The company is sitting on nearly 160 billion in cash. Cory johnson is with me as well. Rudy standard fare. One thing that did check me was when asked if you could see into our internet relapse you will not be worried about anything. Labs you wouldng not be worried about anything. I will say that for all of the bluster that comes out the withny in Public Events apple is known for bluster, when a ceo says to a shareholder new things are coming, then he has to do it. You can talk to the press all you want and make themes up to your customers. You have a fiscal responsibility to shareholders. Did he really Say Something . He talked about the success apple has had in their business, saying they have more money in the last year than any other companies than those who draw oil. They are the most Viable Company in the world. I would argue that it is not. There was also a shareholder that asked about apples more aggressive policies. He says i care more about Climate Change that about all of you making money. Out of our stock if you do not like that. This is why i hate covering these events. Theres always some crackpot who has a chance to go to the the microphone, not the Climate Change believers are crackpots, but i think what happens at apple meetingsis are filled with a lot of exemployees. Very small positions and hold their stock forever and might to get the chance to see the ceo. It is not necessarily representative of the shareholders at large. Moving onto microsoft. Thompson saidohn done with Bloomberg Television in london, speaking exclusively about the future of the company. He was the guy that spearheaded the search for a new ceo. He was very much behind the movement. Tell me more about john thompson. A longtime ibm guy. He took semantic and ran one of Many Companies in the new emerging world of Internet Security and became the leader in that business. He made a lot of money for himself in the process. His role as a war member has been just as important. His central role in turning the heat up on Steve Ballmer is really interesting and one of the Untold Stories of microsoft. Ballmer seen steve retired from the company. How much was his own doing . How much was the board asking tougher questions . Johnows the hands of thompson. Lets take a look at this interview. What the Biggest Challenges are for microsoft lying ahead. The issue quite frankly for us is about focus. One of the reasons why we chose sasha and adele as she has a strong background her. We are excited to watch the next few months unfold as he builds his strategy to reject the company. Absolutely. So much will focus on the cloud. The company that find the cloud attractive want fast service providers, Quick Service providers, flexible. How is microsoft going to be more noble to cater to this consumer . Has certainly demonstrated inability to provide how based web form on which others can build applications. Is a verythat, 365 successful cloudbased application. The combination provides a foundation on which microsoft can clearly grow its cloudbased business. It is focusing on how we we can become more relevant to consumers. It has a strategy launched about a year ago now. It is very much a part of that. Itll be interesting to see how atyaa augments s augments that. What lessons will you bring to microsoft as a new chairman . If they areknow struggled. We grew from 600 million to 600 billion. If we did have a flat revenue performance. If anything, 43 years in this industry has led me to believe that nothing is more important than focus. What do you make of what he had to say . It is obscure this whole moving to the cloud space. What does that actually mean . That is the third of four time i have heard the interview. Focus on focus. Lets think about that. La is running the cloud business. Microsoft is in a lot of businesses and lacks a certain degree of focus. I think that might mean a closer focus on the cloud. Does nothe shares sound like theyre off the table. S,inning off xboxe consumers. They can contractually keep a lot of the things they like about that. But spin it off somehow. What about the fact that the della nadella is an insider. That is the question. Did they categorically decide a year ago to not get rid of the orstuff . Or is he going to say lets have windows office, xbox and the cloud in mobile and when we separate them . Contractually agree to use each others work. We will be watching. Thank you. Up next, we are joined right here in the studio. He is often called the 700 billion man. The architect of art will be here. Welcome back to bloomberg west. Jerry brown just made it official, announcing he is seeking a record for the term. He will be running against kari neil caspari. The 700 called billion man. Now again republican candidate for governor. You are very hit to the new technology. I know youre big on twitter and instagram. You take a lots of reverse selfies, showing your perspective of the crowd. Youre also an engineer. You used to work at nasa. My first job in california was for a nasa contractor. It may haveious how helped you as a politician. Policymaking is problem solving. It, youre trying to unwrap that is what engineers do all day. You welcome and jerry brown on twitter and tweeted even though you do not want to acknowledge them, were going to get the 24 living in poverty a voice. He has record approval ratings. What makes you think you can win now . People generally like him. Only about a third of voters think he should be did. When he is patting himself on the act that he has fixed all the problems, for millions it rings hollow. Their kids are graduated with low debt and no jobs. System california is ranked 46th in america and we are 41 and poverty. 