ghosts from the past. what you need, another provider of online video. good morning, everyone. this is "bloomberg surveillance ." we are live from world headquarters in new york. wednesday, april 16. i'm john keane. joining me -- he did not move to the cayman islands on tax day -- adam johnson, and also olivia sterns. scarlet fu is off this week. we need a morning brief. >> a little bit of good and a little bit of bad. overnight in the u.k. we found that unemployment came down to 6.9%, actually below the bank of england's seven percent threshold. certainly good news, right? in china, a very different situation. the lowesto 7.4% since 2009. the bad obviously. >> china with a one quarter

number you get under six percent , so there is a mixed set of data. >> speaking of numbers, we have more right here in the u.s.. economic data, at 7:00, we get the weekly mortgage application number. it is volatile but we mention it anyway. then housing starts and industrial production and capacity utilization, that might read the highest since 2008. at 2:00 we have the fed beige book which will be released. earnings before the bell -- bank of america at 7:00. i will be looking for those numbers. after the bell, ibm and google. >> bolivia focused on google as well. let's get a data check in stocks, bonds, currencies and commodities. futures up nine. gonear yield has really nowhere. euro-dollar, 1.3838. nymex crude, a big deal. american oil at 104.65 and print crude at 110 exactly.

you can see with the vix, 15.61. better equity market then the carnage last week. the ruble, i will get to that in a moment. here on the bloomberg terminal is the russian yield, the 10-year yield, and it is simply a pause as the news literally goes headlined by headline, tweet by tweet out on ukraine. iegel" onm "der sp twitter, unconfirmed, where one of the tanks in ukraine changed flags. it was a ukrainian flag and now it is russian. back.it will change who knows? it is very fluid. we scoured the papers and the websites of this morning. to look at the front page, olivia. >> i did not know you read german. newton developments in the crisis in ukraine.

ap reporting a column of armored personnel carriers flying russian flags drove into a kiev city -- a ukrainian city that contained the russian militants. someone board said they were ukrainians who switched allegiance. ukrainians have oust militants from an airfield but it is the first time ukrainians have used force. the international conference begins tomorrow in geneva. day thatd think of any we covered this, adam, this is the most fluid news flow we have seen. >> all of a sudden now we realize the complexity of this whole situation. in 1654, think of that, the then the cossacks made a deal with russia because they were trying to fend off the poles. for 350 years effectively ukraine was one with russia and then khrushchev in 1967 put it

up. say toid here putin angela merkel that the country is on the brink of civil war, and now we are seeing things boiling up. >> the only thing i know for certain is the red sox were in in 1650 four. >> we have to keep the series and moved to the second front-page story. yahoo! up eight percent in premarket trading. probably had nothing to do with earnings with slightly beat estimates but it is all about increaseeporting a 66% in sales and it is preparing for an ideal and yahoo! owns about 24% of the company. will! ceo marissa mayer have to speed up the turnaround rather than count on alibaba to bail her out. tom. moan,

>> we are going to beat this to death in a moment. this is like the constant theme of alibaba and yahoo! and yahoo!baba. >> two reasons you care about yahoo!, it owns 20% of all about and number two, marissa mayer. , ii used yahoo! weather dumped that and now i use dark sky. >> why dark sky? >> it is better than yahoo! weather. that is how ephemeral it all is. >> our third front-page story, credit suisse earnings tumbling. the second largest was bank had first-quarter profit falls 34%. big problem because particularly fixed income and equity trading -- us thisspoke to morning. >> i think it was actually a strong first-quarter if you look at strategic businesses, which we focused on. $1.9 billion pretax, 14% return

on equity, which i think is one of the best in the industry. you saw actually in our investment bank as well, we had very strong performance in our strategic businesses. return on capital, 21%. a lot of businesses performed extremely well. >> our guest host is nicholas thompson, bloomberg contributing aitor and we also have mark, partner with grey croft advisors in los angeles. >> good morning, a lot to talk about here. it bank of america coming out as well in the 7:00 a.m. hour. technology, mark. you are visiting from los angeles. this is not something we have talked about on "bloomberg surveillance." what is in the air in l.a.? silicon valley, silicon valley, nobody talkedand about l.a.. what is going on? >> the moniker people use is silicon beach, but it is just --

it is bigger than just the beach area of santa monica and venice but it extends downtown, down south to the south bay as well. what is exciting is you see an emergence of these new companies who -- that are i think higher up in the stack. >> what do you mean? >> content or applications as opposed to the actual plumbing and the infrastructure that runs the apps and content. obviouslywhisper, oculus, while it is considered a platform around virtual reality it is the forefront of this technology. >> a bright guy like you saying i want to live in l.a. and maybe nothing to do with technology? i think geography is so much of the technology stories, where people want to live.

they want to live in brooklyn, l.a., san francisco. >> i think it is similar to professional sports, the best talent flocking there. >> see how he got the dodgers into this? >> i am unfortunately a cubs fans. >> nic, what is new technology for you? you are writing for "the new yorker" magazine. what are you thinking about and technology? what everybody is obsessed with oculus. >> you saw francy looked quite in london doing this thing. >> what i am interested is how technology in the news business is changing. how the ad market is changing. what are people doing? how are comment sections changing? 'sat i saw matt ingrams article last night where he was

suggesting we are in a real tipping point. >> we absolutely are at a real tipping point and there are a lot of companies moving toward pay models. a lot of new companies coming in and old companies figuring out how to survive and a lot of old companies who are not. >> how do you effectively make the transition from giving stuff away for free to say no, i am sorry, you have to pay for it now. >> it has been quite hard for a long time. very few have been able to do it successfully. however, if lots of people start to do it at the same time, it is more likely to be successful. >> a lot of people will look to the gaming business which has been a very successful premium model. >> we've got a lot to talk about on technology. william and brad will join us in the next hour as well. our twitter question -- forget about taxes. that is so yesterday. who is winning the online tv wars? i am using it more and more.

