Transcripts For BLOOMBERG Bloomberg West 20160301 : vimarsan

BLOOMBERG Bloomberg West March 1, 2016

Yuan. Todays intercontinentalexchange is said to be exploring the london stock exchange. Ice owns the new york stock exchange, but is unlikely to move before deutsche bursts the deadline. Those in the headlines from bloomberg news, powered by 2400 journalists and 150 bureaus around the world. Lets take a look at the market. Despite a contraction, we did see a rrr cut, and that is helping hong kong and china. Thats how they were trading in the morning session. This is a picture of the rest of the market. Emily i am emily chang, and this is bloomberg west. The judge in brooklyn back to the companys hands. We will bring you the latest. The former head of the nsa weighs in on apple versus the fbi. General Keith Alexander does not buy apples argument. And the biggest security conference of the world kicks off here in san francisco. We talked to the symantec ceo on cyber threats. A victory for apple in a separate but related privacy battle moving to a court in brooklyn, with the judge ruling that the techtarget does not have to help the government unlocked and alleged terrorist iphone. I want to get to our editor for legal coverage to have the latest in new york. First of all, what exactly happened . It is the first judge to exhaustively look at this issue. They said the demands were excessive by the government, and has now said this can be to lunch. This will not have a direct on the california terrorism case that will be in the Public Domain and will influence thinking about it in the higher court where these issues are likely to go forward. Emily how is this case similar and different to the california case . We are trying to decide how much security is essential, and does an invention of visual privacy trump that National Security and does individual security Trump National security . It is a drug dealers iphone. He has been convicted. The terrorism case in california and ball somebody who is dead. It is also a different operating system than apple. Apple has said it has moved to a greater encryption going forward. But this was an older version of the iphone, and this is the kind where apple has in the past been operating with the government. It is now a dozen cases that their fighting across the country on this. Emily there are multiple cases that continue to pop up on this very issue. Could this be a very important precedents . Apple has a hearing on capitol hill, will this precedent hold sway . They say that this is going to far, this would be too much to do. A convicted drug dealer, there might be information on his phone that is useful to Law Enforcement. They have executed warrants for other purposes in this case, but not this. I think this is a crucial win for apple. It will only fuel the public debate about what is too far. Emily there are 12 cases going on. Do we know which direction those cases are going as well . Next app in the california case is a hearing in which both sides will make their argument. They have finally accepted papers in that case citing First Amendment and fifth amendment kind of things that could rise of to the supreme court. That case is being looked at as a test case. These two judges had disagreed on which direction it should go, because the california judge said apple should comply. This judge says that you do not have to. Thats a sense of the very kind of thing that rises to record system. Emily the all over that hearing coming up between apple, the fbi, on capitol hill tomorrow. Thank you so much for that update. Now a stock we are watching, shares are lower in afterhours trading after the company came in softer than analysts had expected. Workday makes Human Resources software and competes with sap and oracle. It is one of several Software Companies whose shares have taken a beating in 2016. 24 since the beginning of the year. Google has announced they have bought two Video Editing companies. They want to create a content creation experience in consumers everyday flow. Shares of gopro are down more than 70 in the last year. Coming up, i sit down with the former director of the nsa. He helped break down apple encryption case and what it means for the Intelligence Community. Plus, Cyber Securitys most important conference kicks off in san francisco. The ceo of symantec joins us later this hour to set the agenda. More of bloomberg west, next. Emily it looks like one of google self driving cars got into a fender bender, and this time it is on google. This is the first time itself Diving Technology is partly to blame for an accident. They released a report about the incident which happened two weeks ago. The test driver, required to be in the front seat, the bus would yield, and did not have control of the collision happened. The vehicle was rolling at two miles an hour while the city bus was at 15 miles an hour when they collided no one was injured. Lets get back to our top story, the conversation on encryption and privacy heads to the hill this week. They are preparing to get testimony on tuesday, and congress is considering a bill to create a Digital Security commission, bringing together government officials, Tech Industry leaders and privacy advocates to put forward recordation unwanted National Policy should look like. I sat down before the same director to ask who is right, apple or the fbi . They both need to come to the middle. My opinion for the question is not who is right for the phone to resolve this so that we have both, protections of Civil Liberties and privacy, and how to ensure our security as a country . And how to redo the new ways of the American People know that their communications are secure unless