sea. an act of terrorism not ruled out. the prime minister of ukraine will meet with president obama wednesday. on this monday, russia consolidate its hold on crimea. after the better than good jobs report will june be busting out all over after a glorious spring in new york city? good morning. it is "bloomberg surveillance." we are live from world headquarters in new york here at monday, march 10. i'm tom keene. joining me, scarlet fu and adam johnson. at a great weekend. finally decent weather. >> i only had to wear one cult instead -- one coat instead of two. in overnight news, asian stocks and global metals fell as china posted its biggest drop in japan, since 2009 and the economy expanding less than forecast in the fourth quarter. about 0.7%. economic news in the u.s., admittedly, nothing.

as far as earnings go, urban outfitters reports at 4:00 p.m.. -- brunomaker moleskin cucina lee -- cucinelli -- >> he makes those fancy coats? >> i don't wear them but maybe scarlet fu. >> all the wicked fancy guys. >> and wicked expensive. wicked. >> a boston thing. let's do a data check. stocks, bonds, currencies, commodities and futures flat, 10 year yield turning off the better than good jobs report. the euro, 1.3877, higher through friday and through australia this morning. nymex crude goes nowhere. foreign exchange, the yen, desperateally getting into weakness and the ruble stays stubbornly week for mr.

putin. , a decline. again, off of china. how about a chart from the bloomberg terminal? china boom, and we collapse. a classic rollover. >> a lower highs and lower lows. not good. leland miller will join us this morning. he has been dead on on the slowdown in china. really looking forward to the conversation. what a busy weekend? we scoured the papers. scarlet fu gets us started with a difficult story. >> nine countries are involved in the search for the mission -- missing malaysia airlines 777. it disappeared on friday and headed to beijing from the well of poor. 239 on board. vietnam's coast guard said they spotted an oil slick off the coast and there could be sightings of brady and possibly

an inflatable raft but nothing -- >> a lot of possibly here. >> including two passengers traveling on stolen passports him a which means i'll play not be ruled out. -- foul play cannot be ruled out. were issued in consecutive numbers which raises questions. mes in the manifesto are under investigation. >> one company in texas with their asian operations -- lost engineers. >> 20 people. we should point out, this is the first in-flight issue for a 777. there have been other issues, but on the ground. this is an aircraft with a stellar safety record. >> our reporter coming to was from singapore. and in the next hour, richard haas will join us and richard falkenrath will join us as well to give us perspective.

more companys driven. softbank president is coming to washington. he will not be doing hard lobbying on trying to get a sprint-t-mobile merger approved. regulators have stood firm. but he will make the argument for consolidation in the mobilephone business through advanced wireless broadband as an alternative to cable. softbank controls sprint which has been considering an offer for t-mobile but u.s. regulators squashed that. >> i would think a lot of americans alike, who we? >> one of the richest men in japan. he transfer -- transform the mobile industry over there. that is something we will continue to monitor certainly in the coming days. the last front page story, going right to the chart you were just showing. the csi 300 stock index and china fall into a five-year low. it dropped more than three percent today. the trigger was after china reported experts -- exports tumbled 18% in february.

economists were looking for just a 7.5% gain. this was an unexpected drop but you also have the lunar new year fall in february and that often disrupts a lot of the data. >> this is export data. import data, i can understand argument because you are not consuming as much but exports is the rest of the world, cause for concern. >> in the continuum, is this getting worse or the same? seems like every few weeks there's a struggling china story. >> there is a struggling china story that is pretty consistent. whether the first onshore bond default -- >> that was on friday. >> managing the currency lower as a step toward rebalancing the economy. a lot of questions about whether china can achieve the 7.5% gdp it laid out last week. >> gordon chang talking about electric usage in china is nowhere near enough to support the 7.5% growth rate. >> those of your front-page

stories. >> we need to go to asia, the malaysian air crash. to discuss the missing malaysian flight from kuala lumpur to beijing. hacinda, good morning. a 12 hour distance. the evening into the night in kuala lumpur. what will be the goal of investigators tomorrow morning? story.same the search continues. so far 48 hours on, no sign of the plane, no debris. it has been really puzzling for the searchers here. to search has been expanded 30 nautical miles from 20 nautical miles earlier and more than six nations involved. but still nothing yet. ,n fact, experts from boeing faa, ntsb are already here to help. but the frustration persists. initially they thought they found a yellow life raft but it turned out to be nothing as

well. it has nothing to do with the missing plane. >> you mentioned at nine countries involved. who is taking the lead on the search-and-rescue? malaysia is obviously where the flight originated from an china is where the flight was destined but it looks like vietnam is playing a big role. >> you are right, but there is a discrepancy. it all depends where the plane apparently went down or disappeared. initially, it was thought that the plane lost contact about two and a half hours and later reports indicated it was an hour after takeoff. here lies the confusion, if it was two and a half hours, vietnam would take the lead and if it was one hour then it would still be in malaysia and they would take the lead. cannots after they pinpoint exactly when contact was lost. >> what kind of precedent is there for this kind of communication coordination between so many different nations in asia? >> you know, it has been really

tough for all the nations to work together. we know that everybody has been keen, all nine nations contributing in terms of intelligence, aircraft and ships. but the only comparison they can make is with air france which flew over the atlantic ocean back in 2009, for that particular incident, no debris was also discovered until two days later and not until two years later with the help of the black box that they discovered it was pilot error. isfar as this missing plane what can, no one knows be done. there are questions about perhaps it was a terrorist attack because of the stolen passports being used by two other the passengers. that is being investigated. identities was confirmed in the last hour but no information given. it is very difficult to coordinate the approach. da, thank you so much.

