>> from bloomberg world headquarters in new york, i'm mark crumpton. as his "bottom line." today, president obama says russia's actions in crimea violate international law. a $4hite house sends trillion budget proposal to congress. geeking and next appoint in the -- could get a lot harder kicking an extra point in the nfl could get a lot harder next year. to our viewers here in the united states and those of you joining us around the world, welcome. we have full coverage of the stocks and stories ticking headlines today.

phil manning has details on the white house's proposed $4 trillion budget. the $1 billion impact for ukraine. peter cook tells us how the ukraine is fueling the energy debate here in the states. ukraine. the latest on president obama says russian president vladimir putin has breached international law. the present spoke to reporters earlier today on the situation in crimea. thatere is a strong belief russia's actions is violating international law. president putin seems to think -- has a different set of lawyers making a different set of interpretations. that is fooling anybody. everybody recognizes that, although russia has legitimate interests in what happens in a neighboring state, that does not give them the right to use force as a means of inserting

influence. said heresident also has not spoken to president putin since the weekend. let's get the latest on the --und rumble bloomberg ground from bloomberg. what is the latest in the standoff? much a tensel very standoff. there's is an air base down in crimea. it was taken over by russian forces over the weekend. this morning, ukrainian troops -- 300 of them -- marched back to that base and said they wanted it back. soldiersf 12 russian greeted them and told them to go away. they fired some warning shots when they did not. that was pretty much it. the two sides then moved apart. what is interesting about this incident is, this is the first time that any shots have been fired in this conflict. these were just warning shots. they were not fired in the

direction of the ukrainian soldiers. but it does give you a sense of what kind of tinderbox this could be in crimea were you have what ukraine says is about 16,000 russian troops on the ground and the ukrainian military there as well right next to one another. >> resident putin tried to calm fears about russia's actions. what did he have to say echo >? >> he said there are no russian troops in crimea. he maintains that those are russians speaking militia. he has no need to send troops to ukraine. he said russia would only send troops to ukraine in extreme cases. he does not think that the situation is extreme yet. he said that russia had no intention of fighting a war with the ukrainians. i think if you read between the lines, this is president putin saying that he does not plan to

escalate the conflict. perhaps he does not plan on sending troops into eastern ukraine. at the same time, he's holding his ground and is happy to control crimea for the time being. >> john kerry was also there in kiev. what were the highlights of his trip? fore flew in and was here three hours. he went to independence square, where he went to the shrine of some of the people that were killed in the violence about a week ago. he then expressed his support for the ukrainian people and the ukrainian government and promised $1 billion of aid. he continued to criticize president putin, saying that the hol whole world understood what he was doing and he would not get away with it. that was it. he is now flying off to paris. >> ryan chilcote joining us on the phone. secretary of state kerry'

to kiev was designed to show support for the ukrainian government. >> i am pleased to say that this package includes an immediate $1 billion in a loan guarantee to support ukrainian recovery. we return to work with the treasury department of the nine states and with others to lay out a broader, more copper has a plan. >> exactly how much is that going to help? let's turn to michael mckee. is this just a drop in the bucket? >> there's less here than meets the eye. at least financially. listen closely to what he said. u.s. is not giving ukraine any cash. but if ukraine loses the natural gas discounted gets from russia, they lend the money to make up the difference. at least $1 billion of the loan will be repaid. they said they will send technical advisers from commerce, justice, energy, state

and treasury to provide advice to the new government. not much, but designed to show the world it is moving forward with ukrainian egg. kerry did offer more. -- ukrainian aid. >> we condemn the acts of aggression. ,e have throughout this moment evidence of a great transformation taking place. in that transformation, we will stand with the people of ukraine. read this asy easing tensions. it does not look like administration is signing on to that view. >> secretary kerry seems to be trying to make it clear that there are big risks for russia in this. p in the russian stock market was a big risk. it does underscore the high stakes for putin as many analysts say that he does not

care. to attract capital, not repel it. the long-term structural problems -- growth as plunged. manufacturing their contracted for a fourth month in a row. lunch makes inflation a major threat as important goods cost more and threatens russia's banks. $6 estimate losses of about billion from the currency. it raised its benchmark interest rates significantly. that will make credit harder to get, putting more pressure on the economy. russia has a current surplus, but small. to putin comes from lower oil prices. until the ukraine prices had been trending down, they will resume their fall as american fracking increases the global supply. dependent onedibly oil. almost 25% of the economy. >> michael mckee,

