money,"me to "lunch where we tie together the best stories, interviews, and business news. i am adam johnson. message.a's the new ceo of gm apologizes and gets critical over the massive recall. theng rules for bitcoin, treasury's point man on money laundering lays out his game. a bloomberg exclusive. 28 attorneys general go after retailers and the cigarettes they sell. and in cancer engineering. college basketball's winners and

losers on and off the court. kicking it off with what everyone is talking about. just a day after the u.s. and the eu imposed sanctions over crimea's vote to leave ukraine. wagner. a vladimir putin launches counterattack. [speaking russian. >> crimea needs to be under solitary --le sovereignty. i can only be russian sovereignty. >> the defiant putin marching through golden doors and opulent setting. he spoke before russia's political elite and some politicians who had been sanctioned. reminds me of czarist russia. >> many of the world work under the rule that right is right, not international law.

they think it is their privilege to decide the fate of the world. and the fates of those who live in the world. is vladimir putin saying russia did not use might when he put 3000 troops on the ground in crimea? >> have we violated something? what have we violated? upper house of the parliament did give the right to .se armed arms in the crimea it is not as though we brought in troops and arms, they were already there. we did reinforce them, yes. go above thet figures which had been agreed for our armed forces in crimea. vice president joe biden, along with western leaders, seem to think otherwise. >> russia has offered a variety of arguments to justify a land grab.

including what was said today. but the world has seen through russia's action and has rejected the logic, the flawed logic behind those actions. that does not stop the nato from flexing a little muscle. nato training drills in northern norway. soldiers from countries including the u.s., sweden, canada, and the u.k. here is what they are up to in the raw. [tires screech] [gunfire]

>> that is intense. those drills are part of the exercise response 2014. john kerry weeks ago this is not ," one other person seems to think this is the cold war. him fore recognized what he is, he is a cold warrior. toold kgb colonel who wants

restore the russian empire. he himself said the greatest catastrophe of the 20th century was the breakup of the soviet union. we just have to understand him for what he is. margaret thatcher said, ronald the cold war without firing a shot. we have to show a strong approach to him. that means economically and diplomatically. that means militarily, in some respects. and then i think he will curb those ambitions of his. >> so, what is the prescription? we need energy independence for our european friends so they are not dependent on this country that is a gas station masquerading as a country. second, we need defensive weapons in to ukraine. we need to return to the missile-defense system in the czech republic and poland. we need to have strong and severe sanctions on these people, genetically expanding

the so-called thing that the act -- magnetsky act. >> the act targeted correct russian officials, banning them from traveling to or doing business in the u.s.. it was named for a whistleblower who died in a russian prison. is the u.s. doing enough? here is al hunt on "market makers" earlier this morning. >> there is not much he could have done. john mccain is right that there is a lot more, early sanctions are rather tepid. the thinking all along was let's do this now, give him a chance, then we ratchet it up. it is an effort to give him a chance if he wants to to back down a little bit. this guy is a thug, no one knows if he will back down. some people are skeptical. the bottom line is that there is not that much that america or the west can do.

on the other hand, it is true that it adds to the notion that as strongama is not as people would like. it is a conundrum, there is not a whole lot of ways to get out of it. >> how much criticism from republicans is just campaigning into november at this point? -- mitt romney is not future oriented, he is past oriented. he's bitter that he lost. john mccain is a cold warrior. he is for an aggressive, interventionist, internationalist approach. whether it is syria, china, or ukraine. het is not any surprise that has a different perspective than the obama administration. >> are a lot of people in washington cold warriors? it seems the younger generation is asking the question why does the u.s. into champion democratic expression in other places

but what happens on vladimir putin's back doorstep, we ignore a vote. going the other way. i do not think it is antidemocratic, it is more of a neo-isolationist feeling. i do not think americans want to get involved elsewhere. there is a sense we have been too extended. that might be a dangerous view, but that is a growing sense of the american public and political community. doings ceo mary barra damage control after a massive recall. her message is next in motors. putting up mad back in march madness, we hear from the lead attorney suing the ncaa over pay or play. at awinslet was honored ceremony in los angeles, star 2 520 on the walk. [applause] ♪

