That later today. Ism manufacturing. Lets look at a data check. Futures are 18. All10 year yield has been over the place which is a good barometer of linking the ukraine to the market with equities and bonds. Nymex crude and brent are elevated. On to the next screen the vxx 14 and the ruble 36. 49 and brent crude again. That is the big change from friday. Oil is really on the move. To see somearting response in the market from the tension in ukraine. F everyone ignored it last week. If you look at the front page, it is more focused. It has to do with the ukraine. Both the Financial Times calls it the russian creeping invasion. They received permission from the Russian Parliament to send troops there. There has been no public remarks. We know russians are active fighting are occupying airports. They have troops in crimea which serves as a departure point for russian ships. The response from the International Community has pretty much been widespread condemnation. John kerry is on his way to kiev and the president is weighing sanctions against russia. John kerry mentioned there could be asset freezes, be subband, destruction of trade but it is all up in the air. Foreign ministers are holding an emergency meeting. This is the economics of the moment with secretary kerry going to kiev that so many have requested. They aree yesterday well prepared for any guest shortages. Thats one of the big Economic Issues in terms of russia. It suggests big changes and the way that russia sees itself in the world. This is soviet russia. This is not russia the global power. The video and photo of the moment is ukraine troops lined up behind a screen. That has been the single photo of the morning. This will be our focus. Ian bremer will join us later. We are starting to see the repercussions rattle through the market. You mentioned how russia raised its main Interest Rate to seven percent from 5. 5 which is a most since 1998. It has not done much for the ruble and stocks worldwide are falling. Futures are lower as well. Treasuries and gold are higher. Crude oil is up as well as natural gas and wheat prices. We can expect to see more of that. This is a significant change in the fluidity of global assets. Those are the front page stories. 101. 25 is a global litmus paper. About sovereignty and the Nato Response to actions by russia area the headlines continue this morning and Richard Falkenrath has given us terrific perspective on events in ukraine but the courts mated on the coordinated response of the west. Nato, doprinmer on they still have teeth . It has a lot of forces under arms. Border countries ukraine. Teeth but whether they will be used in a serious way in a military conflict with russia, i seriously doubt. We are part of nato and the secretary will fly to kiev today. What would you suggest is his priority list . He will try to shore up the new Ukrainian Government. We will have some sort of offer of nearterm fiscal assistance for the ukraine have an immediate fiscal crisis on their hands that they will try to deal with. We will try to show solidarity with them against what he will describe is a russian menace and stiffen their spines. Would he go to crimea to meet with russia or moscow . He definitely will not. That would be too provocative. I doubt he would go to russia. The symbolism of a highlevel visit like that with russians is too risky for the Obama Administration. What type of influence does the u. S. Have . Not extensive, economic sanctions are an option but they are selfinflicted wounds as well. If you sanction the russian oil experts to europe, it will hurt the europeans as well. They will look at visa restrictions on a couple of russian officials and may look at asset freezes but russia is a really big economy. Its not like some of the other countries that have been effectively targeted by sanctions. Tore is very little reason believe a sanctioned strategy will work to course the russians. Everybody agreed over the weekend. I was shocked to see the statement talking about the russian arch is a patient and the g7. Russian artistic patient in the g7 the russian participation in the g7. Times of International Crisis is when you want governments talking. It suggests this issue is more important than any other issue on the International Stage like a around or syria or the global economy. Ansuddenly say this is important country, member of the Security Council and we will not have meetings because we are to talk . Not sensible. Here is a geography lesson. Ryan chilcote reported out of lush and that mr. Medvedev said a bridge will be belts be built, what is this . The blackdge connects sea to the sea of red. Currently, the only land bridge on the crimea runs three ukraine. It is called the deaths mess of parakot. There is another straight on the far eastern side thats about four kilometers from what is part of russia. First person to conceive a bridge across a straight was architect of the third reich is a way to march troops into persia and they began construction in 1943. The materials were left behind and the red army built the bridge in 1944. It was destroyed that winter by ice floes. An agreement was signed by the former ukrainian president and the former russian president in april of 2010 to rebuild and now they are recreating the idea. What to crimeas want . Its a good question and we dont exactly know where they were go. They dont seem to want war. Who is a crimean is an important question. Its a in until a that has been ethnicallyally cleansed over the years. About forcibly removed one million of the ethnic population of crimea into siberia in 1944. Many of them died on the way and replace them with russians and ukrainians. Now its a mix in the dominant population is russians but there is also ukrainians and the number of tartars who have been coming back from side. To reclaim what they think is their homeland. Richardalkenrath, we appreciate your perspective. Right now, company news in nonukraine is, a rare miss for Warren Buffett, the measure of berkshire hathaway, much ofk has risen as the s p 500 is the first time they missed on their fiveyear target dating back to 1965. After ringing up record earnings last year, he says he will be looking to do more deals this year in the u. S. The microsoft new ceo is shuffling management. He has promoted mark penn to fulfill the new role of chief Strategy Officer. He is a former political strategist to work on the Hillary Clinton president ial bid. Skype is also with microsoft. American express debuts its first no see credit card. Fee credit card. They want to broaden its customer base. We have breaking news out oftyco. Unitll sell itself korean for 1. 