>> welcome to "lunch money." i am matt miller. let's take a look at the menu. in world, russian lawmakers take another step toward absorbing crimea as ukraine's prime minister meets with european leaders in brussels. in tech, a rare interview with the guy who helped make online shopping easier. in design, turning junk into jams. we hear from the architect to high new york city's very popular and successful highline. and company, from peach to peppermint, the lab that

captures all the flavors that you fancy. we will introduce you to a course with 17 lamborghinis. see what i did? i flip that around. let's start out with janet yellen's press conference. many investors did not seem to be buying what she was selling. here are some of the highlights. >> the fomc continues to see sufficient underlying strength in the economy to support ongoing krugman in the labor market. the fomc will continue assessing incoming data carefully to ensure the policy is consistent with obtaining the longer run objectives of the fomc of maximum employment and inflation of 2%. in short, the larger the shortfall of employment or inflation from the respective objectives set by the fomc, and

the longer any such shortfall is expected to persist, the longer the target federal funds rate is likely to remain in the present range. >> and here's what she had to say about what everyone else was talking about in q1, the weather. >> certainly, the weather has played an important role in weakening economic activity in q1. it is not the only factor at work in most projections for growth in the first quarter. it is an important factor. it is not the only factor. >> and so what should investors expect from the federal reserve? >> we have tried to give a general formulation of what we will be looking at, which is how far are we? how large are the shortfalls in achieving our goals? and how fast we expect progress to be that will be the main

factors we will be looking at. >> of course, the big news about potential rate hikes, the fomc says rates will remain low for a considerable period. janet yellen told us what that means. >> the language that we used in the statement is considerable period. this is the kind of term. it is hard to define, but, you know, probably means something on the order of around six months or that type of thing. it depends what the statement is saying, it depends on what conditions are like. >> the seo economics editor mike mckee interprets all that she had to say. >> she continued to make the point the fed has emphasized over and over that they're going to keep rates unchanged for some time after we did to certain

threshold. the phrase she used was "considerable period" even after we get back to our targets. she was asked, how long is "considerable period"? people expect the fed to start raising interest rates in 2015, and now they have raised a total level of interest rates expected to hit and everybody is now moving forward the date in which they think they're going to raise rates. that is why the markets tanked the middle of her press conference. >> here's influential economist ethan harris from bank of america with his take. >> i think that is the problem for the markets as a look at this and it sounds like she's talking about rate hikes in the spring 2015. if you look at this more broadly, there's a bit of a communication challenge for the fed today because twice she tried to inform the markets, were not changing policy here. this statement is not a change in policy. she also said, don't look at

what we say in our statements. the market said, we don't believe you. the bond markets will selloff. the bond markets thinking the fed is more hawkish today. this is the challenge that will have in communicating going forward. i think we're seeing the challenge for the next two years in that they have given up on a specific target for the unemployment rate. so now we're in the vape world of qualitative guidance where it is not clear what the thresholds are. today, the markets challenged the fed on that because she is saying, we're going to look at a lot of indicators, none of them are close to the point where we think about hiking interest rates, but we can tell you specifically what we're looking at. they're going to have to take care of that in speeches. it is going to be a tug-of-war between the fed and the market. >> so yellen said, maybe six months, end of qe and raising rates. >> i think the market is completely understood what she in a statement were telling the market.

simply, the market reacted to the notion, a couple of misstatements, you might see a rise in policy rates sooner than the market would like to see them but as a practical matter, what i believe the statement said, and i think she was clear the press conference, was her major fear is she doesn't know whether we are going to get inflation back up to the target anytime soon. you can talk about the unemployment rate, yes -- >> 6.5%. >> she's not going to use that anymore and she's looking at the labor force participation rate just like the rest of us. the economy may be going through some demographic shifts, but practical matter, this is not a robust employment picture. >> but that really doesn't matter. >> if inflation is going to stay down, there's nothing doing. >> so the question then becomes, what has fed policy actually accomplished?

