worldm bloomberg headquarters in new york, i am mark crumpton. this is "bottom line." releases itsd latest report on the state of the u.s. economy, then, more unrest in the ukraine. four russian protesters storm a building. aboutusk tells congress taking national security to outer space. ♪ to our viewers in the united states and those of us joining from around the world, welcome.

yang yang is on capitol hill where elon musk testified about the state -- the space race. yet another delay in obamacare rules. we begin with peter cook and .reaking news good. >> good afternoon. a snapshot of the u.s. economy. conditions rummy come -- the economy,uggesting the continues to move forth. the growth could have been better if it had not been for all the bad weather around the united states. compiled by the stats, the federal reserve bank of atlanta indicate economic conditions continue to expand. eight districts reported improved levels. only district to report the activity actually slowed. the weather is a significant factor.

it hit consumers as well. retail sales weekend since the report for most districts. severe weather activity. moderateis reported sales growth since the beginning of the year. the weather was also cited. cleveland saw strong gains. the bad weather did help ski resorts. no surprise there. occupancy,owl, hotel tourism was up in many districts. manufacturing sales took a hit and were negatively impacted by weather. -- levels improved districts -- ost

the outlook remains optimistic. the bottom line here, more .vidence it was the weather >> thank you. for more reaction to today's report, i am joined by the chief fixed income strategist. welcome back. good to see you again. as peter cook just mentioned, the latest report seemed to be in large part about the weather. what impact did you see whether conditions?onomic >> i will pick up our something specific you mentioned. the chicago region, a heavy manufacturing base, saw a decline in activity. you break that down. manufacturing activity tends to be a leading indicator for the broader u.s. economy. as we all know, the weather in february is miserable.

i think we have got some fundamentally based weakness not living up to the optimism we came in to 2014 with, coupled with a little bit of weather. you cannot pull them apart. it is not possible. >> the market continued to improve in several areas. is this pick up sustainable long-term? >> the commercial real estate markets have had .remendous recovery we have heard anecdotal evidence of banksrtheast increasing their willingness to lend for real estate. it is positive when it comes to small and midsized businesses. think it is at the level where we see a big impact and -- and improvement. >> any concerns? >> not a lot. 2013 was a unique year. withd a lack of supply

residential housing markets and that lack has become less of a factor in pushing up prices as the year ended. 2014, we are not going to see the same effective subsidy we did from low interest rates. housing markets like to see some appreciation but a much lower pace. to the beige book, it remains largely unchanged. we are still below the threshold of two percent. does that necessarily mean the fed is not worried about? class of anything the federal reserve is worried about too little inflation. we saw that in comments to reporters monday afternoon. it is going to be very hard for the federal reserve to continue removing accommodation if price pressure is actually slow. the first couple of months a year or so just with the

exception of hired net gas prices, the metric is not changing all that much. inflation tends to be long-running and pervasive. we are looking to early 2016. switch to what is going on in the ukraine. affecting the american consumer? what the -- what should they look at? is gas first on the list? >> in obvious ways, yes. a large portion applies to the ukraine via pipeline. the natural gas markets at the same time are very much -- because of the relatively low cost compared to oil. u.s.as we have here in the is provided either domestically or in canada for the most part. prices are not likely to be dramatically affected by ukraine. a little bit.

>> talking about the u.s. economy overall. when is the american consumer both to jump back in with feet? class we presented a graph months ago which made a pointed argument that the level of consumer spending was merging with jobs growth. jobs growth is running at 1.8%. right now, that is the most we can expect. ist i would point out although that is low, it is stable. that is one positive aspect to note. >> it is anecdotal. if it -- will it do anything to move policy -- policymakers off their monthly tapering schedule? >> i see nothing in the headlines that would likely alter it.