theyre doing something that should not be doing. In the past you had the authority to get a warrant. But if you have encryption that cannot be broken, how does the government then go after bad guys . In it possible to have that . All things are possible. What i would do is get the greatest minds in industry to get to work with the government to create a solution that can be laid out the American People in a way that does both. I not for the government reading everybodys email. That is not the fact. When you can see in the investigation after the Edward Snowden thing, they found out that the nsa was doing that the courts are congress, and executive branch asked us to do. And so, we were not trampling over peoples Civil Liberties and privacy. That is what came out. So how do we make them aware of the facts . I think if people understood the facts, and had that laid out, then what they can do is make a reasoned approach to how you stop terrorism. Why do i say that . Terrorism is going to grow. Look at what is going on in the middle east. The middle east is breaking down, no matter what we say. We have some fundamental problems in the middle east. Egypt, with 25 of population unemployed. 82 million people. Where do those 25 go . That is a big group for jihad. But as a big problem in the United States, and for stability in the middle east for those who depend on oil. I think we have to solve that problem. I am not for a backdoor. I for a transparent front door that tells the American People first how to solve this problem can and the second ticket to our allies and say is this an International Solution that we can work with . You can see both sides of the argument, but i think the argument has become polarized around all one way or the other, when really what we want is the middle. Emily is intelligence and lawenforcement be undermined by having this conversation so publicly . There is a risk in that. That is a great question. As you see, what happened to bin laden after the east African Embassy bombings in 1998, it was revealed that the community was tracking him with his satellite phone. And then three years later, 9 11. And then the snowden links, and then we saw a lot of issues that we were not going to be able to stop. In the past we have been able to stop things that the Intelligence Community and Law Enforcement worked handinhand in stopping. Emily you think the paris attack could have been stopped is Edward Snowden had not least that . What terrorists are learning or how to bypass intelligence and Law Enforcement. Are we giving up more information, the answer is yes. That is going to make it more difficult. With that difficulty, if you look statistically at what we gave out, about 54 attacks that we made public, we found that 25 were in europe, 13 in the u. S. , so that means you are twice as likely to have an attack in europe. We said with trish regan back in 2014, but the most likely place to be hit was paris. For all these reasons. And it was. Youre going to see increased attacks in europe and the United States. And we have lost capability. Emily if communications have been encrypted over the past decade, what would be different . A great one is if you Encrypt Communications and the government cannot read the content when it is authorized by a court order to do so, and in that one that is where an al qaeda terrorist was talking to somebody colorado the nsa intercepted that. They talked about making bombs, and make sure that with the guy could go and find out who is this address, this phone number, and that led to him. It was encrypted, all we would knows that somebody would talk to somebody in the United States. It is my assessment that someone would have gotten through. Emily the attack on the subway wouldve happened if mutations have been encrypted . Yes. Emily more from my interview with the former nsa director coming up next. Also, we continue the conversation, talking about the global repercussions of the apple at the idea encryption battle, straight ahead. And if you like bloomberg news, check us out on the radio. You can listen on the bloomberg radio, bloomberg. Com and sirius xm radio. More coming up next. Emily one of shutterflys largest shareholders is agitating for a Strategic Review in light of an unsolicited offer for the online photo sharing site. According to a regulatory filing they have increased their stake in shutterfly to five point percent and is urging shutterfly twoputt is permanent ceo search on hold. They have an attractive unsolicited bid on the table, and they say the company should consider it. Mark is trying to dispel the idea that she is unfairly targeting American Companies as she crackdown on preferential tax deals. The investigations into tax rulings all under her undue advantage look. The Companies Say they have nothing it done nothing wrong. Turning back to my interview to general Keith Alexander, saying they need to come to middle ground on this battle. I asked him why he thinks the standoff got to this point. I do not that the fbi chose this issue, and we were talking about this with a number of people. First, jim komi is the ultimate rational person. The head of the fbi. If you want somebody who was balanced in their approach, look at what he did on the nsa program in 2004. First we ought to give ministers to that individual this is i need this information. I do not think he does it cavalierly. This is an issue that has to be put forward. How do you do it . He has a good reason for doing that. It is not just give me that and lets see where this goes. I can see both sides of the issue, and apple is a this is step one of what could be multiple steps. I say step back. Step back and get the right solution. I question