>> live from bloomberg headquarters in new york, this is market makers with eric chester and stephanie rule. class action on the ropes. the supreme court picks up the most important business case of the season. the justices could neuter or kill the shareholder class action lawsuit. future please in powered by something other than gasoline. how much the alternative fuel will save this global shipping giant. >> worried about getting a big meal after the end of the world echo the noah's ark for food in the arctic that aims to save mankind. everybody.g,

you're watching bloomberg television. this is market makers. >> stephanie rule is off today. she is still working. moret's begin with disappointing economic news. we got the disappointing reading on private payrolls. ont now, the isn manufacturing index, which measures the health of the services economy came out lower than expected. mike mckee has more for us. >> they seem to break their own, putting out the release a little bit early. we were expecting a little bit of a decline and we got a big decline instead. down to 51.6. you can see a weather affect in this. .usiness activity fell rose. it looks like what may have happened is people cannot get to work. that pushes down the composite index. the one everybody is looking at

-- we have some bad news -- down to 47.5. thes considered roughly dividing line between expanding and contracting. this is suggesting that service sector employment contracted in february. factor that into your cap collations for friday and people will get really pessimistic about where we are going with the employment report. >> thank you very much. the latest read on the economy. we are looking ahead to the jobs report on friday. >> as mike mentioned, the embargo broken a bit early. there was little change before this report came out. and now decidedly down with the s&p losing almost three points. yield on the 10 year was at the session high. it has come in a little bit. 7%. gold trading below its four-month high.

will continue to monitor that as the morning continues. we have some breaking news this morning. new information on that activist campaign that is rocking the house. pushing for three board seats last week. she now has information that another activist investor is putting his shares behind loeb's campaign. what did you learn? >> not a good morning if you're an executive. have hadapital -- they a 13 d filing last summer. maguire is coming out and saying yes, indeed, i am voting with dan loeb. it is about the cash. seen thatd already the company had over one billion dollars worth of excess capital that they should be returning. the fact that the company

already committed to returning $300 million is not enough. last week, they released their 10k. if you go through the numbers, they still have a lot of cash. $300 million of excess cash. $200 million released through the lending segment. they will make $200 million this year. another released from refinancing the real estate properties. you need a dan loeb to keep this company in order. it may be a gesture, but not enough. he says there is $1 billion and he wants it. loeb's campaign getting some support here from another activist investor. keep us up-to-date on some new developments. their shares are trading somewhat higher. >> the west is beginning to get a plan together in ukraine. john kerry is scheduled to sit

down with russia's foreign minister. ryan chilcote is in tf. -- in kiev. >> i think we do expect him to threaten t secretary b with thoe sanctions. with thosey lavrov sanctions. talk -- theen threats of sanctions can be as powerful as the sanctions themselves. two things to think about -- since the u.s. started talking about sanctions, a couple of things that happened. yesterday, we heard from president putin for the first time in public comments talking about the crisis. saying that he was not going to escalate this crisis.

it did not sound like you would send troops into eastern ukraine. event that i would point out is, kerry today talking to lavrov. he had a multilateral meeting with the u.k. in france and he wanted lavrov and russia to attend. they said they would not go to that meeting. that would be a disappointment for kerry. -- he has tot the balance it out. from targeted sanctions against russian officials and their bank assets abroad, visa restrictions to sanctions that would affect u.s. businesses come exactly what they feel rushesia should get at this point. there's a downside to the u.s. as well as they way out their interest in ukraine. value -- their

biggest interest outside of the u.s. when it comes to drilling rights happen to be in russia. if you restrict the ability of american companies to work in russia, that could be bad for exxon. will be speaking with investors today and it will have to talk about this issue. those are the issues that senator kerry will be speaking about. he will discuss the issues of sanctions with lavrov. >> ryan chilcote. our next guest follows ukraine. the most complex and dangerous international challenge of obama's presidency. pchess match with utin. the senior director for russia -ukraine and eurasian affairs. lets go with the chessboard analogy. what moves can president obama make?

does he have any good moves left? a very weakfrom position because president putin has used military force to invade another country. the united states has not used military force to counter that, nor should we. the president is left with a series of options. there is universal condemnation of what putin has done. there is less effective organizing economic sanctions. the u.s. will put forward some economic sanctions against the russian federation, particularly russian officials. much less of a powerful united reaction from .he europeans they are closer to russia in trade and are dependent on russian natural gas. that will weaken the overall western response. what has been effective is this a to the ukraine that you have been reporting on. european union the package announced today. that is a powerful shot in the arm for the keiev government.

