>> welcome to "lunch money." i am adam johnson. here is what we've got today. in tech, forget 4g. facebook wants to bring you the internet with drones, satellites, and lasers. is john chen blackberry's savior? we will hear from the ceo himself. there are winners and losers in health-care enrollment. finally, meet the luxury veteran who made a winning bet on a designer few people had ever heard of. we're kicking it off with what

everyone is talking about. one word, credibility. new jersey governor chris christie is facing a test of credibility after a report he commissioned cleared him of the george washington bridge scandal. we will have those stories in just a minute, but we want to begin with president obama. the crisis in ukraine and the ensuing international standoff with russia has been his main topic of conversation lately. it has also hurt his image. 57% of americans surveyed by the ap disapprove of his handling of the ukraine situation come pushing his approval rating down to 41%. while he has had worse numbers in the polls, the president is sticking to his message. he talked about russia's massing of troops at the ukraine border in an interview with cbs. >> it may simply be an effort to intimidate ukraine, or it may be that they have got additional plans.

in either case, what we need right now to resolve and de-escalate the situation would be for russia to move back those troops, and to begin negotiations directly. >> president obama took it one step further, suggesting that his russian counterpart vladimir putin wants to make up for the break up up the soviet union. move on, mr. putin -- that is the message the president wants to send. >> we have no interest in encircling russia and no interest in ukraine beyond letting the ukrainian people make their own decisions about their own lives. it is true that we reject the notion that there is a sphere of influence along the russian border that then justifies russia invading other countries. >> ok, got it.

that is the president's line on russia and ukraine but it is not getting him anywhere in the crisis or the polls. when the president was forced to back down from threats of military action, this foreign policy thing does not look like it is going so well. >> most americans, despite the fact that they are concerned about ukraine and russia, absolutely don't want to the u.s. going in, kind of like syria. also like to syria, the united states set the tough standard and says to -- 3 years later, assad is winning. we have to hang up the "or else" cleats because it is really undermining u.s. credibility and undermining the stability of american alliances, which do matter to the markets. >> one more thing, putin is not going anywhere. >> his approval ratings are up 80%. there is a strong view among the vast majority of russians of the

united states is very happy to help facilitate russian decline, nato enlargements, energy diversification away from russia can even shock therapy, which i don't happen to agree with. but that is the perception. they're setting their own red line, which, by the way, did it much more seriously than we do, on ukraine. thus far the sanctions have been limited from the u.s., but the europeans have taken a much softer tack than we have. >> while president obama tries to prove his foreign policy credibility, general motors trying to prove its own safety credit ability. america's number one automaker is dealing with the fallout from its recall of 1.6 million vehicles. obviously, the bad ignitions -- 12 deaths tied into the problem. gm knew about it years before. extricate new ceo mary barra

will have to go before comes to apologize and also defended gm -- next week, new ceo mary barra will have to go before comes to apologize and defended gm's city record. >> we will learn from this and be a better company. the gm engineers have done extensive analysis to make sure that if you only have the key or the key on only the ring, the vehicle is safe to drive. when they presented this to me, the first question i asked is would you let your family, your spouse, your children drive the vehicles in this condition? they said yes. >> mary barra arrived in the office just last month and now she has to deal with this issue. the careful what you wish for, right? a big deal being the ceo. she created a commission for the sole purpose of improving gm's city record as well as its procedures. the man she named to the decision has been at gm since the 1970's. are there any safety practices -- >> we are renewing our commitment to the safety to the satisfaction of our customers. we are taking full

accountability for the problems that led to this recall. >> ok, here is another question -- what can he do to help the gm improve its reputation after this recall? >> first and foremost, if you look at our vehicles, they have a very strong safety record. our vehicles enjoy the recommendation of 5-stars, highway institute, top safety picks, "consumer reports" best buy. we build on that going forward. what we need to do is the fire process and make the processes more visible, more manageable, so that when issues are identified, we can resolve them quickly and take appropriate action with our customers. >> ok, there you have it. word from gm's new man in charge of safety. the new jersey governor chris christie. >> you don't sleep, you don't need, you struggle. i do believe that what doesn't kill you makes you stronger.

