Between the government and the opposition. You are looking at video of that fight right now. We have a reporter on the ground in key of, joining us right now on the phone. What is the mood there . Todays mood is a mixture of relaxed compared to before. A little bit. There was no victims were injured people since this morning. A couple of fights during the night, according to some of the protesters who were wearing protective gear and were armed stakes and selfmade weaponry. For the moment, it is called here. People are gathering on the streets. There are several thousand people in the center of kiev. What is the sense as we head into the weekend here . Two people on the streets feel like there is an opportunity for things to get done . Or do you get a sense that the tension is melting . Its a mixture. Calmension its like but the feelings are like the storm is coming. There was a moment of great excitement in the street when people decided that the president would resign. They took his offer of early of himns as a sign resigning. There was a bit of confusion. They shot a couple of fireworks in the air but then they realized that it has not happened. Do people trust that . That the election would be real and that they would have an opportunity to change leaders . They want leadership to be changed immediately. They want him out of there immediately. Because of the bloodshed that happened, they are not afraid to wait for several months. They do not trust the government. President ll trust the they dont trust the president. They dont trust the president. You talk to people there on the ground this started out as a controversy between, should the ukraine be aligned with beena or the eu . Has it much more than that at this point . Not really. From what i heard today from manle, there are i met a n ukraine in theukrain east. He said, no, i dont need europe. Ive underant to lea anybodys control. Im here just to protect my country and to defend the normal way of living without corruption and excess. Those are the lines you will hear from everybody. Europe. About us versus its against the regime. Like there is a lot of concern mounting there. We will continue talking about it throughout the day. Thank you very much. We will bring in the professor of International Relations at harvard. Ambassadored as u. S. To nato and greece. Let me ask you, what is the significance of the ukraine potentially becoming more aligned with russia as opposed to the eu . How does that change the political balance in europe and how does it change it for us questio . Ukraine is a pivotal country in europe. It was one of the largest former soviet republics. It really lies in the heart of part between the Russian Federation and the European Union and nato. The ukrainian opposition in the streets and the opposition leaders want to see ukraine it will have a continued relation with russia. There are religious, ethnic, language and economic ties. A lot of ukrainians want to have association with the European Union. They want trade and investment. They want the rule of law. They want to develop a market economy. Thats what the battle is over. Technically, the larger battle is that the ukraine is badly divided between those who support and alignment with russia and those who want to have ukraine go westward. That is the concern. If its so divided, is the country at risk of civil war . A risk. Nk there is there are certainly civil conflict and there is a risk of a civil war. This announcement this morning of a truce brokered by the president and the European Union and russia overnight, perhaps that can give some hope of a couple of days reis by from this d th the violence this sort of violence. The president has broken most of the agreement is entered. Most of the agreements he has entered. Word was that there was a truce. I thursday, that has been broken. The death toll had escalated 75 towin estimated an estimated 75 people. You can understand why lock people on the ground there would be has been to believe that there really was an effort to work toward something. Right. s many of these demonstrators have been on the streets of the ukraine in the Central Square for many months now. Since november when this crisis broke out. There is deep distrust among those ukrainians about the role of russia and putin because russia has been encouraging the chretien government to crack down and use force. Russia has used financial leverage. The supposed interest for that has been canceled as of last night. The russians are playing a very difficult game. Their plane for keeps. The largest dimension of this is it is a struggle between russia and the west for where ukraine will i. We have had some struggles over the last year. You get a sense of all that this is reminiscent of another time in our history the cold war gekko . Putin is a soviet man. A zerosum take mentality to global politics. If russia loses and someone else wins, russia loses. A lot of ukrainians are saying, we will be happy to have a continued relationship with russia but let us have a relationship with europe. To prevent that because he believes that russia needs to create a greater spirit influence with itself for itself. He wants ukraine to be tightly linked to russia and not have trade investment with europe. Its a great battle for the future of this country. You are seeing it play out this morning in the streets. One would hope that this agreement could hold any ceasefire could hold. The task they would tend to contradict that. Sanctions do those work in a situation like this . I think they might work because the u. S. Sanctions that might be coming up will send a message to the Ukrainian Government that they are isolated and will not be able to even travel to europe and the United States if they continue to use brute force against demonstrators. The president is weakening in power. Iev leftistf ke Coalition Last night. Other members of the party of deserted him because ukrainians dont want to see people gunned