Transcripts For BLOOMBERG Street Smart With Trish Regan And

Much, waiting for the jobs number tomorrow. 6. 4 on theing for unemployment rate. And its time for the big three stocks to watch in the lets talk about a couple up and a couple down. Yum brands up today, upgraded will stopbert w eric analysts are optimistic about a rebound in china. Theyve faced a lot of challenges there, particularly with it kfc business. Costco not doing well today. Issing analyst estimates what it did like everybody during the Holiday Season was offer a lot of discounts, but it wasnt enough to drive traffic. The traffic there was, number was depressed because the stock was offered for less. So those shares are down 2 . But not as bad as staples. The company seeing more sales declines and forecasting sales will fall additionally in the next fiscal quarter and theyre closing about 12 of their stores and has a plan to save 500 million over the next several years. So you think there will be sanctions for russian for russia coming out of the European Union time for a little insight in action. Here is why these guys are better off as friends. The European Union counts for 75 of russias for underactive investment will stop that a lot of money going into russia. For 33 of the European Unions petroleum imports. You get the picture they are better off as friends. Ideally thing is this whole crimea situation has been very costly for the coffers of mr. Putin and moscow. Crimea, the russian ruble down about 10 . Stocks down 11 , which is the dow industrial average for russia. Thing takee anything down enough and you begin to wonder whether there is some value there. 50 stocks on the index and we determined there were teen of the 50 trading less than 10 times earnings and a low book value. Seven of those have adrs in this country so you can actually buy them on the new york stock exchange. Energy and mining figures are very big. But are you kidding me gasp from trading at 3. 7 times earnings. The s p 500 trades at 16. 5 times earnings. We are talking miniscule valuations. Relative to price to book ive posted these acutely or tickers im not even going to try to pronounce some of these countries. Ive posted this on twitter, but the point is you take any asset down enough and you start to make the case for a little value investing. I know you cant pronounce that. Ondo have breaking News Congress and ukrainian aid. We returned to peter cook on the hill. What is the latest . Fax despite some criticism of the president s handling of the ukraine situation, youve got a unified vote to support his call for loan guarantees for ukraine. 385 to 23 in the republicancontrolled house of representatives to back that 1 billion loan guarantees. Still has to clear the senate but it is an agreement on policy response in ukraine. Republicans and democrats moving today to authorize tougher sanctions against russian and ukrainian officials should the crisis persists, giving more authority to the white house. The president moving on his own today. It is undermining the ukrainian government. Also giving yourself more authority should you choose to do this. Bipartisan in terms of a response but they might not be on the same page in terms of the comments and how the president has handled the ukraine so far. Chilcote lanes us live now from tf. We also have a senior geopolitical strategist who worked for the cia. What is the mood there today, ryan . The mood here in kiev is business as usual, with the exception of Independence Square which is very much a shrine to the People Killed there. Still a pretty chaotic situation. In the east, yesterday, there were clashes between proukrainian and prorussian demonstrators. Now and theover ukrainian flag is flying. Down in crimea, the trouble continues. The Crimean Parliament just voted to secede from ukraine and join russia. That vote that goes to a referendum in 10 days. Want to saying they secede. Meanwhile, the federal government, because crimea is part of ukraine, has said we are disbanding you as a parliament and annulling that decision which they called a farce. Got severaluve thousand troops. They are not feeling the sigourney a and support the idea of this happening and you have the russian navy blocking access to the area. They actually sank a vessel to prevent other ships from getting in and out. A very fluid situation in ukraine. How do you try to quantify the risk of a semi autonomous region saying it wants to secede and then the federal government in kiev saying you cant do that . I am looking for the sanctions risk. Right now, the sanctions are pretty moderate asset freezes on select individuals and visa bans. Where not talking about the scale of sanctions we have in iran. If we have the secession vote go forward, is the European Union going to ratchet up sanctions . That would matter significantly for russia. But you have crimeans who in theory are ukrainians at this point, who are saying we want to be separate and go to russia. 60 of them are ethnically russian, so there is some legitimacy there. What putin is saying is electivead a radically president who was pushed out, so they are calling this hypocrisy. But its hard to get an off ramp. Forward and goes you are sitting in the position that this is illegal and illegitimate, how are you going to get an off ramp with this crisis . What is interesting to me is the writing tends to be a little more prorussian. Im referring to the Financial Times article today that said putin has been trying to bring together most of the countries of the former soviet union in an economic alliance. The west has done more or less everything it could do to prevent this. That leads me to believe he is just offending his money. They invested a lot in the ukraine. Is it really about sovereignty or is it about cash . This is an interesting question because a lot of russian experts were confused. To occupyt need crimea to exert sovereignty. If you look at the ukrainian elections, crimea, the key source of votes if they want to influence the overall outcome in the ukraine, they have