tv Bloomberg Markets Bloomberg June 25, 2015 12:00pm-1:01pm EDT
as supreme court upholds obamacare subsidies allowing millions of americans to keep federal tax credit to pay for their health insurance. pimm: a key meeting has ended without any agreement. prime minister alexis tsipras says he feels optimistic but creditors do not agree. olivia: we will hear from hank greenberg, he is convinced a judge that takeover of aig was illegal but did not get any damages. we will find out if he still considers it a victory. pimm: good afternoon. i am pimm fox. olivia: i am olivia sterns. a quick look at where market -- markets are trading. equities are higher across the board. the main and mark index up by about a quarter of 1%.
a little bit of economic data out this morning showing jobless claims came in below 300,000. that reading for the 16 straight week. investors waiting to see what comes out of the emergency meetings in brussels. also, when to show you what is happening in the commodity markets. both oil and gold moving lower but not by much. gold little changed. trading about 11 point -- 1172. pimm: checking the bond market and we see a little bit of it selloff. -- of a selloff. the selling of going on in fixed income. taking a look at the dollar versus the euro. the dollar gains in strength 1 .1196. a little bit more ground against the pound-sterling. now a look at the top stories crossing the bloomberg terminal at this hour.
the u.s. supreme court upheld the nationwide tax that cities that are a core component of president barack obama's health care law. justices of 6-3 the rejected offer. the ruling is the high court second to preserve obamacare in the face of republican legal attacks. today after more than 50 votes to repeal or weaken the law, a presidential election based on parts on preserving or repealing the law, after multiple challenges to the law before the supreme court, the affordable care act is here to stay. pimm: here tuesday. the ruling of the collapse in state insurance market and left -- unless millions of americans continue to use federal tax credits that are designed to policies morere affordable. health care was not the only obama administration victory at the supreme court today. the justices ruled -- really
people who file housing discrimination lawsuits do not have to prove they were -- do not have to prove they had discriminatory ideas. they can base their part on whether a policy has a disparate effect on a minority group. the battle over the president's trade agenda shifts to the house today. how stomach that's likely to conceive and support legislation that helps displaced workers who lose their jobs because of a trade deal. yesterday the senate gave final approval that will make it easier for the president to negotiate an asian trade agreement. last month consumer spending rose by the most in almost six years. brian was up almost 10%. economists say americans may finally may finally be spending the savings from less expensive gasoline. uying up almost 10,00%.
one of tesla's cofounders now looking at trucks ther helping jumpstart market for electric cars. now wanting to build electric powered trucks. >> we plan to dominate the power train space in these kind of trucks. imagine if a diesel engine manufacturer came out and said we have been struggling to get 3% improvement in fuel efficiency and emissions, we have a new technology that will give you 60% improvement in fuel technology and omissions, same performance. what is that change the world? wouldn't that change the world? olivia: it will save you -- possible $65,000 that will save you on gas. americans expected to travel more over the independence weekend. aaa says an estimated 42 million people plan to travel 50 miles
or more from home during the holiday weekend, the most since 2007 right before the recession. cancelingunivision its telecast of the miss usa pageant after comments by newly republican presidential candidates donald trump. in a speech announcing his candidacy last week, univision says it is ending its relationship with the music -- miss universe organization, which is partly owned by trump. it was scheduled to air july 12. those are your top stories at noon new york time. more,to come, much including the supreme court upholding obamacare subsidies allowing millions of americans to keep federal tax credits to pay for the new health insurance plans. should a driverless automobile decide to live or dies in an automobile act didn't? the questions raised by the new technology. speaks hank greenberg
out on his legal victory against the government and whether he is really satisfied with the outcome. pimm: it's less than a week to bailoute greece's expires an agreement to lockout emergency loans and lockout remains in reach but you lucid. the euro area finance ministers meeting in brussels broke up today with no deal for greece. not yet. olivia: hans nichols still in brussels with the very latest. what is the current state of play? at the sites come together or retired for the night -- have the sides come together? >> financing ministers are still having meetings. i just walked out trying to get him to give me insight for what is happening inside the negotiations. what he said earlier is negotiations will continue as long as there is not a deal, meaning they are willing to stay here a long time. earlier a finance minister
