A good idea . Our guest says we should regulate and it has been Holding Hearings this week to make his case. I have got to ask you, why does this need to be regulated . We always want innovation and we want to attract more Tech Companies to new york to do more great things. It is clear bitcoin and Virtual Currencies has become a place where we have seen a lot of Money Laundering. On you worry at worried are you not worried about stifling innovation . Balance to make sure Money Laundering is not going on. Permitsame time, innovation. We can do both. There have been a number cases already. A massive amount of International Money going on. Through a little bit. Who was doing what to hide what sources . I am not a prosecutor and we did not do the case. A lot of crib though currency being used to move money out of foreign companies. You do not think the coin is a bad idea. It might be a good solution. You just need an end to Money Laundering. Yes. They have potential and down the road, there could be a real alternative currency that could bring costs down for transactions. They could eliminate a lot of credit card fraud. You do not have to give identifying information. The whole motion, i realize someone has got to make it is as an about how it will work, but the nature of the coin depends on the emanated he. Anonymity. We license money it is looking more like some of the entities in the bitcoin world are engaged in money transmission, the transfer of money over state lines. We have an obligation to license them. Do you . The history that is but is that really necessary now . It is. The bottom line is, we want these companies. Some regulators, we have seen over the years these companies and we want to make sure there is enough capital there so consumers do not get stuck at a huge loss. Is this a commodity or a current . You are talking about regulating currency. The price volatility suggests bitcoin is a commodity. Different countries are opining over the issue. Some say it is a commodity. The key for us is money transition going on. We need to put in antiMoney Laundering guardrails. That is our job. Become a let the area place where all these activities go on. Drugsive amounts of dealing going on. Definitely a national topic for conversation. We put the question to alan. I do not understand where the backing of the coin is coming from. There is no fundamental issue capabilities of repaying it in anything that is universally acceptable. Is that at the heart of the matter . It is out there and it is useful. B makes a good point. I have that reaction initially when i learned about it wants to go. You have to study it and understand the benefits it offers. It is easy and a lot of people have the same reaction where they are very skeptical. We are trying to resist that. Really keep an open mind. If we see a lot of Money Laundering going on in the area, we have to make sure we are getting control of that. Money laundering facilitates a lot of bad things. We need to get a handle on that. The wholejust say thing is ridiculous and give up on it. You talk to the state regulators or federal regulators looking to set for amateurs. Absolutely. Many were at the hearing yesterday. We have other federal entities today. Part of treasury, they already opined on this and said, we need to think about Money Laundering rules. We are talking to treasury and other state regulators. If we come up with something smart, it could be an example for others. How quickly can you get something done . Give businesses certainty about what the rules are, they will plan. Businesses do not mind regulation. What they really mind is a lack of certainty about the rules. You. Ank coming up, 11 stories underground. New yorks new subway. State in the loop yuriko loop. Welcome back. Yahoo release forecasts shorter than estimates. Numerous a myers struggling to turn this company around and that continues. Paul sweeney, you know yahoo well. What do you make of the quarter . Another disappointing quarter. A Revenue Growth story. There is no revenue. One billion users to generate Revenue Growth. Digital advertising is going 15 a year. Yahoo , aol, unable to take advantage. Marissa mayer is probably feeling pressure. We saw alibaba results. They are trailing. It is slower than it has been. It starts to slip to show some signs it is maturing, as well. Right. Indid slow a little bit terms of Revenue Growth in the Third Quarter. People generally feel very bullish about alibaba and e commerce overall in china. Alibaba, the valuation associated with the ipo, it continues to be the driving force. Exactly. When people look at the price, they say mercer mayer turned around the company. The results, you do not see it. What we really see is dan lothian particular finding a way , followingf alibaba the finding a way to make that work as well. A good jobpany did returning proceeds to shareholders and making acquisitions. From that perspective they have done a good job. Aght now, the stock is almost complete that on the value of the ipo. Yet. Al improvement mercer myers said it was a multiyear turnaround. Let me turn to facebook. I have not updated my model yet. To facebook to be reported, what kind of trend . Mobile advertising. For facebook, it is a mobile service. 