The new greek government complained that it was not consulted about the possible new sanctions. It is decision day for the fed. The fomc releases in new statement today. Policymakers are pledging to be patient on the timing of rate increases. Im going to use a tom word. Another stunning quarter for apple. The Company Posted a 30 jump in revenue to 74. 6 billion. Here is ceo tim cook on a Conference Call. Interest in apple products is at an alltime high, with over half a billion customer visits to our physical and online stirrers stores during the quarter. We had sales of over 74 Million Units driven by the unprecedented popularity of iphone 6 and iphone 6 plus. Up next for cook and the company, the apple watch. Tiger woods is back on the golf course. He is showing off a full set of teeth. Last week, he lost a tooth in italy when he was hit in the face with the camera while attending his love, Lindsey Vonns world cup ski victory. I still had my mask on so no one knew who i was. I was trying to blend in. There are not a lot of brown dudes at ski races. [laughter] tiger woods keeping it light. Lindsey vonn the most world cup wins and womens ski racing. Is he now a trophy husband . That is a good question. We will have to see what the golf course says. He is 35 or something . Agent. I think he is my age. Ancient. I think he is my age. I am a lindsey vonn fan. So i say he is a trophy husband. Olivia sterns. Oil is turning a little bit. I dont want to overplay it. On to the second screen. The resiliency in equities. Switzerland, the 10 year the positive news is that it is positive. A little bit of an ease up on the swiss carnage of a week ago. I made a mistake. This is been a lot of good work there has been a lot of good work. Give the website a try. We have tried to revolutionize the clutter that is out there. It is clean. I have a surveillance correction. Tiger woods is 39 years old. I did not know that. Lets go to the bloomberg terminal. Yellen and draghi. Draghi has had struggles in liquefying the balance sheet. That is the difference the janet yellen faces today. We will see whether it has the desired effect. This is just a things the central bank can do. Whether it will have an effect that will be interesting. We will have full coverage through the afternoon on what your Federal Reserve does. To apple. They simply made history yesterday. Brian weiser joins us from portland oregon. We will talk about the cupertino cash machine in a bit. The fed. It is the first do no harm type of fed meeting. The could just make slight upgrades to the Economic Assessment and walk away and that would be a successful meeting. We are growing at a 5 annualized rate over the last two quarters. Lets look at the debate. Simon kennedys quote. The basic idea is that Morgan Stanley says, we are going to delay. The lowflation expectation presents a persistent Downside Risk to the u. S. Outlook. She is front and center, isnt she . Absolutely. The fed is trying to be patient. Financial conditions are already tightening given the strong appreciation of the dollar. The stronger dollar is going to weigh on the export sector and different profits. It is already starting to create down drafts and slow the economy down. I have been chewing on the word patient. It is the feds way of saying, were still figuring it out. They are still looking at the data. I think what the fed might be missing and this is going to be the critical thing to watch the minutes of the december meeting indicate that they were starting to have some doubts about the inflation outlook. They know Lower Oil Prices will weigh on headline inflation. What happens to the core . Well it strips out food and energy, it is still sensitive to energy. If we look at previous episodes were oil and gasoline prices fell as much as they have core inflation decelerated significantly. The fed is not going to have the confidence that deflation is going to hit targets if core inflation decelerates by 40 or 50 basis points. Is janet yellen going to talk about mario draghi . They are going to talk about that, but it certainly wont show up in the official statement. That will be more when we see the minutes in three weeks time. It will be more about the strengthening of the dollar. You said it is already hurting the economy. A lot of economists say exports are 13 of gdp. Corporate earnings are an important driver of economic activity. All of these multinationals are being hit by the stronger dollar and they pull back on the pace of hiring and that would be a problem for the fed to continue on that meet your trajectory. Your job as a fed watcher has changed. It is the minute stay that is exciting now. Especially when we dont have these postmeeting press conferences. That would be the one left Field Development today is of the fed comes out and says, this is the year we are probably lifting off we are going to have a press conference after every meeting. That is something they are looking to move toward but there is no reason to expect that. Brian weiser is with us as well. You dont follow apple. I dont, but it impacts everyone. I have never seen this. I have never seen a company mint 255 million per day over 90 days. Have you ever seen anything like this . Standard oil . [laughter] that is the point. It is the most profitable quarter in corporate history. 18 billion per quarter. This is not about gap earnings. It is about cash generation. Have you ever seen this . Not specifically. This speaks to how apple is slightly outside of your world. Silicon valley is looking to turn eyeballs into analytics. Apple makes pretty products that exist in the real world. Olivia has great charts to get is going. Can you imagine what they are going to do with the dividend . Your kids should own apple. Await, they do. Oh wait they do. [laughter] Perfect Question to the twitter question of the day. Does apple has apple p question has apple peaked . You can now see the brandnew bloomberg business. I cant tell you how thrilled i am to make the post first public phonecall with the iphone. Ancient history. Who would have guessed that apple would be boasting 75 million iphones sold in just one quarter. It is the gdp of yemen. It is the population of turkey. 