But we are not there yet. We want to see a healthy recovery continue. Cory yellen also strongly criticized congressional audits saying it would close eyes the process. She even held up the fed audit look, saying most of the operations are subject to audits. Greece wins a reprieve as eurozone finance ministers improve an extension of the greek bailout. It sent greek bonds and stocks hires. Greece will sell assets consolidate Pension Funds and revamped Tax Collections but the imf manager and ecb president say that the greek minister needs to be scrutinized to be believed. President obama vetoed a bill for construction of the keystone pipeline. It is only the third veto of mr. Obamas entire presidency. The senate will vote to override the veto no later than march 3 but right now, the votes dont appear to be there. Two thirds are needed to override in both houses. The pipeline would run to montana, south dakota and nebraska. The fbi is offering a 3 million reward for information leading to the arrest of a fugitive russian hacker. He is the mastermind behind the hacking of a campaign known as game over zeus, a virus that affected hundreds of thousands of computers and resulted in the theft of 1 of hundreds of thousands of dollars. Hes believed to be in russia and is known to take his boat out on the black sea. Espn is taking Keith Olbermann off his show for the rest of the week after olbermann had a Tense Exchange with penn state handson twitter. He called penn state hands, the students at least, pitiful and continued his tweet barrage even after being sent a story about a long time for the Longtime Program for pediatric cancer. After criticizing their difficulty with the english language, he apologized and espn called the exchange completely inappropriate. Now to the lead hewlettpackard Ceo Meg Whitman says the companys turnaround remains untracked, but first order earnings tell a different story. Overall revenue, down 5 and profit down 4 to 1. 4 billion. Dig deeper into the numbers and some think it looks even worse Enterprise Group revenue was flat service is down 11 , pc revenue is flat, printing revenue down 5 . You know what else is down . Hp stock. Is meg whitman right . Is the turnaround on track or are things just spinning around . My guest joins me now from new york. Missing analysts estimates that always says more about the analyst than the company but this company, 13 or 14 quarters less in revenues despite the acquisitions. It was a challenging quarter. You did have margin improvement, but across the board, Revenue Growth remains challenging to say the least across all the different segments. We see the same pattern this quarter as we did last quarter. The enterprise side of the business remained more challenged than the pc side of the business. The pc side of the business sees mixed trends, but the pc segment doing ok. The enterprise segment still strongly challenged. On top of the execution and operational issues, you have the currency effect which was pretty substantial and likely to be there for the remainder of the fiscal year. Currency is a big deal for this company but there should be some kind of benefit in terms of the cost of goods. A lot of goods are supplied in japan. The yen is a lot lower to the dollar. Theyve got a hedge built right into the business. The rolling hedges can only protect you that much. And the services business, you are a little bit more protective, but when you sell a good, you cant dramatically change pricing to meet the currency swings or else you will scare off the customers and give the competitors in upper hand. It is a lot more difficult that it then it seems and that impacted them substantially this quarter. Cory i feel a little guilty like i am ripping on hp too much but the shift away from pcs, the shift toward enterprise the opportunity and enterprise might be greater in the margins might be better, but is it still possible are we seeing that hp might have a better opportunity but cant rise to the opportunity the Enterprise Business . Is a very structurally challenged industry. Selling servers and storage and networking gear in a fast, commoditizing world where the cloud is the de facto model of doing business and Companies Like facebook and google are dramatically undercutting the ran name vendors and going with unbranded gear is a big deal. The tech spending from the traditional enterprise segment is only going only growing about 4 the year. In that environment, you have to compete with grander gear and along with the likes of cisco, lenovo and ibm, so it is not easy. They have their own execution challenges as well. But the two together, add the currency effect overlay and it does not paint a pretty quarter. Cory operating margins are a little better than they were a year ago, but with the top line shrinking so much its not going to make this a bigger or better company. Do we need to accept the notion that the shrinkage at this point is just going to be its not going to be the big business it once seemed like it was going to be . Meg whitman is certainly betting against that thesis in that you continue to see margin improvement and cost reductions helping the company. We will wait and see if you do split that in your off of a smaller place, a fortune 50 company is nothing to sneeze at but whether you can extract the same kind of cost savings number one and, number two, you can you become more agile thats the bigger challenge, to be honest. Cory this morning, the announced a big deal for deutsche bank. They would not say how many aliens, but it seems like the kind of thing that would give them a big boost but no. Those are the kinds of big deals you want to have many of. Thats a testament to the private cloud is there and the Financial Services industry which is a fifth of tech spending. Those are the kinds of deals you want to have many a number of. Cory thank you very much for the preand postgame show. Bloomberg west will be right back. Cory im cory johnson and this is