Transcripts For BLOOMBERG Bloomberg Surveillance 20140314

The university of Michigan Confidence number. How are we all feeling . Lines and then something to note, secretary of state john kerry arrived in london. He will be meeting with his russian counterpart, foreign minister Sergei Lavrov. As you know, there will be this vote on whether or not crimea will secede on sunday. We had a couple of days of good feeling and it reverses as we go into a nervous weekend. Futures go up, but look at the 10year yield, down to 2. 78ish and a lower yields and higher price. The euro comes back, 1. 3888. Next screen. We will get to the ruble in a minute. There is the 10year yield, 9. 66 , surging in russia. Ruble and stronger yen. It shows you the risk feel. , eightsian bond index percent has been the average. They do a little bit better and this is just the move up. And here is the search as Russian Troops on the ukraine border. As people bail on the russian bonds, the yield goes up. We are following the bonds more than the currency as the russian government really intervenes in the currency market. Of course, Malaysia Airlines front and center. Lets get to the front page. Story. O again with the the latest headlines out of malaysia right now, the government is looking at the possibility of pilot and crew involvement. The defense minister said the police have not searched the pilot house. They say 13 countries continue to work with malaysia on trying to locate Malaysia Airlines 370, and he cannot confirm there is no hijacking as well. Youve got some interesting headlines out of reuters. Indias navyrting is searching far west from where the plane was last reported because the flight was following between navigational points last plotted off of malaysias northwest coast. The geometry of this is from malaysia, down to the tip of singapore, go west across the eastern indian ocean. The u. S. Asked kidd will be there uss kidd will be there and then the navy will go east across the indian ocean as they search for flight 370. We are in the search for some common sense on this issue that is transfixed the world. Richard falkenrath jones is now. Good morning. Us now. Good morning. I sighed for the media frenzy and the genuine care, what is Richard Falkenrath focused on . First, the data we are getting is fascinating and not and not yet confirmed and somewhat contradictory. Something i learned from investigations like this is to be careful to cooperate facts. But if the data is right, particularly about the manual disablement of the beginning is ams, what it tells us human being did it purposely. It shifts to a number of important questions. Who he or she was and what was the motive to possibly do that. It strikes me that this is too complicated to be a suicide attempt. In aviation history we have seen pilot to attempted to commit suicide just by crashing the plane. So some other plot must have been afoot. We got a further headlines, and lets bring them up. The defense minister in addition to saying the police have not searched the pilots house they said they will search his house if needed. You talked about an individual being involved. There is question about the confidence of the government. My morning mustread talks about malaysia being long hobbled by a political poultry culture that puts the ruling partys needs over the people. He says the bungled search made manifest the consequences of this cynical bargain. The you see the malaysia government involved . No, but i do think incompetence is in play. But it is too big a plot. There is nothing in their interest. Employee ofis an the airline, they would have been involved in the sense the person would have had to send pilot certifications to the government. Richard, you served in the white house. Is this a situation where the United States in america assist the other nations as a conduit for malaysia . To washington and washington distributed the information to the other nine or 10 nations . We both investigate independently and assist other competent authorities that are doing so. In this case, that would include malaysia, but it is not just malaysia that would be receiving u. S. Assistance. The chinese, the vietnamese, and they would all, be, in the extent they were involved in the search, would be receiving information from the u. S. At the u. S. Was learning in the course of its own work. They are also going to be a sensitive part of the investigation that they will not be informed of, the vetting of the manifest on the flight, and that would be done by the counterterrorism and intelligence personnel using sources and methods we will not necessarily want these other countries to know about. That would be held privately until there is a determination made that it needed to be shared for some specific reason. We want to point out to viewers that malaysian officials are holding a conference trying to explain were showing scenes. Based on your experience advising the white house and then again advising the Mayors Office in new york city, is there any sort of precedent for entional hijackers potential hijackers taking this long to announce why they have done what theyve done and what they want in return . It is a good question, adam. Hijacking situations are individuals acting alone and not as part of a larger conspiracy. Very few of them result they are quickly addressed. So the hijacking becomes known. The scenario here, the precedent i worry about is United Airlines flight 93, which you recall was the fourth airplane hijacked on 9 11 and crashed in pennsylvania. What i wonder here is we are deep into speculation now, so lets be clear. A hijacking or even if someone was attempting to use the aircraft as a weapon like on and somehow the pilot the number of passengers prevented it causing a crash at some point. That is the closest that comes to the top of mind this morning with a fragmentary data we have. With all the new developments we have been going over, Malaysia Holding the press conference saying the possibility of pilot and crew involved. Knocked down some of the crazier theories. What can you say that this is not . Of crazyare a lot theories. Conspiracy theorists are coming out of the woodwork. We can pretty well say through satellite analysis that the aircraft did not land at some airstrip or airport nearby. Lost isnt like a scenario where they managed to land and the people are safely ensconced on some beach. You can will back out because we know where all the airstrips are in the area that can handle a jet of this size. So you really are down to some form of crash. In the ocean somewhere, and it needs to be found. The scenarios, none of the other ones can be ruled out, which have to do with who did this and why they did it. It is too early to say and the data is to fragmentary. Thank you so much. Richard falkenrath, former White House Security adviser, joining us with the latest analysis of the Mission Malaysian airlines jet. A couple more stories i wanted to highlight, including bp, it can once again compete for u. S. Contracts, including for oil leases in the gulf of mexico. Regulators had barred it from the contract after the oil spill. At one point, bp was the largest miller in the gold coast. In the gulfriller coast. A shape up at barclays. Barclays preparing a radical overhaul and it could lead to thousands of job cuts as well. Shareholders not happy about rising cost and falling profits. This the previous strategy at barclays was fragile by design. This book it is eagerly anticipated we will talk about it in an hour from columbia kauffmanschool, professor of finance from columbia, find out with his book fragile by design. Where well be banks be in five years . It is hard to say, but a key variable that will determine that is the politics. We have seen, after the crisis, of course, the pendulum has swung very far against the banks. My prediction is we will see is swinging back in the other direction. Look at the dilution of the volcker rule that we have seen. By the way, i support the dilution but people are going to discover that they really want to have a functioning banking let me cut to the chase. You are columbia business school. Are you telling the young lads and lasses to go into banking . Is your future being smart on wall street or should everybody work in manufacturing . From the standpoint of where we are enrollments are be declining and the students are part of the backlash. They are not particularly excited about it but i think it will change. Abouthave a lot to talk