to american officials and it's a slamdunk, the ncaa in last vegas will make money with march madness. good morning, everyone, this is "bloomberg surveillance." it is tuesday, march 18. joining me is scarlet fu and adam johnson. good morning. >> i am a little bit worse for the wear but here we are. in the u.s., we have a slew of housing data coming out at a dirty a.m. and consumer rises which the fed will be watching closely as its two-day meeting begins. porsche get hertz and out for earnings today. zew survey is a little subpar. >> it's all the data points we

are trying to connect. >> let's do a data check. futures are -26 and the euro was over $1.39. crude oil was under $100. stillble, 36.56, elevated. this is the equity market in russia. go, 2008 and a slow down and you can see the roll over and the latest drop as we see equity markets in russia. >> their version of the dow industrial average is trading at ints bookat about .6 po which is cheap but there is a

good reason why it is cheap. >> we scour the papers. >> our first front-page story has to do with russia. vladimir putin is putting a request for crimea for them to join russia. also, he will be making an address to lawmakers at 3 p.m. moscow time. that would be about 11:00 a.m. new york time. this would be to discuss crimea joining russia. >> it's amazing how fast this is happening. we were notago, really talking about it and all of a sudden, there were protests and the prime minister was out and he goes to moscow and there is a new prime minister and suddenly crimea is going to russia? >> there is a limited number of sanctions. >> about 11 people have been targeted by the u.s.. >> the president warned that

could widen. we will continue to monitor that story. our second front-page story is more domestic, general motors recalling 1.5 million more vehicles yesterday with concerns over breaks, seatbelts, and airbags. do withhas nothing to the 1.6 million already record -- recalled? rra is trying to get ahead of it. you wonder where the other automakers are. what else do we have? >> our third front-page story is still no signs of the malaysian airline flight 370. says theyork times" terms of the west was carried out by a computer system by

someone in the it who was fairly knowledgeable about airline systems. -- ever alter that pat, altered that path knew what they were doing. ordid the pilot program at was there someone else who got in their? we don't know. >> australia is taking the lead on scouring an area of indian ocean, 1.5 times the size of california. it's like looking for a needle in a haystack. still no sign whatsoever. let's go to a smart conversation. we continue with a top story which is malaysia flight 370. jon hansmen is a professor of aeronautics fromm.i.rtt. you have a terrific expertise in

the area of error knowledge. complex is a cockpit? they are pretty complex although if you are used to the airplane, it is simple. cockpits have gotten simpler because this is becoming more automated. switches -- the number of switches has gone down in recent years. >> as we now learned that this first letter and was preprogrammed, what sort of expertise would it take to actually know how to operate that system and get the aircraft to turn on a new heading? you are programming it into the computer. it requires some knowledge although many people today can learn how to program that by using a flight simulator.

there is a unit called the control display unit which is used to input flight plans into the flight management system. it's a sophisticated autopilot that flies the airplane. you have to go to a page and point which could be latitude or longitude in the airplane will fly from weigh p point and that's apparently what was done here. >> with all the details that have emerged over the last few which are you most disturbed by? i am disturbed by the whole thing. it's clear whoever changed the

direction of the plane was someone familiar with the airplane and is familiar with the systems in the airplane. we are still carrying one hypothesis that there was some mechanical problem like a fire or something that cause the crew to want to diverse. -- divert. if you are going to an emergency diversion, programming the computer is not the fastest way to do it. it seems to point to some sort of intentional action which may not have been a diversion for emergency reasons. it could be a hijacking or something like that. >> thank you so much. this simply will not go away. australia is not just south by 1000 miles but also eased which -- it's hard to fathom --

>> let's move on. our guest host is ira jersey from credit suisse and also the atef marketing officer nitro. i believe there is a college tournament going on? >> the nit. talk about this later, how critical is this that meeting? >> i don't think it is very critical. it's important for janet yellen because its her first opportunity to put a stamp on this federal reserve. the statement is very complicated so it's an opportunity for her to change the way their forward commitment is communicated. >> i want to talk about our viewers this morning who are retirees.