>> new jersey governor chris christie in an interview with abc's diane sawyer. this was last night. he was talking about the scandal at the george washington bridge and what it was like to deal with. must've been hard, like sitting in 2, 3, 4 hours of traffic. it was his staffers that ordered the lane closures that caused the traffic to retaliate against a local mayor. he maintains he did not know about it. -- christies maintains he did not know about it. the report yesterday says the same and points the staffers. the report was commissioned by the governor and paid for by a law firm with close ties to christian. -- christie. >> first off, these are not my lawyers. >> but it is a law firm you have

been affiliated with in the past -- >> hardly a law firm in this area that i've not had some interaction with after being a united states attorney. but the bottom line is that these people have their own personal and professional reputations. 6 of them are former federal prosecutors. they are not going to whitewash anything for me. >> the lawyers who completed the report did not interview richard and kelly, the aide was blamed for this incident. a port authority officials said that he told christie of the lane closures but he denies it. other new jersey lawmakers and the federal government have launched their own investigations into the gw lane closures. stay tuned. we will bring you all the details as they come out. facebook wants to spread internet via drones and lasers. more service means more facebook users. and the new ceo of arkansas has his own vision for the future. that is coming up. tesla tries to show how the new underbody of its model s can protect against things we run over on the road. the electric car maker released these images. take a look. ♪

>> this is "lunch money" on bloomberg television. we are also streaming live on bloomberg.com, your tablet, and your smart phone. i am adam johnson. facebook buys virtual reality provider oculus on thursday, and now they will deliver service to underserved areas by deploying drones, satellites, and lasers. >> it starts here at 60,000 feet with planes opening up the internet to everywhere. what happens now when we all have the internet? who knows?

that falls to us. all of us. >> ok, this is all part of mark zuckerberg's effort to bring the internet to people who don't have it. >> most people in the world don't have access to the internet at all. it is only about one third of people who have any access to the internet. that is about 2.7 billion people today. it is actually growing way slower than you would imagine. people often talk about how there are 5 billion phones in the world. that is pretty quickly transitioning.

in about 10 years those will be upgraded to smartphones and that carries the implicit assumption that as that happens, people are going to have access to the internet. that is not true. >> if drones will help mr. zuckerberg accomplish internet for everyone -- these things have lasers, right? >> i have one simple request to mind that is to have sharks with frickin'laser beams attached to their heads! >> yes. zuck, we had net income is not dr. evil, but he has plans for world access if not -- we admit, is not dr. evil, but he has plans for world access if not world dominance. >> he is looking long-term and realizing that facebook has most of the internet-connected world using its app and they need to find more users. >> new boss nadella is pushing microsoft to get with the times. yesterday he issued his first public product announcement, office for ipad and free apps for apple and android phones. >> the goal for us is to provide the applications and services that empower every user across

all of the devices in all of these experiences. that is perhaps the job number one that we do, which is to empower people to be productive, do more across all devices. >> guess what, it's a hit. word for ipad has become the most popular ipad app in the u.s. just five hours after going live. >> is so right for the ipad. this was not a quick port. they spent a lot of time and a lot of money getting the precision and making it apple-quality product. >> let's get some real-world mba-type perspective. everyone uses excel, right? >> office, you have got to get that. >> overnight it was very respectful -- >> satya nadella unveiled all of this.

of course, it wasn't his idea. steve ballmer cooked this up before he left. >> but there was consistency in the message to you is been saying mobile first, without first. -- he has been saying mobile first, cloud first. it is actually significant push. he handled the discussion well and it was a consistent, bold move. >> by the same token, is also a condemnation of surface? didn't work, we have got to go to the ipad now. >> there is no way to deny that surface -- i have used both products and i prefer office on the ipad. >> whether you prefer apple or not, microsoft is everywhere. windows xp powers atms, though that could change. >> the biggest fear of getting robbed at an atm is probably from the person queuing behind you. but soon it might be from a hacker sitting behind the computer. unknown to many, nearly all of the world's cash machines are operated by microsoft and those

at the -- microsoft windows xp, which runs on many computers. it is also 12 years old. microsoft is pulling its support for the aging software in favor of newer programs. this could mean a high-risk digital attack for those customers which haven't entered into special contracts. microsoft wouldn't tell us how many hadn't. one atm makers say the cost to upgrade could be in the thousands of dollars per machine. the question is whether an atm operator will put a price on new security. >> the mobile technology world is also focused on security. blackberry just wants to stay in business. we will hear from ceo john chen. and we will hear from the ceo of cbs outdoor. ♪

