I am a very fortunate Stephanie Ruhle. Y . Matt miller in here with you. We are sending you the best, but in the meantime we are getting you breaking news. Existing home sales are out. Michael mckee is on hand with the real deal. Rate it down. It down. Eak a reasonable news story with home sales. 4. 6 million at dollar annual rate, barely lower than it was in january. Five,ober we were in the so we have a long way to go. Whatever the weather effect, it has been relatively steady for the past four months and we expect a big spring rebound. Here, a drop in condo and coop sales, 1. 8 . Singlefamily home sales, just. 2 of 8 . One of the complaints about home sales in the past couple of months has been not enough homes for sale, so that may affect things. The other number we just got and here is some good news for people worried about the economy and the weather. February 6. 3, and it comes in a positive numeral mind. It looks like overall the Employment Index is lower, but the Overall Index higher for the philadelphia fed. The general news is really good on the economy. For those who have been hoping for a we bound and rebound from the weather effects. We have bob shiller with us now for some reaction on the housing numbers. Yale university professor. Welcome, bob. What do you think about the numbers here . A slowlooking at recovery, not that bad . Existing home sales is declining on a seasonally adjusted basis for some months now, so it is not just the weather, the winter season. Something is going on. A did the weather not have big effect on this, because it seems to have an effect on everything else. The Housing Market slows down every winter, but this was an unusually i dont know how much that affects people, but it winterunusually wintry in certain parts of the country. But it looks like there is some softness in the market, and Housing Starts have fallen, too, so i am but this is not a disaster, it is just a weakening market. A at does the sale about what does this say about a bifurcated america . And you look at the market in new york city and l. A. , it is on fire. Shoebox. T afford a how do you balance the two . It is not a state of balance. It tends to be the cities that were very volatile before that are still going up. I tend to think of the speculative dynamic, that people have seen home prices go up and they are back to the races. Many people are. On the other hand, the chicago futures market is not showing big increases. Survey of home buyers expectations is not really showing a lot of increasing kind ofions, so it is an ambiguous situation. I would imagine nothing really dramatic is going to happen. Wewill see more modest had huge price increases over the last year nationally. It was up 13. 4 in the last 12 months. I imagine that will moderate. I want to ask you about the characteristics of the buyers. We are not seeing an increase in firsttime homebuyers, which is what you would hope to see in a recovering Housing Market. We are still seeing a percentage of investors buying these homes but they went up. Are they getting the wrong mix here . In some ways it is troublesome and in other ways it is not. To thing is americans seem be more interested in renting now, so there is a natural business of converting to rental, and that is part of what investors are doing. It is a healthy sign, but it is not particularly encouraging that people want to rent, not encouraging for detached singlefamily home prices. Detached singlefamily homes do not confer easily to rentals. Doesnt mean they have just done the math and owning costs more for them than renting right now . What does that tell you about home prices . The big cost that has changed is the mortgage rate. That went up sharply in early 2013, right around the time the fed announced tapering. That they were thinking of tapering. That is a big factor. I think that the market was really strong in late 2012 because of the news that Mortgage Rates were at record lows. That galvanizes people to action. You tell people that Mortgage Rates are at the record lows, and they think, hey, they can only go up for the year. A deferred spending for housing. They are still incredibly low. What would make you more bullish, more optimistic on the Housing Market longterm . If you say Mortgage Rates that are lower, i cannot imagine that would make a huge difference because they are so low to begin with. They are low but they are not record low. Think, nowe people they could go down again because they are not the record low. A salient effect that was really trumpeted when the record lows were hit. But you are right, they still are low. It is plausibly not a bad time to buy a house. Because they are going up. You heard janet yesterday janet yellen yesterday saying up, sotes will follow buy a house now. And that sounds like 2005, and janet yellen saying you had better buy a house now, that makes me think that is what we were doing six years ago and what do you think, bob . I have my own survey data. Excited. E just not as six years ago people thought it was now or never. Back, go a little further 2003 or 2004, people thought home prices would go up 12 per year for the next 10 years. They thought this was it, and you could borrow 90 of the money. They were thrilled by this investment. If it were only true. I dont see that kind of excitement now. Bob, yesterday janet yellen probably used the term shacking up during a News Conference for the first time ever. 30 of the buyers, the homebuyers, firsttime homebuyers. This time they were 28 . What happened to all those married,tting engaged, moving out, and buying a house . I think she is right. They are renting or living with their parents. I dont know what they are all doing. The big question is whether this is a new trend. People think that it is not