years ofen five or six two or three percent cd's when.you go in every day, do it you assume that goes on forever? >> we don't, our call is that the fed will be hiking two or three years from now. you would have been lucky to get those rates a couple of years ago. that would have been the high. savers haven't issue because they are almost saving too much. savings went from zero up to five percent. a lot of that went into investment. if you had a diversified portfolio, over the last five years, since the low of the crisis, you have done reasonably well. years, you have also done well. >> assuming you had the guts to

stay with her. anythingo almost unless a double shotgun is facing you in the face. 18 months is a target for rates to rise. how do you get there? >> the market seems to believe the fed and it's what the fed tells us. >> they have said below 65 -- 6.5% or -- >> there is a chart that says where the preponderance of our members believe when the first rate hike will occur. the answer is the second half of 2015. 18 months from now, more or less. the market is currently pricing for september, 2015. the fed fund futures market are talking about the fall of 2015. >> i have heard him say this for three years. >> he has been fairly consistent.

we want to bring in bill tanner ack. when we talk about general motors and the recalls, you see mary barra trying to get out in front of these. is its difficult for her to deal with the so early in her tenure? >> getting out in front of it and being open and honest in getting the public and gauges generally a good step. it is representative of the values that gm has. >> how has your world changed with to juggle media? you are not the same guy you were five years ago. was'm not the same guy i one year ago. the rate of change is phenomenal. when you look at how people are consuming content. >> i don't change my habits. >> it's like another world.

you get up first thing in the morning and people check facebook. if you look at how content is being consumed with the volume online in sports, 600 40% year-over-year increase in streaming content of sports. >> i am not checking my facebook before i get out of bed. actuallyvernors are tweeting out. >> does janet yellen checker facebook before getting up in the morning? >> before we get to company news, breaking news -- a fourth quarter earnings per revenue miss and outlook for 2014 that would trail analyst estimates and the board has approved the separation of the equipment rental business at hertz. that's something we will continue to keep an eye on. in other company news, a new round of job cuts at sony with positions being slasheed at the

film and television studios. no word on how many jobs will be eliminated. itson is ready to ship streaming device and it will take place in early april. the device will be available on amazon as well is best i and staples. pricing plans are not clear but the rollout will include incentives from amazon prime. pay 10 million dollars to factory workers for the collapse last year in india. the irish clothing company has already paid to me and dollars to workers and we will continue to monitor that story. that is today's company news. >> also, vice president biden landing in poland for discussions. >> a quick correction from earlier, president putin will make an address to lawmakers at

7:00 a.m. new york time. coming up, the disney ceo succession search is on so who will lead the media giant? we will discuss the top contenders when we come back. you are watching "bloomberg surveillance on bloombergon blo, streaming on your phone, your tablet, and bloomberg.com. television, streaming on your phone, your tablet, and bloomberg.com. ," ♪

>> good morning, everyone. pimco is challenging their fixed income space. we will have a conversation with maisoneuve coming up.

started on a management discussion. disney,e talking about they are holding their annual shareholders meeting later today in portland oregon to who will stepsd bob iger after he down in june of 2016. they extended his tenure last year by 60 months. -- by 16 months. i cannot imagine this amount of time. rasalo is the chief financial operator and the other candidate is the head of resorts. neither of these guys have operational experience in the es pn which is the disney crown jewel. they don't have x areas and the film and tv production. they swapped roles in january of

2010 suggest and they are getting into position to take over or be considered successors and they both are being considered. ney unexpectedly announced she is stepping down in january. her departure does not change the race for ceo but it is significant. how important is it for ceos today to be hip? >> i think you have to be in the game. you have to have your finger on the pulse of the people. it's critically important. the issue facing disney is how does the company navigate the challenges of an increasingly digital environment. how does that work relative to cbs or comcast? >> disney has a long history of

applying technology to better tell their stories and they are doing an excellent job for it yesterday and is the crown jewel and has done exceptionally well but there are real challenges with funding and pricing that the network division will have to consider. there are people consuming content across multiple screens. place ofr takes the the ceo has big shoes to fill. returned an has average of 17% annually since he took the position. sayhat does the sell side about this? >> they say the stock could be worth $130. they are looking for pre-cash flow to grow faster. >> last night on instagram, i put out a time lapse video under the paranoia. i have to know what is going on. i don't know how you run a media company today unless you are

tactically touching digital media. >> i don't think you can. the fastest-growing divisions are the interactive division of disney growing at 26% per year. it suggests change. our withl be here all our guest host for the hour, bill kennerick. strategyp, the chief officer joining us as our 7:00 a.m. guest host. this is "bloomberg surveillance," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com. ♪