thank you. some in congress wish that secretary of state kerry could have headed to ukraine promising more than just those loan guarantees, but also access to u.s. oil and gas supplies. peter cook has more on that part of the story. peter, the crisis in ukraine is adding new fuel to an ongoing energy debate here in the u.s.. >> a lot of new fuel to that debate. u.s. oil and gas industries are making aggressive pushes over the last couple of years for expanding exports of u.s. oil and gas, given the big boom here in the net states. ukraine prices is bolstering their case. ukraine relies on russia much force energy. russia has used that gas as a offon in the past. they cut

the price, remain a threat in the standoff. shale boom in the u.s. means alternative gas. they want to lift limits on u.s. exports. and speed up approval of liquefied u.s. gas exports. chorus,ner joining the saying in a statement, the u.s. department of energy excruciatingly slower approval process accounts to a de facto ban on american natural gas exports that vladimir putin has exploited to finances geopolitical goals. they have approved six energy sincenals 2010. roughly 20 more applications are pending with the doe. there is a lot of interest out there. ears for mostyou

of those to be up and running. republicans want to speed up that timetable. calling for the administration to ease the current limits on u.s. oil exports. cook, thank you. coming next, what kiev and washington should expect from vladimir putin. we will be joined by former cia official who says the u.s. and europe need to rethink their understanding of the russian leader. that is ahead when bottom line continues in just a moment. ♪

, it haseteriorates ramifications in terms of economic activity. i sincerely hope it gets resolved peacefully.

fiat ceoas the speaking with bloomberg's guy johnson at the geneva motor show. the situation in ukraine continues, it could dampen car demand in western europe. we continue with our focus on the crisis in ukraine. the obama administration is preparing loan guarantees or kiev and running sanctions against russia. in moscow, vladimir putin made his first public remarks since russian forces took control of crimea. he said he reserves the right to use force to protect ethnic russians in other parts of ukraine. my next guest has special insight into what we may see next from moscow. he is the director of the russia endowment and program. welcome to bottom line. think you for your time today. >> led to be here. >> talk to us about what is going on there. r putin defending russian

intervention in ukraine saying that he reserves the right to use more military force. what does this tell us? how should the nine states respond? us that for the time being, he is prepared to escalate the crisis. which is a positive move in a way. relative to the problems that the united states and russia already have on their hands. it is a very small step in the right direction. the real problem is now in crimea. which effectively is outside the control of the ukrainian government. effectively, denied by what appears to be russian military personnel. is quite satisfied with the situation because he sent a powerful signal to kiev that they cannot move to the west as they had hoped. without his consent. that is his point of leverage.

military forces are in standoffs in crimea and the black sea. what are the odds of fighting? about aless concerned force on force military scenario. i'm more concerned about situations accidentally getting out of hand or some provocation from some extreme elements on one side or another. that would be more worrying to me. so far it seems that putin has signaled that he is not prepared to move more forces into ukraine beyond what is a cap list -- what he has accomplished in crimea. you believe that we should rethink our understanding of vladimir putin. why should we do that? how should the west viewe him? >> his approach to dealing with

the west and dealing with foreign policy in general is in some ways reminiscent of the major powers dealing with the world at the time. europe in the 19th century. it is very hard. it is not based on shared values. something that is essential to the founding of the european union. have a clash of values and approaches to dealing with each other. cia,ven your tenure in the talk to me about the use of masked gunmen in crimea. what does it tell us? is there precedent for this tactic? precedents for this tactic. going back to the georgian war

prewar phaseng the of high tension and escalation. the russian side sent military volunteers and that contributed to tensions, of course. it is a fairly standard page from the playbook. maybe not exactly the same as what was done during 2008. nobody is reinventing any ways here. >> russia's blocking cell phones and internet lines between crimea and ukraine. there are multiple reports of so-called pro-moscow protests being brought into ukraine from russia. what do you make of all this? if it is indeed happening, i

am not seeing confirmation on those reports. it is impossible to keep up with everything. that signals to me that the russians are positioning themselves to continue to andcise control over crimea deny ukraine control over the peninsula. and are positioning themselves in case tensions escalate or the situation warrants to take a more active stance in ukraine. so far, they've only hinted at that possible trouble. >> the director of the crimean -- carnegie endowment to russia. thank you for your time and perspective. we appreciate it. >> my pleasure. >> the white house unveils its budget blueprint. it is a dead upon arrival on capitol hill? ♪

president obama sent congress his budget request today. white house correspondent phil manning lead has the highlights. good afternoon. >> good afternoon. democraticnt long on policy priorities, but short on chance of moving in capitol hill. the president laid out a $3.9 trillion budget request today. in that budget request, he included spending like early childhood education and job training programs. $60 billion to expand tax credits like the earned income tax credit. what it also does is pays for crop including insurance subsidies and cutting back on certain types of tax

loopholes. what this underlines is a new reality for the obama administration. it is an election year. has startedpicture to improve. take a listen to what the president had to say that. >> is a roadmap for creating jobs with good wages and expanding opportunity for all americans. at a time when i deficit has been cut in half. it allows us to meet our obligations to future generations. from the heard president, deficit picture is looking better. much so that levels will be below where they were before the budget crisis. >> how do republicans react to away from the emphasis on deficit reduction act out >? >> john baeder came out and said that this was the most irresponsible budget yet of the obama has proposed.