93 billion units. To get the week started and there will be a financial effect. It will revise its eps forecast because of this deal. It now sees secondquarter earnings per share when you back out some items, or 8940 one Cents Per Share on the deal. Did you sleep last night . Barely. And 15 minutesur of the oscars and i learned the hard way that you dont watch the oscars with the twitter feed. Outking of which, it turns that a lot of the preoscar buzz was on the money when it came to the big acting awards. Slave won best picture. Brad pitt was one of the producers of the film. Earlier in the evening, best supporting actor was taken from the same movie. It also won for best adapted screenplay. One the most oscars of the night including that director. Who are you wearing this morning . Gbs. Wearing alan hit the ball out ellen hit the ball out of the park. She took a group selfie. Was causing twitter to be out of commission. People admitted they were hungry because they had been starving for an entire week. There it is, the oscars and we will have more on that. Markets are on the move in futures are 20. Coming up, the japanese fast looking tothey are expand its global footprint on an American Target and we will speak with the company that they are looking at. Bloomberg surveillance, on bloomberg television, streaming on your phone, your tablet, and bloomberg. Com. Morning, everyone, bloomberg surveillance. Cory johnson is with us today. Are you on at 6 00 tonight . Bloomberg west will be. Cory johnson working a 28 hour day today. Abouthave been talking j. Crew flirting with the idea of going public once again. It is privately held now. A japanese clothing giant is as theyat the Company Might possibly i choir acquire j. Crew. This is a company, fast retailing, that has a number of rounds under its umbrella. How does j. Crew fit in here . J. Crew would be a great addition for fast retailing. Its biggest contributor to its revenue is what you mentioned first which is uniflow and j. Crew gives it a nice step up. It brings it up a notch. Compared to the gap of japan. There is a major deserve diversify outside its home market. Youre talking about 12. 6 oh yen dollars of revenue last year. Most of that, 9 billion, came from inside japan, which is a slow growth market. But i have to go outside and clearly, the company has designed global domination. The president has said he wants to make it into the biggest retailer in the world. Unlike many of the deals we have seen from Japanese Companies coming to the u. S. Or growth, what makes yanai different is that they are priced discipline. He will not overpay and thats what will make this deal from things like softbank coming to the u. S. Are there fundamental changes in business . Fast action is an unbelievable concept that is changing the entire retail loathing business. I wonder if that was it just changes in the way that j. Crew does their business. A bigashion requires change in fashion. They see someone walking on the runway in the lamb and they inerally have seamstresses the bowels of a shipbuilding new clothing so it will arrive in the stores. J. Crew does not change as much. J. Crew has changed a lot of its fashion. It has adapted that model of always coming out with new designs at the higher end. Retailers have to innovate as much as technology companies. With the Company Actually change, thats my question. . Ofanai is a big fan mickey drexler. They would probably keep him at the helm. How that would work out is tough to say. You are talking about classic personalities. The two men have a connection. Yanai has been in touch with j. Crew for a long time. Talks just turn it recently formally because there has been discussions about this Company Going public. It has five equity backers. That want to cash out. Any news on j. Crew going public . They want to be valued like ted baker which traits 17 times cash flow were just gap which trades about eight times. For a growthd retailer, thats what theyre going for. Thank you for the latest on fast retailing looking at j. Crew as a possible acquisition. More is coming up on bloomberg surveillance. Capital management is sending letters to fannie mae and requesting Corporate Governance actions. We will speak with roots berkowitz. Bruce berkowitz. This is bloomberg surveillance, on bloomberg television, streaming on your phone, your tablet, and bloomberg. Com. Good morning, everyone bloomberg surveillance. Futures are negative 19 and the markets are really on a coordinated move off of the continuing news flow out of ukraine, russia, and crimea. Oil is joining the others and a more lengthy response to the geopolitical news. Ian bremer will join us in a bit. Vows tohinese president crack down on terrorism following an attack at a train station that killed 32 people. 10 terrorists stormed into the station saturday and attacked people with knives. No group is claiming responsibility for this assault. President obama meets with the israeli Prime Minister. The president urged Prime Minister netanyahu to make peace with palestinian leaders and he says he will not give in to pressure. The president will become more directly involved in the peace process. Nonstop knocked out the lego movie in the box office. Took in 20 million. Him on central park south, there is no way he is 61. He is probably older. He is now an action star. I read must read it and so did cory johnson this is a tradition in my house right and up on saturday morning before anyone else when a letter from Warren Buffett comes out and read it. I want to talk about the funky accounting he talks about. What does all that mean . Non gaap is the issues. Companies report that when they are trying to massage the numbers. It guesst money what company use that term the most . Ibm. These are corporations rebelling against conservative issues. The corporations are saying not dont look at our real numbers. They are smoothing it out to the bare minimum. I thought it was telling that Warren Buffett suggests a conflict. He is buying more ibm but also criticizing the accounting policies. I cannot say enough about this 21 page letter from berkshire hathaway. This is a primer on common sense. Coming up 12 million is how many people flooded the airwaves last year. Good morning, everyone. Cory johnson and scarlet fu are with me. Futures are 20 and that gets us to a data check. Everything youou need to know. A lot of risk aversion is taking place right you have a flight to safety with futures dan and european stocks falling and stocks fell down and the emerging markets print the 10 year yield is below 2. 