>> welcome to "lunch money" where we tie together the best stories, interviews, and -- in video and business. i'm adam johnson. the search for malaysia flight 370 get bigger and there are still no answers. and ali baba gets ready to come right here, going public in the u.s. in sports, time to rack it up. madness behind the march madness tournament starts this week. and we'll show you the high-tech eco-friendly plan for new york's low lines.

and in pixar movies, a canceled tv series hits the big screen with some technical difficulties. we are kicking it off with what everyone is talking about, grimy of to separate from ukraine. --ording to the elections crimea voting to separate from ukraine. according to elections officials, they voted yesterday, paving the way for annexation by russia. despite the ukraine leaders calling the vote in a legal officials said it fully met international norms. on the other side, ukraine's acting foreign minister spoke exclusively about the motives behind this referendum. >> it is a part of a bigger chaos, not only in crimea, but in the use turn ukraine -- the eastern ukraine. and it might be part of a bigger throughconnect russia the ukraine mainland. >> meanwhile, the u.n. announcing sanctions against

russia this morning. european finance meters were in brussels at a meeting. what they have not done, and this is interesting, if they have not announced any economic sanctions. there is no unanimity or appetite for economic sanctions against russia. nor have they targeted any business leaders. there was talk in the lead up to today's action by the eu foreign ministers that they might go after the so-called oligarchs as well. but there was not a hint of that in there. this does give the european union the ability to scale up the sanctions. is -- of this action from the european union is to try to dissuade president putin from annexing crimea. the crimean have asked to be part of the russian federation. that has not happened, but may happen later this week. the diplomats, if you will, trying to get ahead of president putin, and discourage him from doing that.

compared to iran style sanctions, these are nothing. biggest,tainly the most serious sanctions that the european union has ever used against russia. of the eun the heels sanctions, president obama just issued an executive order authorizing sanctions against a number of russian government officials. >> the white house, the state department, the treasury department, all moving to punish russia for the referendum in crimea, for the russians unwillingness to back down in the ukraine. what the white house is announcing is an asset freeze and a visa ban on seven officials through the russian government. this is an expansion of what the president put in place after the initial action by the russians into crimea. seven officials, including top advisers to president vladimir putin. putin himself is not targeted with these asset freezes, or the visa bans, but this is hitting very close to home for him. it includes some of his top aides, top officials in the russian duma, and the deputy

prime minister is on this list. in addition, there are four individuals being sanctioned under the previous executive order, people seen as directly involved in what is taking place in crimea, the current officials in charge of crimea. and we also have the former ukrainian president, viktor yanukovych on this list. in all, 11 people. asset freezes the united states as well as visa bans. what this executive order also does is that for the first time, it allows the expanded list of sanctions going forward should the u.s. choose to turn up the pressure even further. >> the president gave an official statement on sanctions by the white house briefing room earlier this morning. here it is in the raw. >> we will continue to make clear to russia that their provocations will achieve nothing except to further isolate russia and diminishes standing in the world. the international community will continue to stand together to

oppose violations of ukrainian sovereign terror -- sovereignty. and further action will only deepen russia's isolation and exact a greater toll on the russian economy. going forward, we can calibrate our response based on whether russia chooses to escalate or to de-the situation. or two de-escalate the situation. i believe there is a a path to to solve this diplomatically. that includes russia pulling its back to theirea bases, supporting the deployment of additional international monitors in ukraine, and engaging in dialogue -- in dialogue with ukrainian government, which has indicated it is open to pursuing constitutional reform as they move forward toward elections these -- this spring. but throughout this process, we will stand firm in our unwavering support for ukraine. as i told the register last week, the united states stands

with the people of ukraine and their right to determine their own destiny. we will keep working with congress and our international partners to offer the ukraine economic support that it needs to weather this crisis and improve the daily lives of ukrainian people. as a go forward, we'll continue to look at the range of ways we can help our ukrainian friends achieve their universal rights and the security, prosperity, and dignity that they deserve. malaysia, ande to 25 countries now searching for missing flight 370. we have the very latest. we will also take you inside canada's bomb party a, making its trains right here in the u.s. making itsg trains right here in the u.s. and the blue angels were grounded in your go because of budget cuts, but the team has 68 more performances this year.

gentlemen, good to see you flying again. ♪

>> this is "lunch money" on bloomberg television, also streaming live on bloomberg.com, your tablet, and your smart phone. i'm adam johnson. it has been nine days since malaysian air flight 370 went missing. we are still no closer to understanding exactly what happened. malaysia said it is a -- it is exploring the possibility of pilot suicide after the prime minister's said this week and that the plane was intentionally diverted en route to beijing.