down in the streets. They won a civil dialogue and that is not what the government is giving them. President has been weakened here. That is the opportunity for the United States and europe to send a message to him that he has to come to terms with the protesters and deal in a civil basis. Thank you. Ceo. Ave groupons shares of his daily deal site happened down as much as 16 . Groupon forecast firstquarter profits that missed estimates. The company has been spending more and acquisitions and marketing. He is trying to convert the company from daily emails to thousands of discounts. He agreed to by a fashion site for 43 million. A whole lot more ahead for you this morning. Including minimum wage explained. We will bring in a panel of experts and discuss this. Million the winning Powerball Ticket is still out there. Look at yours. Stay in the loop for details. Welcome back, everyone. Sashingtons referee find under fire finds itself under fire these days. How a minimum jgb a job killer. Peter cook is here with us in new york with more. We are joined by the former bain Capital Partner and bloomberg businessweeks editor. You cook, start with you. It has been very controversial. Theres something in here for front. Cbo singh if you hike the minimum wage come youre going to lose 500,000 jobs in this economy. First it was the obamacare unemployment numbers and now these minimum wage numbers. There are tradeoffs here. O thanks. At cb you have republican seizing on the job losses. Thats 900,000 people that the cbo predicts will be listed out of poverty if you raise the minimum wage. To 10. 10. You run the risk of people losing their jobs. But it could be as few as zero. We are not entirely sure. This is prognosticating. There is something in here for everyone. If democrats are latching onto this idea that you will lift 900,000 people out of poverty. At the same time come you are losing 500,000 jobs. How do these two things Work Together . The amount of money that is transferred to the poor is about 300 per family. Payestimates youll increased taxes and benefits. It is barely lifted out of poverty. The other thing were reporting efficient more tax to lift people out of poverty than it is with the minimum wage. 300 billion in the report. This has become such a political issue. The design inbout our population the with the haves and havenots. Minimum wage taking center stage. There might be other ways to address this. But there is perhaps a political reason as well. Polls show that about two thirds of americans favor an increased minimum wage. So obama is using this as a wedge issue heading into midterm elections. Tt is something that you can ba republicans over the head with. Not everybody agrees with that. Not addressing the right or wrong. Im just saying, if you are trying to win votes, this is this is a big issue. Testifyingllen before congress. She came out against a minimum wage, supporting this idea that it is going to hurt jobs in the economy. Democrats did not hear it quite that way. As peter pointed out, it is probably not going to Pass Congress this year. Even before the cbo report and now most definitely because of be report, this is going to a heavy lift. For democrats, it is still a political winner. That is why it will be on the floor come even if it goes down in the feed. You can bash republicans all year. On the one hand, if youre a Small Business owner and you are employing 10 people, are you affected by it . Or are there guidelines that would be enabling you to pay to the extent that you can pass the increase launcher customers, i would say you are somewhat unaffected. You will see your demand go down a little bit. Your taxing the customers who tend to be younger and poorer. They will hand the money to workers and pay for the single mother who works fulltime. Youll pass the dollar from the poor families eating at fast food restaurants to the workers. It is skewed towards the richer people. The cbo report did not show that. I can see your logic on that. The cbo report actually showed a net transfer from rich to poor a robin hood move. A 31 billion transfer. It does not take taxes into consideration. They caution that they have not taken taxes into consideration. What i am describing is what is completely overlooked. Five ends up in the pockets of families in poverty. 30 and up in the richest households. One of biggest concerns is on people. Theyre working in minimum wage jobs. After you have lifted the minimum wage, six months later it results in an unemployment reduction in team. 10. 10 is not a lot for anyone. Seven dollars 20 five cents is the federal minimum wage here. A lot of states are up to 10. 10. The business role in all this is really important. You have seen some of the Major Companies who might be hiring folks it looks like theyre trying to get out ahead of it. Walmart sing it is looking for walmart backs this. Thats a really big deal. That resonates a lot in washington. Whether that is for politics or thinks it will put more money in the pockets of the customers, that could be a big deal. Aheadamerica tries to get of this one back to you for a second. Its worse than it appears. When you get into the academic research. San francisco raised their minimum wage. What you saw was a shift in the populous of workers to hire skilled workers. A lot of the walmarts and burger kings of the world shift to a 10 an hour employee as opposed to a seven dollar employee which tends to be a parttime student or a mother who is a parttime other. A higher skilled worker. Is that the says sensitivity for the least skilled workers is three times higher than it is for adults in general. The reason why you only get reduction employment that she may it that much harder for them to ever get a job. Stay with us. Peter cook is sticking around. Coming up, how will the fed ease down the road . Youre watching in the loop live on Bloomberg Television and streaming on your phone and bloomberg. Com. Im trish regan. The hour. After that means