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tv   Bloomberg West  Bloomberg  March 29, 2016 6:00pm-7:01pm EDT

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supreme court nominee merrick garland. >> by leading by example i want to show how we can make this constitutional process go forward. florida police have charged donald trump's campaign manager with battery. corey lindau ski grabbed her when she was trying to ask a question during a rally. trump says he is innocent of the charge. brazil's political party has -- is inptian national custody after hijacking a flight and forcing it to land in cyprus. he was wearing a flank explosive belt and was trying to communicate with his ex-wife. everyone on board the plane was
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released or escaped before the man surrendered. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. from new york, i am mark crumpton. bloomberg west is next. ♪ cory: i cory johnson come in for emily chang, and mrs. bloomberg west. coming up, the u.s. government have dropped his legal case against apple, but should they work with the security flaws not found in the iphone -- now found in the iphone? and soundcard launches a premium streaming service commitment doesn't match the biggest
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players in the space? but first to our lead. countless questions remain one day after the department of justice dropping charges in the case against apple related to the san bernardino shooters iphone. counted as a win for tim cook, boosting shares more than 2% in trading. it is a complicated story. apple never gave in to the government to request, but the government found a way and without apples how it may have exposed a security vulnerability. the lawsuit may be over by the constitutional privacy questions have just begun. >> what was interesting in the apple case with the overreach by the fbi. they do not ask for assistance in cracking this particular phone, they asked for a backdoor they could use on hundreds, thousands, perhaps millions of phones, even remotely. so we think the fbi will come again with a request, perhaps a little more modest.
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but the working group needs to understand encryption, the important role in place in every aspect of your life and then passion changes if appropriate that are limited in their scope so as not to endanger the ability of you to have and keep your personal records. has a wayt the fbi into the iphone, doesn't have an obligation to give the key to apple? >> is a great question. your cia, your nsa has had countless methods, countless tools to hack into computers and other things that are otherwise private for as long as they have existed, the enigma in world war ii. those toolsly keep generally classified in secret. aree are the methods that most how close. this would be no different. -- a tool likeis
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this is held close so that nobody knows there is a vulnerability. one that cankely be taken advantage only if you have the phone in your position and can dissemble it and hackett, if you will. i do not think the american people are afraid of the fbi having that tool. >> that was congressman darrell issa speaking. you grown that he brought a he issues disaster -- brought up some key issues. several be concernedall about these issues, court to our founding principles and our democracy. i listened intently yesterday, and of all the aspects they
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disclosed, the question i kept asking was why are they telling us that they did it at all? >> where the telling us? i think that they needed a reason to drop this case. i do not think this is the right case for the fbi to push forward because they were asking technology companies to create, new code, which they think is dangerous. i think they realize that this is not something that technology companies will back down on, because the democracy will not survive if we do. is the case of a terrorist multiple murderers soil, if that is not the right case for the guy and the justice department, what is? >> this case has never been about one iphone.
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we saw the fbi requested the assistance of new or other cases, and we can expect it will still be a foot from the department of justice to break into these phones. members of congress and the public have a right to be concerned, not only that their privacy will be undermined by the very security of the devices that we rely on for medical records, to send e-mails, to send loved ones text are going to be undermined by our government. the case from the fbi was specifically about this one iphone. they made it very clear that this was about just this phone, just this case, and this was as simple as a search warrant for this one phone. what makes you think it is any more than that? >> the reality is that the legal precedent set in the case could be used in any case. it could be used in an investigation of a drug crime or misdemeanor. when the government is asking is for the authority to force private companies to essentially undo the security features that
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have lived in their own products. that is fundamentally with the case has been about. in terms of the hacking of this phone, do you think they will always have this capability? hope so. we pay the government a lot of money to do this. there are a number of governments and organizations out there that have the ability to get information on any of the iphones out there today. >> even the new ones with the latest encryption? >> nothing is 100%. what we trying to do here is raise the bar. right now it is way too cheap and easy to get this information off the phone, and it needs to be difficult and targeted. cory: i am concerned about a where law enforcement does not have any ability to find anything if we decide as a society that things like search warrant's are illegal. was kept in a filing cabinet and can be limited in a certain way, just inside it was legal to do that kind of search
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. >> we have to think about the integrity of our electronic devices. was the fbi was asking something that many other security specialists said w ere actions that would undermine all of our products. to the extent that the apartment justice has discovered a vulnerability and not sure of it to be passed, that is a hole that exist for all consumers and members of the public. that is something we may need to be concerned about. cory: should the government be required to share this vulnerability with apple? >> yes. we in the hacker community call responsible disclosure and it is something protect allday to of us. cory: thank you very much.