here on the politics. I love the idea of, hey, it is all about politics. Fragile by design. Way too long for one week and read. Lets go to company news. Electric in general south africa. The company will provide state on transnet for diesel locomotives. Ge will supply the 465 locomotives to expand the rail capacity. No financial terms were available. Warren buffett becomes the worlds second richest person. The Berkshire Hathaway chairperson network increased to two 63 billion, putting him in second place. Carlos slim helu seen his fortunes shrink as his companyares of tumbled. Mark zuckerberg calls president obama to complain about nsa spying. Angry about report to the spy agency can disguise itself as facebook to gain access to users computers. He says the nsa needs to be more transparent. , amazon prime will cost you more but are the perks worth the extra bucks . We will talk about it. This is bloomberg surveillance. Bloomberg television and also streaming on your tablet, your phone, and bloomberg. Com. We are back with professor chart professor Charles Calomiris momentarily. Coming up on Bloomberg Television, an important interview with the world bank before the spring meetings in april. Kim, now with the world bank. Great expertise on health care worldwide. This is bloomberg surveillance. Morning. Sy friday im tom keene with scarlet fu and adam johnson. Up go the prices. So much for no inflation. Amazon shares are moving a little bit higher this morning. Raising the price of the prime membership, which counts roughly 20 million subscribers. Amazon never confirmed it. The price was increased by 25 , to 99 a year. It had been at the same pricesensitive began the program nine years ago. The surprise really is it was a little less than what analysts had been looking for. The company had warned it could go up by as much as 40. A team over at isi comments it might boost cash flow by only about two percent. Because they are assuming it will be a 10 attrition rate. Theyre looking to raise the 2016 adjusted earnings before taxes and all that i two percent. What i found interesting in the note is they took a survey and they found prime members shop amazon 25 times a year and spend about 1200. Not havedoes membership, probably shops on average four times a year. I have been thinking about getting it. I have to admit. People have it . Am i the idiot . I am the other idiot. Things are much more convenient. You dont have to drive to each lace but amazon is looking to make up about nine percent of the retail market. Nine percent of u. S. Retail. Fromarles calomiris columbia business school. Do banks have Pricing Power . When is the last time i had a fee increase at a bank . Depends on the kind of market. And the kind of account. Obviously banks have some Pricing Power in some regions, particularly in the middle market. England, and new you are a mediumsized company, you have very few options in terms of borrowing. But if you are in new york you have a lot more. What can thanks learn from Companies Like amazon and cost go in retaining Customer Loyalty . That is an interesting question. Banking is still a relationship business. Banks that know how to give customers an extra service lets say, td bank in new york. I am a customer. I have a few other bank accounts. But they are open longer hours. They seem to care about being there for me when i need convenience. Person . U really need a for deposits, you just the wood on the iphone. That is the big thing everybody has been saying for the past 20 years that has been wrong. Everybody has been predicting the demise of the branch. To bring it back to amazon, to me, again, it shows Pricing Power. We will talk to a guest later about it. Why cant they go up 50 . They have to test the market. But they dont want to turn away potential prime customers. They already captured the highend, and there were surveys that showed most people would hang onto their amazon prime membership even if the prices went up by 40 a year. And the only went up by 20, so they hang in there. We will talk about it the next hour as well with someone who is very wellversed in the art of pricing. It is a dark art am a when it comes to pricing. A dark art. Fu er advocates scarlet consumer advocate scarlet fu . T is a bright art coming up, inside the home of the world famous cronut and what the chef is cooking up in the next new york student new york city food craze . That is a live shot . Heather is down there she accepted his mission. Shot. Is a milk and cookie that is it, lower right corner. This is bloomberg surveillance on Bloomberg Television, on your tablet, smartphone, and bloomberg. Com. Good morning, everyone. Here is our twitter question of the day. It is a friday question. How do you pick your bracket for march madness . Me . Over a beverage of my choice with someone who knows less than me. No one knows less than me. Ill give you a run for your money. When i was in high school. Im tom keene. With me, adam johnson, and scarlet fu with us as well. Heres adam johnson with the top headlines. We are going to start in china where orders to halt mobile phone Payment Systems and Virtual Credit cards seem to be part of the picture. The Central Banks of Virtual Credit cards are too risky. The ruling comes one day after alabama and . 10 launched virtual critter court. Bank of china bank of china has called for stricter rules. Bitcoin was disallowed by the country about a month and a half ago. A flat tire is blamed for an aborted takeoff of a u. S. Airways jet in philadelphia. The tire blew out just as the jet was taking off. It called the landing gear to collapse. The airplane was airborne briefly before the pilot could land. It came to a skidding halt and emergency chutes were used to get the passengers off the plane. A sad moment. His youngest son found dead in mexico. A spokesman said Jeffrey Corzine was recently receiving treatment for depression. Particularly poignant was the neotograph of the young corzi helping his father out of the hospital after the horrific car accident. He started as a traitor, ran goldman sachs, senator from new jersey and governor of new jersey. Jon corzine, very tough news for anybody with kids. Lets get to the morning mustread right now. Futures are flat, flat, flat. Heres adam johnson. I should say similar to wages, which are not exactly flat but not going up a lot. My morning mustread is from dr. Aul krugman, Nobel Laureate he says in the past, wage increases of four percent a year, more than twice the current rate, has been consistent with a low inflation. We should see rise in wages as a development to cheer and promote,. Not a threat to be squashed. Cheer and promote, not a threat to be squashed. There is no reason for the government or fed to be targeting or worried about high wage growth. I do not think that is the real issue of inflation risk. The issue of inflation risk is that angst are going to start lending. They already have begun. When lending growth and money growth happens, it will catch the fed on its back foot. The fed is going to be too slow to react to that. I dont think it is a wagePrice Inflation spiral story but it is a money and liquidity growth story. It has been a theme in the u. S. For a couple of years. We will continue with Charles Calomiris on his latest book. Good morning, everyone. Bloomberg surveillance. Im tom keene. With me, scarlet fu and adam johnson. We look at stocks, bonds, currencies, and commodities. I want to get through this quickly because what we are really looking at is russia. Futures up three, the 10year yield comes in risk off this friday. 2. 72. 2. 66 . Come down to the russian 10year explodes from 9. 4 up to 9. 