bomber's who targeted the brussels airport yesterday. it could be an indication they are linked to the same hell of islamic state. belgium remains on high alert as of islamicame cell state. belgium remains on hilar. conference, mr. obama also said the u.s. will provide any assistance it can to belgian authorities as they investigate the attacks. ukraine ofccusing dragging its feet on implementing last year's cease-fire agreement. at a press conference in moscow, he said in action by kiev is the main stumbling block to a peace settlement in ukraine. a task force investigating the flint, michigan water crisis calls it a story of government fan -- failure. the panel released its final report citing intransigence and

belligerence that has no place in government. global news 24 hours a day powered by our journalists in 150 news bureaus around the world. from new york, i'm mark crumpton. "bloomberg west" is next. emily: "bloomberg west this is." a third party is helping unlock the san bernardino gunman's iphone. we break down the methods they may be trying. permission to build an u anontyle business using -- a time's cars. and how bubbly is the housing market? to break down the

numbers. the fbi's strategy to get out of its messy court case with apple. they say they were identified by a third-party with a possible way to get into the phone without apple's help. let's break down the methods the fbi may have in mind. there is a proposal that involves removing the phone's memory and copping the content onto a drive. there are reports saying they may be working with an israeli company. the company declined to comment. then there is the equities review created by the obama administration to determine if security flaws should be kept secret or disclosed. a specific timeframe for alerting companies to these flaws. for more on the possible technology being used, i want to get to our roundtable of experts. join me from florida, adam want,

a professor. who haso alex webb' been all over this case. we arere two ways talking about this. hardware and software. discuss. is a wayrroring thing of pumping the iphone with multiple commendations and if it wipes the hard drive, you can reload the hard drive. you don't lose all of that data. there is a software way, we don't know what they might be able to do. with every upgrade, they find some flaw which they plug. there were some plugged on monday. some of them could be used. we don't know. that is something we need to look into. emily: do we think apple has affixed the flaws that would have made this possible to get into the phone? flaws, it would

not have affected this phone. you need to have the past go to do an upgrade. it might be if there was one, on your phone, as long as we did the upgrade, we would be fine. emily: adam, talk about the second way, using this israeli company to get into the phone. they've actually had a contract to work with the fbi for a few years. when itare the standard comes to mobile friends ask. they sell their equipment to law enforcement organizations around the world. they are able to break through almost any mobile device other than the iphone 6 or 5c. ralph mclaughlin -- oflebrite is ahead everybody. they might be using a software

solution, which is what they normally use. the solution could be as simple as creating the operating system askede fbi that the fbi apple to create in the first place. they may be going to a hardware solution, such as the focused nand copping.e there are a lot of methods that would work. we know that. has a bunch of options to try. emily: talk about how difficult these solutions are and how costly they are. very difficult and costly in general. the ion solution, just setting it up and getting it done may cost $1 million plus. it takes a lot of time and energy. cellut solution, the nand

solution is removing the chip from the phone using an acid to move the surroundings and then read a focused laser to the information off of the uid, out of the secure enclave, the data flash drive, and reconstructed the entire iphone in a virtual environment. that is an extremely time intensive task. software engineering, which might be an option, and again, is time intensive. it could take a team of 10 people a month or two in order reengineer, reverse engineer and re-create the software that could be loaded onto the phone. the u.s. government has said they are optimistic about whatever method the third-party is using. what happens after this case if they get into this phone?

