>> from bloomberg had an -- world headquarters in new york, this is bloomberg " bottom line." i am mark crumpton. today the u.s. supreme court hears arguments in the copyright case between aereo and broadcasters. signs of cooling in the u.s. housing rebound. >> to the viewers in the united states and those of you joining us from around the world, welcome. full story of the stocks and

headlines making stories today. peter cook has an interview with the ceo of marsh mclennan. antennae look at aereo manufacturing plant. we begin at the u.s. supreme court as justices hear arguments in the controversy alsial aereo case. >> no clear answer to how the court will roll. certainly a lot of tough questions. justices were concerned they were using a technological gimmick to get around the broadcasters copyright. that said, also a number of justices that were concerned about the implications, in particular they asked about cloud computing and whether the ruling might limit that industry. >> earlier today on bloomberg, especially addition of "the in l loop" the ceo gave

exclusive comments. >> i do not think anyone can forecast what will happen. that.a fools game to do mainly because i think we feel very confident in the facts. i think as a matter of law, we are dead right. it is the united states supreme court, no one can predict. >> you are giving us a sense of the copyright question yesterday. is that something could justices seem to zero in on today.co >> they spent a lot more time talking about technology than the actual ball. this case is at the core about copyright law. in particular, there is a provision that says if you have a copyright, i cannot publicly perform your copyrighted material without your permission. the question is whether aereo, whether they are publicly performing the broadcasters content when it transfers -- when it uses the antenna to let

users use them to pick up thousands of copies on their own. >> do we have any sense of what the broadcasters are saying about that argument? >> broadcasters are saying let's not be lost in the technology. bottom line, it is something that everyone else pay for if they are going to distribute it to other people. cable companies and satellite companies. one of the justices made that point today, basically saying you are the only ones not paying for the content. it is really the big picture broadcasters are looking at i. >> do we have any sense of how this might rule and what the overall implications will be for whichever side wins? wouldruling for aereo have much bigger implications. we will just have to see what will happen there. that would be of much bigger

implication. other services could join the cable company and they could form their own service. some broadcasters are talking about converting to cable channels. the industry will really change if they win. if they lose, the implications will be far less dramatic. may just be business as usual. we will have to see how exactly the court rules before we say that for sure. extra earning us from outside the high court. thank you. senior west coast correspondent jon erlichman here in new york for a few days and joins me. the implications are huge. >> definitely. you are talking about an industry, the broadcast industry that relies very heavily on the money gets paid. the numbers people have heard a lot about over the past couple

.f days over the past decade those numbers will continue to climb. you have an industry that wants to protect the money it is able to generate from channels. >> speaking of generate from shows, do we have any idea what dollar amount we are talking about? >> certainly when you look at where the money is going to go for the next decade, there have been discussion from the industry generating $8 billion from the paid tv players. think about the technology behind what it is all about, it is a really interesting development. we have a little bit more on that now. >> at this manufacturing , machines are assembling hardware. this is the antenna. >> we have found a great design him a did a lot of work on it,

customize it and achieved great informant for the size we have. >> they gave us an inside look at the busy factory where the final product comes together. our product that is revolutionizing the way we watch broadcast tv. when you see have the technology works, it is different than using old-fashioned rabbit years. they run each antenna to an individual subscriber but they are not mounted on top of the tv. instead, they are stacked on boards and slide into a box that sevencommodate 5000 to thousand antennas and mounted on rooftops in cities across the country. they send the signal to a transcoder and then allows you to stream online and pause, rewind, and record. >> a standard master antenna is all the spectrum and pushes it down the wire to you, whether you as a customer wants it or not.

this is a model in which you are only listening to what you want. >> what is the capability of what you can manufacture? >> it will be huge numbers. many more than what we put in the field already easily. >> they plan to operate in 22 cities by the end of the year and have built the business to accommodate whatever level of demand comes its way. >> we can support 5000 customers and make a profit on that. and then we can grow on that. it is a very analog business model. >> when you think about the size of the antennas, one of the things you like to point out is if they were to make it larger to make a go and grab a lot of different signals but it is only going after one signal. perhaps that plays into the argument it is more of a one to one relationship. >> thank you.

