>> from bloomberg world headquarters in new york, this is "bottom line." today, president obama discusses uroplasty need to be less energy dependent on russia. then, the fed releases the results of its latest tank stress tests. the white house again extends the deadline for getting health insurance. to our viewers in the united states and those of you joining us from around the world, welcome. we have full coverage of the stock some stories making headlines today.

megan hughes details the not so strict deadline for obamacare enrollment. and the data breach earrings taking place on capitol hill. those stories in just a moment. the s&p is changing its outlook on the russian oil companies. the ratings service decision effects luke oil, gas prom and trance that. them from moving triple be stable to triple be negative. luke oil would be unlikely to withstand a sovereign default. just six days ago, s&p revised the outlook from negative to stable. president obama threatening to impose further sanctions on escalates the crisis. the president making his comments today in brussels. hans nichols is there with the very latest. upthe president just wrapped his main speech in brussels.

he true a very clear red line, way, insistingr there would not be military action in ukraine even if russia went into eastern ukraine. he laid that down for crimea and ukraine and did it at several moments. it is really wrapping up a day in fervent diplomacy, talking about new sanctions and shoring up nato. in particular, what you do on the energy sector. the energy sector, obama made this point earlier at a press conference -- what you need to do is use this and sees it as an opportunity to win europe of its energy dependence on russia. listen to how he couched it in terms of the current trade negotiations. >> once we have a trade agreement in place, expert licenses for liquefied natural gas would be much easier. obviously relevant in

today's geopolitical climate. >> that is the long term. what obama is talking about is moving new military assets into native countries. this was in defense of what nato should be as a defense organization and prodded nato a little bit, saying nato countries need to spend more on their defense budgets. free.ne as freedom isn't >> what about an economic aid package for ukraine? gett seems like for that to done, we need to have the imf to complete their negotiations. this part of the conversation as to get what you can do ukraine economy back up onto its feet. it made it seem as though the u.s. stands ready to do about anything necessary. >> we are united in our support for ukraine and the need to

provide economic assistance to help stabilize its economy. we are united in our commitment to europe's security and our determination to isolate russia and impose costs for russia's actions. after this speech, the president heads back to his to romed then he is off for a meeting with the pope will stop >> hans nichols, joining us from brussels. now more from moscow -- how do these sanctions impact businesses with exposure to russia? >> sanctions, the threat of more sanctions, this is easily the biggest political crisis american businesses had to deal with in russia for years will stop doctoring gamble, bowling, they are all here. to drill theng most important well in the arctic with russia's oil company. i caught up with andrew somers

who ran the american chamber of commerce here. since this crisis began earlier this month -- i started asking him as everybody just running through the door -- >> there is really several levels. those who have not invested before it is seriously thinking about it. >> russia is now part of the wto. holding back until they see a resolution? the russianstands market very well. those companies are concerned, but they are relatively positive about going forward. >> just to give you a little historical context, the last time something like this happened was 2008 when russia invaded the former severe republic of georgia, now an independent country. somers says it feels little more intense than that it may take

longer to work through and there could be a de-escalation of those tensions. and europeane u.s. union do not introduce sanctions. if that happens, all bets are off. the u.s. department of agriculture isn't waiting for the international monetary congressional aid package to help ukraine. says the united states is looking to import hemp seed from the embattled country and they are out industrial applications for the plant. we have more now on that story from washington. what does this say about efforts to rebuild ukraine's economy? >> it says the u.s. will be in this for the long haul. when people are signing goingents, they are not to be talking about something like hemp seed, yet ukraine is though world's fourth-largest

producer of hempseed. you got to get on the ground and that's what the usda's doing. you won't see it in the headlines, but how the business they are doingw it to build their own economy. >> where do things stand in terms of holding ties and how does it stand as a long-term effort? doesis is looking at what ukraine really have to offer the international community? that does notduct run afoul of u.s. laws will stop ukraine is an agricultural powerhouse will stop this is where they have a position of strength. get can use the strength to their own economy on their feet get that fromon't russia as they look into their oil and gas section. >> where does ukraine stand and how does russia stand to benefit