this is something hillary clinton has been talking about. take a listen to what cihak -- what she had to say. haveclinton: the fbi may found a workaround. there will be future cases with different facts and challenges. and theech community government have to stop seeing each other at his adversaries and work together to -- as adversaries and work together. emily: this issue is not going away. un-hackable. what happens next? people have been saying the fbi taking this to court was a way of forcing companies to work with them. as atom was saying, the fbi has been able to get to this phone because they are loath to admit it. in the election, we will see it

recur in presidential debates and discussions. possible, maybe not easy, certainly possible, as you say, to do this, what method do you expect will be used? how long will it take because of they can get into the phone, it undermines the case against apple. >> i agree. it is a moot point already. it has been four weeks. the fbi and most professional experts know they are able to get into the phone. i would expect a resolution within two months. never we find out about it, i can tell you. a company like cellebrite with the resources should be able to get into it within about two months. i have been saying for some time a number of technologists could about $1.5is with

million. the theory of getting into the phones has been around since 1996. it is not a new technology. what is new is we are going to be using it on the iphone 6. emily: could your team get into the newest operating system? 5 and from the iphone above, they are pretty much all the same. they use a secure system to be able to store the data, the password encryption. they are all the same method of getting into all of the phones. is now that weon know these vulnerabilities, now that cellebrite will be able to get into the iphone 6, will apple make future upgrades to lock cellebrite out? i have cellebrite at work.

one of the things about cellebrite, every time a new phone comes out, it usually -8 months torite 6 bypass the security and then they push the updates to their technology and then everybody has that access. emily: interesting. learned a lot. alex webb, who covers apple for us. the case has been so fascinating. to amazon, responding to a request on gender pay. finding that women working for the company in the u.s. earned 99 cents for every dollar men earned during the same job. amazon said it hired an independent labor economist to conduct the study, but not without a fight. arm called on

amazon to report on the gap between male and female worker'' pay. amazon tried to omit the resolution arguing it was so vague it would be unable to determine what actions the proposal requires. the sec disagreed and rejected the request. up, the secretive startup taking on google in the race to make self driving cars. we will tell you about a status update for the company. ♪

uber is taking its battle to the courts. them of creating 90,000 fake accounts with fabricated phone numbers and then setting up 400 face

bookings and canceling them to frustrate drivers. ola denies the accusations, calling them false. uber has been accused of the same thing by lyft. one more company got the go-ahead to test drive cars and this one you may not of heard of. they are the 12th company to receive such a permanent joining giants like alphabet, ford, and tesla. the startups goal is to create a service made up of self driving cars. i want to bring in tim from washington. what do we know about zoox, which i have never heard of? >> they are still in stealth mode. they have set -- they have hired some people. they have some jobs posted on linkedin. former gents --

general counsel of apple and other tech companies. one of the creators -- one of the recruiters could together autopilot. bringing together a team and hitting a major miles down, becoming the 12th company to get this permit, which is not going strategy, but indicates the technology is geting to a point they want to test it. emily: how does one company get a permit to do this? what does that mean about how advanced the technology is? >> it does not mean they have a car to test. you look at google, they are testing the software may have installed in one of those lexus suv's you see driving around. but most likely means they have some software they are trying out. interesting is they join

this list of established players, google, tesla, some major auto suppliers and companies like ford. if you looked at the list prior to them joining, only one company kind of you said, they are not a traditional player. they were just purchased by general motors to help augment their self driving program. if theyis the fact, contest, it would suggested they should be watched in the future. emily: who is furthest along in the process? we hear about google. there is no official cars on the road yet that can be owned by regular people. has self driving features, as do many players. who is winning? you have an interesting division of strategies. you have google recently in washington before congress

asking for new powers for the department of transportation to the approval of getting these cars on the road. theyave them indicating are getting on the road to having it and you've got gm, that is investing in companies and really talking about a strategy of having an experience where they think the way to get the technology well adopted is for people to have the experience of calling the car and sharing it with somebody else rather than buying the car and having it in your garage and having to deal with the uncertainties and the changes of the technology. emily: all right. to the list.ox tim, thanks so much. still to come, elon musk has spacex. jeff bezos has blue origin.

to get acult is it space startup off the ground if you are not a billionaire? ♪

let's get a check of the markets. what moved? >> good to see you. chips, something about the airlines. it lets take a look at how the markets ended today. the s&p and the down down about a half percent. the nasdaq was down the most. it was the biggest loser today. in fact at its lowest in a week. for every stock up, there were four down. some of the laggards included google, alphabets, basically the biggest weight on the nasdaq today. the reason is because of google's business in russia.