faced with is probably more important terms of the fed thinking than you might guess. to the regional fed governors deride their expectations from their own research stats. those have huge input. it is a significant policymaking tool. a ben bernanke spoke at conference today in south africa. he said the u.s. economy would be weaker if the fed had not push ahead with monthly bond purchases. the balance sheets, isn't that >> isephant in the room? a big elephant, the biggest we have seen. is thed news right now velocity of money, the thing that could cause inflation, is very low. we have not felt the negative impact of the policy. president is correct in saying we do not know what the impacts will be five or 10 years down the road. that is a risk. the bondher hand,

purchases are going down. me welance suggests to will continue the path of reduce accommodation for the next couple of years. >> good to see you again. thank you. stay with us. when we continue in just a return to ourl coverage of the crisis in the ukraine. what is nato's role? we will hear from expert when we continue in just a moment. ♪

ryan joins me on the phone. good evening. what can you tell us? class a lot to talk about. .bout one million people clashes have been going on for the last two or three hours. there was a group of about 2000 pro-russian demonstrators. another 5000 or so ukrainian demonstrators. for af those classed short while until the police came in and hauled some away. a government building was seized there. we do not know the status right now. protesters are still inside the building. goes to show you this is not over. the we go to ground zero of complex. situation there is still very intense. the u.s. envoy that the airport. it looks like he may be about to leave crimea after having been threatened by a group of about 15 armed men in camouflage. visit just made his first

as part of a fact-finding mission for the united nations. he was walking out of the ukrainian military base and was approached by this group, who told him to get out of the peninsula. for protectionfé for short while and eventually did go to the airport and has not left there. -- theinside the area airport and we will follow that one pair finally, paris, where secretary kerry was meeting earlier in the day with a russian foreign minister minister and then met with foreign minister of france. trying to find an agreement. this is the first face-to-face meeting with secretary kerry and the russian foreign minister. two jobs. once you convince russians to hold out forces in ukraine and secondly to try to convince foreign ministers to sit down for face-to-face talks with the cranium foreign minister. those two sides have not had talks at all.

seven minutes ago, the foreign minister of russia left though the and was asked if he had just seen his ukrainian counterpart and he looked at the reporter and said, who is that. that is because he does not regard the ukrainian foreign minister as legitimate. he said no talks and walked away. >> ryan, thank you. for more on the ukraine, i am byned from washington resident fellow on international security at the atlantic council, he focuses on nato, transatlantice crisis. welcome. thank you for your time today. west shouldthe serve a two-pronged approach by giving support to the ukraine on also by putting pressure russia. the u.s. pledged $1 billion to the ukraine. is that enough? >> a good start.

we have seen the european union also pledging an additional $15 billion. it is a very good start. clear same time, it is the situation continues to not improve and that the united states and the european union will have to adopt sanctions against russia. >> you mentioned the eu. how imperative is it for the european union to at least match washington's package? >> it is very important. that they provide significant economic aid. pledged over two years. it is a significant sum. it is also important that money gets to the government very quickly so they can start implanting some of the reforms they need to do quickly.

>> because implementation come you just heard mike kelly tell us the russian foreign minister thereot even acknowledge is his counterpart in ukraine. that is not a good starting point for relations between .oscow and the new government what will get these two sides to sit down and talk? what will get realize thereally is a new government there? >> it is very clear there needs to be a diplomatic breakthrough and a diplomatic solution to the crisis. u.s., togethere with european partners, needs to toward russia.h they need to negotiate from a position of strength. improveation does not anytime soon. >> the u.n. does feel ready to impose sanctions, just how tough should they be and what type of response would you expect from

rock -- from moscow? >> that is a concern. we heard indications russia u.s. assets.ward that would be a bad thing. at the same time, it is important to ramp up the pressure on putin to make them more willing to reach some kind of diplomatic solution here. what needs to be done is for .ussia to pull its troops back that needs to be the way forward. >> if the west support toward russia and the ukraine is not unified or executed in a way that shows cooperation, will that further embolden russia? >> it might. it is important the eu and the u.s. act together and that is why the meeting tomorrow with european leaders is so important whether they can agree on sanctions against russia. if they do not, and there are

indications there are still some unwilling to go along with sanctions, like germany and the ukraine, there is a risk whatever sanctions the u.s. would impose would not be effective enough. >> we have less than a minute. if the european union were to ukraine,bership to the would moscow feel frightened -- toeaten? the less is looking expand on it store step? >> they probably would. these are sovereign states and they have the right if they want to join the eu or nato, that is up to them. thes important we step up process of both the european union and nato to some of these countries so they feel they can belong to europe and the west. that is really their concern.