6 . The euro is weaker versus the dollar. The ecb held its debt holders is meeting this week. A little bit of pressure has been removed because inflation came and above economist targets. By one pointup seven percent. You see it would rent crude. The yen has new strength. It is showing accord native response to what we see in ukraine. It is the most seismic geopolitical event since 9 11 ian bremmer on ukraine. Maybe g one toward or g2. Bremmer is president of the eurasia group. He joins us again this morning. You made major headlines this weekend,over the comparing these events to 9 11, discussed that point, coming up o the British Foreign minister said this is the biggest danger europe has had in the last 20 years. We are talking about the United States making it clear in no Uncertain Terms that the russians that if the russians in that intervene, the russians went ahead with nary a care. For the first time, we have the United States and the major effectively at our real loggerhead against each other. The europeans are largely on the american side and there is a breakdown in leadership in the geopolitical stability. The narrow, what is the attention point right now between ukraine troops and Russian Troops . How will that work out in the coming 24 hours . As long as the russians do not go into east ukraine proper, we will not see we will see a lot of tension but we are not going to see any active fighting. You have lots of very, very strong ukrainian nationalists that could easily undermine the Ukrainian Government or cause violence against russians in the region. They are unhappy about what the russians have done. If that occurs, it is likely the russians would go into protect them. Without the intention of Vladimir Putin going further into ukraine, it could happen anyway and Vladimir Putin is making up his mind. That could lead to violence. Lets bring in richard falken rath. We saw this other side of russia airing the olympics, why is glad they were potent willing to throw away efforts of polishing up russias image for the ukraine . Im not sure he cares that much about this image for it he believes in the traditional hard power and doing things in strength rather than through goodwill. He does not seem to care much for the hearts and minds of the world. They shined her in the olympics but when you get down to it, hes going to take care of business the only way he knows how which is through the unambiguous use of strength. What is his endgame . I dont think he knows yet. He is waiting to see how this go. I dont think hes interested in annexation of ukraine. Error ways for him to get what he wants out of the crimean. Short of annexation. Annexation is difficult to carry through. Look to Eastern Ukraine as the next flashpoint. Let me ask you about the tools the west has. Is all of the money that russians have and european tools the west can use as tools to influence the western governments . Because this is absolutely , after chechnya, the most Important National security interest russia has. There is nothing the west could do short of military troops which certainly they are not intending. There is zero percent chance of a head to Head Military conflict that would get the russians off the dime and consider moving out of crimea. That is the first point but the second point is that the europeans are not going to support that kind of behavior. The germans right now are blanching even at the idea of throwing the russians out of the g8. The notion that they would suddenly risk their economic relationship with russia or that would support the u. S. With serious sanctions, its not on the table. I fear the Obama Administration really overextended itself on this issue. You sent that out on twitter this weekend. Timothy snyder at your university had the best essay of the weekend, giving us a history. 10 days ago, northEastern Ukraine you mentioned as a place to focus on. With the new resurgence in the Eastern Ukraine, how close are we to a partition . How close are we to a partition of ukraine . Crimea is already an effective partition. Its one that many people will be able to swallow but maybe not the americans. The germans and others could probably get there. That, it isr than not a majority ethnic russia anywhere outside of crimea. I would say that the military in that region would largely be proukraine. The citizens in the larger cities would be split but in the smaller cities they would be proukrainian. The russians know that well. I think the russians would rather use economic leverage beyond crimea to get what they want and they will be able to do it including on a president ial election than directly invading. Having said that, if there is violence against russian ethnic russians living in these cities in the next few days, and not set up by the russians, just something that happens from local ukrainian nationals, some of whom are in the new government, if that happens, the likelihood the russians would respond with force is pretty high. Thank you so much, ian bremmer. It is our twitter question of the day. We will switch gears because we want to talk about airlines. The flight carrier of the United Arab Emirates has now recorded a profit for the word straight year. Part of that profit is money collected from its alliances with other carriers. We are talking air berlin, lingus. Ustralia and aer i want to start with setting the scene. For those of us who do not fly to abu dhabi oh regularly, what is the main distinction between your airline and the emirates . Both of you are premium carriers. [no audio] global carriers and are building a Strong Network over the last 10 years. With greaterentiated service on board the aircraft but we have also invested in other airlines for it we invest in six other carriers to stretch our network. We are Equity Investors in australia and india, throughout the indian ocean and europe. Part of that is generating topline traffic. We have come to negotiate on our costs and achieve greater skill in reducing our unit costs. You mentioned equity alliances, you have seven of them, but nothing in the americas. Might we see you buy a stake in American Carrier . Frankly, its not a shopping list. We have 47 coaches and two of them are with American Airlines and jetblue and they work well for us. Where we see unique opportunities in certain markets where we are being constrained, we have invested in carriers. We dont have the challenge of the u. S. The u. S. Is open skies and i am satisfied with the relationship n andve with america jetblue. Thank you for joining us. Up, the coveted Academy Award for best picture does not always mean a big payout at the box office. We will talk about the numbers behind the oscar boost. This is bloomberg surveillance, on bloomberg television, streaming on your phone, your tablet, and bloomberg. Com. Good morning, everyone bloomberg surveillance. The market is on the move. With me is scarlet fu and we have cory johnson. I am thrilled to be here. The trial of Oscar Pretorius begins in south africa today. He is accused of killing his girlfriend on valentines day 2013. He was once listed as one of Time Magazine most influential people. Pimco is turning more bearish on canada. Bill gross has cut his exposure to canada in half. There were the Canadian Housing market is overvalued and the prices will begin to fall this year a polar plunge for chicago. Rahm emanuel jumped into the water as well as jimmy fallon. He emerged with his eyes bulging. Plunge raises money for the Special Olympics and those are your top headlines. He apparently did that i thought the deal we had is i haved bloomberg west to swim back and forth to alcatraz. Triathlon of great the escape to alcatraz. They go from a boat right near there. Its a sensitive triathlon. Here is a single best chart. Weve got to do something on the oscars. And beingoes up there nominated is an honor, they say. It works the same way for box office receipts. This is data compiled by Box Office Mojo which takes a look at the revenue taken in from best picture winners. Over the last 10 years, we are talking about 300 10 million. How does that compare to the highest grossing movies overall . Of whaterence 1 4 the highest grossing films raked in which was 1. 