Tax cuts for families. Phil mattingly is here with more details on the budget. Give us highlights. Click that is right. We know a couple of things before it is officially released. 56 billion in new spending in this budget, a lot of it based on infrastructure, Early Childhood education. The white house is focused on the expansion of the tax credit, to expanded for lower income adults without children. That appeals to republicans, most notably senator marco rubio. The administration is hoping there might be some bipartisanship going forward. There is a notable absence of changes to entitlement programs. This is something they were willing to be flexible on. Why this . That is right. There are no major changes to entitlement programs. They addressed social security. Branch ton olive republicans. The main reason his house and Senate Democrats said to take it out. This is a major Election Year and we do not think this should be in any type of policy baseline. That is gone and officials tell me it will be back on the table if republicans want to negotiate but it is missing from the budget. Is this more policy or politics . It is an Election Year. We look at it through a lyrical lance. Thing they are trying to set up is the fight on equality. Paul ryan laid out a 200 page report calling into question the war on poverty yesterday. Today is the see administration laying out key points it thinks will adjusts in an Election Year, how they will work towards reducing the inequality gap to republicans will counter right back with conservative principles, saying, these are the ways we will do it. Thank you. Vladimir putin in the political spotlight, announcing he has no intentions of adding to russian and he will not fight the ukrainian people. No military action. For more on the political standoff, ryan is joining us on the phone from the ukraine. Thisig of a retreat does present from his prior stance . It does not represent a retreat. He does not intend to escalate right now. No reason to send troops to the ukraine just yet. Needhe means is he sees no to sandwich routes into Eastern Ukraine right now. They are already in the ukraine. Russia believes that artie has the right to have troops there because it has military bases there. He said sending troops into the ukraine would only be done in extra in an extreme case. He said russians have no intentions of fighting ukrainians. He doesreal indication not mean to take this any further than he already has. Quite frankly, before he made those comments, those for his first uggla comments since the crisis began, no one knew what he would do next. No one did. Viktor yanukovych is still the president of ukraine. What is the significance of that statement . Very significant. It is a way of justifying russias presence in the ukraine. The russians have said president toukovych asked for them intervene militarily in the ukraine. If they believe he is a legitimate president still, and he asked them to intervene on behalf of ukrainians for him, they think they are in the right. They said as much yesterday at the security council. What is different about today is today is the first time we heard from president putin himself on the matter. Very true. Thank you. From equities to oil. They are higher today. They are rebounding. Perhaps the easing of immediate pressure in russia over the ukraine. Still aterm outlook is threat to Vladimir Putin and his economy. The drop yesterday of the , it wipedock market out more wealth than the sochi olympics cost. That is an issue for Vladimir Putin and underscores the high stakes he faces. Russia needs to attract capital, not repel it. Countrys economy has been slowing significantly, now growing just over one percent. Very close to recession. There are odds of about 40 by analysts in russia that russia will slip into a recession in 2000 14. Yesterday, it was reported manufacturing slowed for a fourth consecutive month. Plunge makes it likely they will get much higher inflation because of imported goods. They will cost more. Threatens the banks. About a 6 million loss according to the central bank. Yesterday to combat that, Interest Rates were raised. That will weigh on the economy. A small current account surplus which is likely to go into deficit as well. Russia is ofat to course oil prices. The government spends about 25 of gdp and to keep the budget in balance, Capital Economics needs 100 10rice of about per barrel. They are able to get that just barely but as american fracking increases the amount of supply in the world, their chances of getting that are going down. A rush road ahead rough road at thisr the economy point. If it is such a rough road and all the weakness, why is he risking this . Pretend to want to tell you what he is thinking, but maybe it is shortterm here. Compared to where the u. S. Is. Russia has a large amount of Foreign Exchange reserves. They can pay their bills for now even as the current account goes negative. Resident who may be gambling if this lasts a short time, they could get in and get out without any further consequences, it is worth the risk. Thank you. Mike mckee. Ofturn to another region uncertainty. President obama met with netanyahu at the white house yesterday. Closelyries that work in the past and he looks cooked looks forward to working with the president to look for a way to keep Nuclear Weapons out of the hands of iran. Tension between the two continues to be how to establish between the two states. Ceoess this morning is the who has funded over 100 Israeli Companies based in jerusalem and to brought Many Companies the nasdaq. You are a berkeley graduate. I want you to weigh in first on the political uncertainty. Tensions, how do these Companies Start up . How do you continue business . Israel is an oasis of stability. You look up the road in syria and there have been 100 50,000 people murdered over the last couple of years, 7 million refugees. It is insane. In israel, the economy is booming, typically four percent. Lastve a startup economy, year was 2. 