who is winning the online tv wars? whos get to olivia sterns has company news. >> first investment bank ipos sent a financial crisis came up short, raising less than plan and selling fewer shares below the marketed range. lis keeps control of the firm. gm ceo mary barra wants the company's cars to be as safe and as fun as they are too dry. responding to an ignition switch deaths and now13 she is creating a team that will focus on safety while new cars are being developed. deutsche bank is trying to end its money-losing venture in a los angeles casino, according to people familiar with the matter. deutsche bank wants to sell the cosmopolitan resort for more than $2 billion. the bank foreclosed on the property six years ago after the developer defaulted on a loan. >> that is an interesting story.

the train wrecks all these firms have. >> figure out what you are due -- good at and do that. of sticking to what you are doing, did you realize that yahoo! owns 24% of ali baba and ali baba is going to be the biggest ipo in a long time? we are going to be talking about that and also talk about ceo marissa mayer and how she is leading that. this is "bloomberg surveillance" on bloomberg television, streaming on your tablet, your phone, and bloomberg.com. ♪

>> an important conversation, a little light conversation, that moelis -appened to mr. -he got the deal done but given

the carnage of the last four or five days not where he wanted to have been. on his transaction of the moment as he goes very public. look for that on "market makers" at 10:00 a.m. this is "bloomberg surveillance ." i'm time team. with me, -- i'm tom keene. with me, adam johnson and olivia sterns. olivia has been looking at fortress mayer. >> yesterday after the bell yahoo! came out with earnings and revenue was in line with estimates. a few minutes later the company released alibaba's huge revenue growth, up 66%, and that is when the stock skyrocketed. i believe it is nine percent right now the premarket trading. yahoo!'s core business is still showing anemic growth, although we did see advertising growth slowed for the first time in five quarters. i guess the question is for nick thompson, how long can what is

going on with alibaba mask with what marissa mayer is doing with the core strategy? >> then we get the cash and it is valued on its own and it is a big problem for marissa mayer because nothing is really going that well for yahoo!. she said all the right things. she so we are going to go mobile, do this, do that, content, tv, and what do you use ? you do not use the weather app anymore. >> this is a fancy bloomberg graphic. .66, that is the profit move for ali baba. , this is what yahoo! owns. it equals 15.84% of the applied yahoo! lift which is baloney. there is no way yahoo! can grow at that. how overpriced is yahoo!? >> i think it will be priced correctly estimate it is done -- >> how much will it go down?

>> if you take out ali baba and you take out the cash, is the rest of yahoo! worth more than zero? that is something that has been debated. it is probably worth a little more than zero but not a ton. >> what do you think ali baba is worth? >> 150, i am not sure. >> under 150? >> right around there. >> how do you do find the yahoo! business today? her higher, they are still trying to focus on search and still trying to manage their display advertising business. but i agree, the huge part is the option à la the of what else could it be. it certainly could be an online video port. that might be where they have their best shot, but they have proved it.a -- >> you drive to san jose or i go to pile out so -- palo alto to discuss economics, what is in the building? mark, what is in that building

right now? >> the thing that is happened since she has got there is the change that dynamic of what people in the human capital market think about the company. sales guys -- it is cooler than what it used to be. if it transpires to anything, we will see. >> there was a huge debate when she took over -- it should be a content or technology company? nobody can explain it and she comes in -- it should be a technology company and now it is becoming a content company and back to the whole, what the heck is yahoo! thing. people and making yahoo! cool again, there is a big underlying problem. >> obviously she brought in mogul.rown, the makeup tot does she need to do monetize? what she needs to do a much

better job of selling advertisement. facebook and google figured out how to sell ads on mobile extremely well. yahoo! is in the same business. they talk about the same thing. but the numbers are not close. >> he did break out a little bit of the mobile growth. >> very small. and you look at facebook -- >> do you use any yahoo! products? >> no. >> i use the weather. but used to use weather, this is what i don't get. >> the graph shows online video where everybody wants to go there. >> you are going to love me for this. rown --bought bobbi b >> they brought her in. wills a makeup mobile and anchor all of the beauty coverage -- makeup mogul.

>> who is joe zee. "elle"or and chief of magazine. we just covered more pop culture in the past 90 them the past three hours. in the next hour, i'm very own matt miller, cargill room, -- is at the auto show. we are on bloomberg television, streaming live on your tablet, your phone, and bloomberg.com. mapwants to show you his once again. here he goes. ♪

>> good morning, everyone. from new york city, it is "bloomberg surveillance." i'm tom keene. with me, adam johnson and olivia sterns. wednesday.es on >> china's economy has hit a speed bump. the increase in gdp slowed to its slowest in about four years. rising at an annual rate of just 7.4%. it is opposed to grow at eight percent or nine percent or 10%. on lendingut a clamp which led to a drop in property construction. offensive on the against pro-russian militants in the eastern regions. ukrainians say they we captured an airfield held by separatists. the u.s. and nato accused russia of full minting trouble. international talks on the situation begin tomorrow in

geneva. the college board putting an end to the obscure vocabulary words on the sat. details, on an overhaul the version of the new test. students will have to know what the college board called high utility words. i can only imagine what they are. those are your top headlines. what do you think a high utility word is? >> i have no clue other than my experience -- nick thompson is with us from "the new yorker" magazine. all that matters under test scores. i found with schools looked at they were measuring test scores. >> a test scores and connections. those were extremely important. to be honest, mr. thompson, on the sat. mr. johnson on the morning must-read. no high utility words. >> maureen dowd says in "the new york times" --

