>> welcome to "lunch money." i'm adam johnson. here's what we have today. the ceo sees only one way out of this battle of broadcasters -- winning. gm's road bump is getting bigger. the carmaker slammed with some lawsuits following that massive recall. a wage war in nation. two sides of the wage debate. we will duke it out right here. one of the world's toughest sailing races. virtual reality.

is it finally here? we will take a look at the oculus rift. we're kicking off with what everyone is talking about. it looks like someone is not invited to the party. >> the big industrial nations essentially kick russia out of the g8. it is the g7. they won't be attending the g-8 meeting in sochi. >> so the group of seven industrialized nations, the u.s., canada, france, germany, italy, japan and britain are all coming together. they came together in the netherlands. they said in a statement, they won't go to russia's g8 gathering in sochi. instead, they will throw a party of their own in brussels. they look so happy around the table. >> we are very much in favor of dialogue with everybody in the world and keeping the dialogue open.

there is no sense in discussing these issues in the g-8 form. that's why we are going to brussels. at the same dates that were planned for the original g-8 session. >> a little history lesson here. after the soviet union collapsed in 1991, russia eagerly sought to join the world's top economies and eventually gained entry in 1998. when russia first hosted the g8 summit in 2006, putin did it sochi style, building a palace outside of st. petersburg and adding a series of new mansions to the grounds for each leader to stay in. those were the days. a spokesman said russia is interested in continuing contacts with g-8 members. russia's foreign minister told reporters that he is not clinging to the g-8 format. he says mother russia is the wider g 20. as for the g7, it's statement

reads, we will suspend our participation in the g-8 until russia changes course. the situation in ukraine. if that escalates, president obama and other leaders say they will levy tougher sanctions on russia. >> we are concerned about further encroachment by russia into ukraine. what i announced and what the european council announced was that we were consulting and putting in place the framework and architecture for additional sanctions and additional costs should russia take this next step. >> we know the president can walk the walk. can he talk the talk? >> we have a united states, after having back down on this red line in syria, he feels he has to follow through on his threats.

he is coming up against putin, who feels like this is the most important interest he has. we are set for more escalation here. it is starting to hit the market. >> it was president putin bailed out up president obama in the syrian conflict a couple of months ago. president obama threatened action, but it was putin who brokered the diplomatic solution. russia still holds a wildcard. it supplies europe with one third of its energy in the form of natural gas. that means russia can make life very difficult for europe as well. >> if he wants to make a political decision, he has to be ready to take it. there's discussion among all the governments that they are ready to pay a price to show that international law has to be respected in europe. we don't want these kinds of scenarios coming to europe. we are a union based on peace. ukraine, who offered to be

associated with europe, all of these things started when there was pressure from moscow, not letting ukraine come closer to the union. they want to be closer to the european union and our common values. i think we have a moral obligation to show our support to ukraine and i'm sure the european union member states will be ready to do it if necessary. >> the markets in general made it tough for russia. the government canceled its fourth ruble auction. the stock index is down about 11% so far this year. the ruble has dropped more than seven percent against the dollar. the ruble actually rose when investors speculated those tougher sanctions won't happen after all. stay tuned. gm's recall troubles have just gotten bigger. we'll tell you why after the break.

the supreme court showdown. what the ceo has to say about future of broadcast media. president jimmy carter stopping by david letterman late last night. he said russia taking over crimea was inevitable. letterman asked that the u.s. could pull off some expansion of its own. >> if the u.s. decided they wanted windsor, ontario, which is just across the river from detroit. and we went up there and we sent our tanks in, could we get away with that? >> i doubt that the people in montréal would approve. [laughter] ♪ >> this is "lunch money" on

bloomberg television. also streaming live on

bloomberg.com. i'm adam johnson. what is arguably the most talked about court battle in media right now. the streaming service area, taking on the top broadcasters. streaming broadcast tv to your mobile device. they are expected to submit a brief on wednesday. john ehrlichman recently sat down with the ceo, asking him if he anticipated all the legal hurdles. >> the thing i didn't anticipate were going to happen, like the direct impact of the association with the cloud. if i had taken a moment to step back and say, wow, which you never do. a lot of those things -- the controversy is the scale of what's transpiring. >> outside the courtrooms, broadcasters continue to think about what their options are in