>> this is "lunch money" on bloomberg television. also streaming live on bloomberg.com, your tablet, and your smartphone. i am adam johnson. today in motors, gm adding more vehicles to its roster of recall. this time, citing faulty brakes, seatbelts, and airbags. america's second largest auto company recalling over 1.5 million vehicles on top of the 1.6 million cars already recalled this year due to ignition switches that can turn off. gm has been criticized for taking 10 years to recall those cars. as scrutiny intensifies, ceo mary barra is stepping up.

she created a global vehicle --ety position and created and promoted an executive to run this group. she posted this video on the company website. to cooperate latch while we work to make the recall as smooth as possible. something went wrong with our process and terrible things happen. gm family and the a mom with a family of my own, this hits home for me. we have apologized, but that is just one step to resolve this. we mailed recall letters to owners on march 10 11. we will send a bulletin to dealers the week of april 7. we will send follow-up letters to customers to let them know parts are available. a secondding production line and our supplier to double parts availability. we are completely focused on the problem at the highest levels of the company. we are putting the customer

first and that is guiding every decision we make. that is how we want today's gm to be judged. our system is going to change because of this. we're using this opportunity to change much more about our business. the bottom line is we will be better because of this tragic situation if we seize the opportunity. i believe we will do just that. >> how well did mary barra do? here is founder of a consulting firm for the auto industry. >> she did great. she demonstrated that she is intent on finding what went wrong and trying to fix it and the new gm will stop auto companies have massive amounts of data. they have recalled data and warned today that i can result in a later recall. ta, theymine that da supposedly have been mining that data to get ahead of problems, it is all there to see. they just have to have the

internal process to look at the data and say let's fix it. >> how is she going to fix this? >> with chain of command. she can make this a priority. the past, for decades, general motors' senior management came out of the finance business. their knowledge of how a car works is omitted. she is an engineer coming out of the car side of the business, the business of making cars. she has a better appreciation of what a particular problem could mean in the performance and safety of a car. >> that begs the question, how did gm get into this decade-long mess? >> general motors was in turmoil in north america a decade ago. most of its earnings were coming from its mortgage banking business, not from building cars.

it was under pressure to cut costs. there was a notion of all parts had to be at chinese costs. >> they were cutting corners? >> they were also shedding thousands and thousands of general motors white-collar engineers and administrative people. they were given the opportunity of early retirement or simply cut. a company that was under enormous financial pressure. i 2004, people were speculating that gm my file ben grubbs a. -- that gm might file bankruptcy. that is cold comfort for the full people who died. i am trying to figure out what happened from the time they first knew about this to 10 years later. why wasn't there anything done about it? decade or a culture a more ago where bad news never filtered up.

especially when the bad news had a cost component to it. as they do more investigation, they are going to find that either people who were in charge were no longer with the company after a period of time -- >> and it just fell through the cracks. >> some of the memos have blamed to the customer. that is a characteristic of the auto industry. get letters from disgruntled customers who would complain about a problem with a car. the auto companies would say it is the customer's fault. that is the kind of attitude that existed at that point. today, you are dealing with a different general motors. >> the u.s. wants more rules for bitcoin. lays outasury official his plan. when you think of design, you might not think of biology. using both to cure cancer. that is later on "lunch money." ♪

>> breaking news on the situation in ukraine. i am julie hyman, the situation developing after vladimir putin said earlier he had signed a treaty to annex crimea. he also said he was not interested and the rest of ukraine but that russia had a historical legacy to the crimean region. we're are learning about a shooting at a ukrainian servicemen killed during an assault at the ukrainian army in feropol,rible -- at sim a city in crimea. conflict turned military from political according to the prime minister of ukraine. this all happening after gunmen stormed crimean buildings, shooting in the air. a death in the shooting happened as a result of that.

monitoring this situation. i want to mention that president sman jay carney said the u.s. condemned russia's move to annex crimea and that the u.s. will not recognize that annexation. further provocations, he said, will lead to higher costs. we will bring you more developments as we have them. ♪