75 of monthly users are mobile users. Investors have focused on the fact of how fast they can convert those users into revenue producing users. The method we are looking at is mobile revenues. Two quarters ago, it did not give the for the ipo. 0253 or 54 this quarter. That is good news. Still, the challenge for facebook is 75 of users are mobile but 53 of the revenue is mobile. Ify have room to grow their you are a bullish investor on them. Numbers have been good and the stock has been great. It is amazing they could take a business with no revenue and suddenly make a turn. Youre talking 1 billion a quarter. An amazing turnaround. It is. It goes to the fact when the facebooks and twitters came into the market and the business plan, mobile was becoming a major part of the internet. Compare it to yahoo and a low where mobile was not part of their dna growing up. They have to adapt. Thank you. Cristina alesci is joining us with our guest for this hour. What have you got . Else would we talk to but bloombergs columnist and anchor of political capital, al hunt. You hosted our state of the Union Coverage last night. For those of you who did not catch the whole speech, you have got a Readers Digest version for us. Moments in the president posses 65 minute speech, lets start with the warning on income inequality. After four years of Economic Growth, corporate profits and stock prices have rarely been higher. Those at the top of never done better. Average wages have barely budged. Inequality has deepened. Upward mobility has stalled. Cold hard fact is even in the midst of recovery, too Many Americans are working more than ever just to get by, let alone to get ahead. Too many still are not working at all. If you planned age ranking game around the term, inequality, it would not be exciting because he mentioned it only two other times. Did that surprise you . It surprised me how he mentioned it. Eight lot a lot of democrats and republicans who thought this would be class warfare, as republicans call it. It was not. More measured. The facts are undeniable. It was a topic last week. You do not have to be a radical list to say in Committee Quality is a major problem. The president did it in a measured way and that offered opportunity for limited things to get done in washington. To you feel he backed off . We heard this would be the democratic issue this year. He backed off a bit. Onalso put down markers minimum wage and pay equity for women and economic mobility, which you could build on. There, butt was not i thought he weve did together skillfully. The know that you like speech. Did he make mistakes . Were, i do not think there any big ones. When you have polished speech writers, you have a man used to speechesed to giving for over a decade, you have a venue like that. It is hard to bomb. There is a whole operation apparatus around it. There were nice touches. Addressrned around and John Boehners his father and the fact he was a bartender. Amusing. A little bit i expected john to cry, but he did not. He blew his nose once. We will have more with you and your two other top picks last night. You withome back to that. We want to talk about markets. Markets will be at the mercy of the federal reserve. Comingest Rate Decision your way. Willng us for perspective, we get anything remarkable today . I do not think so. Some people the thought the fed would pause but that is a major stretch. They have outlined the process. What is more interesting is bernanke said this case will continue at each meeting. And that is what we can expect. The next meeting is not until march 19. What if they wanted to do 10 billion every month . They would have to announce 20 billion at this meeting. That is not likely either at this right. It is complicated. Turkey in an emergent the meeting slashing all of their wage. You talk about china taking measures to shore up their system. To the u. S. At do central bank . They backed a minute to the corner. They have got we watch emerging markets. Janet yellen has emphasized the fact emerging markets have their own set of problems and they have the powers to be able to deal with them. Matters at this point. She is. She has taken over the leadership role. A lot of the problems in emerging markets are isolated for the time being. I heard turkey referred to as the fragile five. Indonesia, south africa. I missed one. More important thing right now is what is going on in china, that they have over 1 trillion issued tost products investors, investors who thought they were guaranteed security. With a bailout. What investors learned by them bailing it out is those products are indeed not darren t. 660 billion of the trust year andare due this to really save those securities, they have to be rolled over and investors will be more reluctant now that they know they are not guaranteed. They have to avoid a financial crisis. What does that mean for the u. S. Central policy . We are in a globalized world with connected supply chains. What it probably means for china is Slower Growth. The government could come in and buy out all the securities, but it probably means Slower Growth and lower lending, which means the suppliers to china will get hit. Is the fed back into a corner . You think they should have been on winding Balance Sheets a while ago. That is the key. The investor has a problem because the fed basically, i think, started the taper before the were able to have economic strength they wanted. A tapered really because of the financial stability. Timeare pulling back at a when the economy is still fragile and that is the danger. Not a great spot to be. Thank you so much. Do stay with bloomberg. We have live coverage coming your way at 2 00 p. M. Eastern. Unlocking value. We take stock of nintendos is uphill battle to profit. Stay in the loop. Breaking news. South africa raising its benchmark Interest Rates. Theyprecedented meeting had overnight, they raised their rates as well. Interesting what we are seeing. Lets check in on u. S. Futures markets. A different tone from what we saw yesterday. Futures pretty much at their lows of the session, down half of one percent on all major u. S. Equity averages. Also ur Energy Earnings out this morning. Two earning releases. Boeing down on the news 3. 