from controlling crimea? >> this is a centuries old story. responsible for 90 million tons of grain per year. what that oneyou region did in the days of the former soviet union. russia's agricultural regions is crimea will be responsible for 2 million tons of grain this year. that used to be falling under the ukraine heading. many would say it still does, but russia has control of that region and that just one of those subtle powershift you see takes over they territory of another. >> how about the markets? how are they reacting to this turmoil? >> that has been watched closely for the last several weeks. ukrainian ports are big for russian and ukrainian products. that doesn't seem to be much of a problem so far. dry ukraine is getting a little rain and it's nice headlines coming out in

terms of agriculture are fairly normal right now. people are keeping their eyes out on that. >> thank you so much. coming up, when bottom line continues, the fed stress tests for banks -- the result from the second round of test will be released after the market closes today. login a preview when we return. ♪

>> this reminder -- there are multiple ways to watch bloomberg television -- we are on the web at bloomberg.com, on your mobile device, and also on apple tv. the second round of bank stress test will be released after today's market close. a federal -- the federal reserve released the rounds of its first test last week and they revealed as a whole, the largest banks in the united states are well capitalized and would be able to

withstand significant losses and a severely adverse economic environment. my guest is a large-cap bank analyst and joins us now from baltimore. thanks for your time today. in this week's round of tests, banks have to to prove their plans for dividends thomas. buybacks and acquisitions. they can be carried out without driving those ratios below fed minimums. would being below fed rendered --act the banks tear one >> say that again? >> if the banks are below standards in the areas of dividend. i backs and acquisitions, would that impact the tier one ratio at all? >> it depends on what you are looking at. no bank is going to ask for capital or dividend payout that will go low -- that will go

below those standards in the upcoming exam. i'm not sure i understand the question correctly. what you saw from the report last week is these tanks are very well capitalized for a severe economic scenario. ist you will see this week similar results where the banks are not opening up the purse strings only in terms of buybacks and dividends and probably wait another year. at that point, the fed has done their tapering. are going think you to see a full opening of the purse strings until you see that tapering being done. the 12 freshman banks participating in knees for the first time? because they haven't gone through the house as before, is it more likely regulators might raise a red flag? where would these banks run into greate? >> it's a

question and you saw some issues last week with zion bancorp. our belief in looking at this is there 12 new freshman and they are not going to get a pass when it comes to what they are asking for, but they may be more lenient in the qualitative process because it's their first go-round. i would suggest those banks in that for the first time are going to be a bit more subdued in what they asked for until they get their sea legs in the process. i would not expect them to ask for leaps and bounds in terms of what they are paying out, so they will be ready conservative. >> dan ryan, the head of price waterhouse coopers says the average cost for a bank to run the stress test and prepare a submission is $10 million. am i missing something here? how did an investment of that size help to reduce expensive -- expenses, which is what the bank

wants? >> and it's going to go away anytime soon, especially the larger banks and increased costs tied to the regulatory process or just the overall regulatory process when it comes to the bank secrecy act or anti-money wandering, that is not going to go away. i don't think the fed is saying you have to reduce costs. they saying do you have enough capital to withstand the type of financial stress test we went through and the answer is my 17nly yes all stop in or 20 years on the sell side, it hasn't been better. it is at 1.7%. at the end of 2007, it was 4.9% of the hell are the stress test making banks stronger? has it changed the way financial institutions think about risk question mark >> you're talking

about dividend yield? >> yes. >> i'm not so sure it has anything to do with the overall risk. you have some accounting changes when it comes to dividend, the banks raise the dividend white significantly when you had a lower dividend payout. you are not going to see these banks payout earnings on their dividends, but they are paying out a low level relatively speaking. over time, you could see that go to the 40% range will stop comparing dividend yields today versus five or eight years ago it's probably not an apples to apples comparison. >> the fed stress tests involve the following scenario. unemployment would reach 11 and a quarter percent. fall 25%.s would is this fair compared to the smaller banks? >> that's a fair question.