>> chicago federal reserve bank president charles evans says the central bank will probably raise rates in the second half of next year. he explained why to betty liu in hong kong. >> it is hopeful that we actually get this lift in inflation, expectations are closer to the 2% objective, but actual inflation is 1.1%-1.25%, depending on how you massage the data. raw material pressures are minimal. labor costs, of course, are not very high at all. there is not a cost push that is driving this. we really need a stronger economy to get things moving it, to get wage pressures up a

little bit, to have it passed on any form of higher inflation. >> given that, isn't it too early to start talking about raising interest rates? >> i'm not talking bout raising interest rates. what we're doing is laying out the conditions that we will be paying attention to, and even a 6-month timeframe, depends on when we finished vs purposes and it takes us into well into 2015 and we will look carefully at the economic conditions and inflation. i think inflation is going to be the real issue. the fact that it is so low. imagine that in 2015, sometime april, midyear, the unemployment rate is 5.75%. we are below 6%, and normally you think it is time. what if inflation is 1%? we are away from our objective and we would want to make sure that we get inflation moving up. if inclusion -- if inflation is closer to 2, it is a different ballgame.

>> we are at record lows with our rates, near the role zero. we have been on this qe program for several years now. why can't we get inflation above 2%? >> the state of the economy, with the debt overhang and everything else, if we could do it, the economy would like to have negative interest rates. we are not able to lower them as much as necessary. since the markets and the state of the economy is calling for even lower interest rates to spur things on, we are marking time, and it has got to have time for those financial accommodative conditions to build a veteran economy around. >> we are seeing a lot of ipo's on the calendar as the market hovers near an all-time high. among them, spotify, the music streaming service has started informal talks with investment banks. if all ipo is possible. any echoes of the 2000 bubble? >> it seems to be a little untethered to the fundamentals of stock analysis, but having said that, people have said that

for a long time in the first bubble. i'm not sure this is a bubble or not. but for someone who has been living in the real world of earnings-per-share, there is the psychology behind it right now. it is the reverse and financials. in some instances now, you are seeing the strategic deals antichrist as well as the ipo -- strategic deals not be price as well as the ipo's. >> a ceo spoke earlier with scarlet fu on "market makers." >> cbs has had a content strategy and to that extent we have been somewhat not -- it will re-energize our team and having management that right from the top focuses on outdoor will be good. i think we will be happier having all the capital allocation decisions in our hands rather than having to chase capital around within corporate. >> cbs outdoor is considered a

media company. that you wanted to use the money raised from this ipo to buy smaller u.s. billboard companies. give us a sense of what direction you are moving in as you try to consolidate this fragmented market. >> sure. we have a great business today. 20% of the u.s. market. you see the signs everywhere. on the subway, buses, billboards, metro-north. we have got a great business fit but there is quite a tale of how panisse in this market. the defectors -- tale of companies in this market. a 35% is still fragmented. we will be looking at how we can add some weight where it makes strategic sense. >> is john chen blackberry's savior? we will hear from the ceo himself. and in fashion, the man who saved gucci as well as the tom

ford on the map. ♪

>> this is "lunch money" on bloomberg television. we are also streaming live on bloomberg.com, on your tablet, and your smartphone. i am adam johnson. searchers in washington are still picking through mud and debris trying to find victims of last week's mudslide could the death toll may rise sharply from the people who have been confirmed dead. 90 people are still missing. students in spain battled police that they have purchased over cuts to education spending -- have a police in a day of protests over cuts to education spending. they say it will make it hard for working-class kids to get a university education.

connecticut will have the highest minimum wage in the country, governor dan malloy sent legislation for the minimum wage to rise to $10.10 an hour pit he signed the bill in the same restaurant where he and president obama dined just a few weeks ago discussing minimum wage. in mobile, the blackberry plan. ceo john chen does not have all the time in the world to turn this struggling smartphone maker around, but he has made some progress. blackberry reported a smaller loss than expected in the latest quarter. mr. chen is feeling pretty good. he spoke to emily chang of "the request" this morning. -- of "bloomberg west" is money. >> i feel better every day. inventories are doing much better, enter -- in terms of managing of that.

products being developed. strategies are being laid out. i feel very good about our chances going forward. >> how about a morale check? >> that, actually, is probably a better story. i think the last 4 months we have got to go through a lot of ups and downs. we have had to do some very difficult things. we definitely are at the tail end of the journey. we're looking forward to the growth, profitability, and engagement. not only outside, but inside the company. people are doing better. >> ok, maybe people are feeling better, but what about blackberry messenger?

these days everyone is talking about whatsapp. >> there's a lot of security around it. i believe that the government and the regulator industry would love using it. we are creating more hard-hitting features, more communication and collaboration features could be see a good future focused on enterprise. that would go hand-in-hand with our service strategy. out of the social messaging systems out there, 85 million or so monthly active users. that number is going to continue to grow. we will put it on the windows devices and nokia devices and they have embeded it in the event countries.