mark, should we be concerned about all this talk about drones? >> i saw my first drone this weekend. instagram video. younglong as we have billionaire founders of companies, i think drones -- >> [laughter] with ayou see robert drone with a skyrocket jesse ?yrus group -- gyroscope where is this going, nick thompson? >> i think productive businesses first. people buying drones early on our farmers because you can fly over your crops and water them. >> you can drop a bomb -- >> or drugs, if you are a terrorist. >> can you really trust google

with all this information? there was such an uproar over all the map information and then the nsa collusion. >> i think the horse has left the barn. google has gmail and everything about us. the fact they can film is -- we areith wet going to have to trust them. maureen dowd's morning must-read. >> coming back, the future of online video with our twitter question of the day, who is winning the online tv wars? amazon, google, youtube? tweet us @bsurveillance. ♪

>> good morning, everyone. i'm tom keene. let's do a data check. euro 1.3840, ahe

flight to quality. hydrocarbons elevated over the last week or so. american oil. what6 and brent crude, 110.17. olivia sterns has gainers and losers. >> twitter gaining about 11.38%, the biggest gain since november. twitter is buying longtime partner seeking to offer more insight into trends and breaking news and other data. twitter still down almost 29% year to date. another stock we are watching is coca-cola who put out its earnings. >> and j&j as well. >> coca-cola rising again this morning. earnings met estimates yesterday and sales volumes to north america -- but the bad news, diet coke is not selling well. >> futures up 8.

watching the news out of ukraine. and incredibly important conversation. the news flow has been very difficult. though things are now being taken over in towns on the brink of secession. the question there is patient, nato is diplomatic and germany stands, as always, in the middle. nicholas thompson is with "the .ew yorker" magazine he has fought and written extensively on the hawks and doves of the u.s. military projection in search of a new rulebook. i can't say enough about your book. i look at your chapter talking about what we are about, and we are redefining it. of --e the grandson where is our heritage right now? is nato the same? >> and nato is closer to the nato george kennan wanted it to be. at the end of their lives, they

came together and they said united states should not back nato expansion. in fact, if nato got bigger, eventually russia would -- >> right -- >> predicted what happened. >> to go from what i consider the most important document in atlanticcentury, charter, to this huge success he wrote about and now we are in what you would all agree is a total jumble. to clarity forth the united states? >> a couple of paths to clarity. the first is to continue what barack obama's general philosophy has been, relatively low disengagement and if you intervene you will probably make it worse. that is clear. it does not lead to the best situation for eastern ukraine from our perspective and possibly western ukraine. the second would be more active with the rest of nato and the rest of europe, and that would be to try to thwart russian expansion. >> aren't we taking a neville

chamberlain tacked question are >> there is a effort between hitler and putin. hitler had a desire to exterminate class the people and putin once it take back part of a country that used to be part of the soviet union. the consequences are much less weir. >> do you think putin is harboring an idea of a soviet style state? tom likes to achieve -- tease me because i want to rush and i have friends there. they would tell me gorbachev was promised nato would not expand to the east and they always seem nato as relentless expansion to the borders of russia. >> the soviet reunion. i do think putin wants to expand more or less to include most of the territory. he will not go that far but he certainly wants more than they have. on nato expansion, you are right. there are advantages to that. at some point, the west could say, ok, the stops now or nato will get involved.

point, it is appeasement. >> it is appeasement but not neville appeasement. >> germany is an incredible mystery. meetingsthat the imf to one of their leading people. whatshould we expect or should we demand from the new germany? >> i think we should demand would act in concert with them. our interests are aligned and if they are a partner making decisions that is by far the best situation. they are very powerful, a huge economic influence. a lot of what is happening is an economic game. >> i saw overnight a lot written about france being so important. how far apart are france and germany as the west tries to buttress itself against russia? >> that is one of the big issues. sorts of foreign policy. france and germany have not

always been together. in fact, they have had quite a few differences in the past. but you would like to see all of europe and the united states together. --the heart of them matter the heart of the matter, i tweeted this out. france over to italy and literally over toward a euro breakup. how cohesive is europe right now? less some ways, getting so. but i do think the economic interests of europe are much more closely aligned with each other than they are separate in this particular situation. >> talking about the potential europe doe u.s. and -- step up sanctions but it is there a political appetite to inflict those more damaging sanctions? germany and france have enormous economic ties to russia. >> i think there will be. you have to look at three outcomes in ukraine. the first is a federal ukraine where more power is given to the east and the kind of alleviate

some of the tension. the second is more parts of ukraine is annexed but it looks like he will stop there. third is a civil war. what needs to happen is europe and the united states needs to evaluate where we are going. >> should we put troops in ukraine as a deterrent force question or >> no, i don't think we should because i am not sure whether it would be a deterrent or stir things up. >> ukraine is not part of nato, so why would we put troops in a non-nato country, right? >> absolutely one of the arguments. any other argument is if russia sees this as the west of propping up the ukrainian government it would be much easier for russia to easy -- to rally its people around it. i think it would backfire. >> and just a great conversation. nicholas thompson with "the new yorker" magazine. ubere ridesharing company has been banned in brussels. it has been slowly expanding in europe, opening up in paris and barcelona. but in brussels a taxi company

sued claiming under -- unfair competition. it cost about 20% less than a traditional taxi ride. any time a car brussels is found to operate under uber, it is find almost $14,000. markm, did you ever -- mark, could you ever imagine a situation where start up company starts up in l.a. and they actually get sued because it is illegal competition? >> anytime the government is trying to stop market forces, it is a bad situation. you always want to be on the side where, as a consumer, you have their back. i think these kind of anti-competitive arguments have propping up these taxi services for generations, and to introduce a more reasonable petition and by far a better consumer experience, i think it is here to say -- to stay.