probably not. smaller banks have an issue from a liquidity perspective and depending on what the deposit mix is -- another thing to consider is when you talk about the economy going down that fast and talk about home pricing going down, some of your larger banks have more risk because of their portfolios. if you look at jpmorgan or wells card, they have credit loans and home equity. i think the process is still the best we can come up with and it's a pretty rigorous test that would ensure the largest banks in the country can withstand a financial crisis. analystlarge-cap bank joining us. thank you for your time. quoterket makers was shanks -- erik

schatzker will break that for us on street smart. coming up on "bottom line, is a case of moving the gold coast -- they goal post for last-minute people to file for obamacare? find out when we return. ♪

lex a federal official says the operator of a chicago commuter train that crashed at o'hare international airport admitted she dozed off before the accident, waking only when the andn jumped off the tracks climbed an escalator. the national transportation safety board said the woman had been working as an operator for about two months and acknowledged she had previously fallen asleep on the job for back in february when her train partially missed a station. the woman who was cooperating with the investigation often

worked an erratic schedule, filling in for other chicago transit employees. the deadline to enroll in obamacare is arch 31st. except it's not. it ministration has decided to give some people a little extra time to sign up. megan hughes joins us. was this a surprise? >> it was a bit of a surprise. it ministration really doing an about-face here. you had white house spokesman jay carney saying this would not happen. secretary sibelius at house hearing on march 12 was asked the question would this be delayed and she said it would not be. that was just two weeks ago, so it's a big change in you can add it to the laundry list of changes we've seen when it comes

to obamacare. the small business exchange with delayed for a year and we've seen changes in enrollment as the december deadline was changed. it was a deadline for states to decide if they wanted their own exchange and was extended. the employer mandate we talked a lot about, fines for businesses have been pushed back depending on the size of your business. aboutelay we are talking today relies completely on the honor system. if someone says they try to sign up and couldn't, they would be granted an extension. the administration is expecting a surge near these final days and they are already seeing this third. if there are technical problems were a reason someone is in line but unable to sign up, they want that person to be able to sign up. >> what are the insurance agencies saying? >> i talked to some industry sources and they are waiting to sort out some details. a lot of it depends on how long

they will be given an extension for and how long there will be people still in limbo. their big concern has been people will wait until they get sick and then they will sign up. that's going to mess up their pool. the other issue is they need to figure out who is in this pool before they set premiums for next year. those are the things they are concerned about all stop >> just to be clear, this is just for the federal exchange. but that's correct all stop keep in mind is 36 states that adopted healthcare.gov, the federal website. then you have these other states that have their own systems that maybe are not going to be extending their system. some of them are. maryland and minnesota are a couple of states considering or have already made those decisions. but it could be very confusing as people see these headlines thinking they have a little more time and in fact in a lot of states, they don't.

>> thank you. it is 26 minutes past the hour, that means bloomberg is on the markets. good afternoon. >> let's get you caught up on where the markets are trading. we did rise after we got better than expected data on durable goods. added a third of one percent. a couple of stocks to highlight is mauve auto, the watchmaker. shares are rising after it forecast that are then estimated earnings. of about nine percent and we are also watching corning, guerrilla classes used in many smart phones and has been raised to positive. analysts say shares may benefit from positive trends in

fundamentals as demand for the company's out a diversified. we'll be on the market again in 30 minutes. ♪

lex welcome back to the second half-hour of "bottom line" on bloomberg television. let's check some other top stories we have at this hour. searchers may be closer to theing missing pieces of missing jetliner. a possible debris field was spotted containing 120 objects. hunting forhips are the objects but nothing has been retrieved get. the national weather service has extended a flood warning in the area of the washington state mudslide.