bloomberg west. Here are some of our top stories. Police 28 people are hurt after a metro link train collided with a truck in oxnard california. No one was killed. The driver of the truck was taken into custody and is being questioned. Google chairman eric schmidt will meet with the head of the European Unions antitrust division. They will talk about the fouryear antitrust investigation into googles business practices. Its the first meeting with googles executives since she took office in november. Layoffs are coming at viacom. Parent company of Comedy Central and mtv people familiar with the matter say will be companywide and they are determining the exact size of the cuts. Five comments shrinking dealing with shrinking audiences thanks to streaming and youtube. Existing tack, bills and whistles are increasingly driving car sales. Our automotive expert joins me now from princeton, new jersey. People are not waiting for the hovercraft from tesla . Really, what is happening is there was so little investment in new technology through the bankruptcy for g. M. And chrysler, all of that pentup technology is hitting the showrooms. An average vehicle age eating at 11 plus years, people drive it on to the show room and looking at these data, they are fascinated by the new tech that is out. Talk to me about that dynamic. There are so many dynamics at play. Theres the economic state of the union, theres the state of the debt market and a super low Interest Rates, but the collapse of the subprime markets in 2007 and 2008 what happened there . Even when you look at a company that did not go bankrupt like ford, you can see a significant collapse in their tech investments at ford in terms of the billions they spend on r d. Even with fords near miss the writing was on the wall years before that. They started to rain in the tech spending well before the bankruptcies and what you wind up with is no tech spending going in to post bankruptcy. Profitability search to come back in 2011 or 2012 and as the spigot opens in investment spending that is the products were seeing in the showrooms now. We have basically a lost generation of technology where, if you think about a noticeable difference in Automotive Technology in an eight year window we have compressed that into a fouryear window. People driving onto a dealer lot with a 2010 model year completely different tech from what they are seeing. Cory it is fairly interesting. Every year when i go to the ces show they tell me this is the best and the brightest and this years model has all kinds of new bells and whistles, it sounds like you are saying we are about to enter an age of significant technological innovation from all the automakers because of the downturn from r d spending in 2007 and 2008. If you look at it, safety is a good example. Safety, fuel efficiency and engine efficiency in general. The other would be infotainment. If you look at the safety side, we have almost leapfrogged over collision warnings. We went from protecting you after you have a crash with airbags and side curtain airbags and then we go to collision warning. We have skipped right over that and we are going into Collision Avoidance where we have automatic raking, Adaptive Cruise control, lane keep assist where the vehicles will steer themselves to keep them in the lane. Weve almost totally bypass the effort that says of the vehicles going to warn me, just fix it in the first place. Speaking of autonomous driving and self driving vehicles, this is the technology that is the incremental steps to getting there. Little by little, we search realize we can make the machines better drivers and we are and they probably already are in a lot of cases. Cory at the same time, there has been a significant increase in the price of cars that seems irrespective of the sales and vehicles overall, blowing right through the recession. I wonder if thats about easy credit, subprime lending, which is such a dominant part of the car business now it wasnt 10 years ago. If you look at the price chart, you have a 29,000 dollar average transaction, now of over 32,000 for the rough 2014. That is additional tech in the vehicles but that additional Monthly Payment increases being offset by lower Interest Rates in terms of a payment. That if you think about total cost of ownership, the lowered gasoline prices play into that as well. What you are seeing is consumers go to dealerships and see new tech and they are willing to pay more because what youre are paying for in tact, youre getting in your lower Interest Rates. You can lower your negative Interest Rate into your equity. Cory i was thinking about janet yellen telling us that there is no inflation but i guess what you are telling me is its all netting out with Interest Rate payments coming down. But once interestrate go back up, there could be a rapid turnaround. That is interesting. The other area of new vehicle sales theyre having an effect on his least lease penetration. If you take about a traditional threeyear lease term probably some are around 2017 and if rates stay low beyond, we will get a flood of off lease vehicles coming back into the market will stop if they are 2015 model year vehicles coming out of lease, they will have a fair amount of technology and what youll get is good quality off lease vehicles competing with the 2018, 2017 model year. So now the used car market is going to look like a better deal. Right now, its so close in terms of the affordability gap everybody just buys new. Cory i will keep my power drive for a few more years and see how much i can get for my old accord. Bloomberg west will be right back. Cory this is bloomberg west. Im cory johnson. These are big days for comcast the Net Neutrality proposal and the time warner ceo saying the fcc will approve the deal and soon. The reporter reporting Fourth Quarter earnings, the Company Reported profits up 1 year. With the growth of do not been customers slowing, the company says it needs the merger. My guest joins me