>> the rise of the digital currency bitcoin has raised a lot of questions in washington. is it a currency and currency rules apply? then there is the issue of used for illegal activity. one of the highest ranking

officials in the government spelled out what needs to happen to answer those questions. , treasuryen undersecretary for terrorism and financial intelligence. >> virtual currencies pose illicit finance risks. most significant is the risk that virtual currencies pose because of anonymity. illicit actors have always sought to exploit anonymity to hide their financial trails, making it more difficult for institutions to detect activity, identify those involved, and collect transaction records. the basic pools used to weed out bad actors. for terrorist financiers, virtual currencies are appealing. the funds could be swiftly sent across borders in a secure, cheap, and secretive manner, it would suit their needs. sanctions only work if we can detect efforts to evade them and respond accordingly. he couldioned at it

use virtual currencies to transact anonymously, our sanctions would have a weaker bite. >> how does the government want to regulate them? is it possible? here's undersecretary cohen with matt miller. >> the existing legislative framework is sufficient for us to address any of the financial products, financial industries out there. including virtual currencies and virtual currency exchanges. the evolving virtual currency environment. i think the regulations we currently have an effect and the guidance that has been issued regarding the responsibilities of exchangers and administrators is sufficient for today. i was highlighting in my talk are watching how this

industry grows and develops. isd the analogy to cash instructive. the volume of cash transactions compared to the volume of virtual currency transactions is dwarfed on the cash side. it is certainly dwarfed in terms of altogether the financial transactions that are not virtual currency transactions. we deployferent tools an different regulatory requirements we deployed in different industries and for different financial products. where weual currency, are today, we are comfortable that we have the appropriate regulatory tools in places. just as this industry continues to evolve, we are going to continue to look at our regulatory approach and evolve to ensure we are staying at least a breas -- staying abreast to risks.

>> attorneys general telling stories to quit tobacco. coming up in nation. should student athletes get paid? ♪ >> 26 minutes after the hour, ioomberg is "on the markets," am julie hyman. let's look at where stocks are trading. gains across the board for major averages after we had some housing data that came in better than estimated. spring hopes that the selling season for housing will not be so bad after all. let's look at a couple individual stocks. google announcing it is developing wearable android technology that will be compatible with its phone.

a watch is the first product in the android wear line. microsoft said to be unveiling a version of office for the ipad mini this month. more on ben" in 30 minutes. ♪ ..

them this is "lunch money" on bloomberg television. "lunch money" on bloomberg television. a helicopter crash near the space needle killed two people earlier today. the news chopper crashed just feet away from the landmark and was engulfed in planes. thirdd possible -- a person was hospitalized. and passengers aboard esch relatives ofand passengers aboard the malaysian air jet demand answers about the plane.

the meetinges ended abruptly, ultimately getting up and leaving the room. a layer of smog has blanketed paris. at one point officials banned half of all vehicles from driving in the city. the tobacco industry is coming under fire. 28 attorney generals across the america are pressuring major retail stores and pharmacies to stop selling tobacco products. cbs announced it would do so. here's why. -- cbs announced it would do so. announced it would do so, here's why. said it is fundamentally incompatible with their mission of a provider -- mission as a provider of health care services. >> he is one of the attorney general's leading the movement.

>> we have a bit of credibility in this area. the attorney general of the original cases against they get reached ad in 1998 master settlement agreement, which is still in place now. we're possibly going after big tobacco. they are trying to push their products on kids. in fact here in maryland we are bringing about 125 million dollars in a year as a result of the 1998 agreement. is yes these are stores that are health-care providers and it's inconsistent and even hypocritical to sell tobacco at places where they try to cure people. the real idea is to try to get them to not have access to children to sell their product. 98% of the people who smoke began before they were 26 years old. 90% began before they were 18 years old. the idea is to make it less

accessible for young people and not to send this mixed message. flex why wouldn't -- >> why wouldn't the health department get involved saying we want to have a voluntary ban on all these products? they sell cutlery, they sell electric motors at walmart, things that can do harm. when do you draw the line and -- why is it a legal issue? >> the health department can do it too. these are deadly and addictive products that we feel like we need to protect the people of our states from. we are able to get education and awareness out there with the platform we have as attorney general's collectively. presidentedia past and we are able to do this, to go after the big tobacco companies. there is a reason why kids get addicted to cigarettes and smoke

for the rest of their lives until they die from it. as an attorney general we feel it is our moral and fiduciary legal responsibility to promote this. this is not a lawsuit, this is something we are asking the pharmacies to do. response, "we appreciate that the attorney general took the time to share their views. we are always evaluating options and programs for our stores. a wide variety of smoking cessation processes -- smoking cessation products." what about other products, sugary drinks, trans fats? here's the idaho attorney general. >> tobacco is the only product that when used properly, as it is propped -- as it is marketed, it will kill you.