this disclosure, bloomberg television has a distribution subscriberseo, get two dozen over the air stations plus bloomberg tv. this was not only big headline out of the supreme court today. justices reese -- released a decision dealing a blow to affirmative action, racial preferences at michigan's public universities. megan hughes is following that case. what did the justices say about the band? first, let's talk about what is at issue. a voter approved ban on michigan school admissions and hiring back in 2006. the justices by a 6-2 vote said it was a legitimate subject be put before michigan voters. to be clear, the decision was about whether the states ban amounted to discrimination. not about whether the programs themselves did. just to put this into perspective, michigan one of 10

states that outlaw race conscious admissions. this could encourage other states to do the same. the back story here am a a decade ago to the university of michigan one another famous case that actually allowed institutions around the country to view race as a factor in that mission. today's decision the loaf eyes that decision for the very same schools that pop for it. also turned around a federal appeals court decision that said michigan's ban had essentially stripped minority of the constitutional right. blackents point out enrollment is down about 30% since the ban took effect. including of the ban, the state attorney general from michigan who fought for this, they point out 58% of michigan voters approved a ban. he said in a statement the u.s. supreme court made the right call today. the state constitution requires equal treatment in college admissions because it is

fundamentally wrong to treat people differently based on the color of their skin. justiceses -- two dissented. justice elena kagan did not take art. she was the solicitor general for the administration so she was not able to get involved in this case. >> was this a surprise the justices ruled this way? >> it was not a surprise. chief justice roberts leaning to decision.nd in the last term they overturned part of the voting rights act that was designed to protect minorities at the pole. another decision that ordered tougherjust -- screening. this is really in line with what we have seen from the course so far. megan hughes, thank you. since 9-11, the u.s. government has provided a backstop in the event of another terrorist attack. time for the backstop to end?

the ceo of marsh mclennan says no. we will tell you why when we continue in just a moment. ♪

>> now the latest on the crisis in ukraine. vice president biden warned russia " time to stop talking and start acting to reduce tension in ukraine." the vice president showed support for the besieged nation, $50 billion in aid for political and economical change. he called on moscow to protect separatists to vacate government buildings and check points except amnesty and address the grievances politically. >> no nation has the right to simply grab land from another nation. has that right and we

will never recognize russia's illegal operation and crimea, and neither will the world. as was demonstrated by the overwhelming vote that took place in the security council and the general assembly. biden's tripdent comes as an international agreement aimed at stemming the crisis appears in doubt. the insurance industry keeping a careful eye on another looming deadline in washington. at the end of the year, the terrorism risk insurance program put in place after nine/11 will expire. insurance and leader industry backstopre to stop the poses a risk to not only the economy but not everyone is convinced. peter cook spoke to the ceo of marsh mclennan. he joins me now without exclusive conversation. good afternoon. >> the government stepped up as a backstop when it was clear

that private insurance industry cannot afford to offer terrorism insurance given the risk of another attack at that time. more than a decade later, critics contend it has become another washington bailout that taxpayer simply cannot afford. very mclennan ceo has a different view on that. he was in washington to release a new report on the issue and what might happen if the government backstop went away. we spoke on capitol hill. did not getogram reauthorized, you would see pretty big of peoples in the workers compensation market and property market. i think it would have an impact on growth and employability. a lot of people out there who look at the program and remember when it started back in 2002 and they remember the words, temporary program. such a bigs become issue to the insurance industry, business community today, so many years later, why has there

not been an end to the program is one question i asked? that is a good question really an unfair question. the circumstances that existed that made a program like this necessary still exist. you cannot take an industry like insurance and make insurance companies provide infinite capacity. be against all the underwriting principles. many people do not realize workmen's compensation insurance has no exclusions. that may cause workplace injuries -- injuries. it would only write the coverage at all. particularly for metro areas and companies in sensitive industries or those that have high concentration of employees, that exposure is always going to be there. in fact, i know the senate has been talking about a bill in the

reauthorization for another seven years, and i think that is terrific. seven years from now we will have the same issue. i would sather -- rather see this done on an evergreen basis. >> no one in this town likes the word bailout, but effectively this is what it would do if god forbid there was a terrorist attack. >> i think we have to look at separate outn property insurance and workman's compensation insurance. property insurance the market will pay. it will be a very ugly situation if insurers were forced to provide unlimited terrorism insurance with regard to large property risk. i think what you would find in the chill on investment, because there is no investment without insurance and insurance levels would come down. as each company evaluating their own exposure and capability. the programat itself, this actually works as