2 billion invested in israeli startups. There were 6. 7 billion of exits. 5 billion exits over the last 14 months. Companies went public just doubled last week on its offering, now i billion dollar company. Companies bought by google. It continues to be very bullish. We live in a tool world, with x essential risk. We have issues with the palestinians and the iranians, but on the other hand, we have a partnership and a friendship with america, in particular with the innovation sector. Valley andt silicon tech titans are relying increasingly on israeli technology. Isdo you find because there the risk that always hangs over, israel in one way or another, and i enter stand what youre saying about an oasis of stability, that that is a reason why you see more startups and morons but nor is . Yes. The reality is, the risk of starting a company and losing money for an investor, a big deal. I am not being cavalier. The reality is we live with x essential risk. Life is short. If you are not taking risk in the innovation business, youre not in it. Competent risky country and we innovate. People believe the possible can be made possible. Merrick was happening our own lives. The startups happening in israel are changing the world. What is hot right now . That is being brought here to the u. S. . Medical devices. Companies actually creating glasses the blind see. We have a company, surgical theater, which lets surgeons practice brain surgery. To solve the problem of diagnosis for malaria. How will that compete with startups in the u. S. . They cooperate or they get bought. What happens is israel innovates and then last year, 80 Different Companies were purchased by american companies. , orave become the farm team the incubator, for innovation with these ideas. Get start them and purchased by multinationals. We will talk about that startup culture and how it is exported and imported for many around the world. Warren buffett, whose newspaper business is not Generating Positive headlines, 28 newspapers dropped last year. His idea that they would be crucial sources of local information with few competitors buffett does not appear to have come up with a Solid Digital strategy yet and he faces the same problems that affect the entire industry. Brett newspaper revenue has fallen by one third since 2005. Coming up, we will find out what plus,ercedes sedan another type of vehicle you will never get to drive because the prototype armored truck is driverless. We are just Getting Started on this tuesday. In there watching loop. 19 billion, we are still talking about the price facebook paid for whatsapp. Service according to Mark Zuckerberg is worth even more than that. Were back to the man who is no stranger to valuing companies. John, what did you think when you saw the headline . I thought it was a great time to be a tech investor. You have got to love it. More value than sony corporation. An incredible service. A gutsy move by facebook. It worth it . It could be. It depends on how they play it out and what they do with it. If you have been betting against facebook, as a lot of people did, you have been betting wrong. Smart. Uys are very mark and Sheryl Sandberg are some of the smartest people in the business. I think they know what they are doing. Billion andbout 19 that the company was started only three years ago and we read the headlines and think, it is so easy to get to 19 billion. But it is really difficult. You have helped Companies Reach valuations of 100 million or more and that is hard. Really hard. Oftakes an enormous amount determination and courage and ability to accept risk. What is exciting now is many Tech Companies are not just Bubble Companies and not just creating false start ua shins. They are creating Real Services with real value and revenues and profits. What were looking at in our portfolio, we do crowd funding where we allow accredited investors to come in and pick the next whatsapp and invest their money. We look for companies that actually have traction. Everyone is looking for that. Classes very competitive. There are a lot of entrepreneurs. It has become part of the culture. Everyone wants to be a founder and a lot of people are taking that risk. They are. As your investors are looking at deploying this capital as part give me a sense of who is coming to you and how many of these pitches you actually invest in. We see about 100 pitches and choose two companies. We do about two percent of investments. Companies come to us and we vet them and decide they make sense and then we invite our Community Worldwide from 53 countries of accredited investors who then get to choose. We have a Company Currently called bio catch. What that does is they actually know who you are in a banking environment without having to use a password, just based on. Our bio metric interaction they came to us and it was competitive. Putting 3 million together and the way it works is we aggregate the investors who go on to our site and see a presentation from the company and watch a rep webinar, and they decide and start from 10,000 up. You can try to pick the next whatsapp. It is critical to mention you have got to build a portfolio. This stuff is so risky. You have to diversify. If you do not have 5, 10, or 15 of the companies, youre not doing it right. Today ormpany started even in the last few years, do you see their equity strategy as acquisitions or going the ipo route . People always prefer ipo because you can build real value and continue building the company. An ipo is another funding event to raise money and better valuation so you continue to build value. Most ipos are not showing several others selling shareholders. There are a lot of them in israel. 