terms of where they can take their channels. we can move our broadcast network to cable and take our broadcast network to the internet. what do you say to that? >> they have had an agenda to go to cable for a long time. aereo has nothing to do with it. they step back and say, 15 million people use antenna tv. are they capable of disenfranchising that large a number of people? i don't think so. that's very difficult. >> to be clear, if you are not successful in the supreme court, is there a plan b? >> no. there is no plan. we believe in our merit. we do think it's the right thing. progress is important. the mission of this company was to try to create an open platform in which the system is

open. if we don't succeed in that, despite our best efforts, it would be a tragedy. but it is what it is. >> how will the supreme court battle impact the future? here's david bank from "surveillance" earlier this morning. >> is there a such thing as legal momentum? i don't think there is. i do think the brief on behalf of the department of justice for the broadcasters was a very clear-cut, powerful argument that the area of technology was essentially a violation of the spirit of the law. i think it is meaningful -- if you are trying to read the tv, you would argue that the momentum is going the broadcasters' way.

what do investors who are watching today really care about? we care about the outcome of the case. you know what's going to happen at the end of the day. whether or not it is legal, aereo itself is a footnote in history if it does not find a distribution partner. it doesn't have the scale to make a difference. what investors want to know is, are the directtv's and comcast's going to adopt this technology to somehow avoid paying retransmission consent fees? i don't think they are. >> what is the plan if paid tv does decide to copy his technology instead of fighting it? >> it's a free country. we have invested a tremendous amount of money and resources. this is a very complicated technology. i'm not suggesting we are the only people in the world that can solve these problems, but they are not that

straightforward. >> when we hear stories about you hitting capacity in markets like new york city orlando, should we see that as much stronger demand than you had anticipated? and that there is going to be a lot more usage? >> you have outsourced your government so the design of the technology, that each consumer gets their own piece of technology in which they control it on their own, it becomes a forecasting problem. how much you have to determine in three months, how many customers will have that capacity. for a company that was just commercially available for 7-8 months now, there is a challenge. we will get better at it. >> you can see more of john

ehrlichman's interview coming up on "bloomberg west." can't watch this on network television. we're talking about the world's toughest sailors. you will meet one of them today in wildcard. a new lawsuit for general motors. new probes about its bankruptcy filing five years ago. all those details, coming up in motors. take a look at this. video taken from a helmet cam on one of three men who parachuted off one world trade center. those three men and now a fourth man have been charged. here's a look at how they floated down to the ground at 3:00 a.m. incredible. ♪ >> this is "lunch money" on

bloomberg television. also streaming live on bloomberg.com, your tablet and your smart phone. i'm adam johnson. gm's troubles just keep getting bigger. 13 customers now in the u.s. and canada filed a lawsuit against general motors over faulty ignition switches. according to two complaints filed yesterday, the carmaker may not have recalled all of the deficient chevrolet cobalts.

it doesn't end there. >> in addition to their handling of the ignition switch failure, the justice department is also looking into whether the company committed fraud by not disclosing the defect when it filed for bankruptcy. that those defects could lead to a cascade of liability claims. that is according to the new york times. >> gm admits that it learned about the faulty ignitions back in 2001. the question remains as to whether the carmaker knowingly failed to tell the government about this issue when it filed for bankruptcy in 2009. >> the new gm is protected from any sort of economic losses or damages incurred before july 2009. challenging that immunity requires asking the judge to reconsider the terms of the bankruptcy. gm's lawyer says the time for that has long passed. this latest bankruptcy fraud probe does beg to differ.

gm's ceo says that she will do what's right. whether that means to settle these lawsuits or fight them in court is something we don't know yet. >> bankruptcy is never an easy issue. in gm's case, it's a different piece altogether. >> it's where a buyer hid assets from the creditors. first up here is we are talking about hidden liability. you get into a whole different area than a lot of these bankruptcy fraud doctrines were meant to cover. it appies if there was a hidden goldmine. these were liabilities that were understated. >> gm did issue a notice for the cobalt. but it was, there's a problem here, but not enough to issue a recall.