know yet if the pilot had personal or financial issues. the captain, his name is the hari om and shaw. his facebook and youtube show a aviation ased with well as handy with repairs. they're looking for any possible clues. >> they spoke to family members of the pilot and are examining the pilot's flight simulator. police have visited the home of the copilot. copilot did not ask to fly together on the flight. >> at this point, malaysia has enlisted 25 agents trying to surge from australia to india. it is almost hard to fathom. at the size, the sheer scale of what they are having to contend with. posix don in the north all the

way to the waters of australia in the south. this total area, now cordoned -- now according to the u.k. doing the math, 28,000 square miles. that is more than doubled the size of the african continent. needle in a haystack comes springing to mind. countries, 20 of six now involved. you've got russia helping, and france in particular helping. it is very important because of the french experience in 2009 with air france flight 447. it took two years to find that flight. to 500 taiwanese fishing boats also helping. it is all hands on deck. incredible. the ukraine also taking a serious stance, especially given to people who had been flying illegally.

it to dr. a stolen passport? it is easier than you might think. that will change over the next several years from a white house security advisor. richard falk and wrapped explains why -- richard falkenrath explains why. >> to get from one country to another, you need one. not surprisingly, terrorists, criminals, and fugitives have been trying to get their hands on stolen passports for a long time. in 1980, it was establish the basic standard for all passports currently in circulation. they have four main features. in the upper right-hand corner, identifyingnique number. in the middle, some basic data about the person holding a passport. at the bottom, the same data in machine-readable form. and most importantly on the left, a standard picture. in the old days, it was fairly easy for a criminal to travel on a stolen passport as long as he

or she fit the basic description of the person stolen from. the most important thing was to replace the photograph. and since on old photographs it merely consisted of a physical photograph covered by lamination, all they had to do was cut the photograph out, replace it, and they could travel. after 9/11, it became clear that the international community needed a better passport. starting in august, 2000 seven, every passport issued by the u.s. is a modern e-passport. this new passport has a number make fraud that almost impossible. first, notice the photograph. it's now on the first page of the document, and it is literally embed it into the page itself. if you cut it out, it will be easy to detect by an official. thendly, every page of document has sophisticated and distinctive watermarking, making it almost impossible to dr.. third, embedded in the cover of the passport is an rfid chip that contains all of the

information of the passport, as well as a digital picture that matches the passports first page. e-passports should be fully phased in among all developed countries by 2018. i then, traveling on a stolen passport will require a lot more than a scalpel, a new photograph, and some lamination. china's biggest tech company wants an ipo right here in the u.s., not in china. we will explain why. and bringing the high-tech in, friendly flans for new york's underground park known as the low line. ♪

>> this is "lunch money" on bloomberg television. we are also streaming live on bloomberg.com, your tablet, and smartphone. i'm adam johnson. an ipo? a big offering is in the works. it could be the biggest since facebook two years ago. >> alibaba is in the process of what it -- what may be the biggest ipo in two years. the company is choosing to list here in the u.s. rather than hong kong. we are talking a valuation of 200 billion dollars, according to mcquarrie.

the second-biggest company behind google, if it does get that valuation. >> this is not ali baba and the shareholders who could get rich off of this thing. >> the story is really about the banks. reportedly, ali baba is working with goldman, jpmorgan, but it's -- creditan stanley, suisse, morgan stanley, and deutsche bank. >> exactly what is ali baba? but it is the blank of china. it is the google of china, the amazon of china, the paypal of china. in many ways it is the twitter of china. they have a big collection of e-commerce websites. 28 partner companies. their payment unit alone is 800 million registered users. they dominate the postal service. 70% of chinese packages are reportedly mailed from ali baba. >> it really is china. and it wants to ipo here. the founder, jack mark, what do we know about him -- jack ma,

what do we know about him? ande started as a teacher he kind of some of onto the internet while helping as a translator, helping some business people get a deal done. whilerned english listening to voice of america. he does mathematica -- mass weddings for his employees once a year. he is an interesting character. and he has an interesting view toward corporate governance. at one point, he tried to take the business out of ali baba when yahoo! was trying to threaten to sell their stake in ali baba. it had everyone screaming a route -- screaming about corporate governance. >> obviously, scoring a big potential victory over hong kong, and this speaks volumes on the side of china's e-commerce machine. this is a bloomberg contributor, david kirkpatrick, on surveillance this morning. >> it is increasingly the most important part of the chinese

economy. the reason this giant ipo, it's just that in the rest of the internet world it is where e-commerce is shifting and this is the leading commercial company on the internet in china. in terms of why it is in the united states, a lot of that has to do with governance and whether ali baba will be allowed to have multiple tier strock -- stock structure. in many companies, a small number people control the companies paid overtime. the new york stock exchange has no trouble with that. hong kong does. ali baba is partially located in hong kong, so it is all the more humiliating for hong kong. >> but also they are saying, we want a slice of the u.s. market and steal some customers from companies like amazon. >> i don't think they need to list here in order to say that. in reality, every one of these chinese companies has global envisions in the moment -- at the moment.