just temporary, not just the reception, but that we have lost our extreme love of phil love affair with the owners occupied homes. That is something the buyers now have to consider. Most of the homeowners who have anbuy their own home not as investor are trying to hold on for many years. Much healthier way to look at real estate . Five or six years ago you would hear everyone and their brother saying real estate only goes up. That is the wrong way to think about any possible investment. That is absolutely right. It is one of those remarkable delusions that i talk about in my book. Home prices did not go up at all in real terms between 1890 and 1990, in 100 years. Yet somehow people have the illusion based on recent data at that time, in 2005 or so, that they always go up. These kinds of delusions can spread from time to time, and it is unfortunate. Those may be the same people buy on their credit cards and end up in debt for the next three or four years. Not enough people watch your show. I agree with you. Michael mckee, always a pleasure to have you. Shacking up the top news stories from around the world, new satellite images raising hopes that the objects found in the south indian ocean may have been debris from the missing jet. Two military search planes were sent from australia, but they could not find anything. Another sign the labor market is number ofronger, a americans filling out firsttime claims for Unemployment Benefits , close to the lowest level in almost four years. In initial claims usually fall before hiring picks up. And the Data Analysis firm backed by the cia has been hired Palantir Technologies will to thedetect what led fine for insider trading. The sac cannot get out of the news. Sac, cia you never thought they would be in bed together, but guess what steve needs to tighten his game up. If you want anybody on your side, i think the cia is probably a good start. In a moment, the ukraine next move against russia. We will hear from the ukrainian Prime Minister. Plus dreamworks gets the picture, doubling the number of animators and artists in china. We will hear from dreamworks ceo Jeffrey Katzenberg. This is Market Makers on bloomberg tv. And during the commercial, you can tweet us. Aren brussels, eu leaders meeting to discuss how to pressure Vladimir Putin after he strengthens his grip on the cranberries territory on the crimea territory. Chilcote, are we expecting another russian blacklist here, another list of sanctions . Is that the next step . There is no question the eu leader would like to punish Vladimir Putin for pushing forward with annexing crimea. The question in their mind is they are gathering right now, how they do it and when they do it. One option is to expand the blacklist of russian officials that will be subjected to asset freezes. Maybe go further up the food chain and subject ibo closer to putin people closer to to sanctions. They make decisions by consensus. There are 28 countries, and it is not clear all of them are ready to stomach that yet. The finnish Prime Minister said the markets are already doing a good job of pushing russia and he thinks that might be the most effective tool. In moscow they are not paying attention at all. The lower house and the Parliament Just approve the annexation of crimea, so tomorrow it goes to the upper house and it is a done deal. They are understandably saying even if we go ahead with economic sanctions, is that really going to change putins course . They are wondering that right now. Tighteningabout the grip on the crimea territory. What is the situation in crimea as we speak . Interesting, very tense this week since the crimeans declared themselves independent. A bunch of ukrainian troops want a bunch of ukrainian troops are there that the locals want out. They want to move into the east of the country because he does not think this incursion of Russian Troops is over. It is Crystal Clear for us that russian authorities will try to move further into used in ukraine. But we are still maintaining control and we still preserve this stability in these regions. The polishheard from Prime Minister. He says he wants the you leaders at this meeting to discuss full economic sanctions because he thinks russia will not stop with crimea. Ryan chilcote in brussels, thanks for a much for that. Our next guest is an expert on the subject, traveling to europe last week to meet with german chancellor Angela Merkel about the deteriorating situation in the ukraine. Here to tell us what the eu and is kene planning to do. Oth welcome. It was tuesday morning, two days ago. What did she say . We were talking mainly about ukraine and russia, and german policy toward russia for years has been very much valued by the business community. Engage, then Vladimir Putin will behave more nicely. And Angela Merkel said hold on a second, if you just behave and follow the rules, putin will behave more nicely . It did not work. The processl is in of recalibrating. Part of it is rhetorical and part of it is sanctions. It is not simply on crimea but the threat on further incursions into used in ukraine. Said theseutin has right wing forces are attacking russian language speakers. That is mostly fiction, so the way to undercut it is to first of all deployed international monitors. How do you do that . Has eight hundred monitors ready to go. Good and is not letting them deploy anywhere but in crimea where they are urgently needed. Prudent to oppress the ukrainian government. A tv journalist was hacked the other day for having the speechy to air putins in crimea. Are you afraid . I am very worried. We see prudent cracking down in russia, shutting down tv stations, closing off websites, arresting hundreds as activists all with the aim of preventing anybody to challenge his propagandistic