almost needled reporters saying i will see you all saturday. saturday morning seemed to be his implication of when the euro finance ministers would meet again. all of that is the long way of saying there is a short amount of time and long amount of time. sunday until saturday or to have some sort of agreement in brussels so it can go to the parliament in athens for a vote sunday and potentially a vote monday. there is a lot of time between now and then. it looks like we may be here until saturday. pimm: i am just wondering if you can describe where you are? the wondering whether negotiations have become their own mini economy? well, they have become their many economy, but here inside the european union, the commission press building it is subsidized. i bought a cup of coffee for $.80. outside it is at least two
dollars $.50. the economy is doing just fine, but it is subsidized. you see the flags behind me. one of the strongest arguments for keeping greece in the euro, at least one of the strongest arguments greece has is no one wants to take down a flat behind me. that is ultimately the implication if there is a greek exit. the european union would fundamentally change. that is one of the arguments most left unsaid, but it is really looming over the discussions. what happens the day after greece defaults? what happens to the european union, the project 60 years in the making? nicholsthank you, hans joining us from brussels. pimm: one of the biggest challenges greece faces is not financial but colts role. olivia: we asked larry summers whether this can create cultural change in greece. >> you could coach me or pressure meme or
all you want, and i will not be high jumping seven feet. it is just not going to happen. happenedhings that more naturally in one country are less likely to happen at least immediately in another country. on the other hand, i think that it is very much a mistake to determinismlts role -- cultural determinism. people believed 50 years ago that south korea could never prosper because of its culture. in earlier time people believed a confucian culture met china was forever doomed to slow economic growth. there are many, many statements of this is the way a certain culture seems, and therefore, it .annot economically
i don't think that is right. i think with the right kind of leadership people spoke even 20 years ago, less than 20 years ago actually about germany as a sick man of europe. theory of soltural much attention to this and that and so much need for social protection that germany cannot become competitive and prosper, so i think obviously every countries historical context is different, but it is a matter of putting in place systems. it is a matter of leadership. ,t is a matter of incentives and i do not think there is any reason why greece cannot overtime prosper and converge with the rest of europe. that needs to be the objective. how do negotiators in
brussels today lay the groundwork for the kind of cultural change you talk about that happened in south korea for example? >> part of it i think is that unreasonable and excessive demands. on greece.mpose part of it is that they provide in the way that the united states after the korean war provided generous support to south korea. it is they provide the kinds of technical assistance and help and large numbers of experts for reforming, helping performed the greek tax ministry. to take an example much closer said in it was famously
the end of the 1980's that mexico could not collect taxes. mexico's economy has challenges, the society has challenges him up but nobody says today mexico .s incapable of collect taxes so this is a problem that can be solved. it does not get solved in a day, , but a month or a year with leaders that had the political courage to punish competentwith assistance these are problems that are solvable. olivia: brendan joins us now onset. is summers confident we're going to get a deal with greece? no debt deal is ever the last debt deal. advocateig proponent,
of the idea we do not really know what is going to happen. state, the word they'll which is what reese could potentially become. state.words failed that is the point, that the cost to europe of having a failed state is far greater than bailing them out. the debt load also is going to have to be restructured. that is why we are to be here again in two years, because they're going to fail to restructure and we will be right back at the table having this conversation. olivia: thank you so much. pimm: is that really what your german mother would say? i hear a lot of nine. pimm: more on the pivotal news of the day. the u.s. supreme court upholds -- uphold subsidies that will continue the affordable care act
tenant and universal health services the big movers. could have cut even by as much as 5% if the ruling had gone the other way. bitda. e a checkup how the sox have performed since result the affordable care act enacted. the white line is s&p 500 managed care index. the yellow is the hospital index . the blue line is the s&p 500. we have seen hospitals and managed care do very well in the wake of hca. about whatconcerns would happen for profits particularly for hospitals if we saw the ruling go the other way today. in addition to these stocks, also taking a look at eli lilly which was raised to neutral -- raise from buy to neutral. the shares rising $85 -- shares rising 85 .73. olivia: the court again backing