crews using cadaver dogs bulldozers, and their hands have been working through the muck and rain for a search for more people trapped in the slide. the official death toll stands at 17. as many as eight albums have them located and hundreds remain hasing or -- rupert murdoch laid out his succession plan. his son who left the father's namedy nine years ago was as nonexecutive cochairman of news corp. and 21st century fox will stop his younger brother james will become co-ceo of 21st century fox. that is a look at the top stories in the news at this hour. in washington, lawmakers are taking another look at the data breach at target. 40 million credit card numbers were compromised last year. the hearing is the first since the company admitted to learning of suspicious activity a month earlier than let on.

this after a report from bloomberg with -- bloomberg business week ignored warnings from his hacker detection tools. what have we heard so far? >> apologies on behalf of of target. john mulligan, the chain's cfo admitted to lawmakers that target had clues about the attacks we are responding and is trying to figure out why it took so long to react. he said target is asking hard questions. we are focused on what information we had that could have alerted us to the preacher earlier. whether we had the right personnel in the right positions. ensuring decisions related to operational and security matters were sound. we are working quickly to answer these questions. >> he's testifying along a visa executive alongside the chairwoman of the ftc. the hearing comes after the committee released airport citing the many times target

missed warnings and lost opportunities to stop the cyber thieves. there were plenty. talk about bloomberg businessweek's involvement in all of this. >> bloomberg business we got quite a few shout outs in that senate report. our colleague worked with a team of reporters to uncover how hackers got in and always target went wrong in their response. today's hearing appears to have come about thanks to that same exposé, so good job, bloomberg. lex lawmakers have introduced legislation to address the data breach. where is that going? >> senator jay rockefeller, chairman of the day's hearing along with diane feinstein, introduced a bill to address this very issue. it would allow them to said data securities tendered and establish a reached notification system and be empowered when state attorneys general to ring

penalties against companies that fall short of their requirement. it hasn't gone anywhere yet, but with target as its poster child, rockefeller is making a strong case this afternoon. >> inc. you so much. let's talk all it took now. gave jolly's victory outside groups a playbook to explore ways to possibly gain the six seats the party needs to take control of the senate. we've got more now on that story from washington. what did republicans learn from this victory? fax it gave them a great chance to learn how to work together to really deliver a specific message in key races and to not duplicate efforts but add to each other and everything each of the individual groups are doing. let's talk about the republican strategy. what was it? lex as far as the outside groups

went, and we are talking about things like the koch brothers, americans for prosperity, karl rove's american crossroads groups, and many others, they each specialized in a different message delivery system. the u.s. chamber of commerce was the dominant layer as follows -- as far as tv commercials when will stop crossroads and another group did mailers. people were reaching out io of robo calls and knocking on doors them aop it just gave chance to test out these jobs and how they would fit to gather. senator rand paul's role in all of this? >> that was an interesting last-minute decision. this came from crossroads strategists will stop they realize there was a libertarian candidate who could peel off some really important votes, so they contacted senator rand paul who has a fan base from his father's presidential run and had him deliver a specific

message to libertarian voters say you might want to think about voting for dave jolly. he believes in the same sort of economic principles i do and that was very convincing and held down a libertarian candidate in terms of what everyone thought he would receive for votes. >> how effective for those anti- sink at? >> they honed in on an anti-obamacare message. then they went a level deeper saying to seniors in the district, not only might you not agree with obamacare, but look at what it's doing to medicare advantage. a very specific row gram popular with seniors. seniors are going to pay a bit more and lose some benefits. i think that resonated with voters and we're hearing a lot more talk about medicare advantage in florida and other places. >> you mentioned the koch

brothers moment ago. what role did they play in all of this? >> normally, we've seen americans for prosperity on television across the country with these different races, but in this case, they concentrated on the ground effort, testing out their data system and ways to doorknob and deliver specific messages to voters rather than spending the money to go off on television. 200 paid employees across the country, so we will see more of that playbook in senate races ahead. thanks., coming up, it is the fourth longest river in the world will stop the mayors of cities and towns are asking for help. we will ask about investing in the mighty mississippi, next. ♪