>> we may not know what letter putin's endgame is. does he know? >> the russians were surprised ure of theart ukrainian president. they moved very quickly and decisively to invade crimea. the open question is, what will putin do? will the rest in crimea and not use his military and the eastern part of the ukraine? i'm not sure anyone knows. putin left all his options open yesterday. his strategic aim is to intimidate and coerce the ukrainian government to keep it in russia's orbit and not have an association agreement between the european union and ukraine. the american position has to be that ukraine should be free to decide who would want to trade with. what kind of political relationships it wants to have. .t is very important

that's why president obama will have to lead the western alliance an. >> it may be difficult to discern what is endgame is. what is the probability? some kind of referendum on self-determination for the crimea in which they presumably would want to become part of russia? he behed satisfied with some kind of compromise? putin isk president going to bank on a vote referendum in crimea at the end of this month. the futurespeak to of crimea. my own stance is, unfortunately, he will not move away from crimea. he now controls it. i can't see him giving up control of it. i would think that the russians a not very free

vote of the crimea people that would have them affiliate with russia. the bigger question is, eastern ukraine, that is a much tougher mission for the russians but politically and militarily. i would think the russians would think hard about a military invasion of eastern ukraine. >> let's bring in the business perspective here. tom friedman's comments. putin has made himself richer. as drew will not be kind to him. we know that commodities are a cyclical downturn for a decade. what is the link between russia's economy and this move into crimea? >> the great tragedy of russia since the end of the cold war is that they have not launched market

reforms. they have not dealt with their corruption. they have not tried to develop the human resources which are substantial in a modern, knowledge-based economy. they rely on an old carbon-based economy. that is very dangerous economically for the russian federation. i don't think there is much economic advantage for putin in ukraine. there is a plug little bennett. he is a 20 century person the cold war mindset. the states that are not members and nato -- this is a desperate attempt by russia to stay relevant and stay dominant in its own region. wii will be speaking

with the president of bold though but in the next hour. we will be asking him these questions. -- boldova. what could putin do? >> what the russians do -- this forhat they've been doing 20 years -- they intimidate through economic means. they threaten the use of military force. now putin has these military forces. moldovann restrict exports into russia itself. they have a stranglehold on that economy. you're seeing a brutal leader willing to use all these instruments to intimidate countries in a way that a colonial power would have. this is not the modern politics of the 21st sentry. >> it's easy to forget about the

discussions that the west and the u.s. are having with russia over what to do in syria and iran. what does this development in ukraine mean for those issues? they remain very important and dangerous. >> you are right. i think what the russian government wants to do is intimidate europe and the united states into saying, if you don't be quiet on ukraine, we will not cooperate with you on syria and iran. i don't get works that way. russia does not want iran to become a nuclear weapon state. they remain close to iran geographically. russia has publicly minified with the efforts to bring the chemical weapons of syria. think it will cost us very much. i don't the russians can leverage president obama on those two issues. >> thank you. nicholas burns is a former

security advisor under george w. bush and an expert on russia and eastern europe. he is now at harvard's kennedy school of government. delivering the goods when in comes to alternative energy. we have that story covered. >> the big day at the supreme court. they determine the fate of shareholder class action worth $80 billion in 20 years. we are streaming on your smart phone and your tablet. all of our interviews are live and on-demand on apple tv. ♪

biggest package shipping company is making another investment in alternative fuel. we are talking ups. compositionange the

of the ups fleet in the united states. we recently went inside ups. you say the vehicles run on a variety of fuels. >> they do a lot. they have hybrids, pure electrics, cng compressed natural gas -- they have propane. they have had propane up in canada. the news today, they will make a $70 million investment to buy 1000 propane trucks. they're going to install about 50 fueling stations at various ups stations. they are introducing this propane fleet in the u.s. this will replace trucks in role areas. rural areas. they will reduce the use of ofut 3.5 million gallons diesel and gasoline. >> the purpose -- saving money. >> they have a couple of

initiatives. whethera company -- it's looking at their airplane fleet or looking at their delivery trucks on their constantly analyzing tons of data. date on everything they do. these are the guys that brought you trucks making only right turns. this because at they find propane is readily available. we have had a lot of nat gas exploration in america. this is not a green initiative. >> there are regulations. they have to reduce their carbon for print as they grow. dollar $.25ve about a gallon on diesel. -- about $1.25 a gallon on diesel. ound fleet.ge gr

a man's, cars, trucks, motorcycles -- it's important to them. they squeeze a little bit out of a gallon of fuel and it adds up because they have such a significantly. >> are they on a big cost-cutting drive right now? >> there are always aware of cost. fuel specifically is a big cost component for these guys. they introduced a system called reliant. it's all about how can drivers be more efficient? >> overtime, will we see ups displays not just gasoline or diesel but also other fossil fuels and move towards an all electric future? >> it will depend on the cost. the latest on ups. thank you so much. >> when we come back, inside the doomsday vault. a place we hope you will never use. the circumstances -- not good.

♪

>> we are approaching 26th in its path they are. it's time for bloomberg to go on the markets. c sharesesson -- soaring this morning. third-quarter profits beat analyst estimates. the gunmaker boosted its forecast come upgrading the stark to outperform. for the thesis that people aren't buying guns anymore. let's talk about exxon mobil. the biggest oil companies trading down. a couple of things going on. first and foremost come exxon cut its 2017 outlook target by

540,000 barrels of oil. the target set last year -- the ceo says lower u.s. gas drilling or affecting the output. there is the possibility that exxon will be affected by restrictions that may be placed on the activity in russia as a result of what is going on right now in ukraine. >> no doubt. tons of headlines on that right now. --can expect more headlines as for u.s. markets overall, the indexes, not doing a lot. they are mixed. the dow industrial under a bit of pressure. exxon is one reason why. economic data this morning was disappointing. whether we are talking about isn which givesthe edp us a snapshot into what the jobs

outlook might look like. >> what we have seen month after month is the edp report trending because the economy is creating fewer jobs in america. : noah's ark for seed. you just hope we never have to use it. ♪