our guest host on the markets and the economy, jeffrey rosenberg from black box -- from blackrock. looking at fixed income. chief investment strategist of fixed income at blackrock. an investment weekend -- and it -- led by the jobs report. a better than good number. did the equity markets discount the good news we are seeing? once again, the equity markets out front? and does it mean the equity markets will stay out front going through 2014? >> two things they will be waiting. what is the employment report and the economic data as we clear out the uncertainty over the weather, it will tell us about the strength of underlying companies, earnings, and cash flows. that will be weighed against the pullback from the said that the strength implies. those are the two forces. you will see a much more choppy or equity market then what we saw last year where really the backdrop of monetary policy

power to the market significantly. >> we will discuss this later, but right now it is not the case in china. how does a guy like this emphasized that 30 -- the better news of america with the challenge in china? >> a very different story and what we are looking at in particular when it comes to china is the effect china has on the rest of the world. china's growth powers a lot of other countries, it powers a lot of other market prices. that is a very significant issue for all investors. china is going through some real major transitions. we have been watching it for some time. but you have some real disconnects between the credit markets and the currency markets that are concerning. >> not to mention the government defaultthe first bond happen on the to watch, that will -- that it will not bail out every company with bad that. are the floodgates open for more default especially with troubled industries like steel or cold? >> this is what i was referring to when i said long-standing

concerns. chinese growth, really sense the global financial crisis, china buffeted the economy by flooding the domestic economy with credit. it supported is growth. the bad news is, you create future nonperforming loans, future default. now the chickens are coming home to roost and now one of the concerns is with the defaults, you can have a spiraling effect in terms of what you had in terms of supporting growth now to retard growth. >> jeffrey rosenberg and julia coronado on the success of the american economic -- economy. richard haas and richard falcon raft will join us on ukraine, crimea, and the tragedy in the south china sea. let's go to company news. >> the owners of cars.com website looking to sell. the site lets users check

prices and compare car models. the wall street journal said classified ventures may ask for $3 billion. beign that spotify may getting closer to an idea. the swedish streaming music company, has a $200 million line of credit. morgan stanley and goldman sachs is one of the companies that arranged -- among the companies that range the line. a net loss of $654 million in federal contracts in the year that ended september 30. it makes it the biggest loser among government vendors. bp has been temporarily barred from new federal contracts since the gulf of mexico still back in 2010. that is today's company news. >> we are going to take a very quick break. when we come back, the very latest from malaysia. we will speak with richard falcon raft. dr. falcon raft, who advised the white house. -- dr. falkenrath. how safe do you feel when you fly? tweet us.

we want to know how you feel about flying. on bloomberg television, and streaming live on your tablet, phone, and bloomberg.com. ♪

>> good morning, everyone. features common negative two, dow futures, -21. she is south by southwest, emily xsw.g, live that s chang from texas. why aren't we in texas question mark >> we have emily there. >> we should be in texas. >> doing the show in texas? i like that. let's take it on the road. >> it would be 4:00 a.m. in texas.

>> let's take the show to bermuda. you ok with that? >> this is "bloomberg surveillance." i'm tom keene. we are not in texas, but new york and adam johnson as them -- has the morning must-read. >> i dr. joseph stiglitz, -- this is by dr. joseph stiglitz, nobel laureate. this is what he said specifically. an innovator that makes a better website for dog food purchases may attract everyone around the world uses the internet but the net contribution to economic growth may be in fact relatively small. that is a fascinating concept. jeff rosenberg, it effectively says we can innovate from now until 10 years from now and it doesn't really have that much -- are you buying that? >> no, no, i think we have to be careful about talking but innovation and another related concept which is creative destruction. creative destruction is the key to healthy growth in the net -- and our economy. it is what drives our economy.

the ability for new industries and technologies to overtake older ones. that is what fueled economic growth and prosperity. it is absolutely critical. >> with the technological progress we have right now, are we creating jobs in a net basis or losing jobs? this debate on creative destruction is a debate on technology and its effects on jobs. and there is, of course, winners and losers along the way. overall, over time, technology and innovation always wins and create new jobs. the future. so, that is a difficult transition. the old industries lose and the people who work in those industries lose but the new industries create new jobs. >> and the robots win in the meantime. is there a better way to look at employment to move along with the innovation that has happened? >> one of the debates inside the jobs report -- we will talk about i'm sure later -- is the issue that you need a different

set of skills for today's jobs. if you are talking about only the robots win, who programs the robots, who builds the materials, discovers the materials that makes new robots function? oft takes a higher degree education and background in order to be successful in that kind of career environment. that is what is creating this dual track. >> to close this out very importantly -- important. a lot of the mail does not agree -- they say, no, technology taking our jobs away. >> that would be the same mail from 300 years ago. luddites, that is what the word comes from, people who smashed the weaving looms because it took away weaving jobs. --i was remote that day wearing a bowtie. of a tie,tting more tom. thell right, coming up in

next hour of bloomberg television and radio, the council on foreign relations president richard haas joins us to talk about u.s. energy policy and how the u.s. can effectively manage oil and gas production.

>> good morning, everyone. good monday morning. "bloomberg surveillance." i'm tom keene. with me, scarlet fu and adam johnson. here's adam johnson with the top headlines. >> in ukraine, russian troops are solidifying their hold over crimea. the u.s. estimates there are about 20,000 troops there. russia ignoring demands to stop the takeover. votes in crimea will whether to leave ukraine and become part of russia. the last surviving grandchild of

ford motor founder henry ford has died. william clay ford was 88. he spent 57 years but the automaker and was vice chairman when he retired. he was better known as the owner of the detroit lions football team and was the father of current for chairman bill ford. bitcoin enthusiasts are showing california the physicist who denies a report that he created the digital currency. they have donated about $28,000 to him in the last few days. according to reports, nakamoto has bitcoins worth over a billion dollars when the price peaked in december. >> anyone interested in the story, listen to the interview trish regan and i did friday afternoon with a reporter for newsweek magazine. it created a firestorm among the -- >> there are a lot of people who question whether she was right to publish that. >> i am going to stay out of it ever than it was a fiery interview. >> as it should be. >> a smart team for doing that. it was great.