the president laster put out an all french to republicans and said he was willing to make changes to social security, medicare and other entitlement programs. those are all gone this year. for republicans to look at these budgets in the lines of what the established last year in terms of topline numbers under the agreement, this budget is something that will not move in the house of republicans. are viewed asts more of political documents as opposed to policy proposals. >> that really is right. especially this year. yep midterms coming up in november. the white house wanted to lay out policy priorities going forward to follow through on over the next eight months. the president laid a bunch of these out in his state of the union. inequality issue. what you are seeing here and now is those policies put into writing. senate democrats have already said they're not going to do their own budget.

this probably the most detailed proposal you will see from democrats that lawmakers can pull bits and pieces of on the campaign trail in the year ahead. >> bloomberg is on the markets. alix steel is here with the details. the dow was up 200 points. >> we're still seeing a record rally in the s&p. often times, about half an hour russia fired an intercontinental ballistic missile. s&p, up 1.3%. a couple of individual stocks that we are watching. first is dish network. ae company reaching groundbreaking deal with disney to offer its programming. that includes espn and abc. all part of future web-based subscription to be. more internet television is. verizon ceo passing that the

company will have up to 100 tv channels ready for mobile viewing by the end of the year. also announcing that the company is looking to acquire more airwaves and is focusing on making more video move seamlessly to mobile. back on the markets in 30 minutes. ♪

welcome back to the second half-hour of bottom line on bloomberg television. things were sting with us. we will check some of the top stories we're following for you at this hour. the obama administration has prepared $1 billion in loan guarantees for ukraine. and threatening sanctions against russia. it is taking control of the ukraine's crimea region. john kerry says russia is working on pretext for further invasion. the u.s. home prices rose in january -- home prices rose in january. it might've offset sales stalled

by cold weather. they rose .9% in january. 12% inices have risen the past six months. arctic air has sent temperatures into the single digits in some parts of the mid-atlantic and northeast. it was four degrees at baltimore's airport, breaking a record set in 1873. dulles international airport saw a reading of one degree below zero, tying the record for the month set in 1993. it was the second straight day of record lows for the two airports. that is a look at the top stories in the news at this hour. it is time now for the commodities report. su keenan joins us from the newsroom. wildmmodities continue to due to the frigid weather ahead . continued torices

defy gravity. that and usually cold weather driving trading today, even though the end of the season is here. ukraine is not an issue and that gas. nat gas. we could see oil jumped $10 in the likely event that russian exports of oil are disrupted. crude slides amid rumors that not disruptl doe oil prices. it is unlikely the ukraine situation gets worse. not a big threat to the oil market. therefore, the ukraine turns out to be a "one-day wonder." who does not appear to be spoiling for a war. so crude is therefore in retreat. all of this comes with bank of america's no doubt today that

while oil prices could spike under disruption, it would destroy russia's reputation as a supplier. he sees sanctions against russia unlikely. it predicted the weakness of emerging-market currencies, are reversing the brand rally. we are seeing a trend in gold, even though it was a bullish call yesterday. $1400. we're seeing a pullback as russian president putin comments on easing conflict. gaining 12% year-to-date to date. that leaves prices at the biggest quarterly gain since 2007. >> thank you. my next guest knows that while many parts of the u.s. economy are growing, the housing sector remains and urging concern. he has worked at jpmorgan,

prudential financial and the new york fed. welcome back to bottom line. good to see you again. at head of global strategy pavilion up in montréal. he writes that the housing market presents "one of the largest real economic risks to the u.s. growth in 2014. ." >> the price increases we have seen are driven by constraint supply of homes. volumes are down. applications for new mortgages are at a decade low. we just don't see the kind of fundamental support for the market. that you would hope to see. what we're seeing is a reflexive market, which is still unwinding from the crisis. >> where is this concern coming from? from the fed's monthly reduction in the stimulus or the job market or stagnant wages for people who already have jobs? >> jobs and income.

