Bloomberge from European Headquarters in london. Francine lacqua is off today. Privacying up, putting first. We test out the world most secure smartphones. Is it really nsaproof . We begin with the crisis in the ukraine. There could be a delay to the vote for a new government. Remains onpresident the run with a warrant out for his arrest. Bloombergs managing editor is on the ground in key ever with the latest. What is the latest . With the latest. What is the latest . What we have seen over the last few days, the situation in central kiev is very disciplined. That more remember than 60 people died last week. Unarmedal, the mostly Citizens Militia seems to be keeping control in the city. Still no sign of the official police anywhere. Can you give us an update on what is happening in the south of the country . A more prorussian part of the ukraine. There seems to be a different view of the situation down there. Yes. [no audio] it sounds like we have just lost our connection to kiev. We will continue the conversation. You have a fastdeveloping situation in the ukraine. Ryan chilcote is sitting next to me. He has been watching the latest coming out of the acting president. We thought we would get a vote today from parliament. It now looks like that will be delayed till thursday. The acting president and speaker of the parliament set the deadline of today, saying he wanted to see a government in place today, meaning that the government would have to be composed and the parliament would have to vote on it. At the end of the day, the country is in a financial crisis. In the last 20 minutes, he has come out and say the new deadline is the day after tomorrow, that the country tank go on with the interim government that they have now with him at the helm as the acting president until thursday. People will be looking at how the russians will react to this. There has been some fairly belligerent commentary out. Brov making slightly more moderated comments. The Russian Security council met this morning and just after that, the foreign minister gave a press conference. I think it is still underway. He said that russia will not intervene or has no plan to intervene in the ukraine. You were talking about the belligerent comment from the Prime Minister. Yesterday, he said that russias interests are under threat. Ethnic russians may be under threat in the ukraine, suggesting that perhaps intervention was possibly in the cards. Today, the foreign minister downplaying that. In russia, if youre looking at comments, it is important to look at which ones are coming from the Prime Minister and which ones are coming from Vladimir Putin, the president. A lot of analysts will tell you that there seems to be the realization in moscow that soft power might be the best way to go when it comes to ukraine. Lot you think about it, a of people in ukraine have a Certain Affinity for russia. They want cordial relations, at a minimum, with russia. Lets not forget the russians offered the ukrainians 15 billion in aid when no one was willing to give them any money. Maybe they would provide more. Is interesting because it looks like the European Union would like russia to be part of this big aid program they put together. Its gasine gets half of from russia. It is getting it at a discount right now. Will that discount continue if the poor relations between the two countries there are a lot of ways for russia to influence events on the ground without introducing military. To thehis a reaction very diplomatic overtures that have been coming from the eu . , ith has made it very clear has picked up very quickly in europe to try to get a hold of moscow, to try to maybe provide an outcome that is similar to the one you are talking about. Every time someone talks about the former soviet republics like ukraine, like the baltics, like georgia the buffer zone. You hear western politicians and the likes of merkel say it is not a zerosum game. Dictate orhe west to russia to dictate, we can both agree to cooperate in these places for the better of those countries and the better of our own interests. Feel thatk they often sometimes they leave the russians on the sidelines. And then they get the kind of reaction they do not want to get out of russia. You could say this peace deal on friday that we had between the thenukrainian president and the opposition was brokered by the eu, the russians listened to what they had to say and they left. They did not sign the deal. There is a realization in western european capitals that it is best to have Vladimir Putin on board if possible to at least hate him that deference, if you will, because, in the long run, it will make life easier for everybody. We will catch up a little bit later. Ryan chilcote on the latest coming out of the ukraine. Lets change gears completely. Top tech execs from around the world are gathered in barcelona. We have seen plenty of new gadget unveilings so far, including the new smart phone from samsung. And updated wearable devices. What kind of reception have we seen to these new gadgets . Caroline hyde has tried them out and joins us with the details. Anything to get excited about here . Not much. It has to be said. Nothing was very groundbreaking from samsung. In thed the stampede Conference Center after Mark Zuckerbergs beach across town. The unveilingwhy was not as sensational. Quite often, they did not unveil these sorts of products at the mobile World Congress. They did it on their own in Madison Square garden in new york. This time, good, nice feature updates, but nothing that exciting. A good, improved camera, better looking. One, you can drop it in water for up to 30 minutes. Nice Power Saving Technology and they have the fingerprint technology. They updated the galaxy gear as well. The camera is now embedded in the watch, not in the strap. I really like the new galaxy gear fit. This is the new bracelet that you can monitor your exercise and