whether anybody should be able to defy a court order. That is something that has to be looked at separate. Emily do you think apple is being arrogant . I think there is a lot at stake. I can cfo apples concern about if you do one, that is the gateway to many. I can see the end the as concern that if you do not do this, were going to have a problem in the future, and that gets back to the beginning. You have to have an approach that does both. Include apple in it. Get their help. Do not say to the government you cannot have this, good luck with you protecting our nation. The constitution is not a suicide pact. It is a constitution that was built to defend this nation. If all of a sudden we are saying that we do not have to do this, i think we are in the wrong place. Emily is there a technical solution that actually is a middle ground . Apple was being asked to create a key that could become a master key to all iphones. Tim cook says it is like cancer for iphones. It will put everybody who owns an iphone, hundreds of millions of people, at risk. Does that give you pause . What i would say is there a way to create a solution that can be held by a body or something that does allow the government and others to look at communications that they need to stop a terrorist attack . I would go to google, facebook, apple, ibm, the tech community. I would get some of the best experts in the world, and say can you come up with a solution . Kid get folks like jeffrey stone, who is very rational, shows that you protect both and come up with a solution that does it. Emily you think there is a way to get into this one iphone without compromising all of them . I am saying differently. I am saying to set up the process to do it, first. We will attack this one thing without having any solution. We have not driven to a solution yet. So what is the solution can put on the table that would allow the court and others to say this is the solution we will give to you. If apple has the key, they would use it. The issue the government has is that we do not have a way of getting cremation. Emily is there a middle ground . I think so. It is a technical and policy solution. Emily apple is saying theres no technical solution. I do not buy that. I think we have given up too quickly. What we are saying is there is no solution without looking at everything to see if theres a better way. Emily apple think they have done due diligence. You need to get to a solution that is better than where we are. Here is the question how many lives would you want to lose to not have government been able to protect our people . That is the question. What you are saying right now is it could be an unlimited number because if we cannot read and we cannot stop it. Good luck with that. I think that is the wrong approach. I am not saying you, free access to all communications. I saying there is a middle ground. Find the middle ground. Emily apple operates around the world. If do this for the u. S. Government whose to say thank you to this for the Chinese Government or the russian government . Those are issues that apple and others are facing right now. When i would say is if we can come up with a solution that we, the United States can put forward as a ballast solution, that is the solution that is not apple, facebook and we have had a disconnect between industry and government. Because of the Edward Snowden series of things. My perspective, it is in our nations best interest to help apple, google and facebook. We have to come up with a solution, and that our government has to meet with other governments and work that solution. It has to be something that is balanced in that way. These companies are international companies. Just by your statement. We do not come up with my solution. Solution. Leaning one way or the other. Emily coming up, with encryption in the spotlight with the Central Securities most important conference kicks off in san francisco. Mike brown is with us with his views, next. And tomorrow i sit down with the u. S. Attorney general Loretta Lynch for an exclusive interview. That is 4 00 p. M. In new york, 1 00 p. M. In san francisco. More bloomberg west, next. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. When it comes to the fithings you love,. You want more. Love romance . Get lost in every embrace. Into sports . Follow every pitch, every play and every win. Change the way you experience tv with x1 from xfinity. Angie 12 30 here in hong kong. China expecting to announce plans for socalled financial super regulators sometime this year. It concerns market stability and investor confidence. The most discussed proposal would be the banking, securities, and concerns regulators merging. Four valeant, it is the subject of a previously undisclosed investigation by the sec. The committee declined to say what it concerns. The drugmaker is already being investigated over last years scandal. Shares plunged more than 18 in new york. Apple won a crucial victory of privacy is a new york judge ruled it does not have to hel p the fbi unlock a terrorists phone. It reaches a new level later on the capitol hill meeting. Its not known if he will testify today. Those are the headlines, powered by over 1200 journalists in 150 bureaus around the world. Lets check in on how the markets have been treating. David thanks. The market story at the moment is japan. We are one hour into the afternoon session, and we look at to china in a moment. Lots of lines coming out of japan shinzo abe is speaking at parliament right now, lines coming through that he has a knowledge the riskoff spreading in global markets. He is asking for Japanese Companies to raise their pay and

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