>> live from bloomberg headquarters in new york, this is "marketmakers" with eric chapter in stephanie rule. >> good morning once again. i'm eric schatz care here today with scarlet fu. the u.s. supreme court is hearing arguments today. the case of the year. halliburton could cripple or destroy the securities class-action industry. an industry that is recouped almost $80 billion from public companies over the past two decades. to time warner, to rogues gallery of fraud. the lead counsel on one of the biggest security class actions

of all time that is recovered $10 million for plaintiffs. he is now the head of conflict litigation groups. it is very easy to talk about this in world ending terms. from the perspective of either the class-action lawyer, the defense counsel, the companies and the plaintiffs, how big a deal is this? >> it's really big. a lot of money at stake here. it could be a game changer. what is interesting about the case is there are two key prince pulls intention here. one is the supreme court institutional interest in respecting precedent. the shoe on the rocket -- on the market -- >> take a moment to explain the of >> the fraud on the market hearing. it's a theory that says in an efficient market like the newark stock exchange, the information that is publicly about bliss filtered and reflected in the price. issuesay that companies

its quarterly earnings release and they say they have made one dollar a share in profit. if i buy that share and i later find out they lied, i have to show that i actually heard them say that. the fraud on the market theory says i don't have to show i heard it. -- the market heard it. when i bought the stock, and that statement up one dollar a share had been baked and the price. that is critical to the securities class-action device because it relieves the individual investors of having to prove they heard it. >> the burden of proof is lower. it essential to the key aspect. you have to persuade the court that it makes sense to hear all of this together. it's more efficient than individual cases. the issue of reliance -- did you rely on the statement? if that is blown up, classes could be cobbled together if you

i bought reliance. i don't think that is where the courts will go. i think the tension -- the theory has been around for over 25 years. that was only afforded to decision and has been attacked as illogical. they say the fraud on the market theory is not supportable and that markets don't -- in the had congress have caugh leaving it intact. it there are issues about undoing president that the market has relied on. the key vote here is the chief justice. the chief vote is justice because the supreme court has considered this issue before. we already know where they all stand. four justices have indicated that they are not fans of the fraud on the market theory. they have not addressed this had on. they certainly will.

the question in my mind is, chief justice roberts -- he does not care much for the securities class-action device either. if the conservative justices were to overturn this bedrock -- bedrock president, what will happen down the road if the conservatives go into the minority and the things they like our challenge? i think there is a clinical aspect of this. >> even if the supreme court does not throw out the fraud on the market theory and as a result the class-action bar with , what is thews it practical effect on investors and the companies that have to defend themselves against these lawsuit? >> they will reach a and not destroy the front of the market to rebut into earlier in the process when defendants can attack it. likely.highly

the class-action device has been diluted. it is weaker. the settlement value for class actions are lower. i think large institutional investors will take a harder look at acting out of class actions. you don't always have to stay in the class. watch whatpassive, happens and filed your claim form. i think in the interest of large institutional investors where there think there is been real fraud, to consider bringing their own lawsuit, there has been a trend in the last few years -- you will see that accelerate. it is one of the things i'm looking at right now. client base will be more inclined to evaluate whether they bring their own case because the class-action just won't be delivering the kind of -- >> you're building an op-ed business? >> we are investigating that. i thoroughly enjoyed my time in defending class actions. a real opportunity here

if halliburton goes the way i think it is. for individual investors to bring their own lawsuits. >> companies being targeted -- >> the reality is, the class-action is the big rilla. that is where the dollars are. the bet that you are making as a company is that the opt outs will be far and few between. >> no one will actually do a? >> right. >> before we run out of time, where does this leave the individual small investor? on the courthouse steps with no access to the chamber? >> it will have a dramatic affect on the mom-and-pop investor. it does not make sense to bring individual action. are very brethren creative. they will come up with some theory. it is a real danger for the mom-and-pop investor. >> a lot of investors never got

much of a payout anyway. they paid it back to the lawyers. >> i think that varies from case to case. ,n the worldcom case on privacy $.94 of every dollar we recovered went to the investors. some of the small cases, the legal fees are higher. when congress passed the private 1995,ties reform act of and put investors in charge and introduced competition and drove down fees. case basis. to >> you are the perfect person to add here today to talk about this landmark case. great to have you. >> always great to see you. the term ends the end of june. i would target sometime in june we will hear it -- it will be a big deal whatever they do. >> good to have you back. it the head of complex litigation and kramer levin.

he's the former lead counsel in the worldcom case. one of the biggest securities class actions of all. >> he had a front-row seat. in a moment, preparing for the day we hope never comes. meet the scientist who is ready for an agricultural catastrophe. coming up next on marketmakers. ♪