>> let's get back to some of the top stories. three long days since the malaysian airlines boeing 777 disappeared en route to beijing. aviation experts are baffled. no distress signals and debris recovered and the boeing jet has one of the best safety records of any plane. adam, you are saying the first in air incident of the 777. >> the insurance rates are very low because of it. it has had a stellar record. that is part of the confusion. ofmark martin is founder martin consulting which advises in the industry and he joins me live from new delhi. use that jump seat on 777 test flight. is this the case of the aircraft not being safe enough or foul play as some more sinister reports have suggested? >> good morning. thanks for having me. the triple seven has an outstanding flight safety record. my first experience with airplane is it has so many

counter backup measures that flights.lly -- safe we are talking about next generation hybrid aircraft technology. let's not forget the triple seven came into the market after 1994 so it captured the best technology out there. boeing spent a lot of money in development of the airplane. -- makers, avionics, so what you are flying out there is pretty much the best of the best. having said that, it is pretty unfortunate to see a crash of this kind. i don't think there has ever been a crash of this kind of the last four or five years, even air france, when it happened, was controlled flight into terrain. but he still was broadcasting his position. this is very strange. >> as good as the technology as we still depend too much on the black box to answer questions. in a case like this, why isn't there new technology designed to

provide immediate clues for investigators in the crash? will take time for the actual investigation. by the time you collect the flight data recorders in the cockpit voice recorders, it will take time. probably those units are at the bottom of the ocean and you have to get them out. my guess would be expect forhing between 3-6 months us to actually hear what happened in the cockpit. that said, i firmly believe -- >> thank you. mark, we have to leave it there. mark martin joining us from new delhi. stay with us for more "bloomberg surveillance." ♪

>> good morning, everyone. "bloomberg surveillance." hu and adam johnson with you. let's do a data check. stocks, bonds, currencies,

commodities. sort of quiet. on the 10 year yield, a little below -- a little bit elevated. euro stronger, the yen weaker. turneds a little but it atbit of churn as we look the data check. on friday, a better jobs report. also longer days now. scarlet fu counting the days, the hours until she escapes weekend hockey rink hell. blackrock'snberg, chief investment strategist and julia coronado, chief north american economist for bnp paribas. thrilled to have both of these smart people with us, just to gauge where are we. so much for letting go, frozen, the jobs report surprised everyone, didn't? >> it did but we were expecting a little normalization. we saw the weakness in january

february as payback from the .trong before. we do see the weather affecting hours worked tremendously. but the actual jobs numbers themselves don't look like -- >> did you adjust your gdp numbers or did the strategist adjust their view for 2014? >> we do have a big swing in gdp. we lowered q1 from one percent because there will be a lot of weakness in consumer spending -- >> are we allowed to have people the gloomy on air? >> not gloomy, we get a spring q2.ce back in >> did you hear what she just said, the bounceback, that is what i want to get to. is q2 going to be 3.5, four? >> definitely above to one half percent. but you are getting a little excited. does a guy like you synthesize economist that are not all over the place but

nevertheless ,1.0, 1.5 -- >> mostly ignore them. >> easy there. >> there is a lot of noise in the data. in 90,000 jobs is the standard error to the jobs report. so most of it is noise. what economist do is look through the news for -- noise for the signal. the signal is jobs have been growing on average over the last well months, 180,000 to 200,000 for the last two years. what you commented on as well, the most important change -- not a huge breakout, but look at earnings growth. we don't know how to measure -- know how to measure unemployment and slap of the most important measurement is is -- whether the job market is strengthening so people can demand higher earnings. >> would you suggest we see money from bonds under weight neutral over to the equity space? >> the great rotation everybody talks so much about? not so much. --bnp paribas, le grand

[laughter] >> if there is earnings growth and we are going to get some rotation, when we'll see -- will we see yields above three percent? >> we expect sometime this year. our forecast for yield was to go much higher than three percent. >> a big deal. >> the issue was we came out of the gate with a lot of disappointment so we saw yields go much further below. we are making it back up. we will see it as we get back to higher economic data, cleaner economic data from the weather reports clearing out. and as we see the strength in the economy, that is what is going to push yields higher. the issue isn't so much are we going to see how you yields but it is where will we see them. arron's" this week, next up, nasdaq 5000. >> a five-year long bull market that just celebrated its anniversary.

historically the last bull market also went to five years and fell apart. how closely do you look at these anniversaries and historical trends given the federal reserve played such a big disruptive role in the latest bull market, julia? >> the federal reserve will remain supportive. if we are looking at an outlook of moderate growth and low inflation, that seems like a fairly benign environment. even though the fed is tapering, and it is pretty much set on the steady course, they are still going to stay very accommodative for a long time. they know this time is special in a lot of ways. this recovery is still facing a lot of headwinds and they need to remain supportive. it is not like we are going to suddenly lose that support from the fed. >> you are making me bullish, seriously. you are talking about growth accelerating, julia, to three percent in the second quarter and the fed staying supportive and, jeff, you are saying we are going up because we are growing a we have earnings growth. this is says to be long stocks. >> and that is part of our outlook as well.

you asked how much do we keep an eye on the cycles, the fixed income side. this is the focal point. you always have a credit cycle. the outlook for this year, the fed is still accommodative and still room for stocks to outperform bonds, but you have are you in the cycle in the context. this is getting towards the end of a longer run, and that means you are getting closer to a time period -- >> i want to rip up the script a little bit. jeff rosenberg, a couple of pages you were writing. give us an update. i was under struck at the s&p , aex on puerto rico munis little bit of bounce back recently. what does black -- blackrock say about -- tax-free, puerto rico bonds? last summerhow before the puerto rico story broke. obviously individual investors, this is one of the largest holdings. puerto rico this week is expected to announce a big refinancing deal. that is why the bounceback came

from, the expectation that the market with higher interest rates will give puerto rico more time -- >> kick the can down the road. >> it is kick the can down the road. words,se one of your tom, there's a distinction. this was not a packaged bankruptcy that brought all of the bondholders together. maybe you can speak to this being a bond that. this was the situation that you had to have a bunch of bondholders say we are willing to come to the table without collect the bargaining. how is it possible? >> we are not anywhere near that stage. this is really just trying to get access to financing. they are bringing in a new set of investors. part of the negotiations was to change the jurisdiction of the legal environment. so that may be part of the deal. that brings in nontraditional municipal investors, really driving the deal forward. that will buy them more time but they have significant issues, like many municipalities. they have significant long-term issues that need to be worked out. as you were coming in today