assia's federal and time in police service says they violated antitrust rules and the antimonopoly chiefs basically said there was no compromise that was going to happen with google. shares falling about two thirds of a percent. in the disk space, seagate falling because of a downgrade from ubs. it is falling to its lowest since mid-december. the price target lowered to $24 because of weakening pc sales and western digital also following. predominantly a down day. there were some risers. what is the story with amazon? amazon, the biggest lift on the nasdaq today. apple is having an influence saying it is years away from leaving its cloud vendors and you will remember we were talking about how amazon actually's nine-day deal to shift to -- actually signed a

deal to shift to apple. you can see the lift and then closing up by about 1.6%. i want to end on an airline, virgin atlantic. by more thanday up 13%. the reason is because the airline is thinking about itself all or part of after getting takeover interest. it is unclear as to who that might be. maybe delta or jetblue. we did reach out to those companies and they declined to comment. it is the number 14 best performer on the nasdaq. i know corey has more. thanks for the rundown. we are going to take a look at virgin america. cory johnson joining us now. dig in for us. he said it was not a

tech stock. emily: a lot of tech people like virgin america. it has positioned itself of a tech company. they have positioned itself to be in front of tech workers when they launch a new service. in denver they focused marketing on tech people in san francisco and silicon valley and the denver tech community. it may be interesting to see how they run it. they run it like amazon.com. routes, i want let me showinside, you the stock movement. it has been a great year to be an airline. a big move in the stock after they get this offer today. they are going to look at other offers, partial offers. thecan see the way they run business, like a tech company. they are running it for growth.

if you look at the free cash flow, some quarters they might be up 75 million. last quarter down about 110 million. free cash flow as a percentage of revenue, what is left, you see this business is run in a way they have in the top about .2%. in other words, really running this company like a tech company. reinvesting every dollar into the customer experience, the technology that runs the wi-fi on their planes. wi-fi and television in every seat. they are focused on the company experience, spending fortunes to do it. they are plowing it back into the business. that is how they have gotten so big. listen to a richard branson had to say when i spoke to him via skype about their popularity with tech workers and beyond. , the last nineca

years we have been voted best airline in the states. the team has done a great job. people who want airline.wn in a hip cory: that focus on positioning itself as a tech company and investing to grow their business makes this interesting to look at through our "bloomberg west" filter. emily: what is the likelihood it will happen? cory: branson does not have a history of selling his businesses. are,oil prices where they it has been a profitable time to be in the airline industry, which is a nightmare for investors traditionally.

lifespent a quarter of my on their planes, i hope they .on't screw this up ranked everyone's favorite airline. i'm completely biased here. emily: i was not going to say it. you are their most frequent flyer. thank you. coming up, it is no secret the real estate market is white hot. what does it mean for first-time buyers? new data on what is happening. if you like bloomberg news, check us out on the radio, bloomberg.com, and on sirius xm. more "bloomberg west" next. ♪

v mark c.: i'm mark crumpton. you are watching "bloomberg west." the u.s. is waiting for more

information from belgian authorities on those killed or hospitalized by yesterday's terror attacks. airports in tokyo and seoul are increasing security following the attacks. the seoul airport says it will add 700 employees for security and explosives screening. envoy says warring parties in yemen have agreed to a cease-fire starting april 10. peace talks are set to begin in kuwait one week later. the country has been plagued by fighting between yemen's internationally recognized rebels.nt and houthi the supreme court heard arguments in a case related to obamacare. it is a challenge from faith-based groups to ensure students can get free birth control. john kasich says there is zero

chance he will quit the race before -- global news 24 hours a day, powered by our 2400 journalists, in more than 150 news bureaus around the world. from bloomberg world headquarters, i'm mark crumpton. it's time for us to go to sydney. >> what changed yesterday? this got ever steeper. >> it's not risk on and risk off on the markets.

emily: this is "bloomberg west."

i'm emily chang. biggest homebuyers' challenge in silicon valley is not just the down payment, but a lack of inventory. overall housing stock is down 39% from four years ago. trulia is just out with a report on the tightening market. joining me now is ralph mclaughlin. you don't think we are in a bubble. you think we are at a plateau. ralph: the difference is that a bubble bursts. a plateau doesn't. at worst case, we may be andring a period of slow soft landing. 10 years ago when there was a bubble, lending was out of control. anyone could get a mortgage without documentation. when the bubble collapse, there were a lot of people who lost their homes because they shouldn't have been given a mortgage in the first days.