support in eastern ukraine. If crimea secedes, it will be harder for russia to have influence in the broader election in may. Its not at all obvious what russia gains by having crimea formally incorporated as a state. Im interested to get your take, ryan. Historically, russia has done things like this before, and , they over, in georgia have established these little states with support of the local government. Arguable point because there are armed men in the area. To what extent will this be a democratic vote . There will not be any international observers. Putinagree president does not need to annex the territory. Its just a useful tool, a foothold in the region. President putin said the greatest tragedy of the 20th century was the dissolution of the soviet union. I dont think you so crazy that he thinks he can reestablish it, but he would like to say to the west, and this is part of whats happening here, that this is our backyard and you need to take our interest into consideration. If you go back to when the ukrainian president was ousted the russians keep talking about this. Poland came in, france and germany sent Foreign Ministers and brokered a deal with the then president and the opposition. According to that deal, the president was supposed to stick around until may. Thats funny the early election was going to be. He basically fled that same day in the opposition said we are going to have those elections in may. The russians were not hearty to that deal, so they are trying to say to the west that you did not consider our interests when that happened and this is our biggest neighbor. People were, these all part of the same country and feel very close. We have only about one minute left. The nowtionship between leader of the ukraine and Vladimir Putin of russia can you characterize that . Are they even talking . Nonexistent. They dont talk. For one reason, hes the Prime Minister, so its a formal thing. Looks like we lost ryans shot there. Ifd love to end here the u. S. Could export national gas and natural gas and oil, that would put some pressure on russia. People keep talking about this as a way to put pressure on them. We cant do this quickly. As you point out, its not up and running. We have been talking about 2017 before we get exports. Its well and good to talk about increasing exports, but we cannot do it in a timely fashion. It is not a silver bullet. And we have only pledged one billion of the 35 billion the ukraine needs. Is putin shaking in his boots . No. And he can live with that higher oil. Thank you so much for your time. Coming up, the bitcoin founder has been discovered, in theory. Were going to discuss what it means for bitcoin. Bloomberg sat down with israeli Prime Minister, Benjamin Netanyahu. We will hear what he says from Cyber Security to solving tell a 40s drought problems. We will be right back. And news week reporter says she has found the founder of bitcoin. 64yearold japanese man living in los angeles. The bitcoin faithful are shocked. Tweets one early sign this in this piece, im disappointed newsweek decided to docs the family and regret talking to the author of the piece. One person wrote to us were joined now by charles allen, the the coin shop ceo. We now know that the ben bernanke of bitcoin whats the implications and secrecy was so much a part of the whole deal . Lex i dont think there is a huge implication for bitcoin going forward. Almost his privacy is something that was important to him and now its out there, assuming it was him. Thats in the past and there have been tons of start up Companies Invest in the bitcoin are trying tothey build it into a larger ecosystem. Its an interesting piece and thats about it. Part of bitcoins appeal. Feel as a Government Employee question were i did not find a lot of outrage that he worked for the government like semipeople have. The outraged did tend to be focused on the media and violating the privacy of someone who clearly wanted to remain anonymous. They tend to emphasize that point that charles does that charles just did. The bitcoin source code has been rewritten since what was originally wrote. Cant be changed substantively without a broad consensus of the network. , howeverved beyond him fascinating the mans story can be. It is fascinating. What is particularly fascinating if not downright upsetting is that the fact they have not said ofre the 400 million worth bitcoin actually went. Are we ever going to get to the bottom of that . It is unfortunate and we will all have to watch to see how it lays out. Doesnt it undermine the very legitimacy of this whole thing . To some extent, yes. But also raises the bar to improve on it. There are tons of issues in the. Com industry and with any new technology, there are hiccups and you learn from it and move forward. I would have liked to have seen this happen earlier, but it happened when it happened. The reaction of your customers over the last month or so . Obviously, when bitcoin goes down, we find people less eager to shop. If you bought it at 100 m a r worth 1000, you are more likely to spend money. The consumer behavior, if you are holding it like an asset four bitcoin to be used like a currency, volatility needs to come out of the market. We are trying to position ourselves to be the leader in the ecommerce space and get into other spaces of interest in the ecosystem so when the volatility stabilizes that we are a leader the group. You have written a lot of articles for bloomberg. Back in december, we were mystified at charmed by the whole thing as you talk to your network of that point faithful, have they changed in the way they talk about bitcoin to you . They have changed in the sense that they talk more about it as a problem to be solved rather than a vision to be filled. Can exist and serve useful purposes, but now it gets down to building the infrastructure, the exchanges, figuring out the regulations and security, the things that would make it function pragmatically. Hear a little less, but not too much, the utopian visions of bitcoin replacing the dollar and