6 . Dow chemical is going in the other direction of seven percent. We are on the markets again in 30 minutes. Think nintendo, the Third Quarter profit plunged 77 . Youpers are shunning the we wii u console. I went to the e3 conference in los angeles last year and the we you wii u missed. Shape. S not in good the president of the company said that. Cori fell asleep a couple of times in the state of the union address. If the wii is not selling, you have no developers. The we you is also struggling because you have the gamers going to xbox one and the ps four, which is a lot faster. Then you have players like may. I am buying a five dollar game from itunes for my ipad. Therein in lies the issue for nintendo. They make everything and do not go outside and that is the good part about them long run, but also the hard part about their company in the short term. Wethe question is, how to know if they open up the system and actually put mario and luigi on ipad, that is it will actually sell . We remember the game, but is the brand 440 million games in the last 30 years. A huge Brand Recognition at nintendo. Five. Onic arts has they have a huge brand power and recognition. I was talking to michael that estimates their Brand Recognition alone is worth for million dollars. They have a lot of power. Do question is, will they that . Will they open up their system . The opportunity has been on the table for 20 years. They really felt the software had to be tied to their prototype proprietary hardware. The wii was a surprise success. It seems the president wants to move in some way. Or the playstation three or four, they want to be more aggressive. Forget about the we you. Put that aside, take your time, brand and license some of your brand for now. Sell it to other devices and make a better console, wait until you have it set, and then roll it out, estimating they could sell 10 games per year and sell 5 billion. The nintendo console, all pennies at the local group local drug school. A lot are doing really well. The handheld is double the sales of their actual console. Growth,ill slowing in not quite game over. Thank you very much. We will go underground, 4. 5 billion, right after this. It is one of the biggest publics works project ever. Looks more like the landscape on mars. Deep under new york city streets, there are 659 miles of subway track. For the first time in more than 50 years, this is finally getting a new line. This is the 2nd avenue subway tunnel. First conceived of in the 20s, 80 five years later, construction is blasting forward. This is where we go underground . 11 stories dissenting. This is awesome. Belowground, michael runs a tight ship. Above ground are you face . It appears to be the case. With me on 2nd avenue. The price tag, a twomile stretch of rail with just three stops, 4. 5 billion. Some people here the price tag for two miles and they get alarmed. We put a lot of people to work. Planners used a map first drawn in 1865, which shows the waterways that crisscrossed manhattan. So far, so good. Have a and there, you spot, but in general, you are very dry. The faces that will extend and complete the line. Are you not budgeting because you are scared the price will be so high . The process of doing the budgeting. We do not have any idea exactly how much it will cost. But the short sets section for the 1. 3 million subway riders who squeeze on the single train line riding on manhattans eastside. More than boston and san franciscos entire networks combined. And economic success. The investment will be returned many times over. What is the timeline . In the next 20 years. Cool graphics. Anyway, it has been a wild ride for real estate prices near the construction zone. Rent and Property Values of the earlypped during stages of construction. The completion of the first phase is near. The first phase is in the zip code of one of the most expensive in the country. Discuss whether it is the time to buy is jonathan miller, the president and the eeo of samuel or samuel miller. Is there a bargain to be had . You can see in the pricing there is probably a little bit of one because they are getting to the end. They are in the process of moving the big structures sitting on 2nd avenue. Youre looking at housing prices outside the zone of the subway rising at a pace of about 12 to 14 , more than in the subway zone and rent is rising it or send more. Really lagged and that perhaps provides opportunity for people. It is tricky to analyze. That is why we have you here. When i went to the Upper East Side to check out apartments a couple months ago, they were saying, you are buying at a good time now and we will price that and because the Upper East Side never had service and it will. Sellers expected a little bit of angst for that. everybody built that in. The problem is the reality of living in a construction zone. Concern and penalty for it was higher early on as we get closer, the penalty reduces as people see the upside. Do not live in a vacuum. Sellers are watching this situation, as well. I live in california and grew up here. It is interesting the way certain projects have really changed the city. The underground park avenue. The 3rd avenue coming down changed the eastside. Does this change that part of the city . It does. It elevates the price structure of housing. Commute fromeasier the far northern reaches of the austin Upper East Side. The train will go down the 2nd avenue line. The rails. Will it lead one of the things happening is the breeze turn part of the outer manhattan, there are a lot of Public Housing and a lot of institutionalized low income housing. One might argue that is a good thing. It could change things up there. That is already happening. We have seen a tremendous amount of new Development Creep its way eastd into hes harlem. That is part of the process. You will see rents and housing not spike that there is more upper pressure because you have really eased the way to get to work. It is one of the drawbacks of the Upper East Side as you move east away from the lexington line to the left. Good stuff. Thank you so much. Carol . Thank you so much. Al hunt, anchor of political capital. For those who did not catch the whole speech, you have a Readers Digest v