-- they have implemented it in a different countries. i believe this is going to be strong growth. it is focused on the enterprise world. we have a consumer play out there, which technically will do well. we will continue to push on that also. >> you can watch the full interview on bloomberg.com/tv, also on our award-winning tablet app. getting into harvard just got easier, about .1% easier. and coming up, victory for obama care, but not everyone is celebrating. ♪

>> this is "lunch money" on bloomberg television. we are also streamed live on bloomberg.com, your tablet, and your smartphone. i am adam johnson. it is a little easier to get

into harvard this year. they accepted 5.9% of applicants versus 5.8% last year. i said a little easier. >> if you are on financial aid, and 60% of our undergraduate students are -- 6-0 -- you pay $12,000 a year for your education. that is an important commitment we have made. but making higher education affordable is a much broader challenge than that -- making higher education affordable is a much broader challenge than that. we have benefited from resources that alums and friends have given us over the years. >> you can watch the full interview with harvard's new president tonight on "charlie rose" only on bloomberg television. when it comes to obama care, they will take anyone. please, please sign up.

over 6 million people have signed up for the affordable care act ahead of the monday deadline. as for the states setting up the most and least number of people, the results might surprise you. >> with days to go before the end of open enrollment, a dozen states are far behind expectations, with fewer than 50% of the sign ups the government projected. the worst in the nation, massachusetts. it has met 6.5% of its targets. the irony, this is the state that inspired the law. rather than upgrade massachusetts' already existing exchange, the state decided to start from scratch. has been a technical disaster. oregon has only met 20% of its targets. to date, no one has been able to sign up completely online. maryland also ranks near the bottom.

maryland's exchange crash as soon as it launched and has never been fully fixed. just last month, the prime contractor was fired. on the opposite end of the spectrum, connecticut signed up more than twice the number of people expected. size-wise, the biggest state to beat expectations, the empire state. despite recent efforts by the state senate to defund it. what about the states that use the federal website, healthcare.gov? several, including north carolina and florida, have also beat projections, despite glitches and governors who have been loud critics of obamacare. >> are enough healthy people signing up to balance the books? the president of independent blue cross philadelphia says yes. >> over the last month we have seen a downturn in the average age of enrollees by well over a year.

we have used twitter, facebook, we have gone to places where young people are and used independent express, a truck that folds into the health care reform. we have used online contests, youtube contest where people talk about the importance of enrolling. we have seen young people coming to us as the clock moves to march 31. >> you have 5 different health plans offered. our young people going for silver as well? >> the majority of young invincibles are going for the silver plan. it seems to work in terms of co-pays and access to the various networks we have. that is where they are tending to fall. overall, we have got enrollee's of 180,000 in pennsylvania market, new jersey market. we have seen that trend downward. over the past 2 weeks we have

seen 20,000 young folks sign up. >> a bloomberg columnist has written extensively of the afford to care act. he has been critical but says it might be a blessing in disguise. >> there are elements of obama care that make it easier for us to have a conversation about health care reform that conservatives have been fighting for for decades, and that includes having an open and free marketplace where people can get competitive plans. there are elements of obama care that could be better but they lay the groundwork. >> what do you think specifically needs to be better? what needs to be changed? >> you had a little package of the winners and losers. the reality is, the problem with the exchanges is that are overly regulated. there are only certain kinds of plans you can get a certain prices and that is not really what a free market places about could we -- what a free marketplace is about.

we have got to change that regulatory aspect. if we could deal with those issues we are in a better place. i think a lot of democrats would agree with republicans that there are elements of the law that need to be replaced. i personally think we have got to get rid of the whole thing and start over. but at the end of the day people recognize that this law was broken and it needs to be fixed and the energy still there. >> americans who started the process of enrollment but have not actually finished, you are going to have a little more time to work with it. the white house extended to march 31 deadline a few days ago. most americans when an injured by them are supposed to pay as much as one percent of their income. republican congressman kathy mcmorris rodgers tells bloomberg that the extension is legal but look, it is obamacare, they just keep pushing this off. we will introduce you to the man who put im on the map. and another fashion icon, the beret, not doing as well with tom ford. ♪