21 live in poverty today. It is not even a knowledge them. You are best known for tarp. You gave money to detroit. With basically no strings attached. You gave money to the 1 . How do you justify that to the people who could be voting for you . When we face the critical the worst economic crisis since the great depression, we got republicans and democrats to Work Together and we are tech did the taxpayer. We got every single dollar back. We made a 13 billion profit for the american people. Theres a program that has ever done that. You have said the campaign is about jobs and education. It talked about tax incentives in regulation. What kind of tax incentives would you pursue . How much would that cost . Contest to compete to bring jobs to their states. We are not competing. We are asleep. Governor brown is not traveling insane bring your factory here. Elon musk just yesterday announced his new battery factory. Not looking to build in california. I do not fault elon musk for making a Wild Business decision. We need to improve californias economic climate so we are in the hunt. If you look up these windows, we have some natural advantages in california. Nobody wants to move to texas. People love california. We do not need to be the cheapest place in the world but we need to be competitive and we are not. In arizona,building apple in texas. How would you get them to do california instead. The regulatory litigation complex in sacramento is out of control. Hundreds of regulations every year. It is like a giant ball of yarn because bigger and bigger. We need to reign that and. When legislators want to build a new arena, they take it from the Environmental Review because they know it will cost so much more money. If it is good enough for their projects, why not enough for apple . Why do they play by a harder set of rules on the politicians get a better set of rules . That is not there. What specifically about tax incentives . Texasdo not cap to out texas because people want to come to california but we can create incentives to bring factories to count when you and me become up for ways for them to pay back the taxpayers. What we did in washington was the use taxpayer money. Then we got the money back. Error programs like that that we can look at to make it effective. Like what . I was in alabama i asked him how did you get this booming auto sector . They created longterm incentives to bring the first few to alabama. Then they developed a Skilled Labor force. Then moore said be want to tap into the skilled workers. They started building more fact trees. I want to bring manufacturing back to california. How they design great technologies. If we do this, we can bring down 17 . 17 of californias need work. We can bring that down by putting people back to work. He wants to if it bloomberg west split into six dates. Bloomberg west i like tim draper. I love california the way it is. To bring Major Economic and political change to california. If we do that, i think even tim draper will be happy. What about minimum wage . A Governor Brown just raised minimum wage. When that help the poor . Minimum wage increases are very low. It is devastating for those workers who are now out of work you were making eight dollars and are now out of a job. There are consequences to minimum wage increases. For me, a better way of raising everyones wages is to bring more factories to california so the man or Woman Working at mcdonalds can go down the street and apply for a much better job. If we do that, everybodys wages will increase. I will talk to more about this after a quick break. Neel kashkari here in california. We will have much more with him after this quick break. Welcome back to bloomberg west. We return now with our interview with neel kashkari. I want to talk to you a little bit about some of the tensions simmering around any quality in the bay area. The war on the 1 . Compared it to the persecution of jews in germany. He apologize for the metaphor but he believes the 99 as demonizing the 1 when it comes to protesting against things like this. A i think this is all about lack of opportunity. Well may have Economic Growth with a completely failed education system, inequality expands massively. We make a Fairer Society by making sure kids get a good education. Ive visited some Great Schools that have taken the most disadvantaged kids and open their future through great education. If we put people back to work and we fix the schools, then we truly have an america talks the tocrcy. I understand it. California schools are ranked 46 in america. If you travel around the bay area, this is such an amazing place. So much success and so much failure nearby. Failing schools where kids are not getting a fair chance to participate. What do Tech Companies want tothe nontech Community Education . We all have a responsibility to each other. What should the googles of the world be doing . Forontinuing to advocate how is it that sergey brin and the leadership of google have had so much success . I got a great education. I know many tech founders and ceos are donating money to education. They know that education is the key to the future. Governor brown says were doing great yet our schools are ranked 46 and america. Unless we get every kid in california and america a good education, we will not be a fair society. You oppose prop 30. Without the tax increase, there would not be more spending on schools. That is the light. He sold it as though it was an education for graham. The money is going to fund pensions. Spent 40 billion or more in k12. Only about half of the money is classroom. O the half is going into administration and bureaucracy and overhang. This is not about throwing more money into a leaky bucket. He does not want to do the hard work of fixing structural problems. He wants to for more water into the leaky bucket. Called the highspeed rail the crazy train. What is the alternative . We have a lot and need in our state. Jobs. Education. Needs, who can argue spending 70 billion makes sense . I live in orange county. It makes the two hours to drive two hours. Deputies the two hours to drive to los angeles. It takes two hours to drive to los angeles. What would you have done differently what comes to the drought in california . Theres limits to what the government can do right now. The truth is we should have been building