-- we were talking earlier about clearing markets of creative destruction. within the optimism we are all feeling with you one percent gdp call, isn't it about american resiliency? clear markets, whether puerto rico, or pittsburgh, pennsylvania, 10 years ago. we just clear things. >> i like to worry a little bit more than you do, so i wouldn't go all the way to everything is going to be great and the american resiliency. we have been facing enormous problems and policy makers have been doing heroic things to make sure we stay on track. so we don't want to be complacent and say everything, we are done with all the problems. we are still facing a lot of issues. banking sector, that is a big deal, a big pill for credit the best credit availability. s&phe equity markets, the

is up 21% the last 12 months. that is like once or twice a decade event. >> that should make us a little bit worried, should the net -- shouldn't it? >> why isn't it good seen the balance sheets of our retirement plans he'll? >> it is a good thing, but it took a relic efforts. it is not like that is natural and organic. it is important we keep our eye on the ball and keep the healing process underway. coronado from bnp paribas and jeffrey rosenberg from blackrock. get started on spring cleaning. >> we want to get their takes on business investment, capital expenditure, across the globe. disappointing in 2013. what does it mean going forward? we will discuss that next. this is bloomberg -- "bloomberg surveillance" streaming on your tablet, smartphone, and bloomberg.com. ♪

>> good morning, everyone. i'm tom keene. it features negative one, dow futures, -17. a lot of headlines particularly out of the ukraine. here's adam johnson. >> nine nations have joined together trying to figure out what happened to the missing malaysian jet. searchers found an oil slick and

others say they spot a possible debris but nothing has been recovered. investigators are now looking into two passengers who were traveling on stolen passports. government isthe trying to find a solution to the dollar shortage that led to three weeks of road test. venezuela will start a new foreign exchange market after reopening the credit line from china. a shortage of dollars created a shortage of basic goods and inflation rate of more than 50%. frightening what is happening. water brothers action sequel -- "300" bros. action sequel with times at the box office. you didn't go? the story of the persian invasion of each and greece. it beat out "mr. peabody and sherman" which grossed $32 million. >> headlines out of ukraine and russia, and most importantly, this is a spokesman for chancellor angela merkel --

crimean vote will not get international recognition. this is later in the week. richard haass will join us in a number of minutes. >> they say russia is violating international law and crimea. i single best chart is on the missing ingredient in the economic recovery -- my single best chart is the missing agreement. --dman sachs jan hot see us jan hatszius included as it is not -- in his note. japan, germany, france, u.k. and canada. these are the expectations. the reality, the blue bar, disappointed on every front. seems economists project a lot more business spending than what actually happened at least in 2013. of the reasons why the economy can't gain traction. >> julia coronado from bnp paribas and jeffrey rosenberg from blackrock -- julia, this has been a thing from 8, 9

years. where is investment? where is it? is it over in asia or in moved abroad? >> some has moved abroad, absolutely. some of the production in the capital-intensive industries are moving to the emerging markets. what we are left with is a lot of service that there, a lot of the jobs created are in the service sector that are not capital-intensive. >> is this a big deal? >> it is a big deal, and to the extent it reflects uncertainty, then it is a big deal because we want companies to be more growth oriented and if they are always cautious and defensive we are not going to get the kind of jobs and spending we want to see as well. i was say it is a mix. some of it is structural, and it justis was it is and some reflects some uncertainty. >> given we have such a service dominated economy what would -- how would it show up? >> commercial real estate. tourism is a big growth industry for the u.s. so you need to

build hotels and restaurants and entertainment facilities. that is all commercial real estate. so our outlook for that sector is fairly optimistic. >> photos. we have an interesting set of photos. >> we have a theme today. ceremonies from around the world. game?dquist's 300 >> i want to be at that ceremony. >> you are a fan. in the u.k., a standard poodle, ricky. he and his owner won best at the crufts dog show that took place in birmingham, england. >> that is a puffy dog. >> the dog has hair and owner does not. it featured 190 -- >> it featured 190 breeds. >> there we go. >> a very happy little terrier. >> do we have a picture of the winner? a fine specimen.

i know we can talk about dogs all day but we are moving on. this is quite serious, in kash mir, recruits of india's army regiment taking salutes saturday. after theok oath passing out parade, successfully completing arduous weeks of training. india has close to a million soldiers posted in cashmere -- kashmir, making that region the most heavily militarized and the world -- one of the most heavily militarized. >> we are curious about it and will want to study the sprawling asian flame and the fractious moments -- do you just ignore them and investment? >> it depends on the source of the shock and how big it might be. some shocks that are regionalized him a they are not going to be major to global investing and you have others, like we talked about, centered on china where the spillover

effects because of what china demand does for come under prices and emerging-market linkages with the significance is much greater. it is really about understanding ae interconnections and where ripple in one part of the world can really have a much bigger effect. >> talking about interconnectedness, for number one, back to sochi, russia, where russian president vladimir cute and watching the men's alpine skiing event at the sochi paralympic games. 500 athletes from 45 countries. >> it looks like he doesn't have a care in the world. >> all of this happening as the world debates russian aggression in crimea. fascinating. hanging out, sunglasses. >> i saw nbc sports network they carried it in the united states, part of their agreement. >> fascinating. >> cool as a cucumber. >> in the back he is on the phone with somebody. >> it leads us into the next

segment very nicely. coming up, we will discuss the withle tensions in crimea richard haass, president of the council on foreign relations. from germany a headline -- russia is violating international law and crimea and the crimean vote will not get international recognition. bloomberg television -- this is "bloomberg surveillance" on bloomberg television and streaming on your tablet, and bloomberg.com. ♪

>> this is "bloomberg surveillance." i'm scarlet fu here with tom keene and adam johnson. let's get to company news from the files of bloomberg west. ibm ceo says the company came up short in 2013. in a letter to investors she says ibm did not meet expectations and needs to fix the struggling hardware businesses. ibm stock was the only loser of the dow jones industrials last year. google him and ask the weeks plans to release a software developer kit. hoping to repeat the success apple had with android mobile operating system. the president of japan's softbank heading to washington, arguing for consolidation in the u.s. mobile phone market saying wireless broadband can be an alternative to cable. softbank controls aren't and it is considering an offer to buy

t-mobile but u.s. regulators are skeptical that will promote competition. >> a real treat to bring you on "bloomberg surveillance" ambassador richard haass, president of the council on foreign relations. his book is way out front on what we are now living in ukraine, crimea, the european and russian responses. his book is "foreign policy begins at home." ahead0 says it all nations have no permanent friends nor permanent enemies, only permanent interests. wonderful to have you here. i thought secretary kissinger's comments for a five days ago were remarkable. he took such a different stance from washington policy. relate what henry kissinger said and what it means for merrick appeared >> i thought the op-ed piece from henry kissinger in "the washington post" was the single most thoughtful piece to emerge on the ukraine-russia situation. he tried to place what is going on in ukraine really in the