>> i do think she is right about the idea, you had a major backing real estate crisis, damaged balance sheets. everyone has refinanced, banks are in better shape, the household section is in better shape. i think it has distracted attention from growth. the hope is, and i share that hope him a that the repair process is now well advanced and we can start sing better growth out there. >> looking forward, what exactly do investors expect from yellen and this said? >> i think we have reached a silly point. certainly given the fact economic growth is probably going to be somewhere between 4% to 5%, it is all a natural to expect interest rates to be above zero at a certain point. i do think this has reached -- it is important, but -- >> you nailed this.

you went to the heart of the matter. this isn't about inflation. it's not about jobs. it is about economic growth and the lack thereof. it's just not there. >> as someone who focuses most of my time as an equity investor, i don't fear normalization of interest rates. that was a just economic growth is indeed improving. actually, i could also see this prompting economic growth. the shot clock is running out now on free financing. i think the ford gardens is one of those things, especially as a new said chairperson, you have to do what you say. i think she's trying to have a little bit both ways. sticking to numerical target or something that is unsophisticated like the unemployment rate, more nuanced than that, i think it is only fair for her to change her tune

on that. it is obviously a little more nuanced. >> coming up, washington ratchets up the sanctions on russia, and more maybe on the way. plus, peter thiel is in berlin for a big conference on europe positive digital transformation. president obama makes an appearance on "the ellen de generes show." he was pushing the enrollment deadline which is march 31. it did not seem like ellen wanted to talk business. >> i broke your retweet record. >> i thought it was a cheap stunt. a bunch of celebrities in the background. ?

>> this is "lunch money."

you can check us out on your smart phone and we are also on apple tv. russia's lower house of parliament has ratified the treaty signed by vladimir putin. ukraine is withdrawing troops from the region plus the prime minister of the region is warning. >> is crystal clear russian authorities will try to move further and escalate the situation in southeastern ukraine, but we still maintain control and still preserve stability in this region. >> he is in a meeting with brussels. he is expected to sign a political accord with the eu tomorrow. >> started with the [indiscernible] people have that dream.

this is the first step to execute the dream. the dream for a better life, the dream of dignity and justice, the dream of values. so this is a very solid and historic step for my country. >> as historic as that may be, ukraine is still a major financial distress, owing $10 billion by the end of this year alone. ryan spoke to the use economic and monetary affairs commissioner about speeding up the process of financial aid for ukraine. >> we have actually already a mandate to disperse the $600 million immediately once there is an agreement between ukraine and international monetary fund on a new imf program. everybody is aware there is innovation situation not only --

but economic situation. there is a need to move quickly on these matters. >> meanwhile, from the south lawn, here's what president obama had to say about russia. >> the united states today is moving, as we said we would, to impose additional cost on russia. based on the executive order that i signed in response to russia's initial intervention in ukraine, we are imposing the sanctions on more senior officials of the russian government. >> russia says it will respond to each hostile step from the u.s., imposing sanctions on american diplomats including mccain, boehner, and seven others. russia said the sanctions against it will have a boomerang effect and come back and hit the united states. interesting. coming up, he made a fortune as paypal's cofounder.

put a chunk of that money into facebook. use even richer now. we will hear from billionaire investor peter thiel. plus, good breeding can cost a pretty penny. we will go behind the scenes at london's exclusive thoroughbred auction house coming up. ?

>> tech executives are gathered in berlin today for summit focused on driving the digital transformation in europe's economy. among them, paypal cofounder peter thiel who sat down with hans nichols to talk about what makes berlin's tech environment unique. >> i think berlin is probably the place where it is most acceptable to try to do something new.

and if you say you are an entrepreneur are starting a company, it will not merely say, does not immediately say, why did you fail at your last job? or something like that. which is the question in the background and many other parts of europe. it also helps berlin is very inexpensive. when you start a business, you don't expect to make that much money. there's something about the affordability. i think it has gone to the point where he have this critical mass, which at some point start to jumpstart. it is not quite there yet, but it is close. >> why haven't we seen a big exit or ipo? >> the "why" questions are harder to answer than "what." it is probably one of the critical things that has to happen. my best answer is that people have sold the company's to early and been too eager to quickly transact and sell their businesses, and have not had the commitment or vision to build one up over decades.

>> he also caught up with the founder and ceo of research gate, an international social network for scientists in which bill gates recently invested $35 million of his own money. >> we had several funding rounds before. very famous u.s. investors. my dream was to have bill gates as an investor. his goal to eradicate diseases and all his interests in science are fitting perfect with what we're doing. i met him in a secret place in france and he looked at it and loved it and invested his money. >> so you have done three rounds of funding. how many employees do you have? >> roughly 120 employees. >> what are the next stages or events? >> we're working on an open review so we can create away scientists discuss openly in a transparent way research results. it can help all of us if we have faster treatment for diseases, etc., if we are connecting the right data to the right people.

>> peter thiel last night seemed to suggest some of these companies exit too soon, don't have the wherewithal to stay with them for a long time. what is your timeframe on an exit or ipo? >> i don't think about an exit. selling a company for me personally -- and you're not able to produce something long-lasting. this is something that the research can be one of the big successes. you need one big success, as peter mentioned yesterday. >> when you browse the web under smartphone smart phone or tablet, chances are you're using safari, chrome, or firefox. master digital is challenging those big players with a new option called stream web and launches today. the founder and ceo explained how it works on "surveillance" very early this morning.