take regulators out of it? will happen is these marketplaces are essentially eliminating a lot of the need for some of the other regulations and i think what will happen is you will see increased competition from not just those players but others like them that would essentially serve more market-based regulation as opposed to fares.d tariffs or >> smaller government. you are preaching to this choir, i tell you that. that would be me, by the way. coming up, the promised land for automakers. we will explain -- maserati, i like it. we are on bloomberg television, streaming live on your tablet, your phone, and bloomberg.com. ♪

>> everyone in view of that camera filed an extension. back to new york city. april 16. the entire city of new york filed one big extension yesterday. it is a gorgeous day. there was snow last night in new york city. olivia was caught in a snow drift. snow in april in new york city. i looked out my window, and there was snow. >> and look at it this morning.

gorgeous. >> the flowers are up. it is "bloomberg surveillance." i'm tom keene. adam johnson and olivia sterns here as well. we welcome all of you here worldwide. mr. johnson has our top headlines that >> the real estate market is getting off to a slow start for the spring selling season. "the wall street journal" said marta sales in san diego, vegas, and phoenix were up -- down from a year ago. in south korea, hundreds of people may be missing after a ferry boat sank. this is frightening. somewhere between 160 and 370 were rescued. people are known dead. korean media reports of the ships sailed into rocks as the weather got very foggy. a basketball star's complaint that he went to bed number -- hungry may have led to the ncaa

to approve unlimited meals for all university athletes. connecticutsity of won the championship, the player claims he did not have enough money to eat at times. obviously they have taking care of that. those are your top headlines. you played hockey where? >> unlimited meals? unlimited? what's amazing. -- >> amazing. is the government going to tax that as income? >> only you would come up with a statement like that. milks, sevencolate desserts, 4000 calories. >> you see the upside and i see the downside. funny because i would say i was the optimist. life is curious. >> unlimited meals, are you kidding? let's get series. back to zürich, switzerland. the results are disappointing

from credit suisse. bankjpmorgan, the zürich made less money in trading. jonathan ferro is on a junket to zürich and he spoke to the credit suisse ceo. morning. >> good morning, how are you doing? >> very good. what do you have for us? is the numbers. if you look at the numbers, on the investment bank side, fixed income trading lower. the story across the industry. not just a credit suisse issue. the question cannot go away -- wealth management profits doing terrifically well. why not rein in the investment bank and focus on wealth management. i put the question to him, and this is what he said. >> i think this was actually a strong first-quarter if you look at strategic businesses is what -- which is what we focused on. returnllion pretax, 14% on equity, which i think is one of the best in the industry.

you saw in our investment bank as well, we had a very strong performance in our strategic business. return of capital, 21%. a lot of the businesses performed extremely well. >> brady dougan. the idea ofea is legal troubles. we have seen it in the newspapers. what does he saying about legal troubles? away, is it?oing allegation is very simple, did credit suisse bankers help americans evade taxes? the investigation of very complex. they had to put a billion dollars aside for this. it sounded like a settlement with the department of justice was close but the new york department of financial services stepped up their investigation. -- are him the question those provisions enough and can he will out putting more aside? >> obviously we will have to see how those things develop. i don't think we can roll it out. i think we are adequately

provisioned on the issues and i think we have a record of doing a pretty good job working to the issues. clearly we will have to see how things develop over time. om, he can't rule out further provisions. a question and answer that once investors. a big cloud of uncertainty. ferro, thank you so much from zürich, switzerland. let's get to the single best chart. >> since this is the week of the new york auto show, we decided we would have fun with card numbers. take a look. luxury cars, where all the action is. the entry-level luxury car sales up about five percent premium is up 10%. what a difference versus mass market where the numbers are down across the board. percent argument, it keeps appearing. >> what do the cool people drive in l.a.?

2012.sla is so >> any sort of electric car is great. >> eco-sensitive. >> and you are in traffic all the time. get more extreme than that. luxury is up, mass market is down. it really speaks to wealth disparity. we see it time and time again. ick, you are a sensitive guy. what is your take? numbers aside, you are a writer, a thinker, you study ukraine and the u.s.. what is going on? income inequality in general? i think you are seeing a real backlash. you see it in san francisco and the question is whether the attitude and tension that has popped up in san francisco, whether it's bread, and then whether it leads to -- whether it spreads and whether it leads to policy changes and can lead

to less income inequality worsening economic problems. you don't want to push people down but lift them up. that is one of the great public policy questions of the next few years is how you do that so the whole country does not end up like san francisco right now with people pelting buses. >> and ripping google -- >> ripping google glasses off of people's faces. >> what is the backstory? >> here is the thing. i think what drove san francisco is it is a very small market physically, and people don't -- >> does google -- >> i think it is driven by the fact that those companies are getting benefits from tax breaks and they certainly do not needed based on how much money they are making or equity and value. that is the tension. i don't think it is that people are mad that people are doing

well, but they are getting benefits that they are not. >> and flaunting it with $1500 glasses. coming up, a new trend -- how can it capture advertising dollars? and it is our twitter question of the day, who is winning the online tv wars? tweet us @bsurveillance.