$.10, which is another big one. 10 cents, they are another big one and they are expanding. >> ali baba is a competitor to whom? it is not analogous to any american company exactly. it is kind of a hybrid of amazon and ebay. -- anlly is more of a intermediary between buyers and be.ers, be to ali baba grew up as an agent for foreign companies wanting to source goods in china, and for chinese companies wanting to sell outside. >> why would they come to american commerce? i don't get it. >> they have extraordinarily sophisticated systems, like any on scaling the internet and they can deploy them globally in ways others can't. chinare trying to do in what some are doing in countries like turkey, or southeast asia.

>> is jeff bezos quaking in his shoes? >> no, i don't think so. going to bet really heard. ebay could conceivably be heard, but i don't think they could -- they are quaking in their boots either. it is analogous to a business they have in china to my which is one of several businesses there. i don't think ali baba is going to start selling goods from the ways to americans that ebay does. valuationllion possibly from a quarry. what do you think about that? >> i think that is very high. but again, i think most internet valuations are high. >> is it justified? >> the revenue does not seem to justify that to me, no. >> to companies that stand to benefit from the ali baba ipo, yahoo! and softbank. yahoo! owns 24% and softbank owns 30%.

here is another possible ipo. jimmy choo, the luxury shoemaker. there has been talk about a possible ip -- ipo. the shoe unit could be as high as one point $7 billion. those are expensive shoes. the ipo would be to pay for expansion in asia where sales are rising. some high heels to high tops, march madness is here. making the ultimate ncaa bracket. that is coming up in sports. number oneweekend's box office last week. we've got the numbers for you coming up. ♪

>> it's 26 minutes after the hour, which means bloomberg tv is on the markets. let's gave caught up on today's action. all are up after a huge selloff on friday. we got some better than expected numbers out on factory industrial production. earlier this morning, factory production rose in the u.s. by the most in six months, a 10th of one percent. 0.8 of one percent. and falling concerns that the u.s. will really push control of the website main system.

the announcement doesn't affect the company's operation in.com and.net registries. dot com and dot net registries. we will be on the market again in 30 minutes. ♪

>> this is "lunch money" on bluebird television. i'm adam johnson. today's moving pictures now, where the video is the story. protesters and national guard clashed in caracas. the president had promised to use military force to "liberate" middle-class from the barricade. it turned out to be a large scale integration of venezuelan armed forces. forced thetude quake evacuation of 100,000 people in chile, but only minor damage was

reported and it evacuation order was lifted after three hours after the earthquake. out a topng contender. he tripped and fell at the five mile mark. one less challenger for the winner. ,e went on to win the race covering the 13 miles in one hour, 50 seconds. he also won the full marathon in new york this past november, you may recall. march madness has arrived. the ncaa men's basketball tournament begins this week. warren buffett is getting $1 billion you cannot pick a perfect bracket. it is part of a promotion for quicken loans. to show you just how hard perfection really is, we put together a list of things that have better odds of actually happening. ♪

>> that is a lot of numbers. if you want shot at listening to

but this challenge, you might want to listen to this math professor here. he and his college students have crunched the numbers to help pick fans more accurate brackets. >> the first thing is, we use strength of schedule. we actually adapt methods used by bcs. it is a larger linear system that is three and 50 equations and 350 unknowns. the part that enables it to do better is we enable people to weigh factors that we -- that they believe are predictive. is how you bet -- >> this is how you got the genius 94 percentile statistic? >> the part that got that is to actually determine what part of the season and the time you think it is predicting. >> momentum matters a lot. >> that is the idea. >> cutler jersey? >> no, we don't do that. >> what is the -- where does math not help you?

>> if you are trying to go for the billion-dollar bracket and have it be perfect -- >> you are talking about warren buffett's $1 billion wager, right? >> yes. and i will actually mentioned to my students that at certain places you will want to flip the results because there will be other information you can put into it, like the coach. >> do the coaches matter? is that part of your regression? >> we do not put that in, but that is something we are trying to put in this year. we have information that we share with people and then we have -- >> proprietary data. >> i'm trying to my mind into economics as a priest -- princeton guy. you have 350 columns across and however many rows down, and you cross correlate all of that stuff. >> yes. there are two versions of it. one of them is that way. -- 355,000 for every row.