3 billion. That is all transformers . You got it. Films that when the oscars dont necessarily win the most money but the nominated does. I was surprised that after winning best picture, most of these movies only see about a single percentage point rise in sales afterwards. Did you like e the joke thatllen said about the scenarios . She got rave reviews. Richardfalkenrath, they did the tweet thing. It got huge traction. It crashed twitter. Can you help me here . People beat up on and hathaway . Twitter was a vicious. Andhe is a little too eager shes an enthusiastic drama club kid. People like to be up on her. What was kevin spacey doing their . He was with all the alist stars. It crashed twitter and Bradley Cooper which one is he . This is successful. Integratingat twitter and social media into the grammys was awful. J was mentioning but this is a clever and comfortable way to bring social media into this. Weve got cory johnson today. I enjoyed watching it on twitter. The Second Screen is arguably the biggest change and the way the main events are happening and broadcasting. Broadcasters are adapting to what they call the Second Screen. Tweeting, you have to watch it live and if you watch it live ellen took a picture of everyone with her camera phone and then it was a samsung commercial afterwards. Do you think that was an accident . We want to put this back into the best picture category. Interview the director of 12 years a slave. At some point, i wanted to make a movie about slavery. For me, there was a hole in the canon in cinema about the subject. It was not referenced were there for me. I wanted to investigate that. I wanted to find out about that. If you stayed up to watch the whole oscar sermon a, you will notice brad pitt went up there to get the award because he was one of the producers of the movie. I watched gravity on the plane. Its a bad movie to watch on a plane. Better than the liam neeson movie. Coming up, we will talk about getting a makeover. This is bloomberg surveillance. Lets get to company news. We start with apple introducing a system to use iphones in cars with voice command. It will be rolled out at the Geneva Motor Show this week and be available in vehicles later this year. They say it lets people use iphones with minimized the stretching. Google and samsung have objected to the microsoft plan to buyweibo longdistance. They want to make sure this does not want to result in higher licensing fees. Phonee mobilephone micro makers have objected to the deal. Bo is chinas micro blogging platform, the largest in the country. They make money but twitter doesnt . Weibo has twice as many users as twitter. It is a little bit different, its a combination of twitter and facebook. 1 3 ofassively popular, chinese Internet Users are honest. The chinesest accounting . Well we have not seen it but no, we dont trust it. Ob, theu have the pca chinese auditors cannot even close the book. , that is ado an ipo huge accounting breach. Backn the u. S. Auditors go and look at the documents that went into the audit which they are not allowed to do right now. You should come by more often. Thank you for having me. Hes here again . Ok. Visit the 21ill club later. Ditching of hotels is the orient express. It will rename itself next monday as though mod. Joining us now is john scott. Tell us about the name change. Why make the change and what are the limitations ofs associated with a rail excursion . It was about what is the right thing to do with the company. I have been the ceo for a year now i traveled around to our Great Properties around the world and what resonated is that the individual property brands were very well recognized. The 21 club and the copacabana, people know those properties but they dont know that they were part of something bigger. The opportunity is really to connect the dots. We want to make it easier for our guests to visit or the just one property, multiple properties in the crease more value for our company. So much about Luxury Travel is centered about offering an experience. Orient express is a specific experience. What do you want the name belmont to e volk . Evoke. To celebrate those names. We are not a chain luxury company. We are an experienced travel companies so we will celebrate the individual names. Belmond. Ing to add it means beautiful world and it will be the way to experience all those properties. It will be a connector. Its not meant to detract the individual properties. You were with rosewood before this. I had a beverage of my choice at the carlyle hotel. Is that what you will do over here . We made that connection a little more obvious. Wood was about celebrating individual names and thats what we will be at belmond. We will celebrate the individual names. People are not looking for a onesizefitsall approach. How important is it for those kinds of consumers to have mileage low royalty programs Loyalty Programs . Thats a great question. I think it is even offering. I think it is evolving. I think less about points and more about recognizing when i walk into sunset tower and they say welcome home, i love that place. I get no mileage there whatsoever but they will never get me out of there. It is that and making sure for example, in your minibar, if you had the things you want it was free as opposed to you have aboute junk its customization and knowing what you want and making sure we provide that. Would you please come back . Ohn scott with us with belmond we have a forex report with futures negative. The yen is the litmus paper. Is new yen strength which shows the tension of the last hour of russia intervening on the d valuation of the ruble. China is still in the news as well. Coming up in the next hour, investor Bruce Berkowitz is blasting fannie mae and freddie mac and he will join us in the next hour. This is bloomberg su rveillance. The secretary of date will travel to russia. Will head to ukraine. U. S. Equity futures down 21. Fannie and freddie mac are minting money. Should it go to private investors or stay with uncle sam . This is bloomberg surveillance. 