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we appreciate your time. european lawmakers are already working on their own framework for limited encryption. we are following the story from london. >> the privacy debate that has raged on in the u.s. between the government and apple is also being fought on the other side of the atlantic. the demand by some governments to have stronger powers to access data has been growing louder after the tragic almonds tragic bombings in brussels and the weight of violence. tech companies such as apple, google, facebook have already voiced their concerns, worrying again about the president set by the technologies of eating a law enforcement agencies to hack people smart phones and computers. not all european countries are seeking those types of powers.
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germany and the netherlands are going to -- going vocal with opposition to such backdoors. the toss over privacy versus national security is set to continue further afield as well as at home. up next, sound cloud launching a service similar to spotify and apple music. the ceo explains why is different and who will survive the streaming wars. ♪ [laughter]
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cory: own cloud is hopping on premium streaming service bandwagon. launched the committee's first -- we sat down with the ceo and asked him. you started from the creator community from the beginning. it has gone directly to the source which is the creators. we play over 12 million hastors a month, which attracted 75 million unique listeners a month. they share content freely on the platform and that has given us much larger capital in any of their service out there. cory: use the word creators of the creator -- use the word then musician? >> is broad. it could be podcasters,
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anybody. cory: i will give you that. what makes this different from apple, spotify, or pandora? service wecription are launching for $9.99 a month is similar and different in many ways. you get some same things would free.d offline singh is the most requested service by our users. but we also have an expanded library. everything from the biggest hits to the deepest underground tract that just came out. is the only service in the world where you can get that fo full breadth of content. everything from the industry giants to the emerging creators
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in one place you have the stars from yesterday, today and tomorrow in one service. cory: i want to talk about the struggles you are seeing. i wonder what your take is on apple music. let's not be kind. when you look at what they exit -- succeed at fail us, what do you see? >> they were a little late to come into streaming, but as i said, we are very early in the market overall. then helping the market grow, not just from the perspective of their service but in terms of deviceg strongly from a perspective is good. the compound we have always wanted to build the music service that can contain the entire world creativity. all of the different creators out there. that is something that is appealing to the world and what we're focused on. cory: let me ask you about
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pandora. a different service to be sure, but also going through struggles with the ceo suddenly out this week. the founder comes back as ceo again. if you were looking at pandora, what do you think that they need to do to right the ship? iswhat they have done well peoples intent that capture peoples intent to listen to radio on their mobile device. wanting to enjoy a long, uninterrupted listening session. that is something we have noticed with our users as well. they want to be able to just open the app, and with a few clicks listen to a great stream of music. alsois why we have released features like track stations that allow you to take the 125 million tracks, start a station from that, and then have it play for as long as you want. anything you think of
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where they are focused on a different radio experience? is there a downside to having the ability to pick individual to? consumers today want to listen in different ways. i have for myself, sometimes i want to be lazy and just let like them and sometimes i open it up and went to go to something specific. some days i want to listen to a top 40, sometimes i just want to listen to something not available in the system yet. that is universal for most music listeners. on sound cloud, we are trying to cover all those different cases. depending on what your mood is you can have the music experience that you want. cory: that was the sound count cal -- sound cloud ceo. up, we will talk about what investors are worried about and what is next for the
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struggling solar company. erik: ♪
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cory: the battle ceo of our mask is offered to resign. the forward blackberry ceo at the center of a radel with a wireless charging company. one faction wants him out, another want him in. final settlement is pending. we have a look at the latest five-year plan on china's clean energy. targetsvising down its for carbon intensity, aiming for cleaner and more efficient growth. they also have cap total energy consumption.