>> do you know how that jasmine

scent got into your cologne or how that energy drink that that lime flavor? ,ompanies like food or, create develops and manufactures these flavors and ingredients for the food, cosmetics, and pharmaceutical industries. our middle east correspondent spoke with the ceo about the company's plans for growth. and weove organic growth enjoy organic growth, but no -- part of the strategy is strategic acquisition. plan goingery strong forward. >> what kind of war chest do you have to execute further acquisitions? billion-dollar deals maybe? >> smaller than a billion. between -- around 100 million. with these to agree

types of acquisitions that we are evaluating much bigger positions. lex what areas are you looking you maden mark i know an acquisition just the other week, but what particular areas are you looking to get into? wise, we focus on flavors and health food ingredients. we put a lot of efforts to grow our market share between the u.s. and emerging markets. example is less than 10% of your overall sales. that is a big gap will stop certainly are looking to buy a company in that area or expand aggressively. >> we are looking at positions between india, china and other countries but we continue to .nvest in internal growth we are building a new sector in china and we add more stores

that add more resources in --uggling companies struggling countries. >> mayors and cities and towns from across the mississippi river's are meeting in washington about reviving the economy along the mississippi, the lower mississippi area where $164,000 in revenue for manufacturing, tourism and agriculture. for more on what can be done to help the cities and towns on the region, the mayor of dubuque, iowa joins us. welcome and thank you for your time today. >> thank you for having me. brought in, that's how is that used to improve the economic conditions for the 3 million people who live in that region? all the cities and towns along the mississippi river depend on that river for the income and the economy of those cities. we are looking at it from an organizational point of view that it's an asset of this

country that has not been given it do and the federal legislature, whether it's the flooding or droughts we are theng occur frequently or invasive species or recreational issues. we haveown the river, many issues that affect our economy and we are looking at it run and organizational, holistic view of the entire river. due.u say not given its why do you suppose that is? is it politics or is something else going on? >> i think it really hasn't had a voice, and that's the voice mississippi rivers towns and initiatives are trying to get to the river. i think we are making some progress. we have a memorandum of common purpose with the corps of engineers to help work on the issues they deal with infrastructure wise.

we are working with a bicameral caucus in the legislature of our senators and congressmen along from aer to address it national standpoint. >> mr. mayor, you mentioned the army corps of engineers. what about disaster preparedness? what is your community doing in conjunction with the core to region canthe withstand a worst-case stereo? >> have a flood wall in the city of dubuque and we are responsible for maintaining that. we work with the koran all the river issues as an organization. they were a big partner of ours and we are trying to help them gain the resources to address issues up and down the river. are going to be successful, but we continue to work toward those ends. lex you talk about helping them with the resources. what about it being chronically

underfunded? >> i believe they have a $64 billion backlog and projects. the lockook at any of and dam systems, some of which are 75 or 80 years old. the produce and products that comes through those locks and dams and with the closure of any of those would do to the economy, i think it is high time they start looking at some funding to upgrade those facilities. >> one of the problems your cities and other communities faces involves freight bottlenecks on the mississippi river. the department of transportation said that costs the american economy roughly $200 billion a year. have the mayors, with a plan to alleviate the river traffic and keep commodities moving to their destinations? >> any of those bottlenecks are created by the existing

infrastructure. the only trade surplus that united states has is in agricultural goods and that's made possible by the mississippi river. to the extent that infrastructure works or doesn't work has a tremendous economic impact on the nation. >> what type of feedback have you any other mayors received from congress and the administration? do they understand the urgency of the situation and what are you telling them you and your colleagues need to keep the mississippi safe and keep communities going? >> this is the second year of our organization and we are very pleased with the meetings we have had in washington with our congressional caucus. obviously, we are planning to grow that and when we talk with them, they see the same issues when it comes to funding. that is a cross board in any one of these different areas of the federal government.