-- first place. those days are over. we don't think lenders are being as freewheeling with money as they were 10 years ago. certainly what will determine whether or not we are going to enter a new plateau phase or not is really what happens with the general economy. emily: let's talk about tech hubs specifically. your research zero zen on a few cities -- zeros in on a few cities where new homes are out of reach. prices are so high and inventories are so small. what trends are you seeing? ralph: nationally, starter home inventory is down 40%. that's the segment that has been hit the hardest. in the bay area, it is much worse. the bay area epitomizes what we have seen at the national level. emily: i know people who have made beds on 15 places -- bids on 15 places. there is so much competition. area, starterbay

home inventory is down about 70% to 80%. .t's a huge drop not just on the starter home and, but also the trade-off home -- trade-up home. francisco, to what extent is demand trickling into areas outlying the city? ralph: that's one of the natural reactions that people have, they look outward. from looking at data on where people are moving, we are seeing some shifts of people moving from the bay area to nearby areas, such as sacramento or political -- vallejo or anywhere in the central valley. it's a little bit more affordable, but still close to the bay area. emily: what do you expect to happen to inventory here? there is some new housing being built, but san francisco has historically been bursting at the seams. given how many people want to live here. ralph: inventory, again, really

.- new construction helps new construction certainly helps. but most inventory actually isn't new construction. most inventory is existing homes on the market. what we are watching is whether or not people will start to put their homes on the market and sell over the next couple years. what determines that is whether or not they can find another suitable home. we are seeing gridlock. one of the ways that gridlock might be broken is if certain types of owners can't afford other homes. another release mechanism is if area they in the bay own about 40% of starter homes -- if they decide to sell their investment homes, that might free up inventory for those looking on the starter. a changee you seeing in homebuyers because of a pullback, because of the

slowdown in tech hiring? ralph: for the long-term perspective, no. american homebuyers are telling us that owning a home is part of their american dream. the big question is, why isn't that happening. part of that is financial constraint. we surveyed homebuyers last year, asking what would happen -- have to happen for them to look to buy another home. they said, get a raise. money is part of the equation. we see the labor market tightening. that, isted to actually saving for a down payment. that's one of the biggest hurdles that home buyers are actually telling us. in the bay area, when prices are growing much faster than incomes, it makes saving for a down payment increasingly difficult. emily: how long do you see prices continuing to rise? if you are a buyer, if the perennial question -- should we buy now? should we sell now?

ralph: we don't have a crystal ball. as we get further in the cycle, prices will start to -- increases will start to come down. emily: maybe in two years? ralph: two years to three years. instead of 10% year-over-year, 20% year-over-year, we're expecting maybe 5% to 10%, or even 1% to 5% in the middle of the cycle. what really matters is that the local economy and -- is the local economy and the supply. emily: trulia's chief economist, ralph mclaughlin. thank you for stopping by. coming to the u.s. the startup wants to transform the way people consume news. the company has some major stories, including "the new york times."