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that is nonfossil sources. is surprise is that -- something justin who has his eyes on. to speak to china's policy circles, most people would say aboutast 10 years are wind and solar, and the next 10 will be about electric vehicles. 15 they will be the biggest market for electric thecles and they believe batteries that go into the vehicles are the key strategic emerging industry. it is something they want to support in order to revise the economy. cory: we'll certainly beginning i and what is going on with china. sun edison could be facing the end of the line. 55%,s plunged another seeking a group c protection --
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bankruptcy protection. it has been a disaster. terraform global, a holding that controls sun edison, things are looking at this company. we bring in our analysts. so glad to have you on. when we look at what is going on with sun edison, what is the fundamental problem with this business outlook so promising to investors? >> thank you for helping me. -- thank you for having me on. in a shocking what is going on with sun edison in a short amount of time. the fundamental issue, as you are addressing, is that the coupling of fundamental value of assets on sun edison's books from the devaluation that has been given by the equity markets. sun edison's management has not
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been able to effectively communicate and do so with a consistent transparency what the value of those assets are. we have had this conflation of a development company with those that develop in this space. have done iney financing a spinoff the assets, claim they have a certain value based on for certain cash flows. on closer examination, they were not they seemed. >> that could be the case. haveger problem is they not communicated with the values of this cash flows are. solar has some perceived complexities in the form of tax equity, which is the investment tax credit. it is another layer that institutional investors are not familiar with even when you look at solar abs and other instruments that are familiar to investors, they need to it comfortable -- get comfortable
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with the same risks within the solar context. sun edison has not been able to communicate that across the lifecycle of the. asset. transparent for those that are trying to get to institutional investors. cory: we had hoped there would be great revenue growth, but i go into my bloomberg terminal you can see the revenue growth from 2007 to 2014 is great, but down from where they were. they were unable to generate consistent growth. >> this gets exactly back to when i was saying before about having operating assets and trying to communicate the value of those and then tapping the tapping other, vehicles through debt financing and structured finance, and through yield codes that they cannot get control of.
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cory: talk about it debt. something, that distribution. havean see how much they over the past year, nearly 600 million the year after that. most of the death is coming due soon, and that does not include the off-balance-sheet things where they do not even put it on there. of aems to be this notion bankruptcy filing is about their inability to deal with this. and comes back to development pipeline being used -- theice cash flows castle is being used to service the debt loan being taken on. cory: final note from the bloomberg, if you go back to last july you have the stock at
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$10 billion, and now it is virtually not existant. it's even uglier when i enter 2016. $210 million. -- thatws to show you goes to show you what happens. up, newly proposed legislation in china can make it harder for foreign companies to get access to the company's great firewall. details coming next. ,heck us out on bloomberg radio the ruler radio out, -- the bloomberg dio app and ♪
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mark: i am mark crumpton. you are watching bloomberg west. president obama says aggressive steps are needed to curb the
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opioid abuse epidemic. -- thisference statement as the administration says it will make treatment available to many more people. there is increasing concern about security in southern turkey with a recent crackdown on dissent and on kurdish insurgents. a warning comes as the turkish president travels to washington. with the state's primary just a week away, wisconsin governor scott walker endorsed ted cruz for president. governor walker, whose white house run ended in september, says ted cruz is in the best position to win the nomination and defeat hillary clinton. the world health organization says ebola no longer qualifies as a health emergency. nearly 11,000 people have died,
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mostly in guinea and sierra leone. news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. from bloomberg world , i amarters in new york mark crumpton. bloombergs paul allen joins us with a look at the markets. good morning. paul: good morning. we are expecting a pretty good day across the asia-pacific thanks to the remarks by janet yellen on rates. there will be a busy day in hong kong as well. a couple of ipos to watch, two banks both having their debut on the market today. we took a look at the bank of
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communications as well. they had a pretty good day yesterday. we had been expecting to see profit growth slowing there. also in focus will be sinopec, china's oil and gas producer. income is down 30% to $5 billion. that was better than analysts expected. they have been helped out by a refining business that benefited from a weak oil price and --ersing a $200 billion loss 200 million dollar loss from a year earlier. that is some of what we are watching across the asia-pacific today. cory: this is bloomberg west.
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i am cory johnson in for emily chang. a new proposal from the government aims to force internet service providers to -- twoccess tomains domains not approved by the government. , twitter, and youtube are all blocked in china. this is the latest in a series of measures to strengthen the so-called "great firewall." gordon chang. is always great to see you. how are these rules different from what existed before this? what are the new rules and how do they differ? gordon: this basically creates an intranet because domestic foreign service providers are no longer permitted to provide access to websites with foreign domain names. that means that unless those foreign domain sites are given approval, they are not going to
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be accessed in china. these are just reposed rules. we have until april 25, until ends, butt period this is just one of a series of attempts to cut china off from the internet. they tried it five years ago and it really doesn't work. like it isems focused on individuals and not on helping businesses do is guess. gordon: absolutely. the premier, the czar of the economy, talks about innovation economy because you have manufacturing contracting and investment losing efficacy, so he is looking to the internet and has the internet plus strategy. how can you have that strategy if you don't have an internet? it doesn't make sense. is this saber rattling?