>> we want to get rid of the text url. i just take two fingers and you can actually cap and cut out anything on the screen. it can be text and image, whatever. and then share it across e-mail, social media, whatever. let's say i e-mailed it to you. when you receive it, you get the picture and the picture serves as a link back to the article. >> so i get the article once i bring the picture in. >> a preview, almost. >> can i take a picture and throw it into one of my photography apps? >> absolutely. >> what is the copyright pushback on this? you're essentially pulling apart a website. has a lawyer said you can't do that? >> yeah, i mean, lawyers say you can't do anything. >> really? >> don't quote me. the idea is, anyone can take a screenshot of anything they see. we're just making it easier to do that.

the main differences, the screen shot serves as a link. you're still getting a link, it is just not a text. >> if i do a screenshot right now, scarlet, on my phone, it doesn't have a link to it. >> no, it is just a dumb image. >> but it's not like you came up with this and they did not consider the aspect of sharing and using it. >> it is amazing to realize, but, no, the only way to share in chrome or safari with a text url. there is no such thing as visual sharing. >> has ali baba called? >> no, but if you have their number, i would love to talk to them. >> he has been wooing over key staff from google, adobe, and apple, which is why his shirt was almost all the way unbuttoned. speaking of the tech workforce, reverend jesse jackson has launched a new campaign arguing for more diversity in the sector. he is targeting some of the

biggest companies in silicon valley's with some of the biggest checkbook. you started at hp. cory johnson spoke with him about his mission. >> we do not know how good baseball can be because everyone can play. the same thing with business. the white kid comes to silicon valley, the black kid goes home. that's not fair. we must do better. >> i will say when you go to silicon valley, it is kind of shocking to see how quiet it can be. at the same time, of all companies, hewlett-packard has a female ceo, female cfo. i want to reduce a minute provided. "while we certainly agree diversity is an important issue of corporate america, where puzzled by reverend jackson's sudden interest in hp. hp is the largest company in the world with both a female ceo and cfo and nearly half our leadership team and board of directors are women and minorities." so why hp?

>> what does that have to do with racial justice? we fight for gender equality and racial injustice all the while, but that doesn't have anything to do [indiscernible] we want blacks, latinos, asians. we can buy the product together, let's share the leadership together. it is a net gain. ♪

>> this is "lunch money." we are streaming live on bloomberg.com, streaming live on your tablet, streaming live on your iphone -- in fact, this is the only financial news network that streams live on the internet. today's moving picture, where the video is the story. the search for possible debris from the missing malaysian jet came up empty. they scoured the notion after satellite images captured objects in the water, but searchers returned after being unable to locate anything. a massive early-morning attack by the taliban and on a police

station in afghanistan killed 10 police officers and one civilian the attackers used a suicide bomber and other detonated explosives that led to a four-hour gun battle with the police. in the end, all of the taliban attackers were killed. call it a family excursion, first lady michelle obama come her daughters, and her mother arrived for a weeklong visit in china. she is due to address american and chinese students at the university about the importance of study abroad another cultural exchanges. their triple also include a visit to the great wall of china. in design, architect liz dillard had many challenges converting an old and abandoned infrastructure integrate public space. were talking about new york city's highline, and attraction for tourists and a quiet gem for

those who live here. dillard took part in the second annual design conference last week. >> the highline is a mile and half long, elevated railway that was left to become a ruin. it is important that we look at what exists, that projects don't just start. you start with a place with a history, with the situation. it was a great challenge from the beginning because it looked like a dead piece of infrastructure. no one could wrap their heads around how you could have a part in the air. how to control it? how to get up-and-down? it was hard to explain because we had to do a lot of invention. the first section open and everyone thought, wow, this is a fantastic gift. i'm typically one for adaptive reuse.

not just for preservation, putting artifacts and promote a hide, the rethinking new uses for old things. sometimes it doesn't work out. it is not only good architecture that survives the test of time, also institutions, the fate of cities. many things are really out of our hands and we finish a project, we walk away and hope for the best -- that it is used right, interpreted well, holds up, that people love and appreciate it like the highline. but you can't really forecast what is going to happen. it is interesting to think your work is perpetually unfinished, just like anything, you want to keep perfecting it. but it gets taken out of your hands. you run out of money or time, out of patience. then projects just take off and somehow have a life of their own.