64 , showing the tension in ukraine and crimea. Gainers take you to the and losers. One of the big losers yesterday in, another direct cell multilevel marketing company. Herbalife is being investigated by the federal trade commission so there is concerned that nu skin may be under some pressure as well. Six percent billion williamssonoma gaining on some samestore sales number. Do you shop williamssonoma . Go tosed to, but you can estate sales. I bought a pan their last week. How much did it cost you . Whats too much money. But i will have it the rest of my life. I will give it to my kids. And heirloom pan. Never give your girlfriend in heirloom pan or cuisinart. Middled to finance the child to afford the pan. We want to talk about one of the big stories of the of the day and certainly head of the week and. Secretary of state john kerry will meet his russian counterpart Sergei Lavrov in russia today ahead of the crimean referendum sunday. It will decide whether crimea will break away from ukraine to become part of russia. It can get ugly fast the wrong choices are made. Hans nichols, bloombergs international correspondent, joins us from berlin. This is a vote that germany and the rest of the western world make clear will not be honored by international law. The russian response was that kosovo was on it by international law. The referendum will pass and crimea will no longer for all purposes be part of ukraine. It is very clear, regardless of what john kerry tells us counterpart in london. I am absolutely fascinated by next move. I am thunderstruck by the lack of immediacy in the press. Granted, we are all distracted by the horrific Malaysian Air crash. But over the weekend, what would you presume mr. Putin and his soldiers will do . Want to look at soldiers in Eastern Ukraine or still in russia, but you also want to look at civilians and whether or not they are russian agitators. If i were reporting the story, i would go up and down the east part of ukraine and check in every hotel and small inn and ask their occupancy rates. If they have a lot of russians and i would also look for license plates and see where people are coming in. If these towns are being flooded by russian civilians, they are there to agitate and to sort of create a pretext of a violent pretext for putin to move in their forces. That to me is the strongest indication that those forces that are on the russian side right now would cross into ukraine property at what you are really getting at is lack of legitimacy. What has Angela Merkel said specifically about the legitimacy of this potential i should not say potential election, but this vote. Like every other western talk aboutela merkel this being illegitimate. She has had a half a dozen conversations with putin the past couple of weeks. They speak the same language. She won a contest in high school to study russian in russia. She is making no progress. No one quite knows how far his intentions go. Is it just crimea or is it through the ukraine . I know you want a ward at the London School of economics in 1956 won an award at the London School of economics 1956. What is your view of nato . Noted a to do a nato for north africa, which is france, the u. K. , and the United States, which is french lead, and that is the libya air support. Then you have to do an entire separate nato for afghanistan. The problem for nato as it exists right now is there is no nato to counter the Eastern European threat. The rare the very reason it was formed. It really does not have the capacity. Or really if there is a will to challenge russia and some of the places. Yes, they are moving in a few jets to poland but nato is basically as a all work against russian expansion no longer exist. More nationbuilding and regime change, as it were, in libya. Quit hans nichols putting it in hans nichols putting it in perspective. The referendum taking place sunday. The focus on washington, the American House of cards. Not Frank Underwoods washington but the fragile state of jamie dimons banking system. Seven years and in the financial crisis, smart people to why weng hard as are fragile by design. Charles calomiris, truly one of the nations authorities of how we got into this mess. You focus on the politics of the moment. The politics of 2014 any different from the politics of the spring of 2007 . Absolutely. It is different in a lot of ways. One of the key points we make in the book is that the merger wave of banks in the 1990s and the 2000s and the political alliances that were forged really were important for promoting the governments was for subsidizing mortgage risk. And that this really did make a difference in the 1990s and the 2000s. The differences, that merger wave has already happened. Politics Going Forward will be different. It is not clear that, for example, the large banks are going to be as willing to cater to the political interests they may just say to the lobbyists in washington, give out loans so we got to be reelected. This time they may do A Nancy Reagan and just say no. I think that is a real possibility. Let me give you some data. One thing we are seeing is some of the larger banks, the socalled Community Reinvestment ratings are going from superlative scores to just satisfactory. We are seeing contractions of innercity branches. We are seeing the banks pulling back from some of the sort of Political Investments they made in the 1990s and the 2000s. Of course, the government is reacting to that, too. Was just appointed as the supervisor effectively a fannie and freddie, and he was is trying already to start doing things, pushing back in the direction of using that leverage to try to expand subsidization of housing credits. Thes we head toward election, what will the banks want versus what washington wants . Know whatw, i dont washington is going to want other than to continue. The Obama Administration, to continue the subsidization of housing finance, especially in an election year. Obviously the banks are in a tough position, but at some point, you pressure them so much that it is not so clear that the government has a lot of leeway to keep pushing. So i think there really is a bit of at me play the role skeptic. Does anything really changed . At reason i ask, if you look fannie and freddie, which look like they will be effectively taken apart and replaced with something else. Are we really just shuffling chairs on the deck . I would not jump to the conclusion that fannie and freddie is going to be taken apart or replaced by something else. We have a bipartisan agreement to do exactly that. I dont think we do. I think what we have is the house of representatives of vision and a senate vision and an Obama Administration vision and they are three different visions, as far as i can tell. What we mean is we have gridlock, so the status quo continues. Now the key issue until the next election, maybe until 2016, is how is the conservatorship being run . You quote famed economist george the norstar George Bernard shaw the government that robs peter to pay paul will depend on the always had the support of paul. Kauffman says the way to fix this is have banks have skin in the game. Moynihan, therian guy running barclays right now, do they have more skin in the game now or is it just business as usual . They do have more skin in the game from every perspective. Their capital ratios are much higher. Of course, doddfrank requires them to have specific skin in the game in a new way. But one story that really fell off the pages that people have not focused on the volcker banks can do in setting up the equity funds that they have been setting up before. You know what the exemption for that is . Housing related investments. In other words, at every turn, if you go down all the reforms, what you see is the government always creating this exception because real estate is such a politically charged area. But it is also a very high risk area. Learnedher words, we nothing. We really have not progressed. Just going back to where we were. One of the insights of the book is that political coalitions and the powers of those coalitions are very robust. Politicians like to make claims about reform. A massive shout out to Charles Calomiris you before anybody said greece would make it. You advised the greek government. Greece has come back, spain has come back. What is next for greece . I cant say i am that optimistic, to be honest. Greece is turning the corner on the primary surplus, and there are a lot of good things happening. But i hate to be throwing cold water on it, but i cant really tell you the story about the transition of greece to a successful growth strategy. Ok. Charles calomiris with us tom a fragile by design is a must read. Also want to get his take on the next story. Ready to bow down to your robot or overlord . Especially in a certain profession. Which job is likely to be filled by robots . Coming up in our single best chart, next. Good morning, everyone. Im tom. Scarlet fu and adam johnson on a friday, a busy weekend ahead. Heres adam johnson with top headlines. In brazil, thousands turned out to protest the money that is being spent on preparation for the world cup. And more demonstrations are planned to protest the billions of dollars being spent on the tournament. That is scheduled to begin in june. So far, only nine of the 12 stadiums intended to be used have been completed and plans for Infrastructure Improvements are well behind schedule trying to put in new roads to carry buses, trains, you name it. A new low in the number of teenagers working. Just 26 of teens aged 16 to 19 got a job in 2011 baird that 26 number is down from 45 11 years ago. Almost 2 million teenagers in the 100 largest cities were looking for work or wanted to work more hours. That has been one of the problems here, tom. People who want to work full fulltime but can only get part time, if ata all. Check this out, the sophomore nailed a gamewinning halfcourt shot. Fourth overtime. This is in the Minnesota State tournament. Look at this thing. Go, go. Incredible. If he had missed, the game would have gone to a fit over time. Fromar do you think he was the basket when he made the shot . Any guesses . 