count your calories, against the likes of nike fuelband. Overall, no one getting that excited. We spoke to an executive and he says it is all about improving the consumer experience. I hope that everybody takes into account that it is not just about features anymore. It is about what people use. It is about peopleinspired innovation and helping them do new things with their smartphones. I am going to love the ultra power saving mode feature, which, when the battery is less than 10 , i can turn on the power saving mode and get another 24 hours out of the phone. Speaking, the director of samsung europe. That making these improvements, a lot of consumers will like them, but it is just around the edges. No huge innovation, perhaps a little underwhelming. Need toeasons they really focus on getting some of these core things right is that others are coming out, the chinese in particular. You are right. I was just speaking to lenovo. This is a company with huge ambitions. The chief Financial Officer spoke to me. This is the guy who orchestrated the acquisition of Motorola Mobility just after they bought out ibms server business. They really want to scale up. Their ambitions are skyhigh. They say they want to be not first not third, not second, but the number one smartphone maker in the world. They say motorola can help them do that. They are focusing on driving up revenues. For google, Motorola Mobility was lostmaking. They say they are focused on driving revenues and innovation. He was very bullish on what they can do with Motorola Mobility. I unveiled Wearable Technology and new smart phones as well. The chinese are really tackling samsung where it hurts. Back to you guys. Caroline hyde joining us from barcelona. Lets stay in the sector. Deutsche telekom is considering an alliance with whatsapp. They hope to partner with the messaging startup in some markets, though not its home market. Matt campbell joins us now. Can i draw a line between the takeover and what they are trying to do or is this already in train . This theme has been going on for some time. We are seeing other manifestations of it as well. There was a bloomberg story overnight about softbank, a very a very large japanese carrier, making a competing messaging service in each stage of. The mobile carriers realize they need to get ahead of this messaging trend. Text message is one of the dirty Little Secrets of the mobile world, that Text Messages were basically free for the mobile carriers to provide. They were a source of immense revenue as people send thousands of them every month and year. That is now going completely away. This traffic migrates onto my forms like whatsapp. Toriers are looking for ways not be completely left out of that transition. They must be nervous as whatsapp looks to voice as well. The lines are definitely blurred between overthetop services, these datadriven Services Like whatsapp and Traditional Television and traditional voice calling. Whatsapp says they will offer a traditional voice calling like skype to offer a branded mobile subscription. We are seeing the carriers traditional turf, the one thing they could hang onto, if you want to make a voice call when you are out on the street, you do it through us, now potentially eroded through facebook who now has behind them. One of the questions that has been going on, will they just become terriers themselves . There were feverish rumors that apple was about to start its own mobile offering or maybe by tmobile in the u. S. Or something outlandish like that. We have not seen anything of that level. Clearly telecom and mobility is where the future is. Oh the carriers need to watch out for this and the Silicon Valley giants are very aware of wishing hard in that direction. Pushing hard in that direction. The latest on the whatsapp dt everybody else story. Tot will be fascinating watch. Eric schmidt has been talking to charlie rose. He talks about the revelations from the former nsa contractor Edward Snowden. Documents, which appeared to be true, they figured out a way to get between our Computer Systems as they traffic information. You have no evidence that information was misused, but when we saw that and we saw our protocols, we immediately closed those loops. You can see the full interview a little bit later on. Din is expanding in china. The website will comply with state censorship rules. The news comes after more than a decade of having its english and which website in the country. ,t. Gox has gone offline directing users to a blank white page. It comes amid allegations of a 350 million hack. This will gauge how big a threat this is to the future of the Digital Currency. Also coming up, a picture of risk. Ukraines currency is one of the worst performing this year. We will discuss the embattled countrys financial situation with the sack so bankhead of fx strategy. Good morning, everybody. Welcome back. Lets get back to the ukraine. We have been expecting lawmakers to vote on forming a new government today. It now looks as if that will happen on thursday. This according to the interim president. Clearly face a daunting prospect, 35 billion is what the country now needs in financial aid. We do have some positive developments. The russians may be taking a more pragmatic, positive view on the situation. This is the currency. This is what has happened to the currency over the last few days. You can see the depreciation is very obvious on the screen. What happens next . Joining us is john hardy. Betweenolitical mood russia, the eu, and tf and kiev starts to improve, are we likely to see a shortterm pop in the currency despite the longterm prognosis . I think that is quite possible. The government signed the political stability and emergency loans, it makes it looks like it makes it look like we can see the eu roll over some of this debt and get financing in the short term. I am sure we could see the currency consolidating a little bit. It does not solve the alarming longterm backdrop in structural balances. A current account deficit of 9 ofgdp in the second half 2013. These are longterm concerns for the currency. Not to mention the geopolitical applications here. Implications here. Bankere is some talk of runs. Concern about capital flight. Any thoughts as to whether or not we will see capital control in the short term . Getting your money out is a critical factor here. When we have a situation like this, household demand for foreign cash spikes. This becomes a tremendous problem. It is a very fluid situation. You cannot be surprised to see almost anything in the near term just to stem these emergency outflows from the currency. In january, the month before the worst of the crisis, we had central bankers dropping by 2. 