18 billion. That is the dominance of it. It is extraordinary. It is driven very much by the iphone. 70 of the revenue comes from the iphone for apple. Every other Products Group at apple is in record territory. You are looking at the yellow line. That is the dominance of iphone. Is it a good thing that apple is so reliant on its products . They have been consistently proving every tech journalist wrong. We talked about how terrible the at t network was and it has been fined. Who needs an ipad . It turns out everybody does. Brian weiser is with us. The world that is talked about is ecosystem. What is ecosystem . It is all interrelated participants. It is media owners, advertisers developers of apps. To the extent that everyone has to think about apple first one they are building something, whether you are going to design and add that is just an example of how they catch everybody. Apple is the new html. They have a lot of power. One of the things a lot of investors are hoping for is that yahoo becomes the default search engine. How . That is what yahoo would like. I would like a pulitzer prize. [laughter] in their dream. Is there anything but apple . Who is designing for android . To be clear, this is a duopoly situation. You cannot ignore samsung either. Poor microsoft and blackberry. Here is a number. Scope and scale. This shows the dynamics of what they are doing. They made 60 billion in Free Cash Flow. That is double what they did forfive years ago and that is off capital expenditures. I have never seen this. I have truly never seen this. They are sitting on a cash pile of 178 billion. Second by buy all but 19 companies in the s p 500. Has apple peaked . How can this growth cycle continue . I have a quote from piper jaffray. They say, apple will definitely keep cooking for the next couple quarters. Get it . [laughter] cooking . A mention of google decided not to focus on things outside of advertising. Imagine if google decided not to focus on things outside of advertising. They are spending so much money on things unrelated to their core business. Google. The contrast. Apple is very focused. That is a huge difference. Give me another factoid. How about this one . 556 per every american. Apples biggest market is china. They have less than 10 of the market in china. We will show you how apple stacks up to competitors in china. The only tech company that is actually growing is xiaomi. This is about a premium product with premium products. Rignet china choate chart bring that china chart up again. They are stealing samsung. Apple is tooling along at 7 . What does this say about doing premium . They own it. That is safe to say. You need the mass market if you want to drive it totally. Does apple have a massmarket . They are on the edge of it. There is still a massive opportunity for one or two other players. Wait until xiaomi starts producing in the u. S. Does Apple Software need to be fixed . I dont think so. The app store had recordsetting profit as well. Tim cook said, nearly one billion apple products are out there on the market. It is totally unprecedented. Tim cook said this volume is hard to comprehend. That is correct. It is not about product or fan boy or fan girl. It is economics. The cash generation of this we have never seen. Not at exxon, not at standard oil. s apple is serious about research and development this is like a cold war arms race and they cannot compete with apple is dumping this money into r d. This is the discipline they have versus google. They are investing in totally unrelated. Im wondering if apple can afford to buy greece . [laughter] what we are struggling with right now is comparisons to describe the scale of this. We have the cold war, standard oil. That is our twitter question of the day. Has apple peaked . As it reached standard oil proportions . Will it be broken up . Good morning, everyone. Im tom. I use apple. Olivia sterns uses apple. Brendan greeley uses apple. Victor, the camera guy, uses apple. Can i not talk about apple . [laughter] in europe, there is this strange notion that all the grasshoppers live in the south and all of the ants live in the north. To grasshoppers eat ants . The ants saved all summer and the grasshopper fiddled all summer. Here is his point. The ants live all over europe and the grasshoppers are the bankers who colluded to create a bubble and now it is the answer were paying it off. Does the north get europe right . I think they need to think about this differently. Austerity in a time of economic recession is not the right prognosis. They are forcing the spanish, greek, italian economies too slow. The one point that greece wants is debt restructuring. Is there a precedent for this . I think we will see this in the near term. Greece needs to clean up their tax code. The need more revenue. They do not have more revenue. More revenue means more austerity. They are really in a catch22 here. I am pretty sure i had to read a baudelaire poem in praise of the grasshopper. That probably says a lot about french culture. [laughter] you should take that to brussels right now and give a performance of it in front of the collectively assembled finance ministers. Does greece have it right . Or can germany survive without greece . Germany can certainly survive without greece, but the real problem is that germany is holding back on any type of stimulus including tremendous resistance to the latest round of qe. They are forcing their neighbors to have significant problems. There can be a lot of unintended consequences. German austerity is a lot like what we saw after world war i with the west forcing reparations on to germany. Interesting. We will be back in just a moment with more on bloomberg surveillance. This is different. Good morning, everyone. There is not much going on in the markets. That is the first time in days that i have been able to say that. It is pretty quiet. In top headlines, that is not the case. Boring old earnings news. At t beat profits in the fourth quarter. Revenue rose to 34. 4 billion. That is 200 million above expectations. Nintendo is raising annual earnings forecast. The slumping japanese yen is cushioning the impact of the stalling sales. Annual net income will be 254 million. Harvard university raised a record 1. 