history of russian political culture, russian history and ukrainian history and saying this is in some ways predictable and understandable. we should not see this as somehow a new year of international relations but that is something organic and special about their relationship and we as outsiders need to put together some diplomacy that account for that, that takes russian interest into account rather than just isolating or explore your dating. >> how do your advisors respond to the idea khrushchev made a mistake in 1954 and we in the western world should allow crimea to go back to moscow and motherland? >> there are ways of going back. it will be one thing if mr. toin months ago said we want revisit this, let's do it legally and peacefully. that is not what happened. when somebody like chancellor merkel in germany says it has no legitimacy him of the plebiscite having a referendum on the 16th, that is why. in organic,t spontaneous legal process that has grown up within -- and not an organic, spontaneous legal

process. this is something jim started from the outside in part because mr. putin need to compensate for the political loss when yanukovych fled the pals. 's allies in the situation? does he have someone to work with? >> "the new york times" wrote policyb-izing of foreign under him. he is about the perpetuation of his power and the perpetuation of russia and the russian empire. what i think he is bring things in. >> does he prefer to be on his own here? is there any other country that might be opportunistic and jump on the bandwagon? >> even a country like china will not be on his side because china does not like the president of grabbing parts -- because they have their definition of international order.

no, he is very much on his own. and he doesn't care. this is about to bang -- putin's position inside russia -- he can be as isolated as everyone around the table once and when he will not be bothered. >> pointing out russia holds about 3 billion dollars of paper from the ukraine. it is possible that as we are talking about sanctions we are also talking about giving money to ukraine which is ultimately going to go back to russia to repay these debts that are due in 12 months. >> quite possibly. tranche of emergency a couple of billion dollars. not talking about conditional aid of restructuring but talking about keeping the patient alive. then a longer-term little process where the loans will get a lot bigger, but that will require the ukrainians to begin to work together and that is something we have not seen. one of the reasons we have this crisis is the perpetuation of dysfunctional objects inside ukraine. out, how do ioint

get smarter on this? start with the council on foreign relations where they do a couple of things. they have smart people helping you out to get smarter and they pull in a lot. jeff rosenberg from blackrock, a question. >> i wanted to get your take on what you thought of yuliya tim chenko'so -- timosh comments about the precedent it would have for territorial agreement, that it will be a bad president, not just for ukraine but everywhere else. >> absolutely. at the end of the day, it is more about how change will take place in the world, whether legitimate, legal, or peaceful. whatever the immediate stakes, what this is really about, i would argue, is international order. what kind of precedents would happen and what kind of actor will russia be? what kind of lessons will be learned? as significant as ukraine is with 46 million people, given

its geography, in some ways, the significance of bigger because it's at the president. jeffrey rosenberg, thank you so much for joining us as you get your week started. foreign exchange report, looking at the weaker yen, 103 handle as the dollar churns. stay with us. it is "bloomberg surveillance." ♪

>> this is "bloomberg surveillance. an act of terror is not ruled out. up the prime minister of ukraine will meet with president obama on wednesday. this monday, russia consolidates its hold on crimea. , drought means higher food prices and aaa says no to avocado. the scandal of all. we are live from our world headquarters in new york. 10.s monday, march i am tom. adam johnson and scarlet fu are with me. richard haass joins us. we will get to the horrific plane mystery and crash in a moment. >> on the morning brief, asian boosted -- as china posted its biggest drops in

exports. .apan is expanding less note economic news in the united states. we do have some earnings to point out. urban outfitters is reporting. reporting asper is well. >> isn't that kitchen ellie? well done, scarlet. >> i am waiting for a cashmere scarf. >> company news. >> the owner of the cars.com website is looking to sell. classified ventures is working with a company to sell the site. it allows users to check prices and compare car marvels. they may ask for $3 billion. spotify may be getting closer to

an ipo. the swedish streaming company has secured a line of credit. organ stanley and goldman sachs are among the banks that arrange the credit line. bp has a net loss of $654 million in federal contracts. that makes it the biggest loser among government vendors. it has been barred from new federal contracts since the gulf of mexico oil spill in 2010. that is today's company news. >> we must go to asia. on the telephone we will talk about the missing malaysia flight. just simply, what is new? what is the to do list for the nine nations? >> there is nothing new. there are new -- no answers. toare looking for clues as what happened. there is no discussed call --

distress call or sign of the plane. nationse nine involved. nothing so far. >> you fly around asia all the time. suggest that security at the different asian airports that you run through is more lax? compare to the u.s., i would say yes. it is more like malaysia compared to new york. when i went through security last night, there was a fingerprinting machine but nobody made me put my finger their or my thumbprint. there is a comparison. expert thisn morning and he said exactly the same thing. >> who is running this investigation now? there are nine entries plus boeing, who is running it. >> it is hard to say. the plane initiated from

malaysia. china is putting a lot of pressure on a malaysia. there has been a lack of information. they are accusing the government of the dragging. the vietnamese are taking the lead in a way. it happened in vietnamese waters. russian --uge question mark. where is this plane? >> thank you so much. thank you for the perspective on this malaysian air crash. i think calling it a mystery is not doing it justice. richard haass is with us. to interpol. who are they and why are they so upset at this security lapse? >> it is an international organization.