>> how much are you worth to las vegas? >> a lot of people will bring that up. >> you don't even need to write a lot -- write a textbook. >> bring down the house. [laughter] is vernong sports lundquist. he spoke with charlie rose about what he has learned in 30 years of calling ncaa tournament games. >> to me, there is an interesting paradox in what we do, what the analyst sitting next to me does, what my responsibilities are. we are storytellers. analysts. we give insight into what is happening in front of us. the bottom line is, you have a journalistic response billy as well. notnd in sports, it's perfect. >> no, no, and we all know that. we are reminded of the daily. i sometimes joke on the two words "student athlete." i swallow hard. >> indeed. >> that is the sad side of both

amateur sports and professional. it is sometimes difficult to draw the line. of charliesee all rose's interview with vernon lundquist at 8:00 and 10:00 eastern right here tonight on bloomberg television. african and plattsburgh new york mean a lot to canadian company bombarding air -- bombardier. and we will explain what is coming up with this design. ♪

>> this is "lunch money" on bloomberg television. i'm adam johnson. the headlining motors today, south africa's state-owned sports has named real winners of the billion-dollar contract. general electric and steel giant

'sll provide for bombardier locomotive. africa's largest economy needs the locomotives to renew it asian fleet and boost capacity for commodities, such as iron ore and coal. this is a good time for canada's bombardier. it is the world's number three largest playmaker. they have delayed him profits. the rail division has gone strong am a recently signing another deal with the city of london. welcome news for bombardier's major manufacturing sites located here. series "made our in america," where we highlight shifting of production to the u.s. let's go inside bombardier. ♪ -- bombardier is a

company that supplies airplanes and crafts worldwide. i've always had a motivation to move people in cities. we make them work. the vitality is the train system. the company was originated in the 1940's with the skied you snowmobilehe vehicle. montréal,tracts in canada, but also new york city for 125 subway cars. >> for the start of our process, we start with this scale like this. it comes from a supplier in the u.s. our first operation, we will weld it together. then we come over here where we put windows and doors into the vehicle. we will now go down through the assembly line. we are going to install the floors,al heart, the

the interior lighting. it will have walls and ceilings, lighting. those will all be installed through the station. -- >>dier >> chooses bombardier chooses to operate in the united states because it's one of the most important markets in the world. and it has emerging commuter rail, and light rail systems. there is a requirement that requires a vehicle to have 60% u.s. content and to be assembled in the u.s. manufacturer main for the u.s. market. we have a lot of customers in new york and we have suppliers in this area, too. >> we are building cars for new york city, chicago, san francisco, or the various commuter systems, the florida sun rail. >> check one. check one.

we are going to move forward on our test track. right now, we are testing 13 different systems and moving forward with our chicago cars. and off we go. >> 840 two miles of track in the new york city subway system. there is a lot more rail that has either been abandoned or never used. one abandoned trolley terminal in manhattan's east side is slated to become a living and breathing underground park by 2018. it is called the low line. creator james ramsey stole -- spoke at the second annual bloomberg business design conference. here is his vision on part of the weeklong series here on lunch money. >> oh, my god, what a crazy question.

for me, the idea of design is just coming up with the most perfect, elegant solution to a problem that you identified. oftentimes, i think people tend to focus on finding a solution without really focusing on the problem. ideaoject is the kooky that proposes to use toting-edge solar technology irrigate natural sunlight down into an abandoned trolley terminal. it just so happened that i knew a former nga or -- a former engineer for the nta. immediately, i thought, how can we share this amazing discovery echo it just so happens that i had a trick with light that i think i can use to turn that something that you can both discover and want to spend time in. we got our hands on the original

engineer drawings in 1905. we started to modeling in a rough way the technology -- to model in, in a really rough way, the technology. you can take natural sunlight and use system optics and start to send it through analogous plumbing and it filters through places where you would never have access to the sun. and then it feeds back up. being able to put natural light into all sorts of settings, it is just something that psychologically is ultimately the goal. is really cool. watch our design series right here on "lunch money." tv character for anna komar's major featured debut -- feature film debut this week. we will hear about it coming up. ♪