that is how to leave it. >> architect courting dell also spoke at the design conference. here he is on how innovative design tech scan be used to make cities more energy efficient. >> the tower will be the tallest building the world in about four years. it is part of a massive master plan. it is fun to design buildings, especially if they are large and interesting. behind all of that, we hope is the seriousness about the problems that we encounter. i think for those people who have the skill set second take on the subject matters, take on the buildings, take on the cities, we are lucky to have exposure to many different things. we have a lot of projects around the world. there is almost nothing you see that you don't feel couldn't be improved.

we look for design to help us in a most everything we do. if you look closely at this tower, you'll see it is three legs, like a tripod. it is specific. we discovered we could concentrate from this building for basically unto itself, and generate power from the shape of the building. so it is its own power plant to a degree. i think extra large projects have a lot of impacts that you can trace over time. for us, it is much more important to have extra-large ideas. >> watch our design series all this week for which i guess really is only one more day, right here on "lunch money? do you ever wonder how they make lemon sherbet so limitingy? we will bring you into the flavor lab coming up.

before we had to break, say hello to humanoid robot who walks, talks, and recognizes faces. you made the rounds in a trade show in france that showcases the latest in robots. ♪

>> if you want a reservation at manhattan's new restaurant, you better book at least a month in advance. despite its success, the chef inmates he has faced some big challenges in his first year. he tells bloomberg television how he struggled to make his staff into a family. >> charlie byrd was a dream that took a few years to come to fruition. i really just wanted to cook real food well. one of the things that we realized right away was that our

most valuable asset is people. finding that was the biggest problem for us. in new york, the line cooks or the dishwashers really have the advantage that they can go and cherry pick the places they want to because there are so many restaurants out there. when we opened the restaurant, we had to figure out how to work four stations and there were only two cooks. we had one dishwasher who would show up some days and did not show up other days. suddenly, a cook did not show up. we found ourselves scrambling sources den general manager was running downstairs and washing dishes every 15 minutes. when he wasn't, i was washing dishes. that becomes a real challenge to run a restaurant kitchen without employees. we realized we had to look at multiple places to find great team members. but a look at other restaurants and talk with other chefs. it took a while to really build that core, that family. our pasta is made by my

mother-in-law, rosa, who is a 72-year-old italian woman just outside now believe. you're making pasta at 3:00 or 4:00 in the morning because there just wasn't enough for the onslaught of people showing up at our door. this is something that really meant a lot to us, but to the team members that said, well, this is not just a job. this is a family we are working with. that made all the difference in the passion they came out in the food and really played forward to the guests. people could taste it in the food. it has become an amazing success story for us almost overnight. we are packed. >> very cool. international flavors and fragrances are part of almost every product you buy, even the stuff at charlie byrd's. we take an inside look at their labs.

>> the tiny dark bottles in these labs are filled with the serious potions. they hold the flavors that millions of people taste and smell every day. >> when you think of snacking, so maybe potato chips or cereal bars or something like that, do you think of a flavor? they all contain flavor. >> the vice president of flavors at international flavors and fragrances. the publicly traded company makes a lot of what we put in our mouths taste really good. when i walked to the supermarket, how many products have iff flavors in them? >> in general and the supermarket, about 90% of the products do contain some type of flavor. >> flavor is much more than just what our tongue senses, but what our nose smells. and all iff flavors start in the kitchen lab with aromas. >> we start with some fresh oranges. >> this is the first up in the process, capturing the sand. this turns on, creates a vacuum,

gathers the scent molecules and then what? >> it is pulling the aromas into the sand-like material and capturing all of those aromas. we take the sand and we analyze it to find out what the oranges are made of. >> a computer breaks down the aromas into a molecular map or fingerprint. then iff flavorists use this as a recipe to create scientifically enhanced flavors. >> pineapple compound. >> like the ones iff create our critical part of the food industry. they're more reliable and cost-effective than using the real thing. for example, oranges. >> it helps to have some of the real juice, but if it is not of the quality you want to make getting -- adding that flavor will get you better overall flavor. >> a food company might use an iff flavor to make sure every pint of orange sherbet taste exactly the same, delicious

every time. the idea then is the sherbet with the iff flavor is tastier than just one without the additional flavors? >> that is what we're hoping you're going to see. let's see if you can tell the difference. >> very orangey. it's great. >> do you see a bump any orange and that one or are you not sure yet? >> i've got to do it again. yes. this one is more orangey. that one is a little more bland. >> you pick the right one. >>iff is tightlipped about what they put their mark on, but work with all of the major food companies. >> there's a lot of secrecy about who is doing what with whom. >> is that because they don't want anyone else to get their flavors? >> once we create a signature for someone or they don't want us to do something similar for someone else.