3. Is monday thomas march joining me a scarlet fu. He saw all the oscars, we welcome cory johnson. Our host for the hour, Richard Dalton asked. Falkenrath. Russia raises Interest Rate unexpectedly. China pma dropped to an eightmonth low. U. S. Mortgage approvals rose more than forecast in january to them highest level in more than six years as the property market. Trengthens this shows the change in the Global Housing market. We are expecting some of that. I is some manufacturing Construction Spending and total vehicle sales a big number that is being driven. Subprime lending a big deal. Earnings after the bell, mbia as well. We have company news. Berkshire hathaway sales will rise as much as the s p 500 through 2008. The first time the company missed on the fiveyear target dating back to 1965. After ringing up record earnings last year, looking to do more deals this year. In the United States. Microsoft ceo is shuffling management. Mark penn will fill the new role of street cheap Strategy Officer according to people familiar with the matter. Executive bp tony bates was leaving the company. The employees of citigroup being questioned by authorities and mexico according to government officials. Trying to figure out how the bank was allegedly cheating out of hundreds of millions of dollars on loans to oil services company. City employees were not interviewed as suspects but rather for information related to the loans. Breaking news out of las vegas. A group called the Caesars Acquisition Company says it will hurtto caesars growth nurse a handful of hotels in vegas. New orleans as well. 2. 2 billion dollars, including debt of 100 85 million and will take on of 223 million. Theoving chess pieces on main places on the strip. Do not really have any numbers to play with here. Dow futures 127. Bloomberg you with a terrific rollout. Jeffrey goldberg sat down with president obama. Benjamin netanyahu visits the white house. There is not a moment to lose. First, the news of the morning. Author of the book prisoners and joins us from washington after the exclusive interview with president obama. Many ways to go here. Let me start with the ukraine. What is your most careful observation in the cacophony of this monday morning . My most careful observation will cost you extra. West is not just president obamas problem. The west is struggling to gearing out what to do. Quite one thing when seriousness behaves, and even when small, nations misbehaved. Difficult to bring them into a line. When russia does something they saidlike this, around the white house and other offices of power and look for ways to give a reasonable response when you know this is a huge deal. Huge deal to send the secretary of state 2 00 p. M. To the ukraine. I want to come right back to jeffrey goldberg. The idea of a new u. S. Foreignpolicy. Foreignpolicy . Of passive, reactive one. When you contrast the role compared to the collapse of the soviet union, there is no difference whatsoever. Is a government really following events and trying to keep up with them, not shaving them. Do you agree with that, of passive reactive state department . It is not really a state department. It is a white house. , and iu have a president am not making a value judgment, but when you have a president that is domestically oriented who seems to want to with draw from the world and mess of the world and reflecting what the American People seem to want, you sometimes get surprised by either ends and sometimes surprised by the amount of times you have to spend. They send most of the time figuring out reactions. Of the timet figuring out reactions. Lex i want to go to your piece published today. The president will meet with Benjamin Netanyahu later on in d. C. What surprised you in your conversation with the president . A couple of things. The actual peace process, he is totally reengaged in this. For months, it was john kerry doing that negotiating. Now he is back in the picture, maybe because kerry asked him to be. You think there will be some pressure put on him. They will say you are it, you are the one. What was striking and this is president obama said here are the consequences or your country if you do not do this. He was not threatening any kind of american action, but saying the world is changing and you have to realize you are becoming more isolated and you do not go down the pass of the road i am laying out with you, you will have problems. We talked a lot about serious and the deterrent power. August in syria when you threaten to use force but then at the last moment pulled back from that, do you think theyd no longer believe you would strike them . Not. Id no, of course of course they believe that. He said this. Gave up chemical weapons because the russians told them i was serious. So he is adamant about this. By your termck that president obama is totally reengaged with the middle east peace process. My sense with the president is he does not engage in anything. My sense is this is someone who will have one meeting with the and that will be it for him. Why would he deviate from what he has done for five and a half years now . I am not buying the premise of your argument. It eras of opportunity to have a foreignpolicy achievement they do not have a lot of foreignpolicy achievements in the middle east. This. Chemical weapons coming out much more slowly than they thought. Of course the white house wants to own it. I think what they will do today is they will assess how likely it is. If it is not that likely, he will say to the secretary of state, keep working it. Why wouldnt the president want to come in and quarterback this . This is a really fundamental change. John kerry has used language to describe this is the last chance for middle east peace. I do not think the president exactly believes that but i think he will make a push and the language has changed and we will see if the policy changes. Really appreciated it. Rave review from me. You cannot say enough about the new the zion. You will get smarter by keeping Bloomberg View frequently in front of your eyes. Peter ortzag writing up a storm as well. Breaking news. Progress on the mens wearhouse just of a bank merger. On nondisclosure with joseph a bank. Entering the disagreement entering this to enter a deal. Mens wearhouse said it welcomed the offer for do did salute to diligence. Maybe we will have some kind of resolution in the nearterm. Data check. Futures 20. They were bad and got better and rolled over again. 20 on s p futures. Oil is one nil 104. 57. What is president obamas next step as he looks at the situation in the ukraine . Tweet us bsurveillance. Good morning, everyone. Bloomberg surveillance. Im tom keene. Futures 20. Dow futures 146. At the oscars yesterday. Slave. S a best supporting actress for her role in the film. In terms of which movie ran one that most number of oscars, it was gravity. It started Sandra Bullock as an astronaut who is left floating in space. She spoke with charlie rose, and they talked about why she found it a really difficult experience. All of the things that frustrated me that what once i found out where a benefit. Frustration,rol, and instead of fighting it, you embrace it and became a friend rather than something that was a problem. DoRichard Falkenrath, you not care about the oscars or much of the movies but you did like this one. The thing i love most about it, the sound was incredible. Silence,they handled the briefing inside the suits, a huge explosion impact with no sound. So unusual. He sound was incredible to see the space station fly apart in this massive explosion and to hear nothing, just right. They got it just right. Were you uncomfortable watching the movie . I was uncomfortable watching the trailer. You watched gravity on the plane . About an hour into the movie she says probably not. And from the finance economics that we do, are the oscars the same as they were five years ago . It is not. Not is also because i do have as much time to watch the movies. It is a bigger production than it used to be. I like what i learned in with tweeting a selfie. I feel so produced now. So much of the buildup to the actual awards. Which do you like the best . I actually like golden globes. Golden globes is known as the starter award show. Everyone is excited and testing out everything. That is my favorite one. Were stressed . I do not know yet. Mens wearhouse entering a nondisc is are packed with joseph a bank. Prepared to boost the offer price. This is bloomberg surveillance. Good morning, everyone. Bloomberg surveillance. We deteriorate. 