the thing to look at is the banks. and theof dodd frank rules, they are retreating from the home market. they really will only write mortgages. give the huge potential of home withoutn this country lenders. the average for fannie and freddie is in that 730 rain try now. >> you know what the concern was before. there will be a lot of people who could qualify to buy a home but the banks will see them as kryptonite? >> there is no such thing as subprime lending. you have fully documented loans. the only question is, what is the price? in the current regulatory environment, it is very difficult for banks to josep juy taking a risk if it defaults and it will take them three years to resolve that situation.

in states like california, lender can get sued by a defaulted bar were for making a relatively minor error in the servicing or lending process. a lot of risks. >> the regulatory environment is not helping. what should the regulatory environment be? you have to have some rules. >> some of the rules were put in place that are very good. contact for the bar were. putting in place a really normative standard for making a loan. disclosure. all the things you heard about during the crisis. >> what about for the banks? agree -- we totally don't need to see the new agency that came out of the dodd frank law telling the banks with the price of mortgages ought to be. we should not have legislated the way that prepayment penalties work. as a low credit score bar were its mortgage come your score goes up immediately. another lender will come in and refinance you.

that first lender will lose money. they're not going to do that. >> mark fleming is the chief economist on bloomberg radio. he said the housing market is becoming more illiquid. he says the slowdown we are seeing in sales as a result of not enough homes being available. is there a lack of inventory echo >> it is even scarier than that. think about 20% of all homes in this country still being underwater. the penning on what state you look in. look in nevada. 35% are either underwater or don't have enough equity for the homeowner to sell. >> what is the answer? >> first off, the federal government should allow bankruptcy judges to restructure mortgages. right now, they're prohibited to do that. we have to take a hard look at some of the dodd frank rules that make it much more difficult for lenders to make a good mortgage. we don't have subprime mortgages anymore. everything has to be full doc.

what is the price? >> we have one minute left. where have we gotten the story wrong? >> it's not so much getting it wrong. it the details coming out of the crisis -- people were so angry at the banks. they were so angry at what ed happened -- what had happened. they felt regulation was appropriate maybe don't want to go overboard. that is been the story of the united states. you go back to the great depression. aconian policies in place. we are actually turning the home sector into a drag on the economy. it should not be that way. we need to i just what we have done since 2010. >> chris weiland joining us in studio. still ahead, top lawmakers look to crack down on powerful lobbying in washington.

that story coming up next. ♪

>> senate majority leader harry reid is taking a swing at a powerful adversary. the koch brothers. megan hughes joins me now. what is senator reid saying and what is he opening -- he hoping to get out of all this. >> piling onto the attacks that began last week. the last week. the koch brothers un-american, saying that they're trying to buy america. take a listen. >> once again, republicans are all in to protect their billionaire friends. have defended the koch brothers radical agenda. it is radical. this dovetails with

democratic strategy with their message going into the midterm elections. according to one democratic aide, even though the koch brothers may not have rotted name recognition, this attack really plays on people's fears that the system is rigged for the very rich. that secret billionaires are playing the system. democrats are trying to position themselves at the party -- as the party pushing economic opportunity for all come including expanding employment benefits. interesting to point out, mitch mcconnell took to the floor shortly after read, saying, i stie why he left out tom eyer. usingan senator reid also the stump to push back the attacks when comes to health care? >> absolutely. you mentioned obama care several times in his remarks today. you take a look at where americans for prosperity, the

group that is backed by david and charles coke, where that group is spending their money, and is all about obama care this midterm election season. so far, the group's latest been within 16,000 ads against obama care. starting last january. that tracking, they spent $6.8 million. read and a lot of democrats are taking issue with them. pointing to media reports that debunked the stories of the people that are featured in these ads, who claim that under obama care, plans are costing them more and that obama care is unaffordable. beginscludes one that airing in michigan. it is a $300,000 ad. that one is in michigan. a vast majority of their advertising is in north

carolina. that is about a third of those ads. they are trying to unseat the senator there. washington.hes in thanks. up next, the point after kick is almost as automatic as it gets. our changes afoot? will kick things off when bottom line continues in a moment. ♪

>> time for bloomberg sports. nfl.com is reporting that national football league isn't movingy talks of the point after to the 25 yard line, making it a 42 yard attempt. bloomberg sports reporter mason levinson is following the story. he joins us with more. what is going on here? wise the nfl even considering this? >> it is the hundred year anniversary for the point after.