tobacco is unique in that regard. there is about 480,000 premature it deaths per year from the use of tobacco. and about our economy $298 million per year. about 290 $8 million per year. >> according to the cdc, more try their first cigarette per day. how do you fight cancer? with a virus. we will take a look at the company leading that charge. ♪

>> this is "lunch money or coke we are streaming live on bloomberg.com, your -- "lunch money." we are streaming live on

bloomberg.com, your tablet, and smartphone. week tomberg business sign conference was last week. meet the man who is designing viruses to help cure cancer. me, design is the ability envision and then create that design. designutiful part about is the learning that comes from rias lies in -- from realizing your designing. is a tool for modeling and visualization. i am looking at a subset of those tools that could be applied to genetic engineering and cell biology. many people look at genetic engineering in a negative way. i don't. the more we can grow the things

we need as human beings, the more we will be able to keep the world sustainable. i am particularly interested in how we can design living things very fast and very cheap. i have been fascinated with viruses. i have been learning how to use software tools and some of these print technologies to go and make fire versus -- and make a viruses that allow us to do positive things with them. i want to see viruses used to hunt down cancer kill -- cancer cells and kill them. looking at life from the bottom-up, it's actually a lot like the lego bricks in the dinosaur you may have an frame here. by themselves they may not seem like that much but you can make really complex structures when you have these bricks and can assemble them in different ways. by understanding the very fundamentals of living systems, of living cells, we have this incredible opportunity to make and design beautiful things around us.

>> that is cool. watch our design series all week right here on "lunch money." coming up, in sports we will break down march maness. -- march madness. meet the attorney who believes college basketball players deserve to get paid. -- and a skiing in austria. skietitors are called on to and to send with rock climbing gear. the contents. descend a cliff with rock climbing gear. that's intense. ♪

>> this is lunch money on bloomberg television. we are streaming live on bloomberg.com, your tablet, and your smart phone. sports are easing into march madness. the ncaa fastball tournament starts tonight. a lot of money is going to change hands. -- fromm bloomberg with bloomberg businessweek knows who will be cashing in. >> it is march madness, which means on april 7 we will have a new college basketball champion. there will be plenty of winners

and losers off the court. cbs and turner agreed to pay almost $11 billion over 14 years for exclusive rights to the tournament. that is almost 900 games. the tournament draws more ad dollars than the nba playoffs, then the super bowl tv advertising, and the super bowl. ach regional conference get payment from the ncaa of $250,000. conferences generally pay that money to the schools competing. the payments are spread over six years, so there is a big incentive for schools to go deep in the tournament every year. on --ear nike had it here had it here on 52 of the 68 top teams. the teams are undefeated and all eyes are on them and their nike gear.

some 86% of workers say they will spend part of the day checking out the tournament, which equates to 1.2 billion in activity. warren buffett's berkshire hathaway is offering a $1 to those who hit the perfect bracket. they don't think anyone is lucky enough or smart enough to go all the way. the fbi estimates americans will illegally wagered $2.5 billion on the tournament this year. wager $2.5egally billion on the tournament this year. that money moving around, should some of it goto players? he's the lawyer that one free agency for nfl players back in the 90's. he is representing a group of

college player suing ncaa for compensation. he sat down with an interview with our very own erik schatzker. >> right now most of the players at the top level of football and top level of basketball help the schools earned liens of dollars -- earn billion's of dollars and what they end up with is nothing in return. most of them don't graduate. none of them don't get financially compensated. almost none of them have a professional career afterwards. they end up at the short end. the schools would argue that most if not all of these athletes get scholarships and there is a value to the scholarship. why is that insufficient? >> the scholarships the players get, the athletic scholarships, are not valuable if they don't graduate and get the education