>> they issued a notice for the cars to bring them back in to fix an ignition problem. 474 cars were fixed. why wasn't there a total recall if they knew about the defect? why not bring everything back? >> what does this mean for gm shares? >> it's a feeding frenzy time. they will throw everything they can at gm here. we basically said, there will be several billion dollars. we can get into the legalities of whether sales sheltered them or not. it is clear that they will put up some money. the stock market reaction is overdone. that is less than two dollars per share. >> let's talk about safety. testing a car's crash resilience can cost up to $1 million.

the crash dummies are the one to tell the story. >> a lot of people are familiar with crash testing. but a lot of people are not familiar with the behind-the-scenes work. >> before a dummy gets behind the wheel of a general motors car, it needs to prove itself in tests like this. and this. the reason -- to ensure that the dummy's technology is working properly before a crash. crashing a car does not come cheap. neither do the dummies. >> a lot of people are surprised at the cost of a crash dummy. a crash dummy is a very sophisticated device. we have electronic instruments on the dummies from head to toe. they're designed to behave as a human would behave. our dummies can range anywhere from $100,000-$400,000. >> that's the cost of a fully loaded escalade. they have some pretty old school

shoes on. >> for some of our dummies, the shoes were regulated. the reason the clothes are pink are for the photography of the crash tests. a number of our dummies will measure all of the recordings during the crash test on board, so they will be measured inside this small little body. >> general motors has learned a lot since its 1935 psa. like how to build safer cars that take human error into consideration. crash related fatalities have dropped dramatically over the past 50 years. as cars get safer, it could impact payouts to insurance policyholders. the technology involved -- automakers are being forced to redesign cards to keep up with more and more rigorous

standards. that is why gm is investing so much into making smarter dummies. milford, michigan. >> both sides of the minimum wage debate -- that is ahead. the vote in congress -- we will bring it to you. if meetings are taking up too much of your time, we will get to a robot who can take your place. that is next in innovation. how's this for a tribute to lady liberty? a land artist created an image of the statue of liberty in a field in italy. the artwork is meant to mark president obama's meeting with pope francis on thursday. ♪ >> this is "lunch money" on

bloomberg television. i'm adam johnson. today's moving pictures, where the video is the story. a search team is using everything from dogs to sonar, trying to locate victims of that mudslide in washington. the slide started when a large part of rainsoaked land gave way, sliding to a community. dozens are still missing. relatives of passengers on the missing malaysian jet are protesting in beijing. some family members have accused the malaysian government of covering up information in the search. they were notified via text message that no one had

survived. the search was suspended today due to weather conditions in the indian ocean. michelle obama gets a little workout. the first lady joining a demonstration of the traditional exercise routine called tai chi. she told students to aim high, citing howard schultz as an individual from a modest background who has succeeded. there are two sides to every argument. one of the more polarizing ones, minimum wage. >> raising the minimum wage would raise the wages, not just of employees now below the minimum wage, but also millions of people just above. differentials were preserved. it would make a real contribution towards what should be a very basic value in our economy. that if you are prepared to work full-time, you can support a family.

>> this is a very bad idea from a number of perspectives. the businesses would hurt in job creation, especially among lower skilled workers. i don't think it's an accident that when we raised the minimum wage, we now have teenage unemployment over 20%. >> no agreement there. the former treasury secretary larry summers is all for it. he says the u.s. is at risk of becoming a downton abbey economy. >> there are two americas. a set of people who live one way and a set of people who live in another way. i'm struck that it's not just income inequality that has increased over the last generation. if you look at the improvements in life expectancy, they come to the upper half. if you look at educational