99.6% of these tries are made. an opportunity for people in the stadium to go to the concession stand or to go to the bathroom. it is time to do something about it. -- it isomething that too much advantage. >> one of just illuminated and make every team attempted e?two-point conversion >> i don't expect anything to happen this year. the competition committee may try some of the stuff out during the preseason. not expected to happen this year. it gives them opportunities to try some stuff. roger vidal floated the idea of getting rid of the cake entirely -- roger goodale floated the idea of getting rid of the cake entirely.

there are some ideas. he floated that idea around the super bowl. a how difficult is it to get rule change through the competition committee after how many votes are needed? >> i believe they need a two thirds majority at the owner level. the competition committee is meeting this week in florida. between march 23-26 in orlando, the owners will meet. the competition committee is dealing with safety rules. they will bring it to the owners. they're very conservative. they're slow and they don't have a reason to change. >> you mentioned the safety rules being discussed. to them with protecting players. how difficult is it to make an violent game less violent? fan say they like the organized chaos. they like the violence. >> it certainly is difficult. with extra point does add a little bit more danger to the game. at this point, with the extra

point, this is a safe play. if you are adding another spot where you are going for two more, as more danger. getgh that someone could injured. is something -- it is something for them to consider as well. goodale'soger position to advocate for this? whate owners will all do is in their best interest, which is to keep us talking about this for a couple of years. then do something when they think it works. -- doesfl players union it have a role in this? >> i'm not sure. i'm sure they will have a say. i doubt something like this will be instituted so quickly. who's to say how this will affect kickers? is delete trying to deemphasize the kicker by removing the cake ?ntirely

there are a lot of things to work out here. >> anything else on the horizon quickly? committee competition , they will be considering some other things. some chop block issues. >> that stood out to me because the chop block -- it is such a violent move. you could end someone's career. >> certainly. every year, they're looking at these place. every year.mes up they're trying to find the best way to keep everyone as safe as possible at this point. >> mason levinson joining us here in studio. thanks so much. >> stay with us. another check on market movers is on the other side of the break. ♪

>> get the latest headlines at the top of the hour on bloomberg radio and streaming on your tablet and on bloomberg.com. that does it for this edition of "bottom line" on bloomberg television. ask a much for joining us. we will see tomorrow on the markets. it is 56 past the hour which

means bloomberg television is on the markets. i'm alix steel. here's a quick look at where stocks are trading. a killer rally today, near record high, up almost 1.5%. oil dropping from a five-month high. -- easing of tensions between the ukraine and russia. putin saying he will only send soldiers into ukraine and extreme occasions. taking a look at gold, suffering from the same kind of thing here where the safe haven demand coming out of the metal is falling from a 17 month high. speaking of gold, it is time for today's sector report. taking a closer look at the spider mining etf. it has been rallying for much of the year. the etf is in the red. joining me now is ken hoffman. you are in canada. it is pretty cold. it is the world's largest mining

convention. 30,000 miners, as well as investors. what is the mood there? >> the mood is very mixed up here. on one hand, they really like to see the price of gold higher. that really helps them out. on the other hand, they continue to see what you are seeing today, where the etf is up about nine percent this year. the mining equity is down this year. there was a big disconnect between the way the metals are acting and how the mining equity is. >> what is the explanation for the diversion? >> you talk to a lot of investors. i'm here in the office doing a presentation to a whole bunch of portfolio managers. they don't trust the mining management. they have gone through a decade where the price of gold would up a lot but there is talk that the gold mining companies would up the same amount. they wanted to get that margin. they do not get it aired their leaving for the equities and buying gold itself. >> we have seen many management

teams across the board. what is it going to take for investors to have more confidence in this new management team? hasne thing the industry done to help themselves come out with a new cost, sustaining cash cost, which we have to track. it gives you a full cost measure. what you are going to see from all the new ceos -- everybody has a new ceo these days -- is how they can control costs. if the companies can come out and say, look, you are going to get the margin as the price of gold goes up. they have gone a long way to help themselves in the future. >> mine production grew five percent last year. when his growth going to actually matter? this is impressive. the first time it has reached over 3000 tons. >> i have seen a lot of growth. it towards the end of last year, a lot of these new ceos are saying, maybe we will cut back

and shed some assets. a lot going around in the mining industry, trying to figure out where the gold prices going. ofot of confusion -- a lot analysts were thinking gold might go below $1000 an ounce. that gives you one strategy. if it stays around $1300, that's a completely different strategy. >> under 1185, a lot of these guys become cash flow negative. >> we are run the markets again in 30 minutes. street smart is up next. ♪

pre-k's i am trish regan. i am trish regan. 1873 is the level on the s&p. losses we from the saw yesterday. more optimism. >> what a dramatic couple of days. coming out saying he will not push the crimea get. >> surreal real turnaround and a real turnaround for the market. we will just say that. >> and rally for the year.