>> he brought gucci back from near bankruptcy and is now chairman of tom ford international. he explains the secret of success to our own angie lau. >> i was lucky because a young designer who people knew of the time, he turned out to be what i believe is the greatest designer of his generation, tom ford. and then gucci was an interesting one. i used to run the american subsidiary. wonderful company, immense name recognition, that had fallen into hard times. the mission was to execute well everything, bring proper attention to design and creativity, and the rest was

history. we started with the company in 1994 and sold it to the big shareholder. in the meantime, we acquired a lot of brands. >> there was already a strategy in place. tell me a little bit about what it is like to create a brand from scratch. >> unbelievably difficult and unbelievably expensive. every time, and i talked, -- every time tom and i talked we were very energized excited about the success of the brand. it has been very, very successful everywhere. every place we are in the united states, one of the top brands. it has been around 100 years.

very exciting. >> let's talk about yves st. laurent. his fashion house is part of the same company that owns gucci. >> the legacy for the fashion world was following in the steps of -- continuing to the right women. he was the first to put women in trousers, for example, pretty revolutionary. >> amazing that so many had to think about that -- that somebody had to think about that, that that had to be invented. >> and he was the one who invented it. we have to remember that. it created lots of shock at the time, whether it was trousers or using tuxedos or open jackets.

and then there's the legacy of her business. >> the name is the name of his fashion house. how much of the business mind was behind it? >> probably not very much. this is where his partner comes in the picture. like many very successful fashion houses, you need to the 2 has working together to make it a success. >> one french product struggling for legitimacy, we are talking about the beret. >> in the heart of the east mountain region is france's very last beret maker. it was invented here by local shepherds. laulhere has been making it since the mid-19th century. a made-in-france tradition that an irish man is trying to keep

alive, fighting cheap replicas from the czech republic, china, and india. >> we get them from asia or india or elsewhere and you'll actually see how it is made. >> he joined lualhere a year ago after he was arrested by military clothing maker. the company was nearly bankrupt. -- after it was rescued by a military clothing maker. the company was nearly bankrupt. >> we want to explore everywhere. they love berets in japan. we hope that people from new york and east coast see it as an urban product. >> it takes 2 to 3 days to make a real beret. it is dyed, shape, and shaped to create the highest quality. the majority of the product is made by hand. the company hopes to produce 200 thousand hats this year, is

--priced between 20 and 95 euros. and it is targeting female customers. currently women represent just a quarter of the business. >> it is a lady's fashion business that will take it forward on the global side of things. i love to see what this brand could do in terms of homage to the french beret. >> grabbing headlines at this year's fashion shows could be to boost the beret needs. >> all right, so what do you think? time pull it off -- can i put off? oh, that is scary. we will see you next week. ♪

>> it is 56 past the hour, which means a bloomberg television is "on the markets." i am olivia sterns. the equity benchmark is ending the day in the green, but not as much as they were earlier on. ending the day up by -- the

nasdaq up about four and a half this morning. consumer spending rose. for more on what has been a choppy week in the markets, i jeremy. this in week we saw a lot of action in the markets. -- do you think this selloff in these momentum stocks is going to result in a sell off in the large-cap stocks. >> the short answer is no. in fact you are right. the real risk of the market has transitioned from geopolitics to sad. we are wondering about those high beta, high momentum stocks if they're going to turn over into the larger markets. ,ome of the bloomberg groupings

you will see leisure stocks are down 15%. of dispersionot within the s&p 500. equity management strategies are invoked. >> if you can pick the right stocks, you can still find value. >> well, i wouldn't call them cheaper. yes, but again when you look at various factors and individual needles within arehaystack, there definitely value opportunities available. >> going back to what you're saying earlier. what is the mood that is out there? it is a little bit of a --?ection works week.has been a troubling but i have spoken with managers

who do take a little bit more caution in the last couple of days than they have previously. i'm not suggesting to you that the bulls are becoming bears, but it feels like risk managers are focusing on hedging rather than new money opportunities. >> what's driving it. -- what is driving it? >> it is a couple of things. one, if you look at the rates curve, obviously the 30 year is suggesting that we are in an environment that is going to be limited and growth for a long time. people do have a skepticism. they are dubious about whether the economic growth path will pan out. -- looking for growth in earnings is about zero percent.

analyst and companies have ratcheted down their expectations. the upside surprise is what we should be looking at. it is the end of the year that we want to focus on. ? >> we is your in target are quantitative base, however, gdp is going to grow until the end of the year. >> from a quantitative standpoint -- thank you so much for joining us. we appreciate your time.

>> i just wanted to check and make sure we were on schedule.