intended. this is an ideal public/private ownership arrangement. it is not a bailout. it is actually a backstop. nofederal money spent, taxpayer money spent. all it really means is the federal government would act as the reinsurer before losses in exceeded $1e million. each insurance company would have their own deductible. a deductible equal to 20% of the gross earned premium they have from the year before. this is truly a program that would only attach in the event of a catastrophe. >> even supporters in the senate bill are calling for a greater stake in the industry itself. 20% deductible and raising the co-share, the percentage the industry would have to pay out in the event there was an attack on 15%-20%. >> i think in both times where

reauthorization has occurred in the past, there has been more shift from the theoretical private backstop or public backstop to private companies. not surprising there is a big shift toward private companies as well. lex we are hearing pushback from the industry. it has competitive impact, because the burden falls more significantly on midsize and smaller insurance companies as opposed to larger. in april.e are the deadline december 31. what is your sense right now? year.a midyear election -- midterm election year. how worried are you this does not get done? ceo in their pate to were read. i have been in the brisk business for 30 years. all that we can tell is the prognosis is still pretty good. has aality is uncertainty

chilling effect on business. from that standpoint there are actions already being taken place today that have an impact today. a subtle impact. anticipation that in the unlikely event that it is reauthorized, what would the impact be? for example, certain insurance companies that are declining to write workmen's compensation risk or are pegging the expiration dates with december 31. committees in both the house and senate expected to take up the issue when they come back from the easter recess in the next couple of weeks. given this is an election-year time already running short to get anything done in this congress. the clock is ticking effectively. you will hear more about it in the coming weeks and months. anyone really talking

about not extending the law at talkingmost people about extending it but perhaps limiting the government backstop a little bit more and asking the insurance industry to take on more of the risk. >> peter cook with the exclusive report. thank you. back with an on the markets update for this tuesday. stay with us. ♪

>> this reminder, there are multiple ways to watch bloomberg television. on the web and that mobilerg.com, your device and apple tv and amazon tv. coming up on 26 minutes past the hour were. -- past the hour.

julie hyman joining me now. do with theo combination of factors. corporate earnings, some of them coming out higher than expected. we will talk about that in a moment. a lot of deal action, particularly in the pharmaceutical industry. the nasdaq clear out performer, up almost double what we are seeing for the s&p and dow on a percentage basis. a couple of individual stocks, harley davidson. i mentioned earnings. shares setting a new five-year high after they posted first-quarter profits that beat estimates. the move toward lighter weight hikes have been winning over international writers, crossing overseas sales to rise 11%. also looking at netflix. the online video subscription service planning to charge new customers a couple dollars more each. that coming on top of an earnings beat for netflix.

in three quarters of a million internationally. that is higher than forecast by the company. more on the markets in 30 minutes. ♪

.

. . >> welcome back to the second half-hour of "bottom line" on bloomberg television, i'm mark crumpton. thanks for staying with us. let's check out the top stories we're following for you at this hour. president obama plans to visit a town near seattle where a mudslide left at least 41 people dead. dozens of homes were buried in the town of oso, a an hour northeast the seattle. crews continue to dig through the wreckage in the search for bodies. the confirmed death toll from last week's ferry sinking off the coast of south korea stands at 113. another 190 people are missing. rescue officials say most of

the bodies in the submerged ferry have been found on the third and fourth floors where many passengers seemed to have gathered. many of the people onboard were high school students and they were housed in cabins on the fourth floor. a group of ranchers, farmers and indigenous leaders held a ceremonial horseback ride from capitol hill to the national mall in washington in protest against the keystone pipeline. this as nebraska's governor asked the state's high court to dismiss a challenge to the pipeline. the court case is delaying the white house's review of the proposed transcanada pipeline project. the court may not hear the case until september and may not rule until after midterm elections in november. that's a look at the top stories in the news at this hour. u.s. existing home sales headed lower for a third straight month hitting their lowest level since july of 2012. a senior economist at wells fargo securities joins us now