>> you want musk is looking for some business from the government. he is on capitol hill this morning trying to talk to lawmakers. hillberg is on capitol where musk is testifying this morning. what have we heard so far? we have this morning is a classic case of incumbent monopoly versus the underdog. in this case, elon musk is space sex. the word savings, innovation and calling the

current program on sustainable. take a listen and what he had to say about the current situation. agencies are simply paying too high a price for lunch. the impacts of relying on a monopoly in 2006. space innovation stagnated. called and prices have risen to levels that are unsustainable. 's eelvair force -- contractors like united launch alliance and space x sent satellites into space. right now, does a $70 billion valuation on that project. only united launch alliance has approval to do so. right now, space x is working

with the government to get that certification. a united launch alliance in the meantime is trying to defend its as theas the monopoly, incumbent. the ceos is worried that competition might not actually mean savings. take a listen. >> i believe leveraging the demand of the commercial sector is smart. but relying on commercial demand to enable national security carries huge risks to the rocket supplier and the government customers. was michael gass defending united launch alliance. we are in the queue and a portion of the hearing. one thing that they're doing this time it is a bit unconventional is the chairman of the subcommittee is actually having the ceos submit questions

to ask each other. we are about to get to that soon. >> thank you so much. if you want to watch that hearing, you can see it on our website. >> you on musk as his eye on the stars. our next guest has a more terrestrial ambition. the modern-day equivalent of noah's ark. not for animals, for plants. a message storage facility for thousands of seats. the subject of a new documentary. >> we came up with this idea. the arctic mountain is a million dollars seed bank. it was built to protect food crops from man-made natural disasters and is being described as a frozen garden of eden. >> most of us take seeds for granted. the fate of humankind is resting on his genetic resources. nothing can be more important. mayhe man behind the vault one day save mankind. he is the founder and chairman

of the advisory council with us this morning from london. the purpose here is ultimately what? to save mankind from himself? that. yes.ost we know that the diversity we have in our agricultural crops is the foundation for agriculture. it's the foundation for which our crops will adapt to the next pest and disease and become more productive. that diversity is being stored into banks around the world that are in normal buildings. they're vulnerable. it is a shame when we lose any of those due to mismanagement or natural disaster or wars or civil strife. it we needed a backup plan. we needed a safety backup for these very important, invaluable collections of crop diversity. > talk to us about the

role that industry is playing and the constant need for seed bank of this nature. his government or industry or individual companies making this that much more critical and in the process ruining the planet? >> in a way, there is a real irony here. farmers want to plant the most productive for righties. the private sector is trying to create those righties. i would say is a major crop. comes on theety market, farmers replaced the old varieties. the problem there is that the old varieties will often contain genes or traits that are missing from the modern varieties that we will need in the future as climate change and as pests and diseases adapt.

we need this collection of diverse the as the raw material for the future advancement and improvement of our culture. isanother thing is that this not necessarily a doomsday vault. seeds can be accessed even without a global catastrophe taking place. when was the last time that someone access to seeds that they deposited? accessave not had an yet.t we sourced the seeds from some of the most prominent seed banks in the world. now we are beginning to collect seeds from developing countries that have seed banks that are not quite up to standards. we fully expect to be using the seed vault in the future. ofs not really a case apocalypse or doomsday. in fact, i'm afraid to say, doomsday is really coming almost every day for some crop

righties. -- crop varieties. we are trying to protect not so it huge global apocalypse as the small incremental losses that are occurring all the time. from which we really can't recover. we are going to be losing traits and characteristics that will be gone just like the dinosaurs. to fashioneed those agricultural system is really productive and sustainable for the long term. talk about the security involved at all. there are no people involved. >> very few. we realize that the more people that were involved, the less secure the facility was going to be. it is in a very remote location. 78 degrees north near the north pole. inside of a mountain. there are a lot of electronic security and physical security systems. the biggest security is that we

are so remote. ascan move seeds in and out we wish. today, we have about -- we have samples of some 820,000 different crop righties. -- crop varieties. more than 100,000 different wheat.f rice and it's quite astonishing. the largest collection by far in the world. paide government of norway for this. bill gates paid for the shipping of all the seas. are you getting support from other places? -- what a company on amonsanto want to put lohalo by giving you some money echo is there a connection? >> you would think there might

be. so far, there has not been peer we have not received any funding from monsanto. typically, the private sector has been pretty happy to pick up the tab for doing this conversation -- conservation work. for many of the crops that are in commercial production around the world, the majority of those crops are actually now just being bred by public-sector researchers and farmers. the private sector part of the seed industry is really concentrated on the top most economically valuable crops. we would love their support. >> i have no doubt that you would. the founder and chairman of the seed bald advisory council. >> the favorite new toy for the who's who of the tech world. mustt has become the

own drone. ♪

>> if you thought those go pros -- were almet cams cool way to shoot action photos, the dj asked vision. jx vision drone. john ehrlichman went to california to test it out. picturesque point. they're using these to capture the footage. this is the future of what sports videos will look like. drones cruising high above the surf or anywhere outdoors. drone ofs to be the choice among tech enthusiasts. the >>ured these shots on