21. 30. The dead dow futures 100 87. Further yen strength to a fragile morning. March 3 top headlines. Here is cory johnson. Today is the first day the story that the trial begins in south africa today. The blade runner accused of killing his girlfriend on valentines day 2013. He was once listed as the most influential people and has pled not guilty to the charges. Pimco turning more bearish on canada. Cutting exposure to canada, cutting debts and half. They warned the Canadian Housing market is overvalued and prices will begin to fall this year. Crackdown president on terrorism, following an attack of the train station that killed 30 three people over the weekend. A group of more than 10 stormed into the station saturday. No group has claimed responsibility for it the attack. Scarlet fu with us. We look at the dynamic between i will say western china and beijing. The city where these attacks took place, a lot of minorities in that city. This has been brewing over the years. This is a terrorist attack. Unusual one. Very i have been watching these things for longer than i care to think about. I have never seen one quite like this. When they say there will be a major crackdown, there will be a major crackdown. Really aggressive and comprehensive. There was a writer who call the chinas 911. There was an article going back and forth about whether it was terrorism or not. No question. Into anroup of men wade urban area armed with machetes and large knives do you assume they are from western china . I do. ,ne of the main ethnic groups it is a possibility. Help us parachute into ornghai and moved two blocks hong kong. If we were to parachute to this region, what would we find . A very rural, undeveloped region. It is much less developed. Has not benefited from the incredible growth of china. Many have left and gone to work in the cities. The demographics are totally dissimilar to what we have seen in coastal china. Thank you. Andant to switch gears visit headlines that broke earlier in the hour. Mens wearhouse announcing a nondisclosure agreement with joseph a bank. Bringing in our deals reporter. What does that mean nondisclosure agreement . They are going to do a deal. We knew this was going to happen. Thanks was the, bad guy because it did not want a deal with mens wearhouse. Put up protections that shareholders saw as a poison pill. They announced a crazy deal for eddie bauer to make himself bigger and harder to deal with. Viewedf shareholders that as a very hostile act toward shareholders because they said you have a logical target of a combination makes a lot sense and you are going off to do this deal with eddie bauer. Now it looks like think is pretty smart because i held out to get the price it wanted. To get everyones attention, buy one get five free, 2060 in share price. Joseph bank is the good guy here. It would appear to be the case that if everything goes well, they get the best thing for shareholders. Here is what no one is talking about. They agree, if there are real concerns for getting this over the finish line. Regulators will take a harsh look at the deal. It has to two clear antitrust. Thanks could turn around and protections if regulators do not sign off. That could make ends warehouse look away from the deal. I could demand hell or high water measure. Activists involved here . Yes. They are in both stocks. They have been pushing for the deal from day one. Mens wearhouse is buying just of a bank . A. Bank. Yes. The Bank Management team wants to keep their job and do not want to work for a company that asy think is not run as well their own company. You have a lot of personalities clashing right now. To what degree is the mens warehouse marketing message georgege zimmer cymer. To what degree is there an negative impact from listening to the voice for so long . There is no question that they have not been impacted by this. That is one reason the whole thing started, thanks was the original aggressor. They got word in of weak position because they lost the zimmer and made an attempt to buy it. Percent. Growth, three thank you. I am more baffled than i was before you came on. It is amazing. It is like michael dell but worse. Worse and better close. Twitter question of the day, president obama. Dealis the next step to with the situation in the ukraine . Tweet us. Fannie mae has a back a lot money to the u. S. Treasury and then some. We will discuss this with Bruce Berkowitz. This is bloomberg surveillance. With tomlet fu here keene and cory johnson. Berkshire hathaway changing the language on possible successors to Warren Buffett. Identifying certain current subsidiary managers who could succeed Warren Buffett. A change from previous language that said three managers have been identified. Comcast universal fixers wins the weekend box office. Featuring liam grabbed theelsen number one spot. Secondo movie tumbled to spot. American express debuting the first no fee credit card. Introductiongest in 13 years going by how much it cost to develop the market. Part of an effort to broaden the customer base. There was a tina fey ad on during the oscars yesterday as well. We continue with the number one story, ukraine and crime era crimea. Ian bremmer just back from kiev. Good morning. When you look at what we see, the International Job owning. What would you suggest we should look for from secretary kerrys trip to kiev . I think part of the problem for the United States and secretary kerry is the United States does not have a huge amount of influence or leverage over russia on this issue. From russias perspective, ukraine is in excess agile issue in terms of geopolitics and domestic allah text. It simply matters more to russia. Russia has more influence directly on the ground. What kerry can do is talk about sanctions but they will not have much of an effect because the relationship is not very deep. Political sanctions is not something that will move him tremendously. There seems to be a lot of job owning this morning. Is it for donated . Is it a coordinated effort or ad hoc effort between sweden, imf and others . I think there is certainly room or better coordination. Interests are precisely aligned. Europeans have a much Deeper Energy relationship with russia, which bounds the ability to center into an economic scenario with russia. You mentioned this earlier. Explained the hydrocarbon linkage between russia, ukraine, and