from charlotte, north carolina, welcome back to "bottom line." always a pleasure to see you. >> thank you. thank you so much. >> this has been going on, as i just mentioned, for three straight months. it's also the seventh drop in existing sales in the past eight months so this isn't an aberration, it is a trend. has the recovery stalled? >> you know, that is a great question. of course anything that's more than three months is going to give some indication of a trend. and we do know the recovery has slowed. i wouldn't say that it's necessarily stalled. i even think looking at this headline number gives some view but the underlying details give a little bit more of a supportive view. of course, if we look at the investor transactions, we saw less investors and we saw more first-time home buyers in the market. and that is exactly what we want. we want a healthier mix of sales, whereas not so much

dictated by the stress transactions. >> let's look at the geographical breakdown. sales rose in the northeastern and midwestern united states last month but fell in the west and the south. why the regional disparity? >> on a month-to-month basis we can definitely see regional disparities that make no sense or make very little sense. i think pulling away from the trend, pulling away from the monthly data and looking at the trend, we still see that a lot of the activity that continues to happen is happening in those hard hit areas. we also saw those numbers reflected in fsha numbers. of course today when we look over the past year, the home prices were the highest on a year over year bace and i think the trend hasn't changed. i just think that in the northeast, of course, that's a bit of an aberration on a month-to-month basis. >> what role did weather have to play in all this that severe

winter weather we experienced, particularly here in the northeast? >> yeah, weather definitely played some part. and i don't think that we can -- we would be remiss if we didn't have that as a part of our calculation. of course when we look at completed transactions which existing home sales are, we of course see that those are lagging numbers. and we won't start to see a pickup in existing home sales until next month and the next after. of course, january, february, and march, slowed activity even more. but whether it was just one part of the story, mortgage rates increasing was another part of the story. >> why are we seeing continued improvement in sales of higher priced homes, those costing $1 million or more in nearly every other category, sales fell? >> i think that when you look at the general trends in the economy, we're continuing to see those higher skilled

workers, those technical positions, that is where we're getting the most income growth, and that is where we're getting activity across the economy, not only just in home -- in overall home sales but also in prices. we're also seeing that tradeup buyer. but one of the things we're hopeful about is this increase in the first-time home buyer. even though we've seen a big number in distress, that first-time home buyer coming into the market gives us the sense we are headed to a sustainable housing recovery. >> anika, home sales are slowing but rising prices have outpaced wage growth. that means even with mortgage rates still near historic lows, homeownership is still out of reach for a lot of americans. do you see it changing any time soon? >> yes. i don't necessarily see this changing. of course, rates are still at history -- historical lows.

when we look at the affordability, it's getting away from some borrowers. however, we still have to understand, these are still very low rates. we're also continuing to see a lot of renters. so that dynamic is still going to play a big role in the housing recovery. we haven't changed our story. we're still looking for a slow housing recovery, but a recovery nonetheless. >> anika, we have about 30 seconds left. what's the outlook for the spring and the summer? are we going to see some momentum building in the housing market at that time? >> yeah, we should start to see some momentum once we get past the weather issues. of course, we should see that existing home sales increase somewhere around a 5.2 million number. we should see home prices moderate a bit but should still remain solid, and we should see an increase there and we should see new home sales also

continuing to increase from a very low level. >> anika khan, senior economist, wells fargo securities, joining us from charlotte. always good to have you on. thanks for your time. >> thank you so much. >> up next, the latin america report and the opening of an investigation into exports of american sugar. we'll be right back. ♪

>> bloomberg is the only business news service being offered on amazon fire tv. and remember, if you missed any of our interviews, you can now watch them on bloomberg on apple tv. it features live streaming and on demand videos. welcome back to "bottom line." in the past three years, israel cybersecurity industry has grown from a few dozen companies to more than 220 firms. one of them is aroto. the startup has received funding from eric schmitt's firm innovation endeavors and

from investors in companies like kayak and angry birds. bloomberg's middle east correspondent spoke with the c.e.o. and asked him why the company thinks it could have caught edward snowden. >> basically profiled them and literally build the profiles like you have in facebook. and based on those profiles would create an interaction graph between all the entities. again, as you have in facebook, when you're posting a picture or making someone your friend, behind the scenes, facebook creates an interaction graph to find friends very quickly. we build the interaction graph to find abnormal behaviors in tax and securities issues but we need to connect them into a story and provided our customers the entire story and not a one-time, single event about the security. >> and you're in a spot to set it up after a bank contracted you and you kind of hacked into