60 feet. Incredible. It gets to the college battle. I have to get up to speed. Yracuse has lost 14 Undefeated Team going into the tournament. How do you pick your bracket for march madness . Andt us bsurveillance send your emails to me on twitter to make me smarter. Oklahoma . Oh, st. Louis. [laughter] why st. Louis . He really knows nothing. I always go with kansas. That was the first real good basketball today basketball game i saw. Georgetown. I am rooting for georgetown. Perennial favorite. Single best chart to save me. We might all be saved by robots when they were taken over by robots, because that is a perennial worry and the label economy labor economy. A study showed different occupations that could become automated in the next two decades. Loan officers, 90 odds they will be replaced by robots. Taxi drivers, chauffeurs, i guess that is linked to the google driverless car. Our tender, 77 . I would argue the real role of the bartender is to play shrink. Just listen to me, please. Shot dispenser . As a reporter or correspondent, you have an 11 chance of being replaced by a computer or robot. And physicians and surgeons are in the best position, because the study found machines are not able to match the dexterity or manipulation. Charles calomiris, not at odds for university where the study came from. Or get about all of this where did the studies come from . Do your students have time to do this . This one. Not read a pretty eyepopping number. One of the ones scarlet was showing me, Loan Officers 98 . Do you buy that . I dont. Officer mean . An if it means somebody who is processing applications on a computer, i guess that could be done by a robot. If it is somebody who is trying to figure out whether you will repay your loan and really looking into the problems or potential problems and your credit risk, i dont think. Spend an evening with someone at Columbia University talking about the behavior construct of finance. There is an equation. Says nothing about the behavioral component of your world. Are we any smarter about making dumb loans and decisions in thinking that we were . We are. E it is really not rocket science. For example, in consumer risk him a there are three even to that generally make consumers get in trouble here to divorce, loss of jobs, or health problems. It is really a question of the iscalled fico score that tracking you is a lagging indicator of these things. If you want to know whether somebody is a good credit risk, you need to collect the soft information. Go kick the tires. Would you buy shares in a big bank right now . Yes, i would. I own shares in several of the big tanks. I did a study with my colleagues looking at what is driving the market book ratios of the big banks. There are several of those things that have been driving them down that are predict bleak going to reverse. Going to reverse. A large bank investments, particularly as Interest Rates go up again the value of a bank having a core deposit depends on Interest Rates being higher. As Interest Rates go up, it gets better. , sell side analyst. Ive got something for you. Cronut. Behind the it is a shot glass which is made of a Chocolate Chip Cookie. The numberouring there. Send it my way, please. Heather is on remote, i am guessing. We will be interviewing him right after the break. I am in. Bloomberg surveillance. We are on Bloomberg Television and also streaming live on your tablet, your phone, and bloomberg. Com. Stay tuned for your cookie. This is bloomberg surveillance. Im scarlet fu here with tom keene and adam johnson. Now. S good company news walt disneys frozen is set to be the top grossing animated feature of all time. It has taken in more than 1 billion. It opens today in japan and it is predicted to grab the top spot. What is the name of the song, let it go . Microsoft pushing a cheaper version of its office software. It would cost 70 a year and can be installed just on one pc and tablet. Office 365 sales dipped in the first quarter. Hung ontoystation 4 the lead of u. S. Videogame sales last month. It came out ahead of Microsoft One but by a narrow margin. Spending on video consoles million into 347 the month. From the files of bloomberg west. You were just checking out the russian markets. A really smart note on the dynamics. Russian yields higher. Real tension and as Brown Brothers herons and Brown Brothers harriman said, a real nervousness. Micex index,ssian with 50 stocks, it trades at five times earnings. That is how cheap it is because people dont want to own russian equities. Here is something you may want to own instead. Createdminique ansel the cronut and now he is introducing his latest hybrid, Chocolate Chip Cookie shot glass filled with ice cold milk. He debuted at the sxsw conference and they went nuts. You elevated your brand by making it exclusive and a luscious him about why not go mass market delicious, but why not go mass market . The cronut is something very special. It is not something that can be massproduced. I have a lot of respect for my product and i want to give my customers that experience. They line up starting at 4 00 a. M. I know there are lines in front of your bakery. You had an oreo cookie for the first time about a month ago and i guess that inspired you. How did you come up with the idea of the chocolate chip shot glass . Everybody was drinking milk while eating cookies, so i wanted to do something where i could combine both together. Of course, i might not be the first one making a cookie but i wanted to bring the idea and make it a little more interesting and exciting. So, i found a way to mold the cookie into a cup and then milk with vanilla and pour it into the cup. Have you tasted the imitation cronuts . I am sure there are going to be imitation cookie shot glasses soon. I have not tasted any. But i think people have their own creations. I believe in innovation and creations and seeing so many people, it is something amazing. Excited lot of people about new phones and technology when they launch come and seeing the same thing with food. It is very exciting to me. Very quickly, how do you create buzz . Say it again . But how do you create buzz . I dont try to create buzz. I create new things. I love what i do. I make new things all the time. I believe in creation and innovation. I believe we love what we do. So much. You congratulations on you ruining my waistline. Lets do a four x forex report right now. Weaker ruble with the tensions in ukraine. It is bloomberg surveillance. This is bloomberg surveillance. Them thery of mystery of malaysia airflow 370 deepens. Focusing on the cockpit and the pilot. Thesearch goes west along indian ocean. Europe and nato scramble as pressure hunkers down on ukraines border. The markets move. And march madness. We do the math. Good morning, everyone. This is bloomberg surveillance. World live from headquarters in new york. It is friday, march 14. Joining me as always, scarlet fu and adam johnson. Our guest host for the hour is the cofounder and managing partner of first market capital, with a nodding interest in rest as well. Inte adam, get us started. India wholesale Price Inflation eased to a ninemonth low in february. Economic aid in the u. S. , admittedly not a lot but important. Producer prices, which measures inflation at the wholesale level, it comes out at 8 30 a. M. , university of5 Michigan Confidence number. Earnings before the bell, just carnival. , an item of note, secretary of state john kerry arrived in london and he will be meeting later with Russian Foreign minister Sergei Lavrov, trying to be escalate what is happening in the crimea. We will start with bp, it can once again compete for oil in the gulf of