>> trip to the caribbean. the phantom to comes pretty much prebuilt. it's ready to fly. you go by it and everybody in everything >> >> is in the box. you can take pictures by attaching your smartphone to the remote control. it can also fly autopilot using gps. the phantom to vision is not cheap but it won't break the bank. >> who are the people using these devices? >> hobbyists, professional photographers, real estate. >> flying one of these things does not go according to plan. -- it went over the ocean and never came back. while the faa allows hobbyists to fly drones, it is illegal for commercial use. >> as i think about more of these devices being in the air, it is hard to not think about the risks that come with that. >> we work very closely with the faa to make sure that our devices are very safe. >> is a private chinese company

and won't say hemi drones at cells but it did project revenue for 2013 of $130 million. this company had 300 employees two years ago. now has 1500. up flyingere app phantom two vision, this guy was flying 1, 2. as you want to take cool pictures for your facebook feed or twitter, that is fine. you just can't sell anything. no commercial use. >> yet. >> until the faa figures things out. weathered allows jeff baze is to deliver packages by drones were not? had to bring that up. maybe on the ski hill. we will be back with you in just a couple minutes. coming up, rethinking part of nhe game that has bee

around for decades. the silly extra point. ♪

♪ >> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. right next to, ukraine, not far enough from russia. mold oh but is trying to keep from getting caught up in the crisis. -- moldova is trying to keep from getting up in the crisis -- caught up in the crisis. >> the nfl is thinking about changing one of the oldest traditions in the game. you're watching "market makers." i'm erik schatzker. >> i'm scarlet fu.

stephanie ruhle took time to telephone in with breaking news. time for theit's newsfeed. these are the top business news from around the world. a key measure of the services sector fell more than expected in february. anything over 50 shows the economy is expanding. bad weather might've had an impact. jobs fewer than expected in february. the government releases its february jobs report this friday. motor sales were up 20% in china. sales of gm's cadillac brand almost doubled. cio of target

quits. >> the story we have all been following, ukraine. president obama promising a billion dollars to help the new ukrainian government's cash crunch. peter cook has the latest on the development. any sign of trouble in congress so far? trouble, but real there are some differences out there between what republicans, democrats in congress might want to do. large, republicans and democrats support the idea of giving financial help to ukraine and a lot of them support even tougher sanctions on russia, perhaps even going as far as targeting russian banks. i just heard from ed royce of california, who says the resolution the house could consider will go that far. that's a pretty dramatic step and one we have not even heard

directly from the administration. a short time ago the house majority leader erik cantor, after addressing his troops and a closed door meeting, had this to say about the ukrainian package. >> the world community should stand united against this invasion. if there are issues out there to watch, it it is the billion dollars of loan guarantee, will it be paid for. the other thing is, how far do the sanctions go? the possibility that russian banks will be targeted. there are concerns if it is too tough, that might send the wrong message to the russians in terms of a diplomatic solution to this crisis. the treasury department, the administration would like to resolve a larger issue about u.s. funding to the imf.

to deal withke that at the same time that they deal with aid. they don't want anything complicated in this package. those are some of the potential issues to watch going forward. >> so many requests for money. that guarantee of up to $1 billion in loans, it does not actually mean an outlay of $1 billion. the cash disbursement may be less than that, right? $200 may be closer to million in terms of the score in congress. but it matters to a lot of folks with a tight budget environment here. there are a lot of republicans who don't like the idea of giving any foreign aid right now. they don't like having to explain back in their home districts. >> peter cook, thank you for the latest on that. >> western nations are talking sanctions on russia. russia is talking sanctions of

its own. in the middle, companies doing business in ukraine and russia. are hundreds of companies involved. not just pepsi, coke, mcdonald's. companies that have big grain shipping operations near the black sea. stock prices are holding an but that this not mean there are not effects. procter & gamble has been in ukraine since 1990. pampers, panty and -- pantene. three weeks ago they said because of currency fluctuations they were cutting their 2014 earnings forecast. they said emerging-market toctuations lead the company cut its 2014 earnings forecast by as much as a percentage point rat. >> that may make it even worse. >> caterpillar invested a

billion dollars in russia. they were the first blue-chip company to issue rubles nominated bonds. is not just these companies. i was looking at adidas forecasted profit. adidas gets three quarters of its revenue from outside western europe. i want to ask about the carmakers. they have put a lot of money into russia. >> they look at russia as a growth center. the problem they have had is that the russian auto sales have been slumping anyway along with the country's economy. this crisis does not help. long shadow isa what is going on in ukraine? if it deteriorates, it will have ramifications in terms of economic activity. companies have that

reaction. we want this resolved peacefully. mike, thanks for putting it into perspective for us. about something that caught my eye yesterday afternoon. .he ipo filing some of you may not be familiar with this boutique investment that does business exclusively with companies it has hired, mostly for mergers and acquisitions. 470 people. right now pretax is the right way to look at it because it's not yet public. most of the money flows through the partners. there's some interesting things about moelis. wall street ipo's do not come along very often.

we have not seen them in a &a volumes this high since the third quarter of 2008. wall street ipo's is another casualty of the crisis. it was not just home prices, the stock market. >> cyclical upturn. >> exactly. >> the regulatory filings show that more than 50% of moelis was earmarked last year. why would this company want to go public when it would invite so much more scrutiny on things like pay? >> they're going to be inviting scrutiny for sure. the only thing that can -- ken is thatas in his camp more or lessvals are the same way.

and also ever core, roger altman, founder and ceo. ratios in the 60% neighborhood. -- comp ratios in the 60% neighborhood. it's very different from goldman sachs. >> ken moelis, we hear goldman sachs involved in a lot of deals. what has been his biggest deal? >> selling anheuser-busch. you bring up a good point. one of the existential threats all the time to boutique firms is that they keep selling off their clients. inbesold anheuser-busch to v. those clients and the potential fee revenues they might generate over the years is gone. one deal.