more water storage for years. We should be building more storage right now so the next time we have a drought we are actually prepared. It is a lack of preparation. Budgetr brown is on the here at the stock market went up last year. You and i know he had nothing to do with that. If it goes down this year, it will evaporate. The legislature is controlled by the democrats. You are a republican. How would you push your agenda . I if i run a good campaign, want to help other republicans get into the state senate and assembly so that the democrats no longer have a super majority. We need a vibrant twoparty system in california. Government works better will have a twoparty system. In washington, we work with both parties, republicans and the democrats. I worked for resident bush them president obama asked me to stay. Your former bosses at pimco have been in the news. They reported disagreements. What was the relationship really like . It was very constructive. They worked very well together. I have a lot of respect for both of them. They have a deep bench. They will do great. Why did you leave . To explore running for governor. I had a great experience there. According to reports, they disagreed over everything. Trading, personnel. Overblown. Does anybody go back and say steve jobless to demanding a boss . Jobs was to demanding a boss . No. How much freedom did stock managers really have to make decisions that different russian mark a time. Different . The manager would not go in and start buying greek stocks. The Equity Managers have full discretion. I look go gross in the eye every day. Of au wrote a note tightening cutting entitlements. Do you still believe that . To havenk we need an honest conversation. In california, we are on the hook for more than 500 billion of unfunded liabilities. Governor brown has not acknowledged the magnitude. We need to have an honest conversation. One the question. Its Sheryl Sandberg wanted to run for governor, what would you think . I would welcome the challenge. Neel kashkari here in california. Oscars are this weekend. It is not just movie stars being honored this time of year. Special effects play a big part in making big bucks at the box office. We will show you how some of them are made. You are watching bloomberg west. Apple is holding its annual Shareholder Meeting today where the full apple board was did. Tim cook also said apple will have an up date on its cash policies within 60 days. Carl icahn have been pushing apple to use its cash to buy back more stock but dropped to the plan to force a vote on the issue and apparently has turned his attention to ebay. The days of rapid growth that twitter may be o over. One fit access twitter once a month. The growth rate is expected to to 10 by 2015. By 2018 only 65 million will be logging in. Is artybook audience twice that size today. A british man charged with hacking into the federal reserves computers aces up to 12 years in prison. Charges in thee indictment. Fedllegedly hacked the computers between october 2012 through february of last year and posted personal user information online. The crypto currency immunity is watching the drama unravel with mounted gox. Mt. Gox. There are now being sued by one of the customers for misappropriation of user property. The class action case was found yesterday and seeks to represent all u. S. Users who lost money. Can this lawsuit hold any weight . Cory johnson is back with us as well. Are they ever going to get their money back . Where do the coins go . Participated . Can it be proven . The money disappeared. There is no regulation. Is there real recourse . The owners ofine bitcoin he says hold the money for us and the guy holding the money said it just disappeared. That is the issue. One of the big issues will the what happens Going Forward with an covering this and any lawsuits. We are joined by mark williams. A former regulator, in particular, i am wondering what you make of the role of a trading operation like mt. Gox in bitcoin . Trading not even operation. No controls. It is a mess. Clearly what this represents to the market is that there are other exchanges out there in the bitcoin world which are run this way. The standards were really low. Customers lost lots of money. I wonder what kinds of specific legal requirements banks have that are different than what these kinds of exchanges have that might have served as a model for such exchanges like mt. Gox. Have abanks themselves control system. They have internal policies and procedures. They have external auditors that come in. We also have regulators that come in and find them if they are not complying with these High Standards. Compare that to what we have in bitcoin world. World, we have exchanges. Many of them with different level of standards. We also see specifically that there is no control environment in place. We had cyber hackers come in now up to two years to stool these coins. Not only do they steal customer le 100,000 they sto coins from the owner specifically. What do you think is the likelihood that these people will ever get their money back . There is no regulation . There are no laws . Why should they . Dory. T is the fed assumes theres no Consumer Protection whatsoever and without the Consumer Protection, these investors could lose everything. Most probably they have lost everything. Bitcoin itself is untraceable. Once these transactions are done, they are irreversible. It is anonymous. It is hard to track down the criminals. It is hard to get the money back. , im noto seems to me a lawyer by any means, establishing standing, the most basic legal principle that any suit has to go through, is virtually impossible because of the way bitcoin is designed it so there is no location and place. That is correct. Theres no legal structure over the top of it as well as any sort of regulation over it. The chance of getting money back is quite low. What is very interesting about this whole story is the fact that this is really bitcoin being tested in the real world. Although