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gordon: i think it is. they have tried this before and not carried through on their threats. this is consistent with a line of attempts over the last three or four months to close off china. they had rules that would prohibit foreign websites from publishing in china. it goes on and on. is leader of the country separating china from the rest of the world. this is what he wants. people think he is a reformer. but only if you think a 1950's style economy is progress. reform then. otherwise, it's not. the politburom standing committee and the seven guys who run china because it is consistent with a number of initiatives we have seen during which started in
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2012. if we go back to the era of hu jintao, we saw some of this, but not at the pace of all of these rules being proposed one right after the other, all with the intent of trying to synthesize china. they said they could not use foreign names for streets. this is an in 10 -- an indication of the closing of the chinese mind. bey: ping seems to newoose in the way china communicates with the rest of the world. gordon: really, what they're trying to do is build up their own internet companies. baidu, alibaba. they're going toward that line to try to new shut of china froe rest of the world. but there is something called the wto. china is a member of it.
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and these rules do not sit easy with their wto obligations. rules i talked about are completely wto violative. when we do the analysis on the proposed rules i have just been talking about, domain names, those are also going to be violet if. there will be push back, but this is clearly the direction they are going. check out jeff weiner and some reaction about how linkedin -- affected.ct have 18 million members. when we started roughly a year ago we had roughly 4 million years. over 10 we have seen that substantially grow by virtue of localizing our core offering.
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cory: so, the go along to get , isg approach of linkedin that also potentially in peril because of this rule in china? gordon: i think that is what china is trying to do, to force foreign companies to create content in china. that would violate the january rules, but that's the only approach i think, in the short does because clearly china not want to have foreign generated content on chinese websites. it sounds terrible, but yes, i think that is the only thing companies can do right now. cory: gordon chang, thank you very much. turning to the u.s. markets. suggested no rate hike anytime in the near future. we take a look. words ringing in
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my head right now, and those words are "perceived cautiously." janet yellen was talking about interest rate rises or may be the lack thereof. taking a look at what has happened in the markets, the s&p, dow, nasdaq, all in a broad rally, going higher. look intraday on this day of trade, we can actually see that when janet yellen said gave a lift to the markets. right around 12:20 p.m., you sue that left. and then we never looked back. let's take a look at some of the .pecific stocks for tech stocks, you can see these were the biggest gainers, on the order of 2% or more. a court hearing with apple in the case of the iphone.
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microsoft getting a boost from ubs. ubs going bullish on the services -- on the company's cloud service. up.on also 2.4% facebook up by 2.1%. news coming off of instagram that it will increase the amount of time users can post videos to 60 seconds. flipside, let's talk about some laggards. ending flat, but at the end of the day, it had fallen as much as -- but at the beginning of the day, it had fallen as much as 3%. tesla ending flat as well. it had fallen by as much as 2%. after theyst calls
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model three unveiling. sayingng the other way, that higher competition and other expectations may not be met. but for every one stock down, three stocks were up. thank you very much. coming up, robo advisors -- yes, that's a big thing. about funding that suggests the success of the company. is a this person will be sleeping with the sharks.
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cory: on today's financial
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board, automated startup funding . some companies have trouble with valuations and are seeing them cut. are buckingy firms that trend. tell to on our bloomberg radio broadcast, just about every financial services firm we talked to of any size talks about what you guys are doing with robo advisors. it that has these big companies so concerned? john: it's great to hear that people are talking about us. we like to make them nervous. we have been creating a crazy flow of business financial services that turns the model on unbiased providing
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bance and better service people have had in the past. it is disrupting. financing -- better service than people have had in the past. it is disrupting. cory: i am not terribly interested in the financing. lots of people get money and i say you're not coming on the show just because you got money. but given the size of your business -- give us an indication of what that size is in terms of your revenues. john: we don't talk about revenues. cory:, on, just between us. john: today, we have 3.9 billion under management and 150,000 customers. have grown customers three acts and balances even more than that. -- customers three times and balances even more than that. january was a volatile month.