it offers a new business model. article, prices range up. $.49 apiece on no apps. coming up, the real-life tech wizards of middle earth. we introduce you to some of the most cutting edge innovators around the globe, starting in new zealand. we will bring you a sneak peek. ♪

emily: billionaire paul allen is betting big on bioscience. he is set to give away $100 million in funding to explore and advance bioscience. stanford and top universities are receiving the biggest grant

amounts. smaller grants will be given to support early-stage research. this is the first step towards his larger 10-year plan to advance the science. in a new series we are launching this week on bloomberg.com, a freshworld," it's look at the explosion of technology around the world. peter jackson's moviemaking empire remains a hotbed of talent in the fx industry. face, it's our primary means of communication. untapped ineen terms of a human computer interface. if a computer can express itself to you in a humanlike way, emotional and cognitive, that's

when you start getting to a sort of interesting place. >> going to see an a.i. baby. the fellow you meet next is a madman in the best possible way. >> this lowers the brow. >> he is a computer scientist. >> the nose wrinkle. h his nose up. >> he became famous for building super detailed simulations of the human body and ended up winning a couple of oscars for his work on "avatar" and "king kong." these days, he is trying to reverse engineer the human brain. he has built a series of simulations around how the human face moves, how we express emotion, and how our neurons fire. >> we are trying to build experiences, a head that has its

own existence in a way. i'm going to run baby x. what we are building here is a computer that can live. so, this is baby. she is sort of looking at us and hearing us. she can see my face here. hi. so, she's not copying my smile. she is responding to me. this is a little baby face crop. she has to be looking at it. get her attention. hi, baby. hi. what do you see? look at it. >> puppy. >> what's that? >> apple. >> hi, baby. what do you see? >> sheep. >> very good, baby.

the long-term goal is can we create a model of consciousness. the computer model has become a conscious of something. all of the facial expressions, everything is driven by your own -- this is what is driving in the background. these are all the connections lighting up. simulation ofe a someone's brain? >> yeah. if you're going to make a character biological and behave naturally, you have to use a natural model. that is what's going on inside baby x. the we take this stuff, cognitive computing systems -- you have biological and they're all networks can -- biological neural networks connected to artificial intelligence. the future is enormous.

emily: and that is a sample of our new series "hello world." joining us is actually vance -- ashley vance, who has been gallivanting around the globe, shooting the series. tell us where else you will be going and what else we will see. ashley: we go to australia, israel, iceland, germany, all over the place. it was really an excuse to get outside of silicon valley and see these different pockets of innovation, and each country's unique twist on technology. emily: as someone who has covered silicon valley for so many years, what surprised you most about this whole adventure and seeing these sort of technology hubs or pockets around the world? ashlee: it really grew out of my reporting for businessweek magazine. i kept going on trips to do these feature stories. technology was improving pretty

dramatically. i would go on these trips and find these subcultures of people that seemed to be interpreting our quest to make an interesting future in different ways. then you go to somewhere like new zealand, only 4.5 million people. they are making rockets, doing cutting-edge a.i. stuff. they have this fantastic special fx technology. it is stuff that challenges silicon valley, absolutely. emily: also the home of kim.com, the target of the biggest copyright infringement case in history, who i visited. you opened up a whole new world. what else can we look forward to in this episode? ashlee: there is a company called rocket lab that really stood out. it was formed by one guy who never went to college. they are looking to do rocket trips for about 4.9 million dollars, which would be tens of millions of dollars cheaper than you could do today, especially defend -- to send things like

satellite into space. you can think of it as democratizing space. then we go to wellington and hang out at peter jackson's company and look at all these startups that have grown out of it that are doing a lot of really interesting virtual-reality work. emily: we are all very excited to see where you take us. ashlee vance. thank you so much, ashlee, for sharing this sneak peek with us. you can watch the full episode or friday oncom bloomberg television, 9:30 p.m. eastern. the world's first accelerator for aerospace innovators. we speak to the cofounder about where he is spotting the best talent and what he thinks could be the next breakout space startup. ♪

the pentagon's top combat tester has singled out cyber security weaknesses in the lockheed martin f-35 as one of

many unresolved deficiencies in the costliest u.s. weapons program ever. the report also describes the risks of building these new fighter jets. the f-35 is presented because the defense department nearly 300 billion dollars. the air force is buying the biggest share of them. it has insisted that these deficiencies be fixed before it declares them operational. in recent years, we have seen the first real commercial space startups develop. what do they have in common? billionaire founders. apparently, it's really hard to start an aerospace company without a lot of capital. starburst accelerator is trying to help, the world's first aerospace accelerator, providing the industry's with seed money and big-name mentors. butas a presence in l.a., was founded in paris. cofounder francois chopard joints me with more.