germany. Russia is incredibly dependent on oil and gas exports. A large fraction go through pipelines to the european union, which gets about 30 of its gas consumption directly from russian suppliers. That is by far the most important economic relationship in that part of the world. The map of the hydrocarbons looks like your hockey road trip over the weekend. Like everything goes through the ukraine. That is the issue. Verythink we have to be careful in how we describe cold war versus hot war. Clearly an issue in which the u. S. And russia will have to come to an understanding or there could be a very serious conflict right on the border of europe. The idea of a russian invasion could turn very ugly very quickly. A solution has to be found quickly. I continue to wonder. Of the 56 billion that flowed out of the country could be traced to illegal activity. Seems like they would have there for a reason to him pound at some of the assets and punish russia in a different way, if they cared to. Any suggestion that is on the table . There has been vague talk about sanctions against certain elites. No clarity on that. It certainly is true that one way to get Vladimir Putins attention more clearly is to go key russianssets of elites that support him. I do not have any information on how far that has gone. Enqueue. He is in kiev. What will you look for today with a stream of headlines coming up . I think one of the most intrinsic interesting instruments will be european debt. I think one of the outcomes will be a shortterm bailouts of the ukrainian debt. So they will throw them a lifeline. Alleviate nearterm fiscal crisis. Really, kerry cannot do much else. A visit should be worth a month or two of economic bailout. Within the data check, brent crude almost at 112. Futures as well at session lows. S p futures down by 20 points. The 10 year yield continue syncing as well. As you would expect, with risk assets being taken off the market, the euro weaker versus the dollar. Good morning, everyone. Bloomberg television, radio. All of the interviews of bloombergtv plus. Markets really on the move this morning. Scarlet fu and cory johnson with meat. Guest host is Richard Falkenrath. A lot to talk about this on this front and center topic. Lex we need to talk about fannie mae and freddie mac. Brucecollects berkowitz blasting them for ignoring shareholder rights. Raising stakes to help investors share the spoils in a newly invested company. They have a they have started to break it in with the housing or get recovery. Private investors questioned the profits of fannie mae and going forever to the United States government. Reciprocal with swiss a chief Investment Officer and founder of their home capital management. Owns shares of this to say the least. Good morning. You have been out front on the debate. Any likelihood we will see washington decide that fannie mae or freddie mac should the private . I do not know. , there is no debate. Fannie mae and freddie mac are private companies. They are no different than cocacola or disney. People talking about the debate between privatized, public. Last time i looked on the , all 170,000een ohms fannie mae and freddie mac. So it does not make sense to me, that debate. We own them. I do not see anyone else who owns them. Time to move forward. Note to directors, i am trying to remind them who they were. , theis is the issue directors have a lot of weight on them from washington. What will be the catalyst to get washington to move . I look at it as if i were a director. I have been a director on companies. I have a fiduciary responsibility to all shareholders. I do not listen to what someone in washington tells me to do. I listen to the owners of the company who i represent. You recently one the federal judge right to discovery to find out changes made in the governance. What do you hope to find . What is hidden that you could not find before . May may decision december 2012 when the sun was shining it was obvious the companies would make their a good money. There was a deal between one Government Agency and another and we do not understand this. It was not necessary and does not make any sense. We are trying to understand the thinking behind it because we cannot find any object to it. Thatriginal agreement handled everything. A mistake was made in december 2012. May have been an oversight careless mistake or something else. I choose to believe it was a simple mistake. The law is about the past. With the board is about the future. Government has every right to change its relationship with fannie mae and freddie mac. Government does not have the right to alter past agreements from the 1970s, 1990s. Time for the board to represent their own. That is the primary reason to have directors. Are capable of doing it. Very well to represent the owners. Time to separate fact and fiction. Thank you. Coming up, how will the u. S. Government react to the standoff in the ukraine . Michael turner will join us on bloomberg surveillance. This is bloomberg surveillance. Good morning, everyone. Bloomberg surveillance. Turning to our three top photographs. Admission. E oscar todays top photographs, looking at the goings on of the Academy Awards. Jennifers Lawrence Jennifer lawrence, reaching for the oscar. This time she held it together. She one best supporting actress. Lawrence was nominated for American Hustle and the center. 12 years a slave did really well. Best picture, best adapted screenplay. Photo number two, Ellen Degeneres. Her celebrity selfie. A great sign a great autographed. It is the record holder. Retweeted almost 3 million times. This direct disrupted twitter service. She handed her phone to Bradley Cooper. He is the photographer here. Allen is behind meryl streep, jennifer lawrence. Which one is Bradley Cooper . The way in the front. Goodlooking one. Number one, Ellen Degeneres delivering last night. She is samsung wants and iphone later on. Digging into the pizza. The way she integrated social media. That worked out really well. I heard rave reviews for the town of the oscars. Really beginning to learn from the enemies. They are starving themselves for weeks. We do that on bloomberg surveillance. Actually had to gain weight. Interviewingct the director. At some point i want to make a movie about slavery because all in cinema about this particular subject. It was not referenced and not there for me. I wanted to investigate that. I wanted to find out about that. British director steve mcqueen. Dallas buyers club . And jerod mcconaughey lehto. Jared lehto speech was great. He thanked his mother. Rooting for people in venezuela and ukraine. They are being transformed by your world of social media. A big deal for all of these guys. Twitter may be the most of them all. Were you watching the instagram feed . A much to watch, so little time. Coming up, president obamas next move, what is it . I called turner joining us next. Turner. El this is bloomberg surveillance. Keenecarlet fu with tom and cory johnson. Our guest is Richard Falkenrath, former adviser to the white house on national security. Time