mexico. Ban put inted a 2012 place following the deepwater horizon explosion and oil spill. Abide by ethics, Corporate Governance and safety procedures outlined by the epa. Barclays is set to shake up its investment bank. The Financial Times reports the overhaul could result in thousands of job cuts as shareholders expressed unhappiness with the rising costs and falling profits. The new strategy is expected to be unveiled before the summer. A win for General Electric and south africa. The Company Wants to supply hundreds of diesel locomotives. Ge will supply the 465 locomotives as part of a 3 billion program by south africa to expand its rail capacity. No financial terms were available. News, on the Malaysian Airlines mystery. The search for malaysia and , the indian navy will search 13,000 square miles of the indian ocean, far west the original search area. Will search south of burma and west of taiwan. John mcgraw from the transportation security administration, he joins us from annapolis, maryland. Honored to have you with us. We have seen the news from malaysia where they are beginning to interview the pilot. Do National Security authorities review pilot safety as well as passenger security . They do, in coordination with the airlines. That has been a controversial piece here in the United States, in that pilots and crew are screened in a different way than passengers are. , some inat passengers the United States have been critical of that. But airlines do certify to tsa that all the background work has been done on these individuals, all the employees. And the whole point has been said why do you want to review us so closely when we are in control of the airplane and can take us down take it down . That statement has just been made. The point is, you need to consider and be scrutinized by every and scrutinize everyone. This is so unfortunate for the families that this has dragged on. But come and you know, each time as an investigator that is my expertise. We had on yesterday mary schiavo. The Inspector General focusing on airline parts and such and you were more focused on the security issue. Majoryou say there is a partition insecurity between the way the United States looks at these processes and the way malaysia or other asian nations would . I dont know that. Tsa is to work with all other countries that fly to and from the United States and over the United States, to get as close to our standards as possible. And of course, with the europe and some of the asian countries, you learn something from them, and you make adjustments. So, while we cant do any dictating or requiring, we certainly Work Together with these other countries and hope to bring them to the standards that europe and we have. You were a secret Service Agent in the wok in washington back in the 1960s and 1970s and you helped found the tsa. Is it possible to actually think an aircraft like this could be hijacked and actually be hidden at this point . Believe so. t i think the directions it was flying and the places it was flying over, and the fact that it was on radar i just dont think there is any way that it could land without the population knowing, even in some of the small islands where most of them cannot handle the size of airplane, but if they did, it would be something that never happened before, and just the noise of the aircraft landing on a small island like that there are only two or three of them that would have landing pad, or landing strips long large enough. There are so many theories out there, many of them crazy and many of them really out there. Based on what you know right now, what can you tell us this is not . What series can you knock down . Beginning, very remember i said from the very beginning that you have to look at everybody that touched that airplane since it landed in a while a lump or kuala lumpur. Pretty much everything has been examined. Twothat you have transponders turned off, it flew at a lower altitude and engines were still communicating with the ground. When is a hypothesis here, you put all of the investigative things together, this leads you to a scenario that it just has to be one or both of the pilots. Think you so much the founder of the tsa. For this hour, the cofounder and managing director of all Things Digital and Venture Capital. I have one major question all of a sudden things are crashing. It is like there is almost an overload in your world. Websites. I dont mean to make light of malaysia. Is there an overload of success in your world . We are heading levels never reached before. Facebook has a billion people on it a month. Youtube has a billion people streaming billions of hours of content. It is hard to catch up. I can almost feel it when i am on twitter. Too much buffering. You cant process all the information. What you are really saying is we are a victim of our own success. But who actually i am going right to the gusto on the investment side who is going to benefit as we build out to enable all the data . Some of the infrastructure providers that are providing the wireless services, the next generation, 4g and beyond, because the data is switching mobile to mobile apps. The second piece is security. The nile of service attacks. When you think about any of the big game sites, they constantly have hackers banging on it and a portion of those shutdowns or fails our security. There is a whole next generation of security dealing with this whole new ecosystem of mobile apps, etc. I am wondering if the creation side, the content side, talented people working for them. It cant be as exciting to work for a cisco these days man working for a start up could create the next big thing. It depends on what kind of engineer you are. But if you think about google, they get some of the best engineers in the world. Not only working on the front end but the youtube infrastructure. Of theerest we have some best engineers not only designing the front end of the site but also maintaining kind of a core product, having at times seven different apps webbased,s, supporting different images and video all over the world. Lets rip up the script a little bit. A cell phonehad and everything was wiped out on it . Do you worry that everything on my cell phone could disappear one day . That could easily happen. Whennt of insecurity you walk into a starbucks, unsecured wifi and when you are walking down the street your phone is pinging around. I would be less concerned that your phone would disappear and more so that someone would strip off the data. Questions. Like 45 we are just getting started. He is with us for the whole hour. Lets do a data check. Stocks, bonds, currencies, commodities nothing matters. Looking at russia. Eurodollar weaker. Ae russian ruble gives way solid 20, Gladys Knight and the pips, moves up. Weaker, weaker, weaker. Secretary kerry is in london. And that is your data check. And there is the referendum vote on sunday as well. Coming up, we will discuss amazons increase in the prime membership prices. Good morning, everyone. Bloomberg surveillance. Im tom keene. This matters now to our guest host Rick Heitzmann from firstmark capital. Google is in trouble yeah, right. Seeing search my great to mobile, and that means less desktop revenues. My desktop andnd i am on google and i am not on there on my cell phone. Alexi are moving to an ap you are moving to an app, but you are not searching. So thehe sports app, number of searches, especially in the western world where smart phones are very large, is decreasing. Do you have a sell on google . The core business at the margin decreases . It is projected to decrease, i want is a 1. 6 billion dollars this year desktop search. I will not put a sell on google because some of their products like youtube will be really fantastic. Youtube is going to be one of m agreatest mna deals deals. I had a conversation yesterday about youtube. She is raving about youtube. What is new about youtube . Brands. Brands are migrating onto youtube, the same way they did a super bowl commercial, millions of dollars for a limited amount of time. They are creating specific content just for youtube. It was the old spice at a couple of years ago. It is branding content on youtube. I like that. Desktop over to mobile you are heavily involved with pinterest, does that go to mobile . It is bigger on mobile than desktop. Most content sites now are about 60 slice 40 60 40. Need an iphone 6 . And think they figured out what the next function is. Your phone is pretty good. Are the pictures going to be that much better . You and i have the beverage of our choice this weekend. 