that is a challenge. a firm like goldman sachs has long-standing institutional relationships. a firm like moelis always has to be looking for the next client. we will have an exclusive interview with the prime minister of moldova coming up. president obama's plan to reduce poverty. ♪

>> this is "market makers" on bloomberg television. if latimer viewed and decides to steamroll through ukraine, yes what country comes next? -- guess what country comes next?

the republic of moldova. ukrainians, they too want to strengthen economic ties with europe. today the prime minister of moldova is joining us. scarlet and i want to start by praying -- playing an excerpt from an interview with the former president of georgia. >> this guy is dangerous. this is going to continue. this will not limit itself to crimea. is very simple. he grabbed a part of territory, lay down. and then everybody forgets it. >> mr. prime minister, is mr.

saakashvili correct but not only -- vladimirudent putin dangerous, but he can grab other parts of ukraine without any repercussions whatsoever? >> i know the ex-president pretty well. he visited us quite recently. in mulled over, moldova -- moldova, we need to be careful about what we say and what we do. andkey is to keep stability stability. we are worried. [no audio] we expressed our strong solidarity you through -- with ukraine.

we hope very much, we face a lot of obstacles we hope a lot happen in ukraine. vladimir putin recently in sochi. what did you talk about and did he make any mention of ukraine? >> no. it was the occasion of sport activities. we exchanged a few words on the importance of the olympic games in sochi. no. it to happenect and i don't know if many people expected it to happen. say you are very worried.

you describe a situation as being dangerous and potentially contagious yet at the same time you say you need to watch your words carefully. why? what are you afraid of? >> we have a responsibility. a difficult, sometimes complex relationship with russia. russia is an important political and trade partner. some problems exist in trade relations. this ando fight for for that we need good relations. >> you are afraid if you said the wrong things that the could's -- russians unilaterally decide to cut off these trade ties that are vital to your economy? >> i don't know if my words would make the final decision. but our interest is to have

excellent relations with the west but as good relations as possible with the east, and incow still has the leverage developments in the region. we need to be prudent but calm as well. we have expressed our strong solidarity is with ukraine. we hope to be able to work with ukrainian leadership. >> when you say strong solidarity with ukraine, do you recognize the new government in kiev? >> of course. i congratulate the new prime minister. >> do they need to hold elections quickly to legitimize it? >> it's not up to me. it is end of may when they will have elections. you met on monday with president obama and vice president joe biden. what came out of that meeting? >> my visit was planned long

ago. it was a coincidence. i came here primarily to forge relations. we were able to kick off strategic dialogue. importantve much more dialogue on energy issues, security cooperation, trade and investment which is key for moldova. we have been quite advanced in negotiations with the european union. , and time to expand here bring much more american investment into moldova. >> who holds the upper hand in the energy equation? the russian supply of natural gas to ukraine and eastern europe and parts of western europe, these vital pipelines -- from where you sit in moldova, how far can russia afford to push that relationship?

selling gas generates revenue. it is also the interest to get good quality and relatively cheap run it. if they are interested to sell, we are interested to buy at a reasonable price. what happens in moldova will probably be replicated in other countries. building an interconnection, and electricity with romania. once we final this -- finalize this interconnection project, we will be able to buy from the east and from the west. exploration is undertaking in romania and other countries. energy will become less an

effective tool. >> the former nato ambassador talked about moldova and the relationship with russia. >> moldova is a very poor country. russia can restrict moldova imports into russia itself. they have a stranglehold on that economy. you are seeing a brutal leader quite willing to use all these instruments to intimidate countries in a way that a colonial power would have in the 19th century. not the modern politics of the 21st century. you most worried about when it comes to your economic dependency on russia? >> we are a poor country but not very poor. it is above cumulative growth 20%.

if you look at our foreign trade, almost 50% goes to the european union. russia is still an important partner. the first russian embargo on wind came in 2006 -- wine came in 2006. we want to have civilized relations, we went to have trade relations that are not mixed with political relations. i'm sure we will overcome the immediate impact. >> put yourself in the shoes of western ukrainians right now. what is the most effective thing the united states or the eu could do to support them? is it economic sanctions? will putin respond to economic sanctions? dramatic junction in

time, to try to engage russian colleagues in moscow and find a to get back to the situation that exists a few days ago. if you want to get a problem , we need a very good cooperation between east and just -- west. the first strong appeal goes to our friends and colleagues to try to find a solution. what happens today is not a win-win situation. mr. prime minister, thank you. ♪

♪ >> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. is a successful company in silicon valley, chances are that andreessen horowitz is investor. cory johnson sat down with cofounder ben horowitz. they talked about what makes his firm so different. thing isst fundamental that when i was an entrepreneur, venture capital is oriented around finding an entrepreneur with a brilliant invention and

assembling a team to build the invention,inst that and bring in an experienced ceo to run the company. whether that happened or not, that is what they were good at. they were good at recruiting. when we came in, our whole idea was, let's assume we want the inventor to run the company, then what kind of firm do you need to build to enable that founder to learn to be ceo and become a confident ceo, and to the structure of the firm and the kind of partners we have are all geared to enabling a founder to be a ceo. that has probably the highest impact in the sense that you see other venture capital firms at least going, we're going to give the founder more run. value oftand the hounding the founder -- >> vc's changing their approach

as a result. >> exactly. >> that is just a part of the conversation with ben horowitz. cory johnson's full interview will be coming up on "bloomberg west west" at 1:00 p.m.. how do you look, minimum wage -- lift minimum wage workers out of poverty? that is next on "market makers." ♪