president obama's health care law and the tax mechanisms specifically that it needs to survive. pimm: in a separate case, the house -- the court backed housing discrimination laws healing a blow to lenders. we want to bring in phil mattingly monitoring the court's decision. tell us about this other ruling having to do with housing. the obamahuge win for administration. they were concerned about the act.dable care they actually thought they were going to lose this. this was not a case the government was arguing. this was put forward by civil rights advocates. this is about disparate impact. a legal theory part of a 1960's era statue. with discrimination specifically on home lending. what this law allowed people to do is take they were being discriminated against, even if prove it was being
done intentionally. if they could provide statistics there was discrimination in .lace, they could sue the obama administration has used this statue to get hundreds of millions on civil rights cases through the justice department against top wall street banks. big business was very opposed to this. they have been trying to get this to the supreme court for the better part of the past three years. the obama administration is been working behind the scenes to keep this from happening. that is how sure they work they would lose the case of the got to the supreme court. in the last few minutes they settled separate cases before it got to the supreme court. they want today. that was a big surprise. -- they won today. olivia: i was struck by the blistering dissent from justice scalia. at one point he said words have no meaning. dissents are always
fun to read. it was 6-3 with john roberts more or less saving the law. he made very clear the law is flawed in several different ways. he said intent matters and cited specific statutes in the past where he was intent, not specific language. on some level justice john roberts will go down as protecting obamacare, but also trying to stick within statute and president as he made the decision. pimm: thank you very much, phil mattingly following all of the decisions by the supreme court. still ahead, should driverless cars get to decide who lives or dies in an automobile accident? olivia: it is a scary thought. we will take you to the heated debate between technology and philosophy in the auto industry. ♪
olivia: welcome back to the bloomberg market day. it is a sunny day in new york city. you are looking at a live shot of the empires the building from the roof of bloomberg lp. automobile makers are hard at work developing driverless automobiles. the challenges go deeper than gears and sensors. olivia: the question is, shut a driverless car get to decide who lives or dies in an accident? here to help us understand whether they can ever decide the our automobile reporter who joins us from san francisco. this is an incredibly scary thought. explain what is involved. how do scientists think they can
teach a robot to make an ethical decision to tell my car to swerve off the road down a cliff instead of colliding with a school bus of children? developing.n issue they have figured out the technology. they know how to allow cars to drive for us, but they cannot figure out these philosophical questions like the ones you just described. that is about something they are working with philosophers and ethicists on to determine what do you do when a crash is unavoidable and your car has to decide between the lesser of two evils from a school bus full of children or going on a sidewalk and hitting an individual. they do not have all the answers yet. neither do individuals. there is not a loss that tells you how to drive, but i am wondering what other industries or historical precedence are they using to deal with this issue? ] >> believe it or not, science
fiction does play a role. the laws from the author of irobot in the 1950's say a robot should do no harm to a human. that is the first rule. there are other things called morality math. you try to determine how many lives will be saved or how many harmed, but then you are putting a value on the lives. each of the rules they might come up with have downside. there is still very much working through them. olivia: some people say there has to be a principal that only humans should be able to make a decision between life and death and there needs to be some kind of hybrid functionality whereby you combine decision-making of humor on -- humans and robots. how would that work? >> the automakers say this, too, that the human is always
ultimately responsible for the car, and in the situations where a crash is unavoidable they will ask the human to step back in, grabbed the wheel and swerve it out of the way themselves. that all sounds good in theory, but a -- if you have been inattentive, reading a book, doing your e-mail, then how can you come back to the situation and make a snap decision and make a good one? pimm: we want to thank you on the ethics of driverless automobiles and potential automobile accident. scary. olivia: it is scary. something they will work out we help. i will leave it to you. olivia: thank you. much more to come. don't go away. ♪
conversation with hank greenberg. bring you the top stories crossing the bloomberg terminal at this hour. a big victory at the u.s. supreme court today or president barack obama's health care law. the court has upheld the nationwide tax that cities that are for proponent of the affordable care act by a vote of 6-3. is the high court second in three years to preserve obamacare in the face of republican backed legal attacks. ata isesident of tak apologizing for the deaths related to the airbags. he apologize at a news briefing in tokyo after the annual shareholder meeting. he accepted responsibility and says he has no plans to step aside. i, myself, feel responsible for what our products have caused. what i should be focusing on now is to resolve the issues quickly