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but i think it gave people confidence in the business model. we actually had a really good month. so, january, the nasdaq was down 9% and you had more money flowing and then ever before? john: more customers signing up. more deposits from existing customers. more deposits from new customers. but now march is going to be our best month. we keep growing faster and faster. and that is something investors like to see. cory: what are you going to do with the money? john: we are going to build out our original vision of becoming our customers central financial relationship. we have always said we want to help people do more with their money, make it stretch further, do more with it. see from recent
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introduction, like account aggregation, we are giving advice on assets at the same time. we are also investing in better institutional and advisory business. and we have a new 401(k) business that's growing like crazy. can, really quickly, we often talk about the money raised or the valuation, but we don't talk a lot about terms. what do the term sheets look like that you rejected and those you accepted? john: we look for really clean term sheets. we took an offer from a great , and i, an amazing firm can tell you that part of the deal was that it was a clean term sheet. no liquidation preferences, no ratchets. john: nothing like that. it is the most common friendly terms you can have. and every one of our rounds has
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had that same common, friendly structure. we prioritize the value of our shares. i am a common holder. all of my employees are common holders and we put them first. cory: it's interesting, because we seal of these customers with late rounds and all kinds of deals. john: that stuff may seem good at the time, but then you get into a rough spot, and all of a sudden, you really regret having that structure. willyou got it, you'll that she will was have investors wanting to put in. cory: so many things seem like a good deal at the time. great company. thank you for spending some time with us. theng up, microsoft at annual build conference. why should you care? we are going to did a into why microsoft matters. -- dig into why microsoft
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matters. ♪
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we are geeking out about, computers inspired by the human brain. computerarge-scale with 16 microprocessors, that's a human brain. it's called true north. microsoft is working on chips that speed up complex computational tasks. ibm says true north will be 5-7 years away and ready for commercial use then. working on them in the labs at berkeley across the bay from me right now. the annual build conference is upon us. who cares? we care. let me tell you why.
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i am joined all the way from rainy seattle by matt. sorry about the weather. matt: i love it. cory: microsoft is undergoing this really big change. why do we care about this conference? matt: it has for big platforms. windows 10, which they are trying to get to run across all devices. the big cloud as your -- azure offering. is close.nothing else google may be getting there. offersnd microsoft office 365, which pulls along the extra cloud. so you are really getting two-for-one. cory: what are the new functions?
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matt: i think you're going to see the focus on productivity. they have court on a which na,petes with siri -- korta which competes with siri, which competes with alexa. swiftlso have a key, which is the way to swipe on any device -- in fact, it doesn't work on windows mobile devices. it works on ios and android devices. microsoft has been buying a company to have application intelligence that swift key brings along to the way people interact with their mobile devices. swipe to do what? matt: search for something or interact with an application. it's a new style of interface versus typing into a keyboard. it's a competitor to some of the
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other things out there. it's both a user interface and a capability in machine learning and outer rhythms, all the data science and intelligence we are seeing. and is -- learning algorithms, all the data science and intelligence we are seeing. they use it today. cory: in this context, if i could paraphrase, the computers what is comingm into it without someone saying learn from this. matt: software applications are programmed. intelligent applications are trained. they are trained on data and fancy math models. that is the machine learning. in the future, any application that will be successful will be an intelligent application.
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they are not alone. amazon has a bunch of things. but i will bet that is a big emphasis. cory: you have a lot of people at uw with a focus on math and science. the amazon's professor of machine learning. pedro dominguez wrote a book about all the different styles of machine learning. and on and on. that's a terrific area of depth for the university of washington. and i think you are right. an interface between microsoft and the university of washington. there is a dedicated lab working on analytics. cory: amazon came with alexa, which might not have been a product you would have thought of, but it came from uw. great to see you here. sunny san francisco. imagine. time to find out who is having the best day ever today.
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they will win airbnb's competition for sleeping one night with the sharks. gets to sleep in a circular classroom 30 feet deep in millions of liters of water surrounded by sharks, if you could, in fact sleep, when you are surrounded by sharks. i guess it depends on your shark phobia. that does it for us. we will see you back here tomorrow. ♪
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oh, hi! micky dolenz of the monkees here, getting ready to host the flower power cruise. (announcer) we're taking the love generation to the high seas and reliving the '60s. we'll celebrate that unbelievable era with the music that made it so special. there'll be over 40 live performances featuring eric burdon & the animals, micky dolenz, the monkees lead singer and cruise host, the 5th dimension, the lovin' spoonful, rare earth, spencer davis, three dog night, and many more! imagine enjoying all that great music on the fabulous celebrity summit, leaving fort lauderdale and making ports of call in jamaica and the bahamas. you'll be back in the days of bellbottoms, peace signs, and so much more, with special theme parties and 20 fun-filled celebrity interactive events. cabins are filling up fast, so come on, relive the era you remember so well.
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the flower power cruise, february 27th, 2017. let your freak flag fly. don't miss the grooviest trip at sea. announcer: from our studios in new york city, this is "charlie rose." brooks is here. he has been a columnist for "the new york times" since 2003. he is known for tackling wide ranging subjects from politics and the presidency to capitalism and character. more recently, he has turned his focus to the 2016 presidential campaign. i am pleased to have him back at it table. welcome. david: thank you. charlie:


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