>> good morning. "bloomberg surveillance." a busy morning. futures up 8, dow futures up 56. >> aol the latest company to showcasing new modules on the homepage for online video but would add dollars for online video still below traditional tv, where is the future? k is iner with greyloc new york for the next few days. mark, break it down for us. broaden people like tiki barber and marissa mayer broaden people like katie couric and b obbi brown. who has the edge? if you look at the volume, clearly -- >> if you look at the volume,

clearly you to. i consider to be professional but not well-known talent in terms of historical television, they have clearly run away with it. it is undeniable the gap that they have. i think the battle is forming now kind of around the premium content. and yahoo! who have done a bunch of investments with a well-known television or other celebrity driven content and trying to build a business that can attract really tv dollars, which is the big movement. and i think obviously at the superhigh end there is netflix and hulu repurchasing traditional content but also making their own as well. >> is short form video the hottest commodity of the online video wars? >> in terms of volume and tonnage but clearly the high cpm's are going toward the

longer. >> you work with a guy alan and he has seen a few eggs and flows. you and i know there will be a lot of ugliness. who will be the losers? >> i think the people who are going to win will be the people who can continue to build audience -- exactly, hbo. amc has clearly emerged because the younger demo likes "walking dead." >> who is going to lose? thate small table channels do not have a lot of tonnage, like ove shin -- the small cable channels. and the non-premium based video products online as well. >> these guys -- all of these niche players are all creating drama and the networks are creating comedy. what is the future of networks? ofthe future will be a lot

comedy, a lot of drama and data analytics to see how demographics are changing and a lot of modeling that way. that is where netflix has a bigger damage. >> everyone wants to get online video right but we have seen scary statistics. ads are seen by no one and 90% are skipped. video ads. are people watching the online ads? what does it mean for advertisers? is theuld argue that famous television. everybody skips television ads as well. i think the real key is the that the and the depth ads go. if you look at netflix, that is a subscription model, obviously. as you go down you get to hulu. arerly the television cpm's enormous. >> we love having you in a from l.a. and we look forward to joining you in l.a. in january. ereo?about a

see how note to having license deals works just because of the dollars they invest. but it goes back to my comment. i don't think you want to not give the consumer what they want, so i think there's going to be some reconciliation between those companies ultimately having some sort of licensing deals that allows them to operate. because clearly consumers find value in those services, and i think they will grow. >> it was a supreme court decision. it is not a government that adheres to voters. they will just a yes or no. >> thank you so much. nick thompson as always, thank you very much in your comments on ukraine. forex, what i watch for a litmus paper on ukraine. 36, i will.. bottom, round it up. euro-dollar, 1.3839.

and a little weakness in the japanese yen. coming up, on technological progress, bradley delong from janeway.and william next. ♪

>> militant forces maneuver in

ukraine. kiev confronts pro-russian ukrainians. nato confronts ghosts of the past. we are waiting for bank of america earnings. another provider of online video. this is "bloomberg surveillance." we are live from our world headquarters in new york. i am tom keene. -- technology. looking forward to talking with william janeway and brad delong will join us as well. we are looking at bank of america. let's go to adam johnson. it looks like bank of america lost a penny. they were supposed to make $.27. i want to make sure we are comparing apples to apples. this would be an interesting result. net charge-offs, 1.4%. at negation cost $6 billion -- litigation costs, $6 billion.

not look like jpmorgan, wells fargo, citigroup. this is a train wreck. stock up orense of down, it is just a mess. nonperforming loans, $17.7 billion. citi is trying to unwind the bad thing. have 17.7 billion in bad loans at bank of america. 35 is the number you want to look at. apples to apples. the forecast was $.27. already five is the adjusted after you adjust for all of these other -- >> the distinction, for those not familiar with the distinctions, they each have their own challenges. they each have their own story. rights -- right

tes one third of the loans of this country. bank of america is more domestic. >> bank of america had to take they had to take down merrill lynch, among others and integrate them onto the balance sheet. >> we will look at that much more. adam. >> in the u.k., unemployment will to 6.9%. that is under the seven percent threshold. that is the good news. 7.4%.gdp rose as far as data goes in the u.s., we got the weekly mortgage

applications. they were up 4.3%. at 8:30 we are going to get house and starts. at 2:00, the fed is going to release its beige book. earnings after the bell, ibm and google. >> olivia sterns has company news. melissa and company raised less than planned. moelis keeps control of the firm on getting a handsome pay a lot -- payout. barra is under fire for an instant -- ignition switch fall

that was linked to 13 deaths. deutsche bank is trying to and it's money losing venture. the want to sell cosmopolitan resort for more than $2 billion. the bank foreclose on the property six years ago after the developer faulted on a loan. that is today's company news. >> dow futures up 65. this is fun. i have goosebumps. brad delong will join us in a bit. the great disruption of modern technology is the overuse of misuse of the word initiation -- word innovation. engineering is far more important than a conference. william janeway has seen it all. he is a marshall scholar. dr. janeway has seen booms and busts. 2014 is not 1999.

we have dueling bowties today. what did the gurus of today have wrong about technology? did they get wrong versus the real technology of america? >> that-- quakes -- technology drives itself. the heroes of silicon valley are self-motivated, self-funded innovators, when in fact, if you technological process that makes an economic difference proceeds by trial and error and error and error. it is not an efficient process. it needs funding, upstream and notstream, from sources directly concern. historically, there have been two sources of funding. first, a mission driven state. a government that has

established a political consensus as we did in the 50's and 60's. second, financial speculation. bubbles are everywhere. everywhere you have a liquid market and an asset, you will find momentum trading. most of the time, it is tulip bulbs and beach houses. every once in a while it is fundamental technology. olivia is great. we dragged her out of the london school of economics. did your world of innovation get to eight colt of celebrity? edison was a celebrity. giant of thehe railroad age had a name. great railwayhe

and was an engineer and this time. sometimes, those transformations are driven by technology. when they are, people like david sarnoff, the giant that created radio corporation of america -- he was a celebrity. backs ofiding on the many before them. >> does the generation of the zuckerberg deserve the celebrity they have -- >> i don't know what deserved means in that context. established a position in which they are receiving a huge share of whatever value they are driving. thes the oldest story in book that price versus value, which do you want? >> value. >> we are also talking about

yahoo!. do you think marissa mayer, who has a cult of celebrity built , do you think the cult of celebrity that has accumulated around her masks the effect that there is not a real turnaround strategy in place? >> i learned 40 years ago that corporate happiness is positive cash flow. corporate delight is increasing positive cash flow from operations. not on the cover of vogue to see how a business or leader is performing. >> yahoo! has been struggling. were it not for alibaba, right? >> absolutely. take the s&p. 1999, 2000, selling it 50 times earning. now it is trailing earnings around 32, 23.