>> joining us here. thank you. we appreciate it. >> thank you. good to be with you. it is not aontinue, snafu but obamacare hits another delay. this could help americans who have yet to sign up for health care. more when we return. ♪

>> welcome back. in connecticut this hour attending an event to discuss the minimum wage. the president also may comment on the situation in the ukraine. we will continue to watch the event and monitor for you for any comments.

following this, the president will travel to boston for two democratic national committee events. you get you keep your old health insurance for two more years according to a person familiar with the matter. another obamacare delay is coming, presumably with an eye to midterm elections. megan hughes joins me now. is it ministration admitting defeat? class a little bit. this does, for a very select number of people, this guts the affordable care act. allowedill legally be to keep plants that do not necessarily cover maternity care, that do not necessarily cap out-of-pocket expenses. keep in mind the back story. in october, insurers were letters tocellation individual policyholders and there was a huge backlash. the president promised as he was pushing the law that if you like your insurance, you could keep it. the white house changed course, saying state insurance

commissioners were going to be allowed to extend insurance policies for a year. keep in mind what that did. it essentially set a replay button on the entire controversy for this fall. middle in be in the the throes of the midterm election season. the announcement we are expecting from the white house later today will delay that another two years, moving this out of the election season and moving politics out of this. >>, the people are impacted by the change? class it is a big political statement and a lot of headlines here. we are really talking about a small number of people. when you talk about the individual insurance market, you only talk about five percent of the population. in terms of comedy houses were canceled, the latest estimates we have our round 2.6 million people. state took obama up on his offer to extend the plans. only 28 stick -- states did. a little more than half the

country. we're talking about a small number of people. these people, it had to be grandfathered in. nobody knew getting into these plans. lot of churn is a within the individual market. the bottom line, it is a small number getting smaller. >> thanks. it is 26 past the hour and bloomberg is on the markets. alex has the details. caught up where markets are trading. a bit of a snoozer. not much is happening. still managing to hold on positive territory. the s&p is flipping into negative territory. on the one hand, you have issues with the ukraine. investors are taking stock of that. as well as nonmanufacturing isam slipping to a four-year low in february. private employment coming in later than yesterday. stock 11% below the 30 day average for this time of day. theant to highlight

worst-performing u.s. homebuilder this year. lossstimated first-quarter -- it's loaded winter weather and hurt the market. we are on the markets again in 30 minutes. more of next. ♪

>> welcome back. i am mark crumpton. let's check the top stories we're following for you. kidnapped. -- the you and deputy general said -- the obama administration options to penalize russia. they include possible sanctions. companies projected in february.

a sign employers were waiting for the -- pickup in demand. the search is to says payrolls rose 102,000. in january, it was weaker than originally reported. a congressional hearing on the targeting of tea party groups. other conservative groups for extra scrutiny when they apply for tax-exempt status. she appeared in the house oversight committee but in vote not tostitutional right incriminate herself. at the top look stories in the news at this hour. janet yellen is at a ceremonial ,wearing-in in washington

taking over the job as the central bank official. peter cook joins me with details. >> we're just learning about this event for the federal reserve. janet yellen has already been sworn in and has been on the job for several weeks. this is a ceremonial swearing-in where she did not make significant news in her comments. generally, it's about the job and the challenge ahead were. she is speaking at this moment to members of the federal reserve staff. jack lew is there, as is the former federal chair reserved chairman. she says about the economy in these comments, too many americans cannot find a job and are forced to work part-time. stable employment and prices. it is equally clear the economy continues to operate short of

these objectives. i will work with policymakers to achieve this. not hugely controversial. we have heard this from her before on capitol hill. she is reinforcing the message the economy is not yet ready to her satisfaction and she says so in several instances. she talks about transparency and picking up on what ben bernanke has said in the past to expand transparency. "i promise to build on his legacy." she does not say specifically she plans to hold more press conferences, but there is at least a hint there is more to come from her when it comes to communication and transparency. she thanked the staff for all the work they have done and will do her very best to meet the