the bank's active directory from the inside and your main target is the first is banks and the securities office in new york. >> you're right. it's basically an interesting story because i was the co-founder and c.e.o. of a consulting services company and one of the biggest banks hired me to prove them what an internal employee or a hacker can do inside the network. so i was sitting there thinking how can i build my attack inside a network and then i realized that everyone has access to active directory. and then i manage after less than two hours, i managed to steal an identity of key bank employees and conduct financial transactions on the name of the banks and basically wreak havoc, everything is game over. and this is how i basically founded the company. >> and just briefly, you have $11 million from eric schmitt's fund and from accel brothers. is there plans to raise more

money? >> no. right now we have the amount of capital to move on and get the income that we want and expand the company in the u.s. and to london and focus on the finance will industry. >> but you're not profitable just yet? >> we have our paying customers right now and this is the start of the company. the setup of the company at the moment. >> it is time for today's latin america report. su keenan joins me with details. good afternoon. >> good afternoon, mark. allegations that mexico has been dumping sugar on the u.s. market causing close to $1 billion in damages has triggered two government probes. the commerce department and international trade commission are looking into claims that mexico is exporting far more sugar than it has in the past and at a much lower price. america's sugar producers have been urging the u.s. to take corrective action. filing petitions that document their view. mexico has caused the collapse

of u.s. sugar prices. prices are down 50% from 2011 and hurt wide segments of the sugar industry. if you think it benefits the consumer, phil hayes with the american sugar alliance told me that both farmers and consumers lose here. prices for soda, candy, and other sweets continue to rise. and the taxpayers lose as the government spends hundreds of millions to halt such dumping. mark? >> sue, how bad is this problem? >> while the government has probed dozens of trade violation cases, they say the industry statistics are compelling. american and state governments subsidized 20% of the sugar industry and in the share of the u.s., the sugar market captured by mexico recently doubled. according to the american sugar alliance which represents the producers, mexico sugar imports surged above 70% last year and that's from just 30% of all imports, including suppliers such as brazil and india back in 2011. mexico has denied the claims.

a representative told the u.s. international trade commission sugar prices simply have returned to historical levels. >> sue, any indication why the timing of this is so delicate at this point? >> well, the commerce department has indicated as such. mexico has special trade arrangements with the u.s. because of nafta and trade talks are underway. secondly, mexico is struggling with its own internal debate over food label which is warn about sugar and was one of the highest obesity rates right up there with the u.s., mexico's new rules about sugar intake have been criticized as actually encouraging it. that's your latin america report. mark? >> su keenan joining us. thank you. coming up, new technology that takes selfies to a whole new level. "hot shots" is next. ♪

>> welcome back. this is "bottom line" on bloomberg television. streaming on your tablet, your phone and bloomberg.com.

startup entrepreneur chris robinson never built a boat before and admits a tsunami is unlikely to hit his home in silicon valley but spent the past two years building a 22-foot long, eight-foot high, 0-foot wide tidal wave proof pod made of plywood and epoxy in his back yard. we went to palo alto to check out his progress. >> when i started, i just, you know, bought 20 sheets of plywood and started cutting. i don't know how to build a boat and was a good design for me and basically was two shapes, one is a sphere and one is a cylinder and just put it together. the tsunami ball is a 2 1/2 feet tall, survival boat made of plywood and epoxy. can you put 10 to 12 people

there. i got the idea for working on it, i was in a startup incubator in silicon valley and in one week we had a presentation by an astronaut talking about how asteroids could hit the planet and we should divert them because they cause giant tsunamis and two days later the japanese tsunami hit. i spent a year in fukushima and you imagine the people you knew and friends you had and wonder if they're ok. it was a hard thing. the idea to design something that will be comfortable on land so that if you lived in a place that had tsunamis, it would be in your back yard and when you'd hear the alarm and the family would climb in, you'd be ok. it will sit in our back yard somewhere and possible we'll try to do a deal where folks can come and check it out and spend the night in a b&b deal. i don't know what i spent so far. i kind of look at it i'm taking my retirement early, while i have the ability to jump up and down and lift heavy objects,