>> good morning, everyone. . let's get to top headlines. >> car sales in europe jumped 7.6% last month with the six monthly gain in a row and price cuts helped that volkswagen, gm. and sales in spain sort. sales dropped in france. food prices in the u.s. are forecast to rise to the biggest jump in three years. prices on meat and dairy will rise as the effects of the drought in california and other states hit the supply chain. labour statistics will release the latest forecast later today. new new york state has found a way to suspend drivers license on people who have not paid their fines. the state has collected 56 money

and dollars in back taxes by threatening or threatening to six patent -- to suspend delinquent drivers tickets. pay your fines. >> pay your taxes or you don't drive is the message. >> i'm getting $144 back this year. how do you like that? >> that's better than me. >> what will you splurge on? --the morning must read andrew klein -- yahoo!e idea of what is >> i think yahoo! is got some

challenges as we try to navigate the changing environment. it has to consider its brand and what it stands for and how it will move into the future. worldre competing in the where worlds are converging. >> to me, it's amazing. we see this with the alibaba ipo. >> i want to advertise on yahoo!. we have more coming up including a discussion and interest rates next. ♪

everyone, "ing, bloomberg surveillance." at stocks, bonds, currencies, and commodities

affected by what is going on in russia, ukraine, and crimea. euro, that is your data check. >> we have breaking news from one of the big gainers yesterday in anticipation that it would spin off its equipment rental unit. tot is news for investors cash in on. >> whether it is carl icahn cause and companies to unlock value. >> did you ever rent a manly tool from hertz. >> i didn't rent a stump remover. it was the most miserable weekend i ever had. it was manly.

>> let's move to the fed. it will be her first meeting as chairman. the two-day meeting will end with a press conference and at the heart of the discussion is simply when will interest rates rise. the fed has delayed andira jersey is with credit suisse. you and your colleague never thought we would be here. how confident are you in your call right now? we thought by now that they would be modestly interest rates that would rise print we have had some stumbles and it has not happened. not only are we in a new normal but we are in this time when the economy and confidence is fragile enough that when you have these exile janis shocks of international events like the ukraine, these are things that

can hurt investor confidence and can hurt corporate confidence and decrease the amount of investment that occurs in the united states. ultimately, we don't have the real investment we need to create significant new jobs. a distorteden central-bank policy, if we assume this meeting will be a yawner, established the dissension and the fed -- establish the dissension in the fed. >> when you look at the dots -- >> these are charts. >> when the summary comes out tomorrow afternoon, one chart are the dots and there is a very significant difference between and 45ian of the fomc people who thinks interest rates should be higher.

people who or five think interest rates should be higher. there was a lot of instruments in the fixed income world that are getting within the range of the federal reserve hiking. two-year notes are going to have to continue to rise if the market continues to believe that the fed will be hiking in the second half of 2015. naturally, you will get higher interest rates into your treasuries and three year treasuries and cd rates will be a little bit higher. the economy seems just strong enough that we should be able to do that barring some catastrophe. >> you look at a one-year chart of the 10 year treasury yield and this thing over the past eight months has been incredibly consistent. what actually breaks us out of that? it will be a somewhat faster

gdp growth and secondly, it's this idea that inflation will continue to creep higher. one thing we have noticed is the housing market has turned a corner and continues to climb a little bit. that means that core inflation which is what the fed looks at continues to push a little bit higher. we think it will be just enough 20 15 or 2016n will address. >> i think a lot of people don't they have a dual mandate. the balance sheet gets bigger and bigger. >> it keeps exploding. you drew links between that and how wordy the fed statement has gotten. the alanbe carrying on greenspan style of op the station -- of obfuscation.

>> the statement has gotten very wield a. the correlation between the number of words in the statement and the fed valance sheet is amazing. one thing that janet yellen will attempt to do is simplify things a little bit. it will be difficult to cut 300 words out of the statement but she can simplify things a little and will get rid of the 6.5% unemployment threshold. kannerick, should i ask you of out that i'll see or should i bask you up