funding for federal projects is a big issue today. infrastructure needs that will have an impact if they are not addressed and it's going to be a very negative impact on the nation's economy. >> the mayor of dubuque, iowa, joining us from washington. thank you for your time. >> thank you very much. , doing your weekly grocery shopping at the local pub. -- wel explain will stop will explain. ♪

>> welcome back. this is "bottom line" streaming on your tablet to my phone and on bloomberg.com. it's time for hot shots, a look at some of the most compelling images of the day. need milk, pet food, toilet paper? head to the nearest ending machine. locals from a village in england's derbyshire county have taken to this giant vending

machine for daily needs like bread, bacon and eggs. the last village shop close a decade ago and now residents have tried 32 kilometers for staples. the machine? find it that the local pub. asia's young riders battle it out for the challenge cup over the weekend. spills like this and this were par for the course will stop three japanese writers dominated the race. next up is indonesia in may. in italy, a giant welcome mat for president obama. plowed the statue of in verona.a field it took the artist five hours to cause -- to carve the image was -- using his tractor. for plantingturned as usual. stay with us. another check of market movers is on the other side of the

break when bottom line continues. ♪

i 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 echo i'm mark crumpton reporting from new york. on the market is next. i will see you tomorrow. >> it is 56 past the hour, which means bloomberg tv is on the markets. stocks are selling off as we head into the final hour of the session. all the major benchmark indexes selling off, the nasdaq off the most after, didn't -- after comments from president obama saying russia is testing the international order by annexing crimea. clearly stoking some concern

full top earlier, those talks were higher after we heard a report durable goods rose more than forecast for the month of february. betty liu sat down for an exclusive interview with the federal reserve bank president of st. louis who is speaking at the 17th asian banking conference in hong kong. eddie started asking about that policy following last week's meeting and the first news conference given by janet yellen. >> i don't think policy has really changed. the committee explicitly said while we changed the language, we are not changing the intent of the policy. i think that message is getting through to market them in the right way to look at it. >> that he asked about the plans to taper the bond buying program. lex i think there's a little ambiguity around the notion of when the qe program ends. does that mean october or does it mean january? sometimes you

see different interpretations of that and frankly, the community has -- committee has not really talked about that. that's what's getting the timing little off for different people. >> i want to stress this is not a calendar based policy, is a databased policy. of a timelineetch people have in their heads but that doesn't mean that is what the committee is going to do. what we will do will depend on the data. >> plans to continue to taper are dated and in him so it's important to know what that stands on the state of the economy. the u.s.ard to predict economy. it can go in a lot of directions . i think we are set up for a good year even if the data is soft in thefirst half, i'm sorry first quarter, tracking estimates for the quarter are

low but i think we are in good shape to grow it for the remaining quarters of the year and probably hit three percent for the whole year and better in the year after that stop i think we are in great shape. >> you can see the full interview on bloomberg.com. let's show you what's happening on the treasury markets. treasuries rallying a little bit, sending yields down about five basis points and trading just below 2.7%. big bond to stocks, our deal of the day, dish network and directv in talks with shares surging this afternoon. we learned that the chairman of dish contacted the directv ceo to discuss a merger. tbh boardo watching -- the owner of tommy hilfiger and calvin klein brands with earnings that topped analyst

estimates. guidance however fell short. "street smart" is coming up next. ♪ >> hello, everyone and welcome to the most important session of the hour. target heading to the hill. executives testifying on the massive data breach that they knew about a month before their customers did. what took them so long to tell everyone and our other retailers at risk? >> plus, king digital in the virtual reality deal. are the signs of a growing tech bubble? all that and more coming up right here on " street smart." ♪ >> we're in the red. the