they share- share -- data. they maintain a database of lost and stolen passports. the malaysian authorities or the airline authorities did not check the manifest of this flight against that database. >> do we do that at jfk? >> we do. >> why don't they do that around the world? too many airports where i think you are kidding me. >> there is no explanation for it that will satisfy anybody. happened, it is a failure on a part of the carrier and the airport authority. >> we keep coming back to this idea that file play cannot be ruled out. the majority of malaysia is muslim. they have not had any recent terror attacks. it is a transit hub and a planning hub. in the 9/11tured

plot. it was all the places the plotters get together before coming to attack the united states. there are domestic internal problems. hub. a facilitation it is in a very strategic location. it is your sense that since 9/11 that the terrorists are not the most vulnerable area? >> they are not as vulnerable as pre-9/11.- were they continue to go after them. thesespite a huge effort, continue to be targeted. we see innovation in bomb making techniques. our bond detection technology focused on finding metal on a person or a checked bag person now it is shifting to liquids which are not defective will. this is why you can no longer bring a soda or a liquid onto an aircraft. we know of a bomb making recipe

that only involves liquids and no metallic parts. >> connect the dots for us with china. they suffered a terrorist attack. is there a link there with what we have seen in malaysia? >> did you see that written anywhere? >> there been suggestions. killed byle were machete wielding people. >> there is no evidence of that. these are separatists in china. there have been attacks in mainland china. this is not their mo. it is not uncommon with cases like this in the early stages where there are thousand of dots -- thousands of dots. >> our conversation is leaning toward some sort of foul play, we still do not know exactly what happened. it could've been a mechanical

issue. the deputy in charge of security here. -- airliner goes down over the ocean, you are trying to get a black box. can you get data out of there that will be helpful to solve the problem? >> yes. you will be able to tell pretty precisely what it is. what it records about the systems will allow you to work backwards and reconstruct what happened. in the france flight, it took two years to get that black box. it is not just the passenger manifest that will be looked at. it will be the crew behind the wall. the passenger may have brought a bomb on the plane. another idea is it was checked in. a third is the grounds crew placed it on the vessel, if it was a bomb. that needs to be resolved. >> you have looked at

international relations. there is this whole backdrop of terrorism. how do you treat it? it is the superstructure of international relations now. it has qualitatively changed over the last 10 or 20 years in terms of capability and its globalization on the dark side. ,ou have forms of training recruiting, moneys moving and people moving. it is an international phenomenon. i think it is much more dangerous. what motivates terrorists, in the old days used to have irate terrorists. now you have global mechanisms and bigger ambitions. the was thinking about killing of an war sadat in egypt. but we go to data check right now.

we are looking at commodities very quickly. futuresg to call the negative two. the yen is slightly weaker. >> we have much more coming up on "bloomberg surveillance." we're going to talk about chipotle. >> i could not sleep this week and because of this. >> qe2 pull a? >> -- do you eat aaa? eat chipotle? >> yes. >> will global warming be hurting avocados. we will discuss rising food prices next on "surveillance." ♪

>> good morning, everyone. we have so much to talk about this morning. crimeants in ukraine and and market events here in the united states. first, some difficult news. thee have headlines on malaysia flight. at hong kong airline has found debris. it sounds like it is vietnam very this is according to a hong kong airplane. civil aircraft spotted the breed

as well. the oil slick we have been reporting about it was spotted, it is bunker fuel. clear, bunker fuel is what powers a ship, not a jet. >> that would suggest this is unrelated. >> correct. >> richard haass is with us. is a bloomberg contributor on all matters of security. we have seen too much of you recently. it is a new world where things go into that from an event. had you find confidence when you fly? >> i find confidence in the low probability of these events. air safety statistically is a very safe form of travel. these things are so gripping when they happen, they become top of the mind and they feel more probable than they are.

air crashes like this are exceedingly rare. there are symptoms. scarlet, you go to taiwan routinely. you know you will get on a plane. >> the flight itself does not take that long. it is taken three days to find any real information or to get debris. does that speed up with technology or will it always takes this long? we could have known immediately because it is so precise. it depends on what systems are nearby when it happens. >> what does this say about our projection? military going back to 1938. how do you respond to the isolation and entrenchment of the united states when we see this event or crimea? >> i was not concerned about

signs of new isolationism when i wrote this book. i was more concerned about overreach. we have intervention fatigue in this country. you see that in our society does not see the connection between what goes on in the world and the quality of life and our economy here at home. >> we will come back with richard haass. theur twitter question of day, how safe do you feel when you fly internationally or domestically? tweet us. ♪

>> good morning. i am tom keene. it is monday morning with adam johnson and scarlet fu. our guest host is richard haass. we are talking about the ukraine and crimea. here is adam johnson. >> nine nations are trying to figure out what happened to that malaysian jet. . some ofdo not know

said they've spotted some debris on the surface. they are trying to figure out what that is. they're looking into two passengers who were traveling on stolen passports. way more questions than there are answers. nine nations are trying to figure it out. in venezuela, the government is trying to find a solution to the dollar shortage. they have a credit line from china. the shortage of dollars has created a shortage of basic goods. inflation is running at 50%. that is hard to fathom. "300: rise. sequel then empire" was number one box office. it made $45 million. mr. peabody and sherman." back when few city was an

option. a rich history at the council of foreign relations. it is breakfast time. i am thinking about coffee, chocolate, and avocado. lot moreting a expensive and harder to find. i am spilling my water. he joins us from d.c. ribbon talking about chipotle discontinuing guacamole. is this about the california drought and climate change? farmers pushing growing practices to the max? >> california has a serious drought right now. the larger issue is climate change. agriculture as it exists today in the world evolved over 11,000 years into a remarkable climate change. how suddenly, the climate system

is changing and with each hassing year, the agricultural -- passing year, the agricultural climate is out of sync. problems foring farmers. when the temperatures go down. the research from a team at stanford finds that for each one degree celsius rise in temperature, we get a 16% decline in grain yields. the relationship between the climate and our food supply is sensitive. we are beginning to see some of the effects of that on food prices. >> the washington post is called to one of the most influential thinkers in the world on this issue. you have written a number of books and won medals. you studied and lectured at harvard. given what is happening right now, what do we do? >> it is a bit late in the day.

we need to get serious about cutting carbon and missions. that means shifting from using fossil fuels to using wind and solar and geothermal energy. there are no other options. and accustomed to fossil fuels that it is difficult to break away. we are seeing progress. we have cut carbon admissions by 10% or 12% over the last several years. we are in the right direction, but not fast enough. >> there is an industry to push against anything you said. with the recent route in the west, is there any bringing together of these two disparate parts of the debate? >> one part is based on science and i am not sure what the other thing is based on. >> is it based on lobbying dollars? >> among other things.