change the world. People want to make money and that faction of bitcoin is growing. Bitcoin obviously going through some growing pains. And our very own carter darty. Coming up, israeli Prime Minister Benjamin Netanyahu meets with tech executives in silicon valley. What he told cory johnson about israels tech in history, coming up next. Latest letter from carl icahn to ebay shareholders. Ive lost track. Maybe its number four . There will be more. We will talk about it when street smart continues. Time now for todays global outlook. Israeli Prime Minister Benjamin Netanyahu signed a cooperation deal with california governor jerry brown. The two agreed to help each other in areas where they share interest, Cyber Security, clean energy and water and conservation. Cory johnson sat down with the Prime Minister, talking about israel as a hightech hub. We want to get technologist to come to israel and see how they can find not only soulmates, but entrepreneurs and our technologists to cooperate with them. Technology is a very big part of the israeli success tori. And with commodities, you were talking about in terms of water. The water stories have been fascinating they reuse 80 of their wastewater and lead in terms of desalination. They have a lot to offer to the rest of the middle east, when there is a concern about water scarcity. Curious that israel would go to california directly and not the u. S. Its interesting when you think about california droughts, who has pioneered it better than israel . What is going to be the motivator for them to get at her Water Supplies . This drop might be the breaking point. Israel never had to deal with that. They always had to be reliant. Desalination is heavily energy intensive. There is always a cost. Good having you here. Comingup, the gloves are off again. Carl icahn versus Mark Andreessen we will talk about the latest volley over ebay. Angry blog posts between an activist investor legend and a venture capitalist you know we are talking about. Just another day in a carl icahnMark Andreessen fight. Womackhnson and ryan join us. Why has this thing gotten so ugly and so personal . About a slate of directors and the way the board of directors is constructed. Its going to be about people and its going to be personal and carl icahn is willing to go there. What he has pointed to are what he thinks are some lapses in integrity and dealmaking that, by Mark Andreessen in particular , one of the ebay board members, who has made investments in companies ebay wants to own. And recent encounters he has recused himself of any discussions from the ebay board about skype. This suggestion by carl icahn is even so, the board would have benefited from his input. Its clear hes going to use every tool in the book to try to get the changes on the board that would facilitate a sale or separation between skype and ebay because he believes its the best for the future. The next stepke is highlighting this research that came out that says 55 of shareholder surveyed think the board should change. What is the probability that will actually happen . You talk to wall street and its never really clear the entire sentiment. John donahoe is touting how shareholders come out and say we have seen some good tings here. Theicon is going after authority of the company and the board itself will stop the board itself. Its nothing if not resilient. Rex the founder of the ebay board hes contending mr. Cook allegedly told ebay we would like for you not to try to recruit any of our people into intuit. The department of justice is doing an investigation about that ring. About thegreat point employees that havent been able to go from company to company. It is a real concern there. Is going to take everything he can to throw at these guys. The notion that wall street can get a quick payout this is what can happen when you give control of your company to shareholders for whatever the duration of benefits to think taskedop the board is with a longterm benefit of that company and its an important distinction made by the time warner, at the time, warner bros. Merger and going with a cheaper author then they would have cheaper offer than they would have gotten otherwise. The board can say we think the longterm interests are thus, but if shareholders start to think its not the right Management Team either in the executive suite or board of directors, they are going to instigate for those kind of changes and that will be interesting, proxy time. We talked about what value can be unlocked if ebay is spun off, but how important is ebay to paypal is the question . It has a builtin market for very little cost. Been important to paypal and a couple of major ways. It gives a huge bucket of customers they can fund paypal. John donahoe talked about how they are going to be able to invest and make it better and stronger. Around the value and a lot of Bigger Companies are getting into google, etc. Ebay has that mets what they talk about together, we are stronger. Its up to shareholders but they have been making the case forcefully. The value of ebay to paypal has always been the fact that someone else could get a hold of it if they didnt own it. They acquired the massively moneylosing operation just to keep it out of the hands of amazon and out of the hands of google and apple, all companies that would like the success paypal is even though paypal is not yet massively profitable. Were separated, it might get a stupid valuation from wall street or a stupid valuation from a competitor but it would accrue to the shareholders of ebay. Carl icahn does not care if ebay screws up their own business by allowing their competitors to get to the thing that is paypal. So far, the market has spoken the stock is up 8. 5 year to date. This whole thing has happened over the past couple of weeks. Clearly, they are voting with their hands and buying stock. What are they telling you . I havent talked to all investors, but the stock has on up. Can even argue that ebay had a disappointing quarter coming out of january. This is stuff gets a lot of inve