800 are bought for each woman goes public. We have a lot of Companies Traded in new york and right now were number four behind china candidate in the u. S. View of ther own startup culture here in the u. S. , everyone is trying to compete with silicon valley. New york seems to be the next hot spot for tech startups. Think thereable to will be other cities that can crop up and compete . Absolutely. I spent a lot of time recently in san diego. We just put up a company in san diego from our site out of the supercomputing Center Building a massively parallel Management System for big data. The first customers, it was a great deal and i said, how do we get the steel and were based in jerusalem . Countrye parts of this where there is unbelievable technology but not enough capital. We are investing in san diego and cleveland. We invested in a wonderful where we arew york completely reforming educational systems. Jerusalemng it from but doing it in the global sense. The startup scene now is global. Everyone wants into it. Investors want to invest in different countries. It is interesting. They do not want a job on wall street. They want to start up a company on silicon valley. Stay with me and we will talk about more. Talk about driverless Car Technology. Coming up, one more way to keep soldiers safe on the batter field. We will talk about the armys driverless truck. We will be back. It is 26 minutes past the hour. We are on the markets. Uite a strong rebound they seemed to have eased just a little bit today. Here is a look at the other Bloomberg Top headlines. Jpmorgan bracing for a trading slump in the first quarter. The fourth straight drop in fourthquarter trading. The Fourth Quarter is typically strongest for trading. Half a foot of snow in the south atlantic. A blast of arctic air is set to spend sent temperatures plummeting today. Parts of the northeast could see. Ecord lows Disney Program includes abc and internet and by satellite tv. The deal is the first that allows a paytv provider to offer disney content as part of a webbased subscription. In the automotive world, the u. S. Army unveiled its first self driving vehicle. The department of defense made big push in recent years to put more Automated Technologies on the battlefield in an attempt to scale down personnel and put fewer soldiers at risk. We got inside look at the armys his newest tech. Leave it to the military to be the latest in technology. I want to bring in cory johnson, our bloomberg west co. Editoratlarge. Investing in startups, specifically crowd funding. Allhave been studying, for your research. Interesting stuff. Clearly just the senses. All sorts of Safety Devices going into cars 10 years ago. The carmakers love to talk about the stuff. Every car show for the last six or seven years. They try to attach themselves to the coolest of consumer electronics. It is a little cooler than the Car Technology these days. It is becoming real business. It is the leader in Collision Avoidance technology. What they do is they have a little chip which teaches the car to recognize tesla is partnered with mobile app. They are partnered with the majority of carmakers worldwide. The guy is now on to his next these glasses that let the blind essentially see. Israel in robotics in terms of autonomous driving vehicles and john technology is off the charts. Absolutely. Moretime, it might be made. Aboutusk, he was speaking technology. We are continuing to build on that expertise. The firstto be Company Market to market with autonomous driving functioning in the vehicles. That was a surprise. He just sort of dumped right in the middle of the interview they were working on this. It is kind of a race to see who is able to perfect the technology. He says he will be first. To me what is more interesting is not the car you get and start checking your email or read the paper, but the steps where we take the driving experience and add more help to the driver and we see the very aggressive ways with every release of every model. Class apple is doing something. Yes. There is actually great work going on in terms of automation inside the car. One of the big problems is voice in the car. The background noise. How do you talk to syria . We have a Company Called vocal zoom. It turns it on their ear. Toy use in opticals signal measure the vibrations of your face and then they correlate that with the audio signal. The amount of things you can begin to do not just in terms of Collision Avoidance, but in terms of it hooking up the car to the internet of things, the big new buzzword, the future. A number of cars from mercedes and ferrari and honda, with apple ios interface. On a touchscreen, that will connect to the iphone on your car, and allow you to do things like use serious and use other maps. One of the interesting things about serious it is an innovative morning till. It mightve been crummy but he continues to get better because it learns from every use. They probably thought of this as a vehicle builtin device but knew it would take some time to get the excellence and safety required for the vehicle. I am just seeing on my screen, same sussed same subject, the cfo is retiring. He been cfo for a while now. Eight years or so. Probably boatloads of money. Classic and use that money to invest in startups. I have a theory just getting. Ack this is what i think about when im not on the show. I am really worried. [laughter] with all the Technology Going into the cars, the car industry, it means more turnover or that more, orll release they will turn over their cars a lot more. From the Development Side of things, you have seen major automakers. Ford was the first one who got this. Me