2014will we talk about for , what is the number one thing on your mind . The ideal market. How long will the ipo window be open. Venture capital community. A lot of people rushing to go public now. The silly season in check ideals, getting silly . Not yet. It gets silly when subpar Company Start to file. I have not seen it. I think we are in the good season at least three 2014, but sometimes you hear people saying stuff that you know it is silly. Thank you so much, Rick Heitzmann. 3. 1456 i day, went to the met museum to relearn my geometry. We will show you. I survived. On bloomberg surveillance. Squared r good morning, everyone. Our twitter question of the day. Thanks for your support. Great week for the twitter question. How do you pick your bracket for march madness . How do you pick your bracket for march madness . Whatever way you pick it is better than the way i take it. We know that for certain. Better than the way i take it, too. Adam adam johnson, dumber than me on the bracket and scarlet fu, smarter than the both of us. Rick heitzmann, what happened to georgetown . A tough year. Next year is going to be much better. Terrible. Cant talk about it. Uniform color, they changed you the uniforms they changed the uniforms . Next year is our year. It is a rebuilding year. That is what you say. Get to tops headlines. China orders a halt to mobile phone Payment Systems and Virtual Credit cards. The Central Bank Says virtual critic arts are too risky. It comes just a day after and . 10 launched Virtual Credit cards. Things have been calling for strict your rules for the Online Finance industry. A flat tire blame for an aborted takeoff of a u. S. Airways jet in philadelphia. The tire blew out as the jet was taking off and because the landing gear to collapse. A skidding halt and emergency chutes were deployed and used to get the passengers off the airplane. Sadly we have to tell you jon corzines younger son was found dead in mexico. He committed suicide after a long battle with oppression. The spokesman for the family said jeffrey had been suffering form from severe depression for several years and have recently been digging treatment for the disease. Those are your top headlines. Just difficult. It really is. Jon corzine led goldman sachs, let new jersey as governor and was also a senator from new jersey. Our thoughts to the family this morning, from all of us at bloomberg lp. Lets move to company news. Free shipping and unlimited streaming on amazon will now cost you 25 more. 99 a year, up from 79 set nine years ago. Will this increased deter potential customers . The onehe author of percent windfall and a pricing expert. You said this was a well executed move but amazon could have done better. Could have been more creative. Can you explain . Exactly. From an execution standpoint, first of all, amazon previewed the price increase saying it could be 20 to 40, so when it wereout as 20, Companies Like, it is lower than i expected. Secondly, they attributed the price increase to cost with is a standard pricing technique. No one wants to hear that executives want a higher salary. Third, it was important to emphasize they have not raised their price in nine years. That goes to the fairness notion. Finally, there are a lot of rumors about added value, that there could be more streaming. I know there has been some Market Research that indicates that a 20 increase could put as much as 40plus percent of the amazon rhyme customers at risk. At the end of the day, i dont think it will happen, and they did a good job of execution. They did a good job of execution. Is it clear to you what amazon prime membership buys you . It gets you faster shipping but not on all products, like thirdparty vendors. It gets you access to streaming but not all content. It is like amazon better but slightly better. Is it worth the premium . Obviously, for 25 Million People so far, it has been worth the premium. There are a lot of people who are very addicted to the convenience, especially if you look at other attribute like straining. It is a great value relative to, say, netflix or the competition. At the end of the day, it is a good value for customers. Is there a Tipping Point when it comes to Pricing Services . You mentioned netflix. The annual Service Comes out just under 96 a year where is amazon is having the 99 dollars level. At what point does it turn off customers . I think it was smart to keep it under the 100 mark. I think what they could have done better is, if they really wanted good you do a good job with pricing, they should have offered two different versions. I think they could have actually pushed the current amazon price up to 110 or 120, but more importantly they could have had an amazon basic, 79 or even 69, but restricted. The key of prime is not necessarily to make money on prime, but it is a marketing conduit for amazons future growth. Is there enough price discovery by big corporations . Is their big mistake if they dont tweak prices enough to find double the market will bear . Absolutely. At most companies, pricing is kind of the dark course strategy. Time and time again i see it that they have not thought about it. It is sort of like the undiscovered strategy at most companies. Rafi, on the one hand you have uber that changes rates on an hourly basis if not faster. Then youve got amazon on the other that took nine years to do the price increase. What is the optimal time to actually figure out when and where to change prices . Yearlyink it should be a discussion with executives to go over the Pricing Strategy and what has gone on the last year. But i should point out that pricing fortweak its product virtually daily. There was an article a couple of years ago saying as much as six to eight times a day on some products. So on their products, they are almost uberlike. Amazon has almost dynamic pricing on millions of products where they are constantly filling demand and inventory, so they are constantly tweaking. A great thing about the web, when you have large amounts of realtime feedback, that you can respond to customers immediately. At you for joining us as morning. Guru andmmed, pricing author of the one percent windfall. Coming up, a lesson on bracketology 101. Beckons. Ekend it is a perfect early march morning, middlemarch morning here in new york city. Looking forward to wonderful temperatures saturday. Really looking forward to warm weather. That is a gorgeous shot there it it could almost be summertime. Lets take the rest of the day off. It is still like 30 degrees, guys. Lets get to company news. Starting with mark zuckerberg. He called president obama to complain about nsa spying. He was angry over reports the spy agency can disguise itself as facebook to gain access to users computers. He says the nsa needs to be more transparent. Warren buffett passing carlos slim to become the world second richest person. His net worth includes increased more than four percent this year. Carlos slim helu seen his fortune shrink by 11 billion third Warren Buffett trails number one bill gates 514. 3 billion. That alone would make him the hang onto theon 4 lead. It came out ahead of the xbox one but by a pretty narrow margin. Spending on video consoles soared 42 in the month, thanks to new game consoles. That is todays company news. 3. 