5 billion, a very large chunk of the remaining reserve, down to about 10 of gdp. These measures might have to be reset to stem the risk from panic outflows. How are real money account going to play . The brewery, a big position in the ukraine, massive footprint. How does a company like that deal with a situation like this . That is a very good question. They are sort of sitting back and hoping that the sales continue. Not exposedhey are beyond a possible loss of sales because the currency is devaluing. That means domestic inflation and less purchasing power for their products. They are hoping that things will blow over and sales can pick up again. It is more for the domestic ukrainian base. The institution has to worry about foreigndenominated debts that is in a pinch. What size or scale of devaluation would be necessary to provide some degree of stability from a macroeconomic point of view . You need to see some structural reforms. Even the backdrop, you are looking at eight 10 15 further evaluation on a oneyear basis, even assuming we get relative lyrical stability and some move to stabilize the situation and get the debt funded. Read across into the ruble . Ofi need to see some sort linkage between what is happening in the ukraine and with the ruble . What is your shortterm to medium outlook for the ruble . The only instance in which the ruble is affected, there are factors that are affecting the ruble to the weak side already, but if we get some international confrontation going on, a really dramatic escalation, which, we have not seen yet. Russia would like to see it slowly devalued. Russias growth coming in much slower and they are facing structural problems of their own. Too much reliance on oil. A weaker currency they would see theelping to improve competitiveness of Domestic Industries and economic activity. I see some Downside Risk for the ruble. Not for emergency reasons, but just reasons that the russians would like to see it weaker as well. Always a pleasure. As much as a problem as it has been in the past. Nice to see you. Thank you very much indeed. We will take another look at the situation in the ukraine with citigroups senior Global Political analyst. We will be back after this break to talk more tech. Good morning, everybody. Welcome back. The you are watching the pulse. We are streaming on your tablet, your phone, and bloomberg. Com. How are the markets opening this morning . Jonathan ferro at the touch screen with more. A pullback this morning. About. 3 . No notable pieces of data. German gdp came out in line. Unlikely to shock many of you out there. That wein, the level are at, the s p 500 touching record highs yesterday. The ftse 100 in london touching highs that we have not been at since december of 1999. If you look at year to date figures for the s p 500, we are dead flat. If you look at the stoxx 600, up a mere the bulls will not be popping champagne as of yet. The data is missing forecasts. Is it a weak economy . Is it bad weather . Is it just bad forecasts . We will not know for sure until the weather gets better. Happenslly hope that soon, to be honest. It would be nice. Putting privacy first. We will test out the worlds most secure smartphone. Is it really nsaproof . And as we head into break, it is time for the pulse number. That is how many signatures the petition to deport Justin Bieber from the United States has gathered. At makes it one of the most popular petitions in the history of the white house website. Should america really be kicking him out . We will talk about that later. Good morning. Welcome back. You are watching the pulse. I am guy johnson. These are the top headlines. The ukraines acting president says a vote on a unity government has been delayed. He is an opposition politician elected harlan Parliament Speaker. He wants to move quickly so they can seek economic aid package. Minister has won a confidence vote in the senate. This is the first indication of his new government winning the backing of parliament. He presented his government and laid out his priorities. German exports surged the most in three years in the Fourth Quarter boosting expansion in europes largest economy. Are. Ose 0. 4 it was stronger than anticipated. Now, black phone is a smartphone for the Edward Snowden air. It was developed in direct response to the nsa spy revelations. It runs free of carrier and vendors. It allows callers to make and receive calls left the fear of being spied on. Attica snowden case has ofvated everyones awareness what we live in. Have a future we surveillance, the snowden documents have revealed to us that it is worse than we ever imagined. We have to push back against this. Black point is a smartphone that has been created for protecting the users privacy. To protect your Online Activity. Of your phone calls is encrypted so no one can wiretap you. No one can listen to the phone call except the two people that are on the phone call. Criminals have access to the same technology as the rest of us. The 9 11 hijackers had gps receivers to guide their airplanes to their targets. Technology developed by the pentagon. What are we suppo