bloomberg tv is on the markets for you. Lets take a look of the markets. Slightly higher here. 20 . Q futures are up take a look at that. Closing in on the biggest week to gain in over three years with temperatures expected to be above normal this week. Forecast calling for another polar vortex starting next week. That is having an effect on thanks. On things. Herbalife is going to washington. The Nutrition Company is accused of being a pyramid scheme. They invited congressional staffers to ask questions about how it operates. Herbalife hasinst been the biggest loser for his firm. Withdent obama will meet the dolly lama at the white house this morning. Third, is being protested by china. They want the meeting to be called off because it will hurt u. S. China relations. It has been 24 hours since the winning numbers of the Powerball Jackpot were announced. Not comer will forward. The Winning Ticket was sold at this Convenience Store in california, about 10 miles north of san jose. The ticketholder has one year to claim the prize. It has been almost two months since the fed began its modest taper. For the most part, does not seem to have a lot of effect here on the economy either way. What is next for janet yellen . Running the right now is mike coy. And peter how the numbers then faring . Its because of mother nature, not mother yellen. The weather we have had in december and january reflected thell of the data Production Report blaming severe weather. We saw the big homebuilders decline in confidence this week. They blame winter weather. The fed has to look through that. They know that First Quarter is going to be pretty bad. The numbers will come in and be half the rate of the third and fourth quarter. Once the weather warms up, things will warm up and the economy as well. There is an expected rebound when the weather improves. Normally after a natural disaster, we would classify this in the same category, you see a rebound effect. We have seen some of that in the numbers so far. That wee suggestions will see a comeback. Asked someaid special questions about peoples business is a far. If you leave out the weather affect and whether or not their business was higher in january of the year ago. In both cases, people say things are better. Heres my question. At what point does this really start to have a deteriorating effect on economy act out if the weather is not good and you dont go shopping or eat or do any of these things come at some point and has a compounding effect. As much as we like to think, things are going to improve when the sun comes out. Do you run the risk that there is some kind of slowdown that is actually material in between . Agree with mike in general. Two different effects on consumer spending. There are certain things that once that it passes it is gone. Going out to a meal, if you miss a special valentines dinner, we will not be valentines dinner in march when the weather is better. Looking for a car, you will still look for that car. You have to separate those two factors. One of the key things to watch his confidence. Consumer confidence has remarkably held up. Tells youmething that that people are just hunkering down and waiting this out. What is also is amazing is the react in the markets. Steady gains after the initial concerns. In the face of the paper. Wall street seems to be ok with this right now. Take a look at the 10year note over the last six weeks. Do . Was qe3 supposed to drive down longterm Interest Rates. They should be going up. They are not. Longterm Interest Rates are lower since when the paper begin. Taper began. Record low Interest Rates for as long as we can see. And yet, no real improvement. No inflation for a lot of reasons. The fed has always said, we would not expect inflation like we got. These reserves are not getting into the economy. I think you make a good point about longterm rates thing now. Which is good and bad. We would love it if the demand for credit would drive up rates by market forces. The fact that is not happening as a negative. I guess its good that the fed is able to pull back and get back to more normal Monetary Policy without doing any kind of damage. On wallteresting debate street right now about whether the fed is screwing things up or helping the economy. So far, the only thing you can really say is that all the doomsday predictions of the people who think that that is screwing things up have not come true. This will have no effect. It would increase inflation but not the man. In order to increase inflation and get slightly negative Interest Rates, you need to conditions. Andneed to lose liquidity high capacity we wont get until after the economy improves. After the economy recovers . If you have the threat of higher Interest Rates in the future, youre more incentivized to go out and spend money now. An individual who is maybe looking to buy a house i can do so now or do so in six the same with a company that maybe wants to invest on the capital side. It doesnt really need to borrow money right now so it can borrow six months from now. Is there a danger in not having a threat of higher Interest Rates in the future . Does that actually have a negative affect . Been in this zero Interest Rate environment for so long. There just is not enough demand to create that kind of situation whether or not we have slightly negative Interest Rates. It does not seem to matter because the demand is not there. That is one of the things that more confident. These reserves lobby converted to loans right away. They will not see an increase in the Interest Rate for quite some time. Does not have a negative effect on incentives . Need to do something now because you can do it tomorrow. I think its indicative of a negative sentiment. You have given the fed the power to attach favors when the economy improves. If youre saving for a down payment on your house come you need to be saving more because you have to worry that by the time 35 years from now you get the down payment, yo