that the scholarships are supposed to provide. statistics,at the what happens is most of these are used by the schools to generate all this money and then they basically are discarded at the end of that process. >> who are you fighting for here? are you just fighting for the top football players and the top asking ballplayers in collegiate america? the bigis about business of college sports. that has to do with the revenue of generating sports. yes we are focused on division i men's basketball and the top tier of college football. that, most of the players in those sports are not stars. most of the players in those sports will never have a professional career. what we are trying to do is create a system that puts -- a

system for thousands of players who are not stars. think some level of reform is needed. the college is not a minor-league, it is a complete falsehood to go on camera and say that most of these kids don't graduate. athletesty is student in college campuses around the country graduate in a higher percentage than non-student athletes do. the premise that the model is in my journal -- the premise that college is the minor-league doesn't give credence to the college athletic experience. premisesed on a false that the college education doesn't matter to these student athletes. i would beg to differ.

the number of student athletes in college basketball and college football but go on to play, they go on to play professional sports, it's still less than five percent. about how vulnerable the scholarships are. they can be revoked any year. if you get injured, duke or unc can say see you later and then you no longer have the opportunity to go to college if you potentially got injured. the reformsne of that the ncaa has looked at is whether grants ought to be for more than one year. i think that ought to be on the table. more integritys in the business than we are giving credit for in terms of honoring scholarships for kids who get hurt. of reality is a great number student athletes going transfer to other places. there is more of that then coaches chasing players off.

>> the first four games are tonight. these are the wild card games that get you into the brackets. do these athletes get paid? today's mystery leak. -- mystery meat.

>> we are coming up on 56 past the hour. that means bloomberg television is "on the markets." halfway through the training session and we do have a rally holding up here. half a percent each on the dow and s&p 500.

way, up 9/10g the of one percent. resident vladimir putin of russia saying that while he is in favor of annexing crimea helowing a secession vote, is not looking to retake ukraine. let's look at treasuries. there was a tight range in yields. again, many investors watching the ukrainian situation. the 10-year note is going to 2.67% but very little change here. let's take a look at gold as well. seeing gold decline as there is a bit of a reduced demand. 'svestors are reading putin comments as reassuring. we want to highlight some movers. the casino operator received april limoneira he casino license in south korea. that is the first time a governor -- a government -- first time the government has awarded that to a foreign

casino. the four-year outlook still fell short. dividend breaks, paying out to $.19 per share. .amestop shares are down walmart announcing it will accept videogame trade-ins at 3100 stores nationwide on march 26. also down, shares of shutterfly. down whichowth slow may be part of that -- part of a larger trend. it's time for a quick history lesson from adam johnson. ease joining me with today's insight and actions. >> history doesn't repeat itself but it does tend to rhyme. time for a little insight and action. ornk you net davis research pointing out the three patterns we have seen before, which are all converging.

first you have annual seasonality. the team at stock trader's almanac talked a lot about this. q1 and q4 tend to be best. now that we are at the end of march, it means sit tight. is the same message coming out of the presidential cycle. in midterm election years you tend to be sideways. until you get the election at the end of the fourth quarter and then you trade up. then you haven't heard of this one, not a lot of people turn about this one. the decennial cycle. this is data going back to 1891. if you just look at the decades typically in the fourth year it is mid-single digits. that is my typo, it should be year for. year four. the team has used this cycle congress it to effectively predict markets going back to

2010. you can see their prediction and the actual markets. they have been pretty good. not exact but pretty close. just go with what is working. health care has been on top over the past year. if you have a market that is going to be flat and not move until year end, go with what is working, health care. >> thank you so much, adam johnson. we are going to be on the markets again in 30 minutes. "bloomberg west" is next.

>> live from pier three in san francisco, welcome to the early edition of "bloomberg west," where we cover the global technology and media companies that are reshaping our world. i am emily chang. our focus is on innovation and technology, and the future of business. the city council's voting to severely limit the number of company cars on the roads. also covet is a hit show with a huge social media presence. we talked to the woman behind the little liars behind the season finale.