challenges that lie ahead. i am told we may get still pictures of janet yellen making the remarks and he will not see them on video. >> peter, thank you. elon musk is looking to get in the business of sending pentagon satellites into space. his chiefout competitors, russian engines. hill.ang is on capitol is he playing the russia cardiac ofit was a textbook case monopoly versus the underdog. elon musk by dashed line for the share of the lunch market, currently controlled by a competitor. with everything happening the federation, now is not the time to let them hold onto the exclusive government contracts

when rocket engines are made in russia. closely except military ties with russia. it does not make sense to reward russia right now with a multi-hundred million dollar contract for rocket engines. that would be completely inconsistent with policy. it is crazy to me. and camede in america, after a hearing before the appropriations subcommittee on defense where the elon musk sat next to and testified a long side the chief competitor. the were there to discuss short forogram, default, expendable vehicle launch program. it is the federal government's answer to reducing the cost of military satellite space

launches by hiring out contractors. spacex is currently not in the business because it does not have the certification to do so. betweeny, joint venture defense giants is the only thatting rocket maker with certification. which means it has held a monopoly for years. a monopoly he said he is convinced the competition would not help that monopoly or bring the government savings because he says redundancies between having to rocket makers might wash out any savings elon musk label and now -- amount to $1 million should the federal government go with spacex. luckily, the pentagon clears -- it tends to put an end to the monopoly.

the sentiment also seems to be shared by lawmakers today. >> thank you. moment,continue in a the mission, should you choose to accept it, can it be done? we take you on the search for at 41,000 feet when we continue in a moment. ♪

>> engineers are now able to bring in-flight levels down so low you can have a normal conversation standing 16 feet away from another person. we find out how they do it and why you have to be a billionaire to get this kind of peace and quiet.

>> we modify aircrafts to make it more like a home environment. increaseden an emphasis on noise reduction in aircrafts. a sound level would only allow you to have good speech interaction within one feet of each other. we have 47 decibels. they communicate 16 feet easily. once it was identify that you could get lower, we rely, alessio far we can go. we apply a continuous and uninterrupted barrier of installation -- insulation. we isolate the component that passed through the barriers. we also have to treat the systems within the barrier already. ventilation fans and whatnot.

it is about optimization. more we add, the more weight you add to the aircraft. this would be what would typically come on aircraft. but we develop an whole new only two thirds of the way, it is 10 decibels quieter or half the noise level. interior,f the basic it would be $25 million range. we will have a wide body aircraft. 747, that is just what we do from the interior completion standpoint. class coming up, the bank of nova scotia will be in the spotlight. we will speak to the ceo about the first-quarter earnings results. we will be right back.

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>> we turn our focus now to the bank of nova scotia. colleague.with my >> thank you. the bank of nova scotia ceo is sitting beside me. thank you for taking the time to talk to us. canadian banks came through the with a sterling reputation. theyuld like to know, are as well-run and safe as americans have been led to believe? >> a good question. it is one i get asked quite often. as a bank, we are had -- entering our 183rd year. we pride ourselves in taking long-term and delivering all of our stakeholders consistent and

predictable results. we have done a good job. >> let's talk about the system. is there anything about canadian banking that americans, and you know america is still in the process of rebuilding their financial system in an effort to make it more safe and in some cases more equitable. is there something about the system the u.s. should think about adopting? >> if you look at it, it is the core of our banks in canada. you will see we hold a lot of mortgages on our balance sheet. we know the customer. in the case of our bank, we have got 189 billion mortgages on our balance sheet. if you look at the uninsured part of those, it would be in the mid-50's. we like the risk profile. it is consistent and predictable product for us. qwest you know that is the antithesis of what goes on here. the federal government, the united states, insurers, about