>> do you like your old health insurance? it turns out you do get to keep it for a few more years. it is another obamacare delay coming, and this one with an eye on the midterm elections. megan hughes is joining us from d.c. is the white house admitting defeat with this? some does essentially gut

of the affordable care act for a relatively small number of people. we're talking about people who will legally be allowed to have plans that do not cover maternity care, the did not have on out-of-pocket expenses. it was this october as those exchanges were rolling out, people were getting those cancellation letters. there was a huge backlash because the president was pushing for this law, and continually said if you like your plan you can keep it. in november we saw him change course. and essentially allow the state insurance commissioners to make decisions on an individual state-by-state basis whether people could be allowed to stay on those plans for one year. this is all set to replay one year later. season, the obama administration pushing us back another two years out of election season. >> what does it mean for the financial viability of obamacare?

it is dependent on participation, particularly of healthy people and healthy people who happen to like their plans don't participate for another two years, even if there are not that many of them, doesn't that threaten the prospects? there still are not that many people in obamacare. >> it's a great question. a lot of people are still trying to wrap their heads around those numbers. we were talking about those individual plans. small number.ely we're talking about five percent of the population originally on these plans. 28 states went along with the obama proposal to allow people to stay on these noncompliant plans. we don't have numbers how many people actually made that choice. there is a lot of concern within the insurance industry that the people that did make that choice are the young and healthy, the people that really neede humana

to keep the premiums down. that is something we will be watching closely and we may get a better sense of that is march 31 rolls around. >> thank you so much. erik? >> a lot of economists say it is the best poverty fighting idea the government has had in decades. the earned income tax credit. now president obama wants to expand it. in aore, let's bring senior economist for bloomberg government, which analyzes how policy decisions affect business. the earned income tax credit or raising the minimum wage, which works better? going to answer that question specifically. i'm going to tell you why people like the earned income tax credit. they like it because it encourages work. pullingsponsible for six and a half million people out of poverty in 2012, 3.3 million that were children. support ratetisan

it has the effect the democrats like any incentives that republicans like. >> you are punting and not answering that. for the sake of argument, run through the things that people like about raising the minimum wage. we have seen that those receiving minimum wage at a higher level feel good about their lives and feel like they don't have to work two jobs anymore, and there are all these psychological benefits that have knock off effects which other economists describe as positive. >> there is always positives to earning more income, no matter where your base starts. minimum wage has been shown by effective be somewhat in getting people out of poverty, which is the end goal for democrats. of the 45 million people living below the poverty line, it's for increasinge

that income across the poverty threshold for a fraction of americans. it is not as targeted as the earned income tax credit. it is not specifically directed to low income households and that is why some economists have a problem with it. has bipartisan support. where would the opposition come from? >> with all these programs in terms of partisan support on the spending side, the question is how to pay for it. in this particular proposal of increasing the earned income tax , itit for childless workers is paid for by taxing wealthy interestnd carried that private equity individuals use in terms of their tax and getting a lower tax rate on that. a lot of republicans, a lot of businesses are not going to like the way it is paid for even if

the likely effects overall. >> for a poor or low income person or family, what with the tangible benefits of this expansion of the earned income tax credit be? how much money would they see and when would they see it? >> what you would see is more directed to childless workers. there is a disparity between families and people without children. people without children do not get as much of a credit. what they will see at the end of the day is the tax refund. if their credit is greater than their tax liability, at the end of the year they will get money back then that will help them meet their bills. very real situation for people living in poverty right now. >> we talked about the minimum wage and this earned income tax credit. what are the other ideas floating around in congress to bring down the poverty rate? >> those are the two major ones. marco rubio has another idea

called a wage enhancement. many say it is just the earned income tax credit 2.0. it would be a monthly payment instead of yearly. it would solidify that incentive to work as opposed to just take benefits. poor people have a high marginal tax rate when you include all the benefits for medicaid and food stamps. these types of programs would help incentivize work. >> thank you, nila richardson. >> analyzing how policy decisions affect business. that is what really matters when you're thinking about the american economy. >> it's all public policy these days. >> we are going to throw out the rule back when we come back. ♪

>> one of the most automatic

plays in sports. having thelk of extra point plays start of the 25 yard line instead of the two. baseball has rewritten some of its rules and there is speculation the nba might make the court bigger. what is going on? jackowski, bob partner at innovative sports and entertainment and former president of madison square garden. what inspires some leagues to consider rule changes? is it outcry from fans, players, owners or tv networks? >> it could be all of that. is soes down to something predictable and really is something that everybody knows is going to happen. they want to be careful. they don't want to change the actual play, but they can maneuver a bit. >> you bet the fans respond.