achievement, the gaps between the children of the affluent and less affluent are rising. if you look at college attendance, you see something similar. we're losing our status as a socially mobile opportunity society. we are seeing increasing cleavages within our population. cleavages in where people live and how people get around. cleavages in the medical care they receive. overall, it's differences in the lives they lead. i don't think that's healthy for the unity and ultimate strength of our country. >> the president of the center writes, let's put all of this in perspective. >> this has been a bad recovery. people hear a lot about the jobs. even those who have had a job, we have not seen the real wage gains that they were expecting

and are used to. the median family income has declined over the recovery. when they say, hey, you can get paid more, it is very popular. then you get a group of economists who say, hey, this will have no impact on employment. we have a bunch of fancy studies and politicians have something they feel is bulletproof. it doesn't hurt jobs and raises income. >> it doesn't seem like it would have that much of an adverse affect. >> it really is targeted on a small section of the labor market. 500,000 jobs that would go away. that doesn't seem like a big number. trouble is, it's a very big number if you're in retail trade or eating and drinking establishments. this is where the low skilled workers wind up.

it's pocketed distress with wider gains. that is a recipe to do something that is not very smart. >> here's one thing both sides can agree on. in minimum wage hikes, it's not the all-encompassing solution to close that income gap. >> i'm under no illusion that raising the minimum wage is enough or is sufficient or is going to roll back the kind of trend that we have seen over 25 years. that is going to require much more. ultimately, what is probably most important is education. citizen schools and organizations are focused on extending the school day for children. it has looked at research that demonstrates the magnitude of differences between the children

of the more affluent and the children of the less affluent. it takes 10,000 hours to achieve real, true expertise. there is a 6000 hour difference in the amount of attention and enrichment attention that children of the fortunate and those of the less fortunate get. we are going to be perpetuating this inequality from generation to generation. >> there wasn't always such an income gap in the u.s. incomes grew rapidly and at roughly the same rate across a number of different age groups. the startup that is making virtual reality a reality. it is called oculus. it is about to revolutionize the gaming world. one of the world's top sailing races. that is coming up. a lot of money to get you there. ♪ >> this is "lunch money" on

bloomberg television. also stream live on bloomery.com, your tablet and your smart phone. i'm adam johnson. today's wild card -- we are setting sail and going around the world. the global ocean race. it starts on october 12 in spain and ends in sweden. thousands of sailors dream of earning a spot on the professional team in the volvo. only the toughest and most skilled get to sail. olympic and world champions don't necessarily make the cut. then there is charlie and cardinal -- they have sailed for brown university's nationally ranked team. it was their business and economics degrees that are going to help enable them to compete

against the world's toughest and best funded sailors. they spoke to alix steele earlier this morning. >> we know that, at the end of the day, this is a business. it does take money to compete and get to this next level. we have been pretty fortunate to see it that way and we have been able to make the most of our opportunities and create opportunities for sailing. versus just show up and go sailing. >> in terms of attracting sponsors, how long did it take you? >> this is basically a 2.5 year mission. after we competed in the trans-atlantic race, we were put in charge of the volvo race and we have been working with them for 2.5 years. >> you were able to tailor your

marketing to each company you try to hit. tell me about this business insight. >> sponsorship is a struggle of conviction and malleability. you are what you are. every sponsor would like to see something different. you work for them. it's all about their return on investment. we wanted to make sure we had a good plan to work with all of our potential sponsors, not only the ones we end up representing in the race itself. >> we talked about your brown degree and you brought up the turkish medical devices company. >> we were a team looking to do the race and they were a company looking to be a sponsor. we met and were able to get in front of each other and found out that we had a lot of the same core dna. we are both young and ambitious

and looking to take the next step. for both of us, the ocean race is that next step. we have a great relationship so far and we look forward to carrying through the race itself. >> robots that can go to the meetings for you. we will introduce you to them. a new virtual reality that is about to hit the gaming world. that is ahead in innovation. how about some google glass from this morning? >> you do have new glasses. show off the new glasses. >> i don't know if we're comparing glasses here. these might look a little cooler. >> put those on. >> do i look like a dork with these glasses? >> you look like harry potter.

♪ >> this is "lunch money" on

bloomberg television. also streaming live on bloomery.com and your tablet and smartphone. i'm adam johnson. robots have come a long way. they talk and some can even help you skip meetings.