from new york. Talk about this order for comcast. It was interesting on a lot of levels. What stands out to you . To be honest, its a stock covered by richard reid. I think comcast talked about the wifi strategy which might be adjusting to talk about as well. Cory when i look at the subscriber numbers from comcast and dish, its interesting for both because this is trying to go after comcast customers but they might need comcast to do it. I think what dishes trying to do is with their spectrum the challenges they face the paytv business with people doing more overthetop services put a certain timeline on how far you can grow the business or how you can sustain the ebitda. Theyve been in the wireless business before and are talking about the wifi strategy. Other companies have done something similar but comcast will have to rely on an agreement to handle the traffic that they cannot handle on the wifi hot thoughts. Its a different approach for two companies that face different challenges in the paytv businesses. Cory customer seem like they are looking for something different. My next guest also covers comcast. When you look at what is going on with comcast and dish, is there a common line about what subscribers are showing they have a preference for . Subscribers are showing they have a preference to watch what they want to watch when they want to watch it and that has created a lot of challenge for the industry. They are going about it in a little different way. They are just trying to address the people who say i dont want the big bundle. Comcast is trying to address broadband and trying to make the video project better. When i look at the quarter comcast just reported, one of the thats was betting on content, not just the form to deliver. But that business only grew about 1 yearoveryear. Is that a trend or just a bad quarter for programming . Its a little of both. There are clearly pressures on the overall tv ad market. Theyve been a decent job executing and have improved cash flows there. I dont think you can look at that collection of assets and think the Growth Profile is going to be any kind of low or midsingle digits on a go forward basis. Cory dish has been criticized the fcc commissioners about the process in which they acquired licenses and pretending to be a small is this when dishes nothing of the sort. Do you think thats going to hurt their position negotiating with the fcc, posing the comcast and time warner merger because it ticked off someone at the fcc . It ticked off one of them. One of the guys who was ticked off was a republican, so if you look at what really happened from dishs participation is they raised 61 billion, of which 30 billion went to paying down the debt. There are studies out there that if you dont use designated entities, the sums they would have raised would have been far less. Im not sure if the government was worse off for better off from their participation. More important, those rules were set and approved by the five commissioners, including the commissioner who did not like it so just like at t and verizon use those same rules and the last years. Cory thank you very much. Bloomberg west will be right back. Hes out there. Theres a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. Somewhere in that pack is a driver that can intimidate the intimidator. A guy that can take the king 7 and make it 8. Heck. Maybe even 9. Make no mistake about it. Theyre out there. I guarantee it. Welcome to the Nascar Xfinity series. Cory you are watching bloomberg west. Does Edward Snowden regret his whistle blowing . He says he wishes he blew the whistle sooner. He said the program would be less entrenched and the nsa would not be as a custom to abusing its power. Snowden and the film makers of the documentary citizen for held day for him after winning the oscar for best document refers. Snowden is still releasing information about what the nsa has done. A report from the intercept based on snowden documents says one company was hacked by the nsa and a british spy agency. This is the Worlds Largest maker of mobile some cards. Such a hack would give the government access to the very keys that are supposed to encrypt every smartphone. The story is amazing. Spies apparently broke into the personal gmail and Facebook Accounts of employees at the company and wireless carriers and employees of google and yahoo . By mining those accounts analysts were able to figure out who was passing information and what information they were passing the stop my guest joins me now from washington to them. This is a fairly amazing, focused effort. They are doing the things you expect spies to do, but if reports are believed, they are spying on employees at yahoo google and Wireless Companies trying to figure out who might have the codes that would get them in the front door. Thats right. Good to be with you. The basic idea according to these reports is that the nsa and its rich counterpart were in essence, fishing through all of these areas, saying they would go after all the different parts that pertain not only to the sim cards themselves but the encryption protocols these were made by and that becomes critical. Once you get into the encrypted piece, Everything Else becomes open for those going after it. If these reports are correct, it was a pretty extensive operation. The intercept article uses a clever metaphor saying that it was so clever, it was like using a key to go in the front door instead of breaking the door down. Thats right. Encryption is all about the keys. In this case, very complex algorithms to note the most modern encryption systems and it is very hard by themselves for agencies like the nsa to go them break the more modern encryption systems. That is why they are constantly looking for things like backdoors or other ways to get in there so they can read traffic when they need to and the whole idea is to get after a target when its necessary to get after that target. But the basic elements pertain to e