and provide safety to our customers. i strongly deal and should continue to spearhead this mission going forward, so i do not have any retention to resign at this point. spoke just grandson hours after toyota and nissan recalled another 3 million vehicles. we will be seeing another entry into the everex handing yield of republican presidential candidate. people with knowledge of the matter say chris christie will officially joined the crowded 2016 field tuesday. the announcement will be in his hometown of livingston, new jersey. that is a look at the top story we're following. still to come, we will hear from richard branson on why he is backing one went, a company planning to build a constellation of satellites to provide broadband services across the world. then, a look at how nor region air is expanding its budget in the backyard of the u.s. airline
in just three. plus, how the business of underlining -- underwriting bonds is being turned on its head in the u.s. hank greenberg appealing of court ruling that proves he was right, to a point. terms of aig were unfair, but afforded aig shareholders no compensation. betty liu has filed -- follow the fight from the very beginning and joins her now with an exclusive interview. betty: thank you so much. hank greenberg th speaking for the first time after winning the government against the lawsuit. how do you feel about this? >> i feel pretty good. the first conversation -- betty: right after you heard the decision what your way? >> we were both very happy about it obvious. david did a great job. i think that judge wheeler
understood the facts pretty quickly and made the right decision on that. betty: i know you are appealing. you made the decision a few days ago. why was the decision not enough for you? it was a moral victory. >> shareholders involved in that. there were 275,000 shareholders involved in that. did you hear from them after the decision? what was the some wereou got? >> happy that we did win. disappointed in the fact that here the government did something improper, overstuffed -- overstepped its authority and benefited to the tune of $23 million or more, and the one who overstepped their bounds got
rewarded, and the shareholders who were the victim of that did not. betty: new had said before, and i understand you were representing a class action lawsuit. , and itad said before is a class action lawsuit, two hundred 75,000 shareholders. how much of the percentage would you get of the settlement if you think it would i be between 10% and 12%. it is not me. betty: what would you do with that money? >> a very small part. betty: the funds that you got, what would you do with it? would begin to charity, and some would be invested. what do you normally do? betty: i don't know, i have never been
in the situation before. during the trial you were there. you saw the witnesses. i was not. i was not permitted to attend the trial because i was on the government's witness list. the rule of the court was that i could not appear there. the government did not call me betty:. --the government did not call me. betty: but you did go to d.c.? >> i did go to the last discussion. betty: what bothered you the most? what bothered me the most is the way the senate acted and went beyond the authority that they had. 13-3 is this attitude call , the federal reserve act. congress decides how much authority the executive branch of government has. had authority to lend
money, and they did. they lend money to many institutions. they were not authorized to take equity. that's got that 80% of aig. got 80 percent of aig. that is one of the major issues in the case. who isn't? those in charge of that area. the three people were polson, bernanke, and geithner. -- pualson. aulson. betty: whose testimony did you find the most revealing? want to get into personalities. i think they each said what they believed in. wasink paulson straightforward. i just read some of the testimony. i was not in the courtroom; not tell you. timothy geithner i was a little
surprised by. defending what they did. the law seemed quite clear. i read it. i know you disagreed with wheeler's desertion it would have gone to zero had the government not stepped in. tell us why you disagree with that and what options were there at that time? >> with all due respect to judge wheeler who i think is a judge, to suggest that you know what a bankruptcy court would do and what the outcome would be is a little puzzling to me. first of all, there are many had.ns aig they were being called on for collateral. aig did not have a solvency -- had athey had let
liquidity problem all of the rest of the institutions had. they all had liquidity problems. morgan stanley got far more money from the fed then aig did. got 180 odd billion but paid it all back. the government made 23 billion on that transaction. if you did not have the authority to take equity, what aig would have done, they could have sent to the counterparties the securities that you were as aaa rated were not . why would we betty: respond to a collateral call? that boils down to leadership doesn't it? absolutely.