view. Preventing the truth from coming out . He has been doing that a number of years. It has gotten much worse. There has been a gradual trend in the last two years, but it is month ore in the last so. Why do people in crimea want to be part of this . Fear . How does he respond to these sections of georgia and it is still there. Russia is still in south georgia. The people have basically forgotten. They were at the center of the universe when russia took over and now they are forgotten. The best longterm strategy for rights is to create respecting demolisher see democracy that the ukrainian people want to be apart of. Do they have the ability to do that . Ukraine has been up and down. They had their revolution a couple of months ago. Hopefully this time around they get it right. Do they have any choice . Crimea, from our perspective, it looks like a done deal. The eu is looking for a way to back out of sanctions. There is a strong business relationship with russia and they want to keep getting their fuel. . Snt it over there i think crimea is over with for the time being. The real issue is Eastern Ukraine. Food and is threatening to invade there. Is threatening to invade there. I have not seen a putin stepped that they did not want to respond to. America is finally beginning to stand up to the business community, but it is not clear as much it is not clear how much. The answer is shifting quite radically. What . M what to business to suddenly recognizing that germany is the leader of the european union. If germany does not act, the eu does not act. Looking for a better balance, not a complete turnaround. Where you need to go past this view is trading that is prudent going to change that . It does not. Roth, the executive director of the human rights watch. The menu for success how one of the most successful restaurants got that way. Living the dream in china. We will hear from dreamworks ceo Jeffrey Katzenberg about the citys bold new initiative. Plus, more americans are cutting the cable cord, watching their favorite programs on any Video Services instead. To you give that story next. If you cannot watch us on cable, watch on your phone or your tablet. Dont forget to tweak us. What is matts mystery drink . Live from bloomberg headquarters in new york, this is Market Makers with Erik Schatzker and Stephanie Ruhle. Welcome back to Market Makers, im Stephanie Ruhle joined by matt miller, in for Erik Schatzker. In case you are wondering, it he just told me to kiss his grits. I was doing my flo impression. Works, jeffreams katzenberg, unveiled designs for the center in shanghai. Stephen engle of Bloomberg News is there now. Dreamworks really making a 3 billion push to draw in chinese consumers. Absolutely. Haveig Hollywood Studios been battling piracy, battling censorship here. They have been battling the quotas for the big films that come into china. They all want to have a foot on the ground or two feet on the ground. Theirland is building shanghai disneyland that will open up at the end of this year. The box office here in china last year, domestic films out paced the big hollywood blockbusters for the first time. There is a huge market here, and dreamworks, led by Jeffrey Katzenberg, are building this dream center, which is going to u. S. Ut 2. 5 billion they will have a big movie studio, as well. Onre are animators working their next films. There will be 400 animators working in shanghai by the end of next year. They will launch kung fu panda 3, next year. I asked him what the strategy would be, and he says this center will rival the west end in london and also broadway in new york. We are making movies here in china for china, for export to the rest of the world. In order for it to be exported, it has to be of the highest quality. This is within < handful of years, going to be the number one movie market in the world, so we think it is a great center for us to attract great artists in china, and we think it could be a worldclass competitive studio. Jeffrey katzenberg is going to say that. He is the guy putting all the money behind it. What do analysts think . A huge undertaking in a country that over the last two years has been known for these vacant cities, giant, massive buildings to replicate new york paris, and no one is in them. What kind of risk is this . Thingy say the same always. They cannot afford not to be here. Again because of the potential. For the moviem operators here, the Hollywood Studios, is there stuff gets ripped off not only by dvd , on numerousline sites. There is a lot of risk that you are giving up with your product here, so they are taking a different approach. An entertainment movie studio where they will make the movies here in china and try to sell it in china and also take the product that they may hear and sell it abroad. Again, there are only 34 movies coming into china every year. The big hollywood blockbusters. What they are trying to look at our joint productions with the local production houses. A lot of different strategies, but censorship is still tough and the quotas are different as well. Stephen engle in china, great story. I want to go there. I want to go to see this. Without a doubt, definitely. Maybe to go see the gray wall . Theaybe i will be in mcdonalds there. I wasas lonely when there. So i will be less lonely. When we come back, we reached a milestone. A little awkward. Thats ok. Reached a milestone in the paytv business, but it is nothing for Cable Operators to cheer about. We will find out next on Market Makers turcotte during the break, matt and i will be making big plans for china. And his mystery drink. Welcome back to Market Makers. Im Stephanie Ruhle, joined my my friend and by my friend and traveling companion matt miller. Paytv prescriptions subscriptions fell by a