you had the many bubbles, but they were very limited and they seem to be corrected. >> i do not want to pin you down on individual stocks, but twitter and facebook? >> internet stocks are in a process of going through the same kind of transition that took place 15 years ago from concept to cash flow. like google, they generate a cash flow that validates the price, then you will see a more stable base. in the meantime, they are highly volatile. >> why is the transition from concept to cash flow happening faster now than it did in 2000? tweaks it happened pretty fast between 1999 and 2000, the all-time peak of the nasdaq was just right about now, the first week of april, 2000. within 12 months, the $6 trillion of wealth that john doerr used to talk about that

had been legally created, was all gone. >> william janeway is with us. cannot say enough about this. bill bradley in new jersey loves it. mr. janeway with us. brad delong will join us in a bit. it's look and a data check very quickly. euro, 138. an elevated bit of tension in ukraine. driving massive change in the financial sector. we will talk about it with mr. delong and mr. janeway, right here on "bloomberg surveillance." hold up your bowtie. >> that is a gorgeous bowtie. ♪

>> this is "bloomberg surveillance." william janeway, one of the world's great thinkers of technology, innovation. can we bring process to bear on the warming of the earth. can technology solve climate change. can the u.s. clay park? copenhagen was a huge failure. had we jumpstart an intelligent debate towards a solution on

melting glaciers and the polar ice caps and the rest of the. >> in this country, the debate is not taking place. question toritical ask -- those who oppose response to climate change, do they do it because they deny the science or do they deny the science because to accept it would say that there is an active, progressive, positive role for government. i think it is the latter. read a memo from a major mining company on coal. they did the obligatory climate change discussion. can big business be part of a climate change solution? >> the driven mission is going to come from washington or will not come at all. this is the same kind of challenge that has emerged in the past, where only a national consensus --

>> i need a bruce marshall movie to make a bruce willis -- i need a crisis. not just the sputnik moment, but the pearl harbor moment, what we lose the greenland ice cap and palm beaches under a yard of water, then there will be a demand for government action. that is probably still 50 years away. >> does a drought in the west count? >> these should make a difference. we're likely to see this occurring from the dried out grassroots and the beaches where the hurricanes hit. happen, notg to from the kind of top-down leadership, but more bottom up demands. >> are you happy with the way climate change is taught in our universities? >> i worry about it.

in the universities, by and large, the issues, trying to model these complicated processes -- i think there is a lot of good work academically. the problem is more at the level of popular political culture. >> william janeway with us on technology. our twitter question of the day who isck to the media -- winning the online tv wars? there is a digital exhaustion right now. stay with us. it is "bloomberg surveillance." ♪

>> our twitter question of the day. who is winning the online television wars? is maybe no one, because there are so many competing interests. the online tv wars? i am tom keene. with me, adam johnson and olivia sterns. our guest host, bill janeway.

andill focus on capitalism the innovation economy. >> china's economy is hitting a speed bump. slowest case in years. chinese leaders have been putting the clamps on linning. that has led to a very big drop in property construction. turning to ukraine, it is on the they say they in have recaptured an airfield held by separatist. u.s. and nato have accused russia of fomenting the troubles. bringing it back here, the college board is putting an end to obscure vocabulary words on the sat test. theils will calm out on overall test.

is a high utility word a word "like?" say like one more time you will be excused like, ok. like, excused. lose the "like." >> we have a great test coming up. our guest host, william janeway has spent decades thinking about technological progress. joining us now is brad delong. a crusader against income and equality. he is also author of the log grasping reality. is technology fueling in economy

-- feeling any quality? >-- inequality? >> increases in technology made human brains in the eyes of hands they were connected to much more valuable. that seems to be edging away. look at the new technology and you teach at berkeley, how are you teaching technology differently than you did 10 years ago? willked me in a month, i know. i have not done it yet. i have to do it at the end of april. >> woody going to do in april? was0 years ago, what i said that people in the work place, they used to be muscles and fingers, moving big things around and making fine manipulations. they always were brains

connected to eyes and hands and ears and mouths control things. like paul marks, who thought that technology was going to be in is arising thought technology was going to replace muscle and fingers. they failed to realize it would make the brain much more valuable. the problem is that the technologies we are moving into our things that can substitute for a look at the form and put it in the profit -- in the proper pile. >> you mentioned a three player game. we take brad delong's world game, whatnto your do we end up with your what do we end up with? without information

technology, without computing, the enormous increase in the weight of the financial sector, of financialation assets and liabilities that have taken the banks to multitrillion dollar balance sheet and therefore enabled much greater disparity in wealth and income -- >> this is really important. this is critical. you are one of our kings of inequality. , or doring up the bottom we push down the top? which can it be? >> the first thing i would do is go with my teachers. educationve to make win the race between education and technology. states, before the start of land grant colleges, education won the race.