14,big number, the rationown as pi of a circles circumference to the dynamic diameter. Today is pi day oh, i get it. I just got it. We dug through archives and we brought you video of tom keene visiting the math museum. He quit the Hedge Fund Business and start at National Museum of mathematics. They built this wonderful institution here in new york city. It is about math. America is way behind. Weve got to get the kids and parents engaged. Inside it is a lot of fun, but this is a serious business. Weve got to get better at math. Ok, what are we doing here. Oh, my god, there i go. I flunked this. This is serious mass, people, trying to get a seventh grader fired up. People learn through their hands, by touching and doing. Im faster than you. Like a hexagon. Mathematics and algebra is not just about numbers. It is almost also almost in every instance about the physical space of geometry. What do we need to do in this country to turn around to make math cool . It is great to have places like this where they can touch and feel it. I am always looking for toys to keep their brain going. Do you let them do the machines . Throw them in the pacific ocean. I do that, too. Gete are expecting kids to the math skills in school but we never show them what they connect to in the water in the real world. We are here to show them the beauty in application and we rely on the grade math teachers to give them the skills. What i will do for mathematics. Math is fun, math is cool, and, tom, you might meet heidi klum. We come. Hypotenuse we come. Compared hypotenuses. She was going to do something in new york and she was scoping it out for kids and we had a really fascinating conversation about her paranoia of keeping her kids up to date with academics, it and particularly math. It was really interesting. Rick, are you a math guy . You are now a numbers guy on wall street. I am a member of the math museum and i take them there a lot. It is a good thing we have a lot of kids smart in math. The museum is great because it is fun. You are riding bikes and turning yourself into a tree and you are solving puzzles. It is very hands on. Toit is not that you have sit here it is very geometry based. Geometry is cool. Rick, when you hire people for your firm do you look at whether they have the necessary math skills or can be picked up . It can be picked up and supplemented but there is an element where you have to understand how businesses work. There is such a huge quantitative aspect of that, about income statements work and what margin structures look like. If you are not at least into with that it would be really hard to be an investor. Comparing and contrast. Relationships. You and i talked about this before. I see this every single day. They can do math but they cant do math. It is a distinction within an industry. And you have to be able to do both. Like were discussing with the with the changes. At less than an hour away from economic data. The Producer Price index coming out at 8 30 a. M. And ahead of that, the features are little changed. 10year yield is 2. 64 . Good morning, everyone. Bloomberg surveillance on Bloomberg Television and radio. We are out on your digital media. On itunes and android. It is free. Look at bloombergtvplus on your ipad. It is free. That is the theme. Our interviews and great guests. Im tom keene. With me, scarlet fu and adam johnson. Rick heitzmann is with us, managing director at firstmark capital. We are talking about bracketology. It is not just for jocks and investment bankers. Math jocks, to be precise, blowing the pros out of the water. The associate professor at the department of mathematics and Computer Science at Davidson College and is author of an upcoming book this friday, march 14. Math bytes. U. N. Your fellow students worked up algorithms on brackets and you placed them in 97 97 percentile. What are the parameters . A strength of schedule. So we adapt message from the bcs, so it is a linear system 350 has 350 equations and unknowns. But the part that enabled it to do much better is we enabled ple to weight factors that that they believe are predicted. The schedule is what you used. The 94, 95 that got or than 90s percentile was putting in the ability to actually determine what part of the season do you think in time is predictive. Momentum matters a lot. That is the idea. Color of jersey . [laughter] what were you surprised by when you were looking around trying to figure out what to weight the heaviest . We actually only did it to see if the method was giving predictive information and the 97 was the very first time we did it. Rick heitzmann from georgetown an ugly year for him. Jump in with the other choices. I am a huge fan of university of florida, and my dad was a professor for over 40 years at villanova and grew up there, so i like villanova and i hope they still get a one seed. I think there is a good chance. Right now florida, arizona, and villanova are all high on the brackets but we will not know until sunday because we use all of the data through sunday. How do you predict the cinderellas . Is highly them, if it improbable and it is just that magic day, we will not pick it up because that is the randomness of sport. Excuse me, you are in the 94th 97th. What are the limitations of using math and figuring out the advances in the tournament . Where does math not help . If you are looking for the billiondollar bracket and have it perfect Warren Buffetts one billiondollar wager. Anyone who can fill out a perfect record. With my students, i will mention to them, at certain places you want to flip the result. Because there will be other information you can put into it, like the coach to the coaches matter . Aree dont put it in but we we have methods we share with people and each year proprietary data. Trying to picture as an economics guy at princeton, i had to use regression analysis. You have blocks of data, 350 columns across and however many rows down and you cross correlate all of that stuff. There are two versions of it. One of them is that way. 5,000 for every row. You . S caesars called how many millions of dollars are you worth to las vegas . A lot of people bring it up and they ask why you dont have to write a textbook. Bring down a house the house. You could be in a katy perry video. There is a new goal. Tim, thank you so much. Can you go back comeback . Bracketology 101. Our twitter question, how do you pick your bracket for march madness . Tweet us bsurveillance . Madness dart and dartboard. How is that for old score old school . The jerseys . Bright yellow . Looking at the cheerleaders. We will talk about china and u. S. Listings when we come back. Good morning, everyone. Good friday morning. Of course, a lot going on. Stay with Bloomberg Television and radio throughout the day as we focus on will Asia Airlines malaysia air and what is going on in ukraine. With me are scarlet fu and adam johnson. And it 00 a. M. And beyond, betty liu. It sounds like exactly. About theking intersection between wall street and k street, washington i dont know how else to describe it. Ithy as i can be. Jim reynolds will be guest hosting with me. We are also bringing on new york city state comptroller he will be talking about the pension. Burden of the big running the five Pension Funds here in new york city. A huge deal in chicago as well. A huge deal. John from bankunited, the floridabased bank. Of course, the news from the morning, what is going on in malaysia. Where is secretary kerry, london . Meeting with Sergei Lavrov, the Russian Foreign minister. Lets get the morning movers. You, libya media dropping his bid for 40 full control of sirius. They will no longer pursue the plan. Liberty owns 53 of it and offered to buy the remaining shares. It would have given liberty cash flow and additional assets to borrow against to fund a Time Warner Cable Time Warner Cable bid, but it never happened. We also want to highlight another mover, something moving all week and certainly has captured our attention because it is on the cover of bloomberg businessweek. A deep dive into the target cyber breach. It happened months ago, yet the details are just coming out about how target could have done a lot more to prevent this. Heitzmann, our guest host for the hour, you thought about this a lot. You say this is just the tip of the iceberg. It is just the tip of the iceberg. The number of breaches is increasing, and the size of the problem is escalating. Orhink target was a 400,000 five hundred thousand credit card compromise, and you see it in big and small ways every year. When you think about personal security and passmore passport management and wallet management, it is getting into peoples consciousness that this is really important. Especially as everyone gravitates toward wearable devices, whether a smart watch or monitoring how many hours you sleep. Why is that so vulnerable . It is somewhat attractive but your phone is always a beacon. It is telling everybody where you are. The data point that marketers pull from you, so they know where you are and what you are doing and what you are checking on. All of those things. An increasing amount of people are disconnecting from that. They say i want to share my information on my terms. I dont need to know let every marketer know where i had dinner or how many hours i slept. You better put that phone on plane mode. They are scared off. Just turn it off. Nobody needs to know we are sitting on the surveillance desk. More on the missing Malaysian Airlines jet. This is bloomberg surveillance. Im scarlet fu with tom keene and adam johnson. Our guest host, Rick Heitzmann, cofounder and managing