some political interpretations of things that i find difficult to understand. >> i want to bring in our guest host, richard haass. in terms of talking about securing food supply, is that tension between countries? do you see that increasing? >> the resources that go into food supply, you think about territory and energy. water could become another source of friction or conflict in the world. you can see that in parts of the middle east. one is between countries. there is increasing evidence that environmental degradation and water shortages are forcing migrations which are leading to state failure and internal conflict. >> what is the mechanism or form that allows countries to come

together and have substantive conversations in dealing with this? >> there is nothing working. do you remember copenhagen? that is not working. that has failed. >> nicely frowned -- framed. what can be the catalyst for an intelligent discussion? >> when you say not working, -- >> we went to copenhagen and that was a nice photo shoot. what is the mexican that will get countries to deal with climate change? >> getting international agreement has been difficult. that majore is countries are going to move ahead on their own. we havecountry, originally 500 coal power plants. we have close 130 of them as a result of the sierra club's

campaign. it was well organized and very effective. >> thank you for joining us, lester brown. thank you, sir. >> coming up, asian markets are .lumping we will discuss on "surveillance." ♪

scarlet fu. let us get you some company

news. sales of xbox one are lagging behind the playstation four. chiquita brands are merging with an irish reduce company. at $526 is valued million. chiquita will own the majority of the company. twitter is looking to move overseas. letter convinced his -- overseas companies pay for a service rather than relying on advertising. those are your company news headlines. >> there has been this revenue shortfall in the last couple of days. >> that would push back the prophet. >> that is something to watch going through march. >> cory johnson has pointed out that these companies are going through the same thing. growth is slowing. >> i think it is something worth

watching. about the market. we are talking about gold. it lost one quarter of its value last year. it is showing signs of a reversal. there is increased demand out of asia. analyst.atrick is an he joins us now. that we are not going to those levels? and $.80. down to $11 we never made that break cap as the market went higher. dip has been similar to we saw in the mid-70's. there are some similarities to today. the mark in aow similar fashion. that was a platform and we saw

gold move substantially higher. we think we are in a lull. the most important level would be $14.34. >> will other metals or commodities move north as well? soft commodities are exploded again. if you go back to the 70's, the initial push. >> the spring at the chart on gold. use able market, i say bear market. >> it is like both. how do you correlate the old and other commodities? >> palladium has just broken out.

that is going to go significantly higher. symbol -- silver is similar. some of these have been surging. a lot of the soft commodities are not pushing up. copy is looking very heavy. iron ore is not doing well. if we were to take one step back and look at this, we think this of an economic move. we might be getting that cost and inflation dynamic. rosenberg is getting his head handed to him. >> that is the second time i have heard that. >> it is happening on the same day that we find some weak export numbers out of china. that is crushing the industrial note. is seven and a half percent. forget the taper. can china grow seven and a half percent and support these markets? >> no. china puts out these growth targets.

isyou seriously believe that not an artificial number, they are not going to do it. it is the most interesting thing going on in china. they no longer have growth as a lubricant for their society. the party will crack down and tighten up. it raises question about their trajectory. >> i want to get this and quickly. do you see costs pushing inflation down? >> eventually, yes. go to the guy in the fleet and ask him how his rent is. you go back to the 70's, that is easy policy. it is exactly like we had under bernanke. that culminated in the late 70's. >> scarlett, remember this number station. this is the first time i have heard this discussion. >> we will remove her this conversation. we will bring you back when it

is all confirmed. speaking of the markets, let's get a data check right now. futures are not doing a lot. they down slightly about two points with the weakness we have seen any merging markets. air is a drop in chinese markets, down 18%. >> good morning. look at the digital space for on appler interviews tv and the ipad. i am tom keene with adam johnson and scarlet fu. is richard haass. futures are negative to. china, asian markets tumbled as export data disappointed.

they have been out front and vocal on the china slowdown. our guest post is richard haass. we suggest a more vocal and confident china. it is wonderful that both of you here on the china watch. why were you right in the optimists wrong? >> we have the data. they were jumping around and drawing conclusions. >> the late winner is michael leavy. by all means necessary, whatever it takes with china, what will the government do for a smaller economy. ? .> they have been seeing growth people need to be looking at the credit picture. this will tell the story in china. it will tell if they are

rebounding or if growth is on the way. it is broken right now. look at how china's resources are changing the world by all means necessary. >> coming out of the council for foreign relations, another book that caught my eye is orton chang's book. he said there is no way to have seven and a half percent growth when utility consumption is only up about one and one half percent. what is the growth? away from the number. you cannot tell. it does not matter. if china wants a percent growth, they can have it. they just dig themselves a bigger hole and it threatens a slowdown. bonds fall out of china. the government has made clear it is willing to let companies fail if they have bad that. if there is a banking crisis, how would

that look compared to a u.s. banking crisis? >> they know it is not a market economy. with a plan things out, they start to adopt the mindset of a market economy. the idea they will have a conventional banking crisis is far-fetched. evidence ofe any china succeeding or reorienting its economy from exports? >> we do. there are a bunch of rebalancing things going on. retail is being emphasized over manufacturing. we are seeing a geographic unit rebalancing. we are not seeing the consumption of debt. >> where is their military fit in to this? do they have a military budget? >> is huge and hard to cap delay.

the bottom line is they are spending more. a lot of it is local. they are increasingly thinking about japan. one of the things that people are not thinking about is the significant possibility of a class of some sort between china contestedover these islands. it may be an air or naval incident. will the government be able to avoid that escalation question mark people are discounting that too much. >> what would it mean for china if this comes up once again? >> if you're talking about a regional problem, it would be disastrous. they are the two biggest economies out there. there would be a slowdown in growth to start with. the government would start other anti-japanese and anti-chinese policies. >> can you come back? i have more questions.

about then dead on chinese economy. a lot of people say that will be a challenge. our twitter question, how safe do you feel when you fly? we want to hear from you. ♪

>> good morning, everyone.

i am tom keene. with me is a scarlet fu and adam johnson. she got here at 2:00 a.m. betty liu is with us. idid you survive the weekend? >> i did. it was anybody else in t-shirts and shorts? last week we talked about warren buffett owning a piece of property in new york. our guest this morning owns a big piece of property in new york city. we are talking about hudson yards. they are developing that huge city within a city. the ceo will be joining us. they are in the mix of a fight. icahn-likeost a carl activist fight.