>> this weekend box office winner was actually last weekend alleged flop. we are talking about "mr. peabody and sherman." it is about a very smart dog and his adopted sons and their time traveling adventures. it earned about $1.2 million. and in second place, rise of an empire. grossedtation of 300 1.1 million dollars in its second week. and in third place, the need for speed. it pulled in $17.8 million in its first weekend. fora rocky opening weekend veronica mars, not just at the box office. it grossed just $2 million. there are also glitches for those downloading the digital version at home. backers who donated $30 or more could watch online, except some

experienced five-hour delays. the raw kinds of technical issues. the movie, which is a film version of the much beloved low rated television series was almost entirely financed through crowd funding. 5.7 million dollars in the kick starter. >> i started doing back of the cocktail napkin math am i trying to figure out, well, it seemed crazy at the time, but could we raise a couple million dollars on kick starter to fund our movie echo -- our movie? at the time, the biggest kick was $900,000, so we would have been asking more than twice the largest project ever. it seemed a bit crazy when i thought of it, but we kept pursuing it until we got a yes. >> and you have thousands and thousands of backers as a result. what do these backers get? will we see a world record producer credit? giving producer credit was one of the things i was

originally going to offer, but the producers guild of america vetoed that land. plan.t they get various things, you know, the most common was a $35 level will -- where people get a digital copy of the movie, t-shirt, and a copy of the script. and it went all the way up to $10,000 for one backer got a speaking role in the movie. he got to say one line. people could donate at the dollar level and get all of our backer updates over the course of the movie. >> your show over onto mars on television was canceled in 2007, but continue to have this life on other platforms like netflix. what was the effect from that? we have more viewers today than we did when we were on the air. in fact, i'm of the belief that itunes beenand going at full speed when we were

on the air, we might have had a better chance to survive. we are one of those shows that does very well in the aftermarket. people are really dedicated to the show. our dvds get bought and rented, and the downloads happen all the time. i think we have actually gained life over the seven years we've been off the air. strangely, i think more people know about the show today than we were on every week. before his record-breaking kick starter campaign, rob thomas had only heard of the crowd funding site once before when he backed his friend project. at single biggest donor was $10,000 and was given that one line in the show. today's mystery meat camesa chicago river is green, it means only one thing. happy saint patty's day. ♪

>> it is 56 past the hour, which means bloomberg television is on the markets. i'm olivia sterns. let's get you caught up on today's action. stocks are rising today. this comes after we had better data out on industrial production, which helped boost optimism over the u.s. economy

after a steep selloff on friday. the s&p essentially raced off of it start of the year. blackrock global chief investment strategist joins us. this five-year-old bull market, he believes, still has room to run. >> is he still has room to run, but the evaluation metric is where we are with the economy with inflation where -- rather than the bull market. stocks are no longer cheap, but relative to bonds they are still a better value. we are in an environment that it grossly moderates. generally, that is a good environment for stocks. >> the s&p is off only about half of one percent from the start of the year. also, and the treasury markets, yields are up a bit. the 10-year note is trading at 2.67%. this comes ahead of the fed's two-day policy meeting where

analysts adduce the policymakers holding steady on the taper and continuing to pull back on -- where analysts do see policymakers holding steady on the taper and continuing to pull back. >> the most upsetting fact i've heard all day, time for insight inaction. look at this. only 500 companies in the s&p 500. 216 of them since 2009 have gotten at least half their earnings gains from buybacks, not from actual organic growth. this is not good. in other words, you could just buy back shares. by definition, your earnings per shares will go back -- go up. almost 216 of 500 companies, that is how they have been generating gains. that is not good. the problem is, earnings are down here at the bottom of the income statement. up at the top, you've got sales. that is money coming through the door. then you have costs, interest, taxes, depreciation -- depreciation and amortization, you name it.

it tweaks the number by the time you get down here. that is why we focus on sales specifically. forget the earnings side. go up to the top line. we searched the s&p 500 for companies that had 10% sales growth last year and are forecast to have it again this year. we found a handful of names. they were about 60 of them. we further limited that down to companies that are accelerating between last year and this year. there are 17 of those. here are five of them. gilead.charles schwab, i posted all 17 on twitter. sales growth is up almost six percent this year. growth.e top line sales that is what you want to watch. >> tanks, adam. we also want to highlight a couple of movers in today's session. is planning to spin off its construction rental

business. the deal could be valued at approximately $4.5 billion, according to the "financial times." they are expected to announce the deal this week. and formally known as green mountain coffee roasters, they are trading higher today. the ks after news that cup coffee maker will replace wps energy in the s&p 500. we will be back. ♪

>> live from pier three in san this is "bloomberg west." i am emily chang. ipo in theh spotlight -- we have the so-called twitter of china filing to go public while alibaba says it will ipo in the united states. ono, apple makes a big bet college sports as march madness gets ready to go but first a check of your bloomberg top headlines. apple cofounder steve jobs pp