spending millions of dollars on horses. we will take you to london's thorough bred auction house. ♪

>> today in pursuits, we had to the exclusive world of horse racing, expressing a rebound in the u.k. with record sales and investments. stephanie baker traveled to the auction house in the north of london for a look into this exclusive world. >> this horse sold for almost $7 million. with that money, you could get 17 new lamborghini's. it is a symbol of the booming trade in resources. why is she so expensive? dancing rain was a champion on the track and caring a foal by the stallion regarded as the greatest resource in at least 60 years.

it is easy to get excited. this is a genetic gamble. in hollywood terms, she is like angelina jolie pregnant with brad pitt's child. this is john ferguson. he just bought dancing rain for the ruler of dubai and one of the world's biggest breeders. >> she is a great pedigree. she was a classic winner. from our point of view, she was a kind of virtual -- jewel. if you want to breed champions, you need those kind of jewels. >> here, revenues rose to record $424 million last year. it is gulf money pushing up prices. qatar is where the new money is coming from. the sheikh is ready to spend. >> things have recovered a bit. people have more money to spend

on horses. >> this is risky business. you can pay millions for horse, that that is no guarantee you're buying a winner. the racing manager for prince khalid of saudi arabia knows about luck. >> the risks are inherent. through words our great if you're lucky enough. the downside is still pretty big. this mare doesn't produce anything they can run, the value goes down. >> one fall, kick, or disease, and her millions are down the tube. but the move here is going. prices have bounced back since 2008. money is flowing and buyers are feeling confident. now, if you feel the need to hear more about throw breads, you can get that in all things luxury in the spring issue of "bloomberg pursues," including

pursuits." check this out. as a child, the perfect escape from nature our parents is a treehouse. if you think they're off-limits to adults, think again. from a fully fitted kitchen and the latest electronics to skyhigh price tag, this structure is anything but childish. >> if we were to resell this treehouse, we're looking at about $400,000. that is pretty standard for us. a lot of them have anything from floor heating the hot tubs. you name it, we will stood it up a tree. >> this model is proving popular. one of its special features is how it blocks out the outside world. it is full of noise reduction technology from the insulation in the glass even the food blenders.

the team behind us a peace and quiet is an important lecture in today's hectic world. some of blue forced treehouses sell in excess of seven figures, but they did not start out like that. >> we were building kids toys for 25,000 to 50,000 pounds. when the recession changed, we upscaled to do high network. >> that can sometimes mean strange requests. we did the job for a client who firmly believes in fairies and insisted on separate entrance for fairies. some fairy furniture. >> they don't let imagination get in the way of their design. ♪

>> bloomberg television is on the market. i am julie hyman. we did have an update for the major averages. the s&p ending higher by 11. that is a quarter percent for the nasdaq. janet yellen indicating interest

rates may rise sooner than some investors predict it, we saw it bounce back today because of better than estimated economic data. it has been a volatile couple of days for the vix, in particular. it tracks what we saw, the reaction to janet yellen's comments. for more on the vix and it means for the markets, i am joined by an options trader. he is joining me from the cboe. what have we seen happen in the vix alongside the market action that we have seen over the past couple of days? we have seen the vix very volatile this week. last week -- this week, we had domestic issues. lastly, we had geopolitical worldwide issues going on. today, we saw a little bit of easing of concern.

the market is getting more used to the idea. economythinks the u.s. is on stable ground. that means lower volatility. the market opened up five points lower today. rallying 12 points in the s&p, so that was a big move. you see these big moves, especially last week, we had days where we were down one percent, up half a percent. >> what is that? what does that reflect when you see these big swings question mark -- big swings? >> the market, having realized -- when you look at the last 30 days, the market is moving on a if you look-

overnight, intraday, it is moving closer to one percent. >> what does that indicate? >> it is certainly more volatile than it was last year. me there is a lot of concern. there is some disagreement between market participants. some people think the market is going higher and some think it is going lower. sometimes when you have these larger than expected intraday moves, it it can mean the end of a trend. i know we have had a very long trend. it could mean that we are getting at the end of that trend. it also could mean the trend could mean a sideways market going forward. >> i know you have been looking historically and you are looking at the end of the last bull market in 2007.

what are the similarities? goingot of similarities on right now. 2007 was the end of a rally in which we saw markets -- earnings ratios collapse down and rally back up. we have very strong rally last year. ok. we have to leave it there. thank you so much. ♪