that produced a balanced prosperity that lifted nearly all boats and lifted them a long way. since 1980, we have been losing the race. in general, if you are a financial professional, you make money in one of two ways. risks onpeople with the one hand and bearing capacity on the other. you match them and you get out of the way. peopleond way, you find that do not understand what risks you are asking them to bear and you ask them to bear those risks and then you get out of the way. massive increases in technology have allowed people to do the second much more easily. >> we appreciate that. look ateway, we will

this further. the dow is up nine points. s&p up ninee me points. we will be right back on "bloomberg surveillance." ♪

>> last night, in new york city, in april, snow. a beautiful morning this morning. there is manhattan. the chrysler building, the citigroup building. the empire state building.

this is "bloomberg surveillance." i am tom keene. scarlet fu is off this week. uph us, brad delong getting very early to talk technology with bill janeway. about capitalism and the innovation economy. what drives you nuts about silicon valley? when you look at the goings on, all of the rich people that get to stanford and not berkeley, what drives you nuts? >> that is the thing that drives that stanfordt -- is over for with money and cannot figure out how to spend the money it has. berkeley is performing an enormous mission and the state is no longer willing to fund its the way that it used to and the way i think it should. i think you want to hear about broader issues, not a graph to

professor who wants larger research budgets. something that drives me nuts, private equity guys are good at moving cash flows around. i question whether they are creating a whole lot of value. what is the concern in all of the new technology that we talk about -- that they are just moving people around and not creating something that moves us forward? >> what does ultimately move us forward mean? we ultimately let the consumers and the users judge what they want to do. if there's a strong demand for a better facebook experience or a better twitter experience, we should let the market rip and let it try to satisfy that particular demand. is united states as a whole

enormously rich. that we aregh food not starving and hungry all the time. we have enough clothing that is not cold. if you know one thing about human beings, they really like to gossip. , theyeople do gossip learn things that are important and valuable for the future. >> we see this within the speed of technology. finance all of this stuff. >> the technology that we know did not just happen. it was not invented and deployed.

it is spilling over into the private sector with the pc, and about 1980. the momentum and the fund and -- and the funding of that momentum proceeded very strongly through .com telecom bubble. there is a lot of momentum in the private sector. what stalled is the next technology. the green tech technology needed to respond to climate change. the only way it will happen is if the underlying science and the original technological whontion is funded by those do not need an immediate economic return. that is the government. one chick gets there, the venture capitalist and the entrepreneurs can take over. they tried to do that and they failed. capital inin venture

green tech today is half of what it was five years ago. >> do you think we should see some kind of similar initiative in technology? >> definitely. we always have. andave a back in the 1820's 1830's. did so in the 60's and 70's as bill janeway said and we should be doing so on a much larger scale. brad delong, thank you so much. berkeley. is at blog is a mustis read. >> absolutely. brad is a disseminator of which need to know in economics. wicks let's do a data check.

you will see the 10 year moving up. that is an optimism. the euro, resilient. >> good morning. we welcome all of you worldwide. don't forget our digital products. we are on apple tv, which has for from it -- has proven productive. our guest host, bill janeway, senior advisor at warburg pincus. have a little bit of slowing in china. gdp slips. construction falls and lending falls 19%. leland miller is president of -- china

you read between the lines. what are the next two years going to look like in china? >> we try not to go too far ahead. whether the government reforms, restructures, do some of the things that they promised to do, that will dig taped -- that will .id take -- dictate it is not the baseline scenario. people need to understand the contagion's. these are not likely and shayna -- in china. that willt something create one domino after the other. they are at the end of the rope

as far as dealing with misallocation. >> you have said manufacturing is no longer the bellwether for china. >> retail and services. retailu want to see is and services strong, manufacturing, not the growth driver. it is not what you saw in q1. the q1 performance that people are starting to cheer is not something you should cheer about. >> the numbers in the china beige book shows a rise in manufacturing. production, people have long relied on this as an indicator of the economy. it is not a reflection or microcosm of china as a whole. it is performing countercyclical before the past years. you never know what is right or what is wrong. the reality is that you have a situation where you never know what data is right or wrong. -- lucky tovely

have leland miller here. janeway, we feared china. do they have a technology that we should fear them? -- they are in an interesting place. they are racing to the technological frontier. it took the u.s. a hundred years, germany, 70 years. a hundred years punctuated by world war ii. when you get to the frontier, what has worked as a follower, --t is protecting appropriating intellectual property, following the others, and then leaving. -- leading >> do you see any of that with the new regime in china? >> sure. int is in the growth

services sector. there's a push away from the manufacturer model to more service. theks -- >> from your book, state has served as an enabler some time as the engine of economic development. that is china. is china the one that is doing right? eight -- it shifts from copying well to creating new. there is a great story that is totally forgotten. at&t, the engine of american economic realm and in the 20th century. in the 19 60's and 1970's, at&t did everything it could to block the internet. they said the technology would not work, it is insecure, and will attack our monopoly

profits. china has that problem now. leland miller, the china beige book, thank you for being here. >> how do you consume your digital entertainment? who is winning the online tv wars? ♪

>> coming up on "in the loop." the new york auto show interview. , he drives north from dearborn. canada to play pond hockey. ponds,uld play on the but they would put me in the goal because i couldn't skate. >> we played in the bartsch. the puck would go to syracuse. with me, adam johnson. olivia sterns is bored this morning. >> the real estate market is getting off to a slow start. march sales and las vegas, san diego, and phoenix were down from a year ago.

in south korea, hundreds of people may be missing after a ferry boat sank. at least two people were known to have died. the ship sailed into rocks during some foggy weather. complaint thatar he goes to bed hungry may have led to action by the ncaa. they have approved unlimited meals for college athletes. napier complained about not having enough money to eat at times. i figured out a way to fix that. those are your top headlines. that stuffot make up. >> it is kind of bizarre. >> it is some kind of weird subsidy. is out withmerica

earnings. shares are a little bit down in the premarket. this is after the bank posted a loss of $6 billion on cost tied to bad mortgages. the earnings-per-share came in at $.35 per share. the first quarter loss was the problem. , trying tohan here clean up the mess. >> it is the now what for bank of america. >> that was the same message from citigroup. wicks they seem to have the best earning so far of the bunch. more earnings coming out after the bell. stanley, morgan blackrock, pepsico. a busy day for the bank. it will be a lot of interesting issues.