but if you are going to go to bankruptcy court, how do you know now with the bankruptcy do? aig did not have a solvency problem. they had about 80 billion of net worth at the time. betty: and you said before, they had assets. >> they could have sold them to raise the money. of course they could have. they sold later at a huge value. every insurance company they owned was more than solvent. they had plenty of collateral and assets. going ahead with the repeal. will you seek redemption if you win? >> yes, we will. betty: are you finding this case alone? i know you are representing 200 75,000 shareholders -- 275,000.
>> a couple of contributors that yes. langone, is he teaming up with you caps off >o? >> yes, he is. betty: you and i have talked about this for many years. you will take this to the highest court if you need to. so why? why is this so important to you gekko tell the world why is this so important to you? >> if the government overstepped its bounds in the executive branch, they have to be held accountable for it. without a constitution, what are constitution, if the government can overstepped its bounds, they are going to be held accountable. i am serious about that.
this is not just conversation. i can feel that. the supreme court decision is another example of this. go, you are much more than just an aig case. you are quite concerned about trade in the u.s. the fast-trackon authority in the senate. how do you feel about this ? >> i think there was damage. a 40ad the president has for that. we need to have trade agreement. we don't want to isolate ourselves. glad the president has a deal for that. it will take 10 years to negotiate. betty: it has fallen on deaf ears. >> i know that. betty: you think it will continue? >> for a while.
betty: hank greenberg, the former longtime chairman of aig. back to you. you.a: thank still ahead, we will hear from virgin group founder sir richard branson on why he is backing a company that is waiting to build a constellation of satellites to provide broadband services to every corner of the earth. ♪
bloomberg market day. i am olivia sterns. now a look at the european market closed. -- close. >> european stocks close lower for a second consecutive day. four euro area finance ministers meetings in the past week. the most notable rhetoric came from the german finance minister wolfgang schaeuble who set rather than making progress, the greeks have moved backwards. still they finished the session higher. three companies a complex than .1% of the broader stoxx 600. greece accounts for less than 2% of the euro area economy. if you needed evidence greece does matter to europe, the euro moving in union by the most since july 2011. want to show you the rebate moving stocks in europe today,
h&m the second biggest clothing retailer. second-quarter profit estimates. the u.k. oil company up by 4% today. that is because pneumonia -- nomura holdings recommended buying the stock. on track for the best we can five years. by 1.8%.x down swedish newspaper jargon industries dated the chief executive plans to leave the company. electrolux said he had not resigned. i wanted to finish with the athens top market, despite the ink of progress among talks athens in the emergency summit, the index finished the session .1% higher. it is up by 14% over the week. the saga continues as the finance ministers meeting again saturday morning.