now for company news. Starting with apple introducing a system to use in iphones and cars with voice command. It will be rolled out at the motor show this week and be available in vehicles later on this year. Google and samsung have objected to the plan to buy nokia phone business. They have asked the ministry of commerce to make sure the deal does not result in higher licensing fees. Chinese mobile phone makers have artie expressed concern about the deal. Valued at 5 billion after posting the first profit. Weighing in on chinas largest microblogging platform after posted a profit last quarter. Ipo said to be pursuing an in the u. S. Today at 1 00 and 6 00, bloomberg west with the best in technology. Thrilled to have cory johnson with us this morning. Got it. What is the distinction i need to know about . I am always arguing that we are quick to focus on businesses and companies and not on stocks and markets. I think the market is an of theg ipo that is one Biggest Technology ipos ever and think that is one of the reasons people are looking at this as one of the other kinds of next shoe to fall. Very good. Cory johnson on that. Ore on that at 1 00 the next guest says the president is sending a dangerous message to the world, especially russia. A critic of u. S. Actions around ukraine from intense Congressional District in ohio, Michael Turner and the Armed Services committee. Good morning. Our secretary of state goes to the ukraine today. What would you like to see him accomplish . Has by castingt this environment of weak this takeed president putin to the actions. The whole thing began by him intervening in ukraine internal politics where they were trying to execute an agreement with the eu. Ultimately this invasion by russia. The president , and secretary kerry, have to shift their view to understand this is a different russia than they perceived. Their view has been as secure russia is a secure europe, but the more secure russia feels, the more adventurous they become. The secretary needs to begin to recognize this is not an eastwest issue. Bring as breaking news to help us in the conversation. The ukraine Prime Minister says Russian Forces are now only in crimea. Also seeks clarity for what they want and says the troops will not invade east ukraine. Headlines from the ukrainian Prime Minister. To what extent is there discussion on moving american warship to the region if it comes to that . There needs to be a broader discussion then where do we move asset . Takeed to make sure we actions that strengthen the allies. A number of allies are very nervous right now. Obviously concerns as they look to their issues with russia. Certainly as this comes on the need to have concerns. Certainly we need to look at this in a broader context. One of them is this is an administration that has walked away from nato obligations with europe. As we look to the possible expansion, this has been cold to that. The ukraine and georgia on a path to the missed midwest, and that has been disrupt the. Richard falkenrath working with us. Frugalityusterity and of the national defense. How do we project a state Department Policy if we are recovering from two wars and want to take the Armed Services back . With great difficulty. Dimension is absence. This will not be a crisis that teachers u. S. Military use of force. Carriers are not going to the black sea. We are engaged at all, it is about what we say and do with our allies. We have no powerful course of instruments that can merge them on this front. By cap we learned anything about the way russia has made the moves . Ive remember when georgia invaded the south. There was an interesting cyber attack that precluded that. I was wondering if you saw anything that happens in crimea that was similar . I think there is a lesson to be learned. I think the big lesson is to be learned from the administration. He got caught trying to negotiate a secret deal with putin about the Missile Defense system. Russia may be violating the treaty without action by the administration. This administration has been pursuing an narrative that is just not accurate. It has put allies at a very disadvantaged decision as we look to russia that is an aggressive state and taking action and meddling in the affairs of the ukraine. You were the mayor of dayton. That is a pretty cool thing. The tone of your 10th Congressional District over the weekend . Our constituents engaged in the ukraine or domestic politics . They are engaged in the issue of ukraine but not just an issue of what is happening there but what is happening with the United States and the fact that we are projecting weakness. Not just an action that has been happening in russia. Nuclearaway from modernization and imposing the sequester on the department of defense and cutting the military. This is a president that is policy at aor u. S. Time when russia sees an opportunity. Thank you. Congressman turner for the 10th Congressional District in ohio. We asked everyone, what should president obamas next step be to deal with the situation in the ukraine . Some of the answers, it is not our fight. The second answer is real power must be demonstrated that military is not an option. Does back to what Richard Falkenrath was singing, opening talks with china. China has been oddly silent on this. Are we in control of the message . No, we are not. This is a problem the president the military has struggled with. Right now theyre trying to figure out what he will say and do. Answer, and probably from the republican, talking about a weapon of mass distraction. I love the twitter question excerpt. Thank you. From his huge response work. Getting to the agenda. I will take ends off because we have a busy week for data. Starting with the latest manufacturing numbers. I sm due out at 10 00. Right now the consensus is for inincrease that would be an dash indication that manufacturing is expanding. Big number. Microsoft big shakeup on my agenda today. The new ceo of microsoft making a move. Tony bates passed over for the job. Makingal future leader moves right away about the future of microsoft. Microsoft shares have done so well. My agenda for the day as well. How about march . In the month of march. The weather alone. The world is coming to an end. In like a lion. There we are. Is a new month. Somehow markets clearing and moving stronger given the news. February was the best one month performance for the s p 500 since mid2013. There it is. Thank you. Can you come back tomorrow . Sold. All you have to do is sacrifice sleep. That is all. S up next. Loop i lex i am betty liu. Heres a quick look at the headlines this morning. More Russian Troops have moved in. Investors are bidding on the prices of safety. Gold and treasury. Were waiting to get february sales for automakers today. Nissan already reported their sales come up almost 16 , beating estimates. Chrysler is due out at any moment. The microsoft newly appointed ceo is shaking things up in an effort to turn things around shuffling management. As we learnedme two are leaving microsoft. Ryan, tell us what you know ri