>> welcome to robo. >> it is the international robotics summit. all the latest robots come to strut their stuff. stealing the limelight at this show is -- don't feel like going to the meeting? he's got your back. he takes videoconferencing to a whole new level. >> it's a machine that we call mobile telepresence. it lets you teleport yourself to a place that you're not physically. it's your avatar that goes and meets people. >> they can do the down and dirty and dangerous, too. it's a walking, talking rescue robot. >> maybe it will be used in an emergency situation. >> it's big business.

organizers for this event say the industry is growing at a rate of 30% per year. service robots are particularly popular. one question everyone is asking, it's how much longer humans -- >> after decades of false promises of virtual reality, that is going to feel more real. much of the credit belongs to a startup called oculus vr. they have produced a prototype. gamers are excited. >> right now, i am wearing an oculus rift. a virtual reality headset. here i am, flying up into space. i now see the enemies so i'm firing my machine guns. >> the maker is making a big promise that virtual reality will finally feel real. >> what if it were perfect and

we could have an experience with full body language, full presence. >> palmer luckey created the prototype in 2012. that was the beginning. >> this was your hobby. now you are the cofounder of a company that is worth $75 million. you get to live your passion. >> it's pretty great. a lot of people are a lot smarter at what they do than me. >> one of the people he is working with is brandon aribe. >> i grew up in the 80's and 90's. there was a lot of expectation and excitement around it. the technology now is finally there. you realize that this has potential to change the world. >> oculus has a new technology called positional tracking.

when the player leans forward, the character leans forward as well. >> optics technology has advanced. we are finally able to deliver on the promise of synthetic 3-d environments that are photorealistic, which we could never do before. they have accomplished a lot with this version. i'm not feeling any nausea right now. it's almost like i'm there. the buzz has brought out some competition. sony just announced project morpheus. those at oculus are not worried. >> we have now proven that there is a market. i am a huge sony fan and i hope they take it seriously and deliver something great. >> both companies have many hurdles ahead of them. it's not clear whether the biggest gaming software developers will ever embrace this new technology. there is no release date.

>> buy an oculus rift when it's ready. >> is that in 2014? >> we will see. >> here is one innovation you don't have to wait for. it is called the footbonaut. ♪ >> we are coming up at: 56 past

the hour. what's look at how stocks closed. there was a rally.

if you take a look at what happened with treasuries, with that consumer data we saw, a little bit of selling in the treasury market. particularly on the longer end of the curve. in terms of currencies, the currency world and get a little smaller today. the irs announced it does not consider bitcoin a currency. it will be treated as a pretty. -- as property. if you do prefer youth this the greenback, adam johnson has insight as to why now is the time to buy. >> dollars? this is your moment. the team making the case for the dollar. the bad weather is behind this. can see what has happened

with all of the bad data. that is behind us. in theory, we will get an axle ration in the economic data. that should be bullish for the economy and the dollar. argument number two, weakness in asia. default suggests you should be in the u.s. in japan, there will be a new sales tax trying to reduce the budget deficit and debt. in china, we found out that organization is slowing by about two percent. -- 30%. that is bringing the middle class up. that has been knee changing paradigm. not the same story. slowing in asia. that is bullish for the dollar. the g8 effectively gives the boot to russia, reducing it to the g7. with that kind of uncertainty in europe, by default, that argues for the dollar. if you look at the chart, you

can understand why. here rope the couple of years over the low end. there are 20 different strategists -- 21 think we will get higher. about four percent over the next several months. and stocks are flat, that one works. dollar your moment, bulls. >> we will be watching the dollar. with all the talk about boosting the economy, let's look at commodities. in particular -- copper. that chile, the largest copper producer, will be disrupted by protests. china may intervene to ward off slow growth. conquerest consumer of -- copper. natural gas moved up.

yet.r is not over there are snow expected for the mid-atlantic and coastal new england area starting tonight and heading into tomorrow. that is causing prices to bounce off of the 10 week low. are in us, good if you natural gas. hyman --markets, julie four on the markets, julie hyman. ♪