>> coming up, infinity revamping its top of the range look. that is huge. there is a new infinity cap the. it is bright and yellow. qx 80.he we will be going live to the new york aid -- auto show. matt miller will be interviewing the man that runs in an 80 -- runs infiniti. >♪

>> coming up, the water wars. i used to say the soda wars. chief financial officer has a lot to say about the shift from sugar to something that does not have sugar. look for that tomorrow. i am tom keene. our guest host, william janeway. as we have been discussing, the new york auto show kicking into high gear. miller, our resident card viewer is joined by the ceo of which has big announcements.

i am interested to hear about the qx80. >> it is very big indeed. they have a new facelift for that suv. i am here with michael barnes. really exciting to talk to you because you have a whole new team running the global brand. you are looking to do some kind of different things, break away from the typical nissan lunch jury -- luxury badge. it is 25 years since the brand was launched in the united states. idea is to turn it into a global brand. >> how areing audi

you going to do that? -- helped develop the queue 50. it is a great seller for you. forwardthe kind of way to have these incredible technological advances? >> you have to have the technology right. it is designed by technology, advocacy. good brands have really great emotion. we are still in the automotive industry. we are targeting the younger isdset and that mindset attractive.

it is a global sport, not to begin the united states, but very big advocacy group here. my bet is in four or five years, now that we have texas, it will grow as a sport. >> i was chauffeured around in the qx80. it was an ultra-luxurious kind of road barge. seemed to occupy that luxury segment. how do you compete with them? >> it is dominated by the german brands. is a very particular style and flavor and feel of the german luxury carmakers. opportunity for someone to come in and offer a different style, a different emotion. certainly, infinity is well

poised. 80 is the perfect car for that. the amazing thing about the car is that it performs in a way that you would never expected to for it size. it can really throw around. it is brightly, has a hydraulic stability management system. 400 horsepower. a can drive in a very dynamic way. at the same time, you can move your family around in true business-class. different wanted a traditional german form and function, this is where we are. embrace the japanese cars, as well. you are running the americas. that is your focal point. in china, i wonder if japan has the same kind of warmer section.

q70.thinking of the >> it is less about what country it comes from. there is a german design, but infiniti is situating itself as international. the chinese consumers are opening up. by market has been dominated generation.llennium their opening two new brands and new challenges. it is a great opportunity to continue to go. know, if you want to be a global player, you have to be in china. if we want to get the brand it to a global brand, it is not good enough to be big in america. you have to be big in china and get a footprint in europe. q50 aree the qx80 and fitting well and an alternative

in style and choice. >> thank you for joining us. i am going to toss it back to the crew at "surveillance." -- we will be going in and out of the car show throughout the day, including our interviews with bill ford. >> it is time for the agenda, where we look at the stories shaping the day. >> i have to go with an important number called compassionate utilization -- capacity utilization. that is the measure at which factories are operating act capacity in the united states. potentially the highest that we have seen since 2008. that is a big deal. i am still -- the talk of the meetings was the outcome

in 18 months. >> it is amazing, for the past two or three years, any bullish strategic got talked off of the set, and yet the bulls have been right. >> it is another indicator of the people growing the bottom line. they are sitting on cash. it is another example of how people are able to grow profit without moving the top lines. on my agenda is google. they had a huge set of earnings last time. they have seen results twice. in mobile see growth ads revenue from video ads. that is the key. also, cost per click on the pc and on the mobile. we will see those this afternoon.

google is spending tons of money. they are buying up robotics companies. they're going to buy titan. we are looking forward to those. technology versus innovation. capitalism in the innovation economy. this gets rave reviews. i might mention senator bill bradley in new jersey. how do you define innovation? >> it is an innovation that makes an economic difference. it has to deliver value and the value is measured by the cash flow it generates. >> can we lead in innovation? >> we did. going back to inventing modern manufacturing in the springfield armory in the 1820's through the internet. giving we are stuck

china the option to take the leadership at the frontier of technological innovation. in the next wave, we need the same kind of upstream investment in science and in technological startups that can fund and fuel the ways. >> when you are not in cambridge, please come back and visit. it is time to answer our twitter question of the day. who is winning the online tv wars? >> i find online television i exit if i cannot fast forward or watch ads upfront. .> the amazon juggernaut vision always wins. >> that is the message of janeway. in anal answer, we are rare moment where consumers are

winning, but this could change on a dime. it is the golden age of tv, but -- question is, does netflix >> very good. we have more on bloomberg radio and television. this is surveillance." ♪

>> good morning, everyone. good morning, everyone.

aftern the first quarter the morning bonds. earnings beat analysts estimates. and the general motors ceo, the new york auto show as it is gone underway. matt miller talking to the biggest names in the car world. he joins us right now from midtown, manhattan. they are creating quite a stir, shall we say. >> yes. yesterday was the most violent scrum i have ever seen in my history as a journalist, the last 14 years. it was jampacked. everyone wanted to get a question off to marry after which -- she gave what i thought was a really good speech at the national american dealers association forum.