back to you in new york. in asia overnight, the shanghai composite look like it fell off a cliff. the selloff came after the central bank provided much-needed funds to an increasingly cash-strapped system. bankhe chinese central stepped into the market today injecting liquidity to operations for the first time in two months. also, commenting on the liquidity situation, describing it as ample. other questions have been raised because of what happened today. funding.t money market rates have crept up silently. plus, dozens of fresh ipos approved this week. you also have the sovereign bond the targetg to raise amount. strong argument that lets a very timely move. says feweronald people are having soda with the happy meals area this after the
fast food chain stopped listing soda as an option last year. 48% of happy meals ordered in the u.s. place between last july fromay selected soda, down 56% in the same time a year earlier. hertney love tweeted out escape two men on a motorcycle after they smashed a delivery car, said triers ablaze and blocked traffic across the country part of a nationwide strike aimed at uber. that is a look at the top stories at this hour. mark crumpton joining me now to look ahead at the next hour. cap you ever heard of a satellite constellation? mark: no, i have not or you would not have asked me. probably what is right behind you on our screen. i am having a sneaking suspicion and they involve someone we know. olivia: sir richard branson
toking a company trying build low-cost satellites that will bring internet to every corner of the earth. mark: at this point what they are looking to do is they are in his friends -- in a sense spreading the wealth. there are some places that do not have satellite access, and that affects everything, especially in terms of communication. i think of folks not just on the phone but businesses as well that need video conferencing. you can't do this unless you have some sort of gps or satellite. olivia: you need serious bandwidth. a cool idea. we spoke to richard branson earlier. >> most of my time is now setting up non-for-profits. this combined the best of both worlds. ofgave me this picture connecting the 3 billion people who were not connected. also said you have virgin
galactic. , you canantly replenish them within two hours notice. that is something virgin galactic can do. it seems like a win-win all around. i was delighted to say yes. i talked to all come and became the founding company. olivia: there are some pretty airbus, qualcomm, and coca-cola. is going to be interesting when this gets up and running. when you have this mass communication, the ability to connect and all four corners of the globe, it is good for business, but it is good for global communication. it makes the world so much tougher -- smaller anyway. i was texting someone today in switzerland on my iphone. olivia: the marvels of modern technology. mark: supreme court ruling on
the affordable care law. the second time the boat has -- the court has voted to uphold this. one of our guest miles davis and greg soar who i contend is the best supreme court reporter living. he will help us sort through all of this about the tax subsidies and how this will help some folks keep their health insurance. i certainly second that. thank you. more on betty bloomberg "market" ♪
scandinavia will begin offering several flights from baltimore, boston and new york to the caribbean. this is provoking a renewed dispute over than -- over the open skies agreement. this is the third largest budget airline in europe. matt miller enjoyed a cheap flight to saint barts and joins me now to explain the story. waterloo bay and martinique are the destinations they will start with this winter. they may expand next winter but will run into a lot of political hurdles. it really opens up a can of worms as far as the open skies agreement is concerned right now. open skies is the idea that u.s. airlines like american, delta, and united do not have an absolute monopoly over all care unitedin and out of into
states of america. recently the u.s. carriers have raised a big stink about the fact that they think the three golf carriers are getting subsidies and unfairly competing and taking market share from them. u.s. carrier unions have been concerned about norwegians operation of europe to u.s. long-haul flights because they say it takes american jobs and they say the european carriers can go and hire people that are willing to work for less and regulationser fewer than u.s. flight attendants would be willing to do. withey have a real issues these people, the other businesses encroaching on their territory. norwegian says they will operate out of these french-based caribbean countries because they consider french territory just like flying to france.
difference,ot see a but they could expand if they do not get too much political pressure and if consumers like having more choice and more competition. we will find out if u.s. regulators will allow that sort not really free market but whatever you want to call it, controlled market. olivia: fascinating. i am just waiting for standing only flight. as low as $79 flying from new york. don't go away. a lot more on the market that including more on the market. ♪
-- win for thert white house. >> the french president holds evenope for a great deal as angela merkel says negotiations look to be going backward. preview thel possible winners and losers in tonight's's nba draft. ♪ olivia: good afternoon. i am olivia sterns. mark crumpton. let's begin with the markets on this thursday. stocks are moving higher today. by reportsncouraged showing strong rising consumer spending last month. health care stocks also higher after the supreme court upheld the affordable