it's a great time to get a beer. >why does football want to mess with a great formula? football has the largest television contracts in the country. i can understand why hockey might want to get rid of the centerlines, because you might raise the level of excitement in the game. hockey struggles for viewers. football does not. 1300st year there were extra points and five were missed. it has become too predictable and i think folks are getting bored by it. the managers are getting bored by it. they're looking to see if they can make it more of an important play and still keep it in the .port, still make impactful sometimes an extra point missed can change a game, let alone the billions of dollars spent on football and the impact it has on that. >> football and th enfl -- the

fact that anythe team can win. >> the nfl, they started their whole situation where the money would be split equally. they're going to try to make the sport better, not systemically change it, but make it more exciting for the fans. >> do you think that's a good idea? there are legions of fans who -- it does not matter which sport you love -- who do not want you to tinker with anything in the rulebook. they think of themselves as custodians of the game. >> it depends. i am a hockey old school guy. for 60esentation went on minutes. in football, making it more ing -- i would make it a 10 minute overtime play. somebody who runs a team, you

have a lot of wins in shootouts. you are not scoring as much as you should score. it is something you really have to look into. >> what leagues are least likely to innovate and respond to the changing way in which we consume sports? >> the nba. there is so much they can do with that change -- game. i read somewhere they were thinking about a four point lay. -- play. the commissioner said that is not true. i don't see that happening. then you start to get into gimmickry. i don't think any sport wants to do that. >> who needs to consider rule changes? >> hockey, they did away with the to line -- two-line tabs. it took away the ability for breakaways and impacted the speed of the game. that was a good elimination as far as hockey was concerned.

you are always looking for ways to tinker a bit, but don't impact the sport that is occurring on the ice. >> baseball, home plate collisions? >> they are traditionalists, old-timers. what happens is high-priced players now like buster posey get hurt and go out for a year and the team is impacted and he comes out in money. >> what can baseball due to shorten the length of the games? three hours, 40 minutes on average? >> the amount of time between pitches, how many times you can tie and untie your glove, getting in and out of the batters box. serious,f baseball was there are some things. maybe this is a more relevant question. which sports should think about following football's lead and

play fewer games? >> i don't think any legal do that. the money is too large. -- league will do that. the money is too large. >> hockey was so much better with only 50 games. >> not as profitable to the owner or networks. of footballmics with 16 games a season can make as much as it does. >> you can rethink it. i do not think the leauges will. responseese changes in to how influential fantasy leagues have become, especially for the nfl? are they responding to the way that spectators are watching and thinking of themselves as managers? >> with baseball, it's a response to technology and a lot of calls that have been made have been incorrect and impacted the games. i think the fan is getting tired of it. ownersmissioner and the made the changes that make

sense. >> and then they go and rant about it on social media. bob gutkowski, thanks so much. >> in a moment, we are looking at homebuilders. bluebird goes on the markets when we come back. ♪

>> i will do it for "market makers." stephanie will be back tomorrow.

the hour.inutes past it is time for bloomberg television's on the markets. julie hyman has more. are driving straight into derivatives for today's options insight. competitor reported revenue that missed analysts' estimates. the equity derivatives strategist joins me, blaming it at least in part on the weather like so many others have been doing. i was looking at the march 22 $24 call. we saw a big surge in volume on those contracts. a lot of those calls traded. it is also tied up to stock. stock trade ihe

do not think this is expressing a directional -- stock. i do not think this is expressing a directional view. somebody took the opportunity to close this trade. d.r. horton is on a different calendar. we will not hear from them until april. maybe we will see more of a directional options trade as we get closer to that. smith & wesson coming out today and surprising investors. the stock had been waning going into the earnings report and then it came up with earnings that beat estimates. we are seeing a lot of activity today. i saw in the march $13, $14 calls. like here you are talking about the underlying stock is rising. people seem to be bullish going out as well. is that the read -- >> it is a reversal.

what we saw yesterday in smith & wesson was increased productivity because of what happened to our gr the week before. today, with the real surprise, the market is paying to contain the move. it is really high move. would see a lot of market makers covering the options and what option a la to they can to protect the downside they have experienced. >> is a catch-up trade. >> it is. if you look at the stock, the stock is trading very low. if you look over the last 10 years, revenues have been turning up and there is all aroundf regulatory rates sellers are manufacturers.

at the same time, this is a cheap stock and i would say there is probably more upside from here. let's get to a chinese internet security provider that came out with earnings later this week. you have a three-leg strategy for this one. >> i like the company. i like the stock. given what the stock has done so far, i think it is a little bit dangerous to hold the stock. i want to play from the bullish side. options are him playing a hefty move. -- implying a hefty move. around $117.g the way i like to play is by the weekly calls, pay around six dollars for them, and then to

further cheapen the cost, i want expiration, one hundred 25 calls for around three dollars. net, i get into this trade playing $1.90 and i have six dollars of upside. >> thank you so much. that has been today's option inside. ♪

♪ welcome to "lunch money," where we tied together the best stories, interviews, and video and business news. i am matt miller, in for adam johnson. innovation, the final frontier? elon musk takes his space mission to washington. vintage steve ballmer, the former microsoft ceo shares his patented doozy as him with students at oxford. this is a bloomberg exclusive. politics, have you listened to harry reid lately? he is mad as hell and he will not take it anymore. a dish, a deal that shakes