90%. this would be a better housing market in the low -- in the long run if you and other -- if they do it you another video banks will do. speak directly to the american system. as a bank, we have stuck to our fundamentals. it is bread and butter banking. we like the predictability of that. know, one of the world's homest investors says prices will fall by 20% over the next five years. i am talking about pimco. it is not the first or the last to predict the canadian housing correction. ?re they right maybe it is not 20% and five years, but d.c. housing prices

on a downward path? >> we are seeing softening in the market and mortgage demand. we view that as a healthy thing. . >> healthy for the system. >> healthy for the system and the customer as well. local.real estate is we look at it across the country in all the major and midsize cities. supply and demand is relatively in check. in terms of our lending business, we are comfortable with our profile. again, i was a former chief risk officer of the bank. i know a thing or two about stress testing. we have run rigorous stress tests. have a huge escalation on unemployment numbers and a huge escalation in interest rates for us to see against. the bank inies to

nova scotia. you cannot speak as confidently for what other things are doing. this don't you know and believe, they probably them the same thing and if it were to play out over that length of time, it would not spell trouble? can speak for the bank of nova scotia. i think the canadian system will be fine. >> raising costs for all banks including yours. recover those costs? by raising prices for the customers. >> it is tough to do. announcedwe first-quarter results yesterday. numbers.ur capital 9.4%. we made a lot of headway in terms of capital and liquidity. it is very competitive out there, whether it is the new york lending market, lending in europe, in check -- in canada,

anywhere. qwest it brings the to another obvious question. it is competitive in canada. six banks dominate. the on from your immediate rivals, how do you grow the economy? >> it is competitor -- competitive. canada is a growing country of immigrants. 300,000 new canadian immigrants come each year. around 100,000 of those immigrants would have ended up in the area last year. they need housing and accommodation and that has impact on your numbers. you see that in other major centers as well. >> that is 100% of the population. >> we are growing in the economy is going. >> i need to ask you the question about gold. you are well aware gold fixing his minute delayed for a decade

by banks. what can you tell us? >> we have been in the gold business for a long time. our business, we are one of the largest perpetrators of gold in the world. we think the price of discovery around the price setting every day has been transparent. we look forward to any adjustments people think and make it more transparent. >> too much room. , is if it cannot be proven there too much room for improvement? so many benchmarks are similar. >> i think the fix is dated and has been around for a long time. it should be reviewed. any degree of transparency we can bring to that would be a help. qwest thank you for your time.

qwest thank you. stay with us. is on the other side of the break. ♪

>> that doesn't for this edition of "bottom line" and thank you for joining us. i will see you tomorrow. "on the markets" is next. >> it is 56 f the hours. here's a quick update on what is happening. not a lot. the nasdaq able to maintain its positive momentum. off by about is 3/10 of one percent. the s&p is relatively flat, not ahead of the jobs

number on friday. i will show you what is happening on commodities there it oil in particular. buchanan move at russia conflict. u.s. inventories climbing seven straight week. down week onities week. falling.ural gas is normal weather perhaps coming our way. no more 10 degrees. a five year high last week. it might be coming to an end. speaking of oil and gas, a private equity firm raising $2 billion. that is according to the matter. it exceeded its goal of raising $1.5 million for its growth funds. thisk at what is behind and their strategy. overprescribing for two main

dollars, how rare is that? net -- >> not really rare. privateique, not a equity fund. this is a fun looking to invest at the asset level and oil and gas. existing mineral operations, taking royalties or a revenue stake. getting current income for the fund. >> how's that different? >> they're also doing the strategy, but they have raised funds more focused on the private equity control center. partnerships, royalties, and other opportunistic investor opportunities. is itwas interesting didn't happen yesterday. it has been happening for years.

all of it has been found and it is getting higher cost and a way >> the early phase of it, looking and trying to find the land that have wells above formations. are looking for existing operations where they can come in and provide capital to help these operations go to the next level. to reverse aarting large trend. qwest very quickly. only about 20 minutes. what about how they raise money?

>> what it has been doing a starting funds on its own, doing deals by itself, seeing if those deals work and if they work, then it goes and says, our deals have worked. commit more money. we will wrap it all. qwest thank you so much. ♪ >> hello. we have stocks fluctuating after a record high. welcome. 59 minutes to going to the closing bell. we're looking to find the best rates for you. the