he has recruited a billionaire to join him in this fight. this is an unusual friendship . >> our one mover for this morning is boeing. shares are lower after the plane went missing three days ago. some debris has been cited near vietnam. this is some development on this front after searching for any kind of sign. my husband is traveling in asia. he says all the talk is about how these boeing planes have problems. you were talking about how this is the first in air incident. a dreamliner had to make a landing over the weekend. boeing is behind these. sat down with the man

who runs boeing, they are doing something they have never done before. these fuselages and wings are new structures. the 777 is half metal. had explains why you issues. the one in malaysia, it has had a virtually perfect record. the insurance rates are some of the lowest in the industry. >> richard haass is with us. he says foreign policy begins at home. you think of henry kissinger and diplomacy. why did you go domestic and then look out through our export business? why did you choose to go domestic? >> the biggest threat to the united states is nothing in the world. it is our own underperformance here at home. our inability to grow our economy and eel with our economic challenges.

we would be able to discourage the emergence of an international arrival. happens out that what domestically is just as critical to our national security as anything that happens out of the state department. i don't mean that. i think it is an important issue. >> if washington can get it together. will talk about the tensions in crimea with richard haass. ♪

>> this is "lumbar surveillance. -- "bloomberg surveillance." let's get you some company news. we start with ibm. the ceo says the company came up short in 2013. in a letter to investors, she said they did not meet expectations. ibm stock is the only loser in the down jones industrial last year. do you want to build apps? google will develop a software developer kit. repeat the success

they had with apps for the android. wireless broadband can be an alternative to cable. controlc -- they sprint. they are trying to buy t mobile. that is today's company news. >> i think they got a real education. >> some people have no idea who he is. >> he has some serious money. >> the average american does not know who softbank is. , stood the -- how much does the average american to know what is going on in scotland? >> i probably no less than the average american. >> there is a referendum on whether or not scotland will become an independent country. it leaves out one famous ex-pat,

james bond. james bond is not alone. scots living abroad would not be able to vote. it is open to residents and not just u.k. citizens. about 900,000 of the population were born elsewhere. >> what would it mean? i go back and forth on it. what is the significance of this? statesould be the latest vulnerable to splintering from within. he have seen it in spain and elsewhere. it would raise real questions about the viability in some ways of contemporary states. i don't think it is going to happen. if i were betting, i would bet against it. it is uncertain whether scotland could retain eu membership. countls is saying don't

on it. you might not meet the criteria. 70's.go back to the what is going on? why do these states want to split? ofthis is the inability governments to deliver. there are governance problems. one is globally, we talked about climate change. the world is not working. inside countries, governments are not delivering. what you are beginning to see is greater unhappiness with the relationship between people and their government? . >> you have a particular focus on this. >> i will testify tomorrow. that northern ireland has been settled. they have made a lot of rye grass.

they have made a lot of progress. it is the most divided society in europe. 90% of the kids go to single religion schools. there are still low levels of violence. one of the questions is how do you complete the piece. how do you make this a normal society? i was trying to do that. >> what is different now from 300 years ago or 30 years ago? >> not enough. it is still divided. define themselves by what tradition they came from. -- politics are designed that way. people are defined by religious orientation. it is not a normal society where people go about their lives or to find their politics in terms of the role of their government in the economy. >> i sat down with tony blair.

in a camera in belfast and one in london. the kids get to talk to each other. is that where it starts? >> yes. but it takes generations. it has to be top down. that is where the political leaders have to make tough decisions. have to deal with daily life. they have not dealt with 3500 people who died in the so-called trouble. there was no process of coming to terms with the past. >> fascinating. if we were not talking about ukraine, we would be talking about venezuela. >> that has not gotten any attention. coveringw journalists are it. we are not focused on the world. before the year is out, you will be spending more and more time talking about the breakdown of order in venezuela.

has a significant role there. they are advising on security. venezuela is subsidized by the cuban economy. unresponsive and repressive government. a lot of people fled the country with their money. people are alienated from the political system. it is breaking down. people have no confidence in the government. replaced chavez is kind of chavez without the political gifts. >> there is distrust in argentina, two. you have dysfunctional societies. you have dysfunctional leadership in both countries. these ought to be successful countries. because of what has happened in venezuela, it

shows how badly your skin mangel and undermine the country. it shows what terrible systems can do to the promise of a country. >> let us get to our agenda. >> you are going to stay focused on the globe. to wednesday.get a referendum on crimea. withports of meetings merkel. about what richard haass henry kissinger. opportunity could come out of this. meeting -- they are meeting with president obama on wednesday. >> the referendum is sunday.

>> my item is on company news. you want to know if this is a price war or just disruption. at&t is cutting prices on its mobile plans. t-mobile is raising prices. t-mobile cut prices to steal market share from at&t and verizon. it did a good job of that. competition with four players is viable. vers.s cutting prices >> it is a deceptive price war. . your bill still goes up. at&t fore a check to $174. that is for me and my iphone. that should save me money. yourself an agenda item. >> retail sales are going to be coming out.

jcpenney is doing better. 2/10 onooking for up wednesday. we will have small business optimism, not. hopefully we will have some better headlines. 70% of the jobs in this country are created by businesses with fewer than 80 people. >> what a busy day. richard haass, thank you so much. you have a really busy schedule. >> there are so may things going on around the world. >> the obvious focus is crimea and russia. keep the focus on asia. chinese dynamic is rob. this could disrupt the global economy. >> i am going to shamelessly lug

you. get smarter on central america and south america. there are great articles. surveillance." continues on bloomberg radio. surveillance.

>> good morning. it is monday, march 10, and we are live from bloomberg headquarters. i'mare "in the loop" and

betty liu. another twist in the federal investigation as to whether currency traders manipulated the rates. sec is looking at whether the rig rates for options -- were for options and etf's. the fed, the justice department, and the cftc are all investigating currency trades. headlineto the next coming in china, the index of the country's biggest stocks hit a five-year low. the index fell three percent after reports showed an on its back the drop in exports. chinese exports fell 18% in february. analysts had forecast an increase. nine countries are trying to figure out what happened to the missing malaysian jetliner. large debris off of vietnam. they say fuel found in the water were from a ship and not an airplane. to