2 billion in a single year, beating rival stanford and a decade. Harvards hall is the largest in Higher Education and represents more than the entire endowments of all but 70 u. S. Colleges. In at t, their Free Cash Flow growth is flat. They are also struggling with competition. Apple is alone in its class. Olivia, what do we have . We are turning to russia. Putin is skating on thin ice. The s p downgraded russias Credit Rating to junk. Chris, thank you so much for joining us from moscow. The eu and the u. S. Are talking about another round of sanctions against russia. What kind of economic and political impact would another round have . Is sanctions come, they will add on to the existing stock of sanctions. There had been a fear that we could move to something far more serious like the banking system. What we are really expecting is that the sanctions will be adding to the sanctions we already have. It does not really make the situation that much worse. The more serious sanctions to hit russia were last august. That remains the most serious round of sanctions. Some embellishment of that. Is the junk rating the game changer . Or does putin shrugged this off . In the long term, it is a serious issue. It will make it a lot more difficult for russia to pull out of the crisis once we get through the politics. It is a lot easier to use to your lose your investmentgrade status than to get it back again. It does not materially change the difficult situation we are already in. Russian banks and companies have not been able to access foreign Capital Markets since last august. It is immaterial what the rating is to some extent. It does add some extra cost to companies with existing debt. Some extra cost. If moodys and fitch follow this it is going to be a lot more expensive and difficult for russia to pull out of the crisis later. You write in your february outlook that they may have to change their commitment to letting the ruble float if they experience further downgrades. Do they have the reserves to do this indefinitely . Russia does not have the reserves to keep defending the currency. That is for sure. We do say in our report that it is a deliberate policy of the kremlin to allow the ruble to keep going down with the Falling Oil Price because it protects the budget in local currency terms if the budget has enough rubles to raise pensions, publicsector workers salaries. If you protect the broader population from the effects of this downturn. Last year, we saw the central bank intervening on a number of occasions. That was more to stop a freefall and preventive panic. If the Oil Price Goes down to 40 than i would expect to see the ruble go back up toward 80. I dont think they will try to stop that. If sanctions were to move to a different level you guys have been talking mug global currency wars. If that were to change the picture, that might provide an excuse to be more defensive in terms of capital controls. I do not see the central bank or government wasting reserves to try to match currency and oil prices. I want to play some sound from Maurice Cramer when they made the downgraded to junk yesterday. There are some businesses that have been built up during the oil boom years. The buildup of assets is the rainy day fund. Theyre probably rather puny. Do you agree with that . No, i dont. I think that russia has enough reserves to carry it through its existing situation. Russia has enough money to carry it through for several years. Not indefinitely. Russia runs a very large trade surface. When you do the calculation idols who russia having a problem for about three years. Just a final question. You have been living between london and moscow for years. When you hear us in the west debating the russian economy, what do you think we are missing . It is not a question of understanding. I just think people are making assumptions of continued deterioration. That is one of the things that western observers miss. How important keeping the economy stable is for the kremlin, for president putin. That is the whole basis of his popular support. If the economy or to go into deterioration longterm that support would weaken and would undermine his position. I think people in the west underestimate how important the economy is, getting back to longterm growth in the economy is. Therefore, last year, the measures the kremlin took to try to mitigate the effect of sanctions these things are important. It means that you are not going to get any unusual actions from the government. They will try to mitigate the effects. Got it. Thank you so much for your time. Coming up, there is a new normal in the business of pork picks. We will explain what it means for china. This is Bloomberg Apple surveillance. Good morning, everyone. The most anticipated interview of the week. Ellen zentner. We really looking forward to that. I think we need a chart that is single and porcine. Did not use that word. [laughter] we talk about conquering production, shadow bank liquidity. Today, we offer chinas poor kurds. Opork herds. You have the hog herd and the port sow herd. Sows are girls . Yes. Thank you. [laughter] port consumption pork consumption in china is correlated with wealth. Farmers in china are not making big plans for the coming year. The general Economic Outlook and the crackdown on corruption. These are not independent developments. The crackdown on corruption is of the slowdown. Why does our control room always have to show cute little pigs . I am a vegetarian. What makes you think that the chinese economy is not turning vegetarian . [laughter] seriously. There is not a lot of cultural precedent. [laughter] there have been so many chinese chicken scandals. I know. They are looking for specifically hog production in the u. S. Those supplies are less likely to be tainted. That is what you see from the acquisition of all these companies. Smithfield. This does big to the cultural part of any economics. Did you just point at olivia when you said pork . No, i said chicken. When economies become wealthier, they increase protein consumption. Poor c