i've been at some fairly successful startups which helped with the budget for the boat. the biggest one was paypal and at some point i was at facebook. but what it's really done is allowed me to think very creatively about problem solving. there are people who are making spheres, tsunami balls in japan that are very cost-effective that didn't exist when i started the project but think this is more like an art project than a business. >> it is time for "hot shots." a lot at some of the most compelling images of the day. just because you want to be protected from gunshots doesn't mean you have to end up on the worst dressed list. a colombia fashion designer known as the armani of bulletproof clothing recently staged a fashion show in mexico showcasing his latest collection. the clothes are meant to protect the wearer from tasers, revolvers, and ak-47's. for those who can't get enough

of themselves with their smart phone selfies, you can now get a selfie in 3-d. a company called shapeify created the machine to allow people to scan themselves and the scans can be turned into personalized 3-d figurines. the company says they can even show tattoos on the skin. what happens when you're a poodle given an armadillo head with painted on images of a buffalo on one high leg and a horse on another? you win a pet grooming contest? dog and cat owners sprayed and painted their beloved pets for a chance to win $1,500 and a hair dryer. paisley, the white poddle looks like a confused creature from the wild west took first surprise in the coming dog cat doer it. -- category. people say it's a good thing cats and dogs are colorblind.

stay with us. another check of "market movers" is on the other side of the break. ♪

>> am i the only one that feels sorry for paisley the poodle? get the latest headlines at the top of the hour in bloomberg radio and streaming on your tablet and bloomberg.com. that does it for this edition of "bottom line." i'm mark crumpton. "on the market" is next. i'll see you tomorrow. >> it is 56 past the hour. indeed, that means bloomberg television is "on the markets."

i'm julie-an. ratings tocks based on today. sector report, metals and mining are in. yamanin gold and eagle mines reached a friendly takeover deal for it. talks about barrack and numon hit a snag a it was agreed to a merger. more on how the m & a will affect the merger, i'm joined by ken hofmann in princeton. you recently gave a speech in hong kong talking about a boom potentially in mining acquisitions. what sort of is driving it? what did you talk about? >> the tight of my speech was "here comes the boom" in the metals and mining industry. basically what you've seen is a coming together of a lot of different things. number one, you've seen the

gold companies in terrible shape. they've underperformed the s&p by a stunning amount. i think if you look over the last three years, the s&p is up 20% and most gold companies are down 60% to 80%. the gold companies are all trying to figure out, what can they do to get themselves back into good graces of the investors. part of it is going to be they're going to sell themselves to private equity or sell some of their assets. part of is will be they're going to come together and try new versions to come together, sort of glenncor coming together with xtrada and reducing their debt and trying to improve their performance. and so that's what sort of is the barrack and numont rumor is they want to take $1 billion of cost out of their combined companies. >> ken s does this also sort of say these companies are not very optimistic that gold prices are going to reverse and they'll continue to trend downward and they need to do

deals like this because of the era at least for now because of rising gold prices is at an end? >> it's hard to say but they are looking -- when you talk to the management, i guess you meet a lot of c.e.o.'s and what they say historically is the valuations of gold miners is extremely low if you look at a long-term history. what they're saying is now is a great opportunity if i have cash, it's a great opportunity to buy. if i have a lot of debt, maybe it's not a bad time to look for somebody who has some cash and merge because if this is going to continue with low gold prices we want to be in a safe harbor. >> how long you think the boom will last? there are only so many players out there. >> yeah, think about this, there are 1,700 private equity firms that go after energy. there's 96 who go after metals and mining. so a lot of private equity funds are coming into this space to the tune of around $40 billion in the last two years. i think private equity will be a big part of this a&a boom and could last a few years.

>> thank you so much. we'll be looking for more of these deals happening in metals and mining potentially and maybe we'll get that barrack and numont one and get the kinked works out. we'll be on the markets again in 30 minutes. "street smarts" starts next. ♪

>> i'm matt milliner for trish regan. six days strong. big phrma deals mean big stock gains as health care shares rally. we'll tell you who is selling and who is buying. >> "street smarts" starts now. >> welcome to the most important hour session. 60 minutes left to closing bell. aerial versus american broadcasters. the supreme court questions the startup threatening to seriously disrupt the way you watch television. are we fearing the end of aereo or are cable bundles about to be