director of firstmark capital. Frozen set to be the top grossing animated feature film of all time. Taking inen in more than 1 billion. It opens today in japan. The profits dont bother me anyway. [laughter] microsoft launching a cheaper version of the office 365 software. It will cost 70 a year. It can be installed on just one pc and tableted it sold three point 5 Million Units last year but microsoft said sales dipped in the first quarter. The cofounder of wikipedia said eventually companies will come out ahead in their battle with the nsa over spying. He made the comment during an interview with Bloomberg Television in london. I think it is very straightforward. The technology is already in place. Awareness among companies, they need to move to the better technologies, is also in place. I think it is just a matter of time. I dont think ultimately the nsa will win in this fight. He also commented on bitcoin, saying despite the recent problems Venture Capital money has been a flowing into the virtual currency. That is todays company news from the files of bloomberg west. Stunning how we changed our information flow. About wikipedia. They have stuff on my page that is wrong. Ice cream about it. Ream about it. And you are not allowed to change your own. There has been a profound change. But there are so many Adam Johnsons that i dont have to worry. Screening at jimmy wales his music was loud. [laughter] news about chinese ecommerce companies. The background is alley, the biggest, is angling for new york over hong kong in its ipo. Alibaba this week bought a 60 stake of china Nation Media Group because it is competing baidu. 10 and i do what is so attractive about the u. S. Over hong kong . All the Asian Companies are starting to move west, not only their institutional Shareholder Base but even consumer products. I was on the board of a Company Based on the west coast that was acquired by ten cent, and they think this is the beginning of a very profitable and high market cap rarity these are companies with over 100 billion of market cap coming west and really becoming global players. Are invested in the u. S. More willing to or interested in with acompanies compelling emerging tech story a pass versus asia where they want to see hard physical assets, physical holdings to back all the valuation up . It cuts two ways. They are more than willing to give a past thats some of the numbers of alibaba and ten cent, hundreds of millions of people in a day but things like Virtual Credit card that came out showing the regulatory issues in china not being the same as here it gives people pause. Sort of a combination of what is happening in mainland china, the fact that these Chinese Companies actually want to come to the u. S. Say being able to list on the New York Stock Exchange is a seal of approval. Do you trust their accounting, and do they have profits . Yes and yes. I think the best companies, and alibaba a la bobby could be the biggest ipo could be theba biggest ipo ever. They want to have the level of transparency you see in a u. S. Company because they want to be from both an eagle and value globaltive seen as a leader. Everybody trumping up the alibaba ipo being the biggest potential in history. Where could it potentially disappoint . They have to this expand beyond china. They have such a huge presence in china. 60 of the people on the internet in china use their site every month. They have to get beyond those. Is there someone who can buy them out preipo . Is apple big enough to buy alibaba . The rumor is it could be a 200 billion company. They could buy every Media Company in the u. S. With that kind of market. I understand their china dominance. Has they displayed any International Abilities . Some in asia. I am baffled by the story. The major question is every year we hear about alibaba. It never seems to happen. What has changed to make 2014 the year . I think they decided to become more transparent and decided to go public. The numbers are starting to leak and supposedly the leaked numbers are amazing. Scarlet, get us for the weekend. We have to look ahead to the stories that will be the dominant themes. Ukraine, the meeting happening right now between john kerry and Sergei Lavrov. Look at the markets move, the russian yield spike. Crimea, Russia Germany front and center. I thought our interview this week really focus on the relationship between chancellor merkel and mr. Putin in russia but this is exceptionally fluid friday into saturday. She is a russian speaker. There is also a very strong relationship. Germany accounts with recorders of the Foreign Direct Investment into russia. That is how tightly involved they are. Shout out to Richard Haass and the council on foreign relations. About the former u. S. Ambassador to russia was great about how alone mr. Putin is, versus having a set of advisors. Talkingn osullivan about this idea of sending natural gas to europe, it is like a four year or five year out thing. For the u. S. To effectively compete with russia. We are trying to build out the facility down in louisiana and that will not be ready until 2015. Tom, you have to head off to radio now. The Producer Price index at 8 30 a. M. Earn your keep here at bloomberg. We will see you in a bit. But my agenda item, of course, is that disappearing Malaysian Airlines jet. Details from a News Conference from the malaysian government. They have not given up hope on finding the plane but they are lost they are also looking at the possibility of pilot and crew involvement. That they did all of this on purpose. A possibility. House, ifsearch the needed, but it has not yet been done. It has now been one week since the plane just disappeared out of thin air. May be some news over the weekend. We will be covering that on bloomberg. I am looking for news coming out at 8 30 a. M. And then 9 55. Producer prices, a major of inflation at the wholesale level. It is way down the line but gives you a sense of what is happening. And Consumer Confidence coming out at 9 55. Rick, you are a Venture Capital guy and you take a longterm view. How much credence do you get to the numbers we focus on day in and day out . Very little. My view is 3, 5, 7, 10 years. Iu care about the market, and am personally interested in the market, but it matters only as much as do you see the economy being strong, do you see andumer demand being strong do you see the potential acquirer is being cash rich and having good currency and the Institutional Investor market being hungry for tech ipos . And it is a good time. The tech ipo window is open, seems to be open this year, and i think it is going to be an important year. The biggest ipo year in tech and probably which is why alibaba is relevant this year. The window is opened and they are big. And the window is open for you guys to get your brackets in. Our twitter question for the day how do you pick your bracket for march madness . E answers that is legit. I can go with that. And i can go with that one, it is true. And 50 luck . Unlucky a couple of years. But next year they are due to be lucky. New uniform, new stuff. We will be all right. Villanova will be all right if they pick up momentum you are still looking for a woman nova win. Someone said a horseshoe, rabbits foot and a rosary. If you are trying to win the 1 billion award for a perfect bracket. Could you imagine getting there . I could not even fathom putting out a billion dollars for a perfect bracket. Has a perfect bracket ever happened . He is affiliated with some of the Aegis Insurance companies in the world, so im sure he did the math. Is lambasted writing puts and he was absolutely right to do that when the market was at a low. He knows the math behind it. He knows the math. Rick heitzmann, thank you. Bloomberg surveillance continues on radio. In the loop is next. With betty liu. Good morning. It is friday, march 14. We are live from bloomberg world headquarters. You are in the loop. I am betty liu. We made it through another week. Warren buffett is now the worlds secondbiggest richest person behind bill gates. Get no biggest banks love from investors and 70 billion vanishes. Jim reynolds from loop capital is my guest post. Kenneth and new and newy john kanas York City Comptroller scott stringer. Investigations continue into the Malaysian Airlines jet disappearance. At this hour in london, secretary of state john kerry is meeting with his russian counterpart. Europe are holding firm on the warnings of sanctions if it is not back down from annexing crimea