what kind of support do there a space startups really need, aside from a lot of cash? francois: i started withpper -- my career airbus. i am passionate about aerospace. i have been doing research for the past 20 years. emily: harris, l.a., munich, singapore -- why these places? francois: we wanted to be global for our startups. they need to be connected to all these large corporations to develop their business as fast as possible. were, for locations us, the major hubs, combining vc aerospace.epreneurs, we wanted to be in these locations where startups could meet and collaborate with these large corporations. find --here do you

where do you find these people? are they coming to you? francois: it's a combination of the top universities, whether they are in the l.a. area, m.i.t., the same in europe or asia. these engineers, these phd's, they want to do something different. they don't want to work for these large corporations anymore. they want to make a difference. they want more autonomy. they want to be moving forward. they want to put their name in the industry, like elon musk did with spacex. emily: if not just trying to build rockets like -- it is not just trying to build rockets like musk and branson. francois: there are so many different startups. we are working with more than 300 of them across the globe. out of the different areas, we car, but withric vertical takeoff and landing

capabilities. there are probably 20 startups working in the area. there are a lot of them working on satellite. aircraft, there are a lot of things going on in the cabin, with more connectivity. startups want to do comfortable seats. there is the big data. more and more sensors. we want to operate the aircraft smarter and more efficient. emily: a lot of people think of spacex as the only space startup. there is also sierra nevada. you think we are going to see a lot more space and aerospace startups on the main stage. when and why? francois: definitely. by what they were able to demonstrate, there were some good evaluations. it showed the way to many more.

now with that, there are more and more vc money in the segment, more and more entrepreneurs who want to be successful and build their own products. there are 300 to 400 mature startups with strong technology, world-class products, coming into the market. maybe not all of them will succeed, but at least the landscape in 10 years to 15 years will be completely different. emily: and elon is helping out, right? francois: of course, by what he is doing, what he has done with hyperloop and some of the others. he has announced he wants to launch a train car, electrical ones. by showing the way, of course he's helping out. , thankfrancois chopard you very much. it's really interesting to hear what you guys are working on. starburst accelerator. it's time to find out who is having the best day ever. today's winner is vice media, which recently premiered its

channel on cable and satellite tv. the numbers are starting to come in. while it has not released official tv ratings yet, they released many episodes online and the numbers are huge. the first episodes of this new show is the most popular, 6.3 million viewers, followed by "noisey." that does it for this edition of "bloomberg west." tomorrow on the show, we'll hear from the ceo of one of the fastest growing cyber security companies out there. that's all today from san francisco. ♪ .. ..

oh, hi! micky dolenz of the monkees here, getting ready to host the flower power cruise. (announcer) we're taking the love generation to the high seas and reliving the '60s. we'll celebrate that unbelievable era with the music that made it so special. there'll be over 40 live performances featuring eric burdon & the animals, micky dolenz, the monkees lead singer and cruise host, the 5th dimension, the lovin' spoonful, rare earth, spencer davis, three dog night, and many more! imagine enjoying all that great music on the fabulous celebrity summit, leaving fort lauderdale and making ports of call in jamaica and the bahamas. you'll be back in the days of bellbottoms, peace signs, and so much more, with special theme parties and 20 fun-filled celebrity interactive events. cabins are filling up fast, so come on, relive the era you remember so well.

the flower power cruise, february 27th, 2017. let your freak flag fly. don't miss the grooviest trip at sea. ♪ >> from our studios in new york city, this is "charlie rose." thelie: we begin with attack in brussels. two explosions at an international airport. a third stuck in train -- a third struck a train. this came four days after the capture of terrorist suspect abdeslam joining me