>> from bloomberg world headquarters in new york, i am mark crumpton, this is "bottom line." today, president obama discusses foreign policy at the west point commencement. also, as fighting intensifies in eastern ukraine, the country's foreign minister speaks exclusively with bloomberg television. we will have a timely discussion on the value of a college degree. ♪ to our viewers in the united states and those of you joining us from around the world, welcome. full coverage of the athens

headlines today. megan hughes looks at the chamber of commerce's numbers on climate change. we begin with julianna goldman at the white house as president obama outlines his foreign-policy plan to graduates at west point. good afternoon. >> good afternoon. think about the president posses speech today as the state of the union address for foreign-policy. it is something he has been thinking about for months, how to frame the next era of u.s. foreign policy and what that should look like when he think about the u.s. emerging from a time dominated by wars. what should the war -- the role of the u.s. the when it comes to counter terrorism and more broadly? usually they will concede they had not done a great job making an affirmative case for u.s. ofdership in part because distractions that had come up beyond their control, ranging from serious to russia to revelations by edward snowden. a lot of this speech was

president obama on the defensive rushing back against critics who had claimed he is timid or indecisive in confronting some of these foreign-policy matters. most measures, america has rarely been stronger relative to the rest of the world. otherwise, who suggest america is in decline, or is seen as global leadership slips away, are either misreading history or engaged in partisan politics. the president said the biggest threat to the u.s. continues to be terrorism, but that it is more diffused now and ranges from north africa to the middle east to south asia and the best way to confront and combat it is to build partnerships and fund those partners around the world. >> speaking of funding, the

president announced in anti-terror fund. tell us about congress> he is asking , afund up to $5 billion counterterrorism fund. it would essentially be capacity building, training and equipping other nations to combat terrorism, and funding us-led missions as well. officials and the president in his each said serious fits nicely into the model. you would have money going to countries like lebanon, iraq, turkey, and jordan, to confront the refugee prices they are facing -- crisis of cross the borders. also, the president alluded to this and omission -- administration officials clarified it on a conference call later, saying the president wants to work with congress right now to its or other ways to help support serial posses moderate opposition. administration officials said it could include the possibility of

some kind of military action as well. >> julianna goldman is welcoming us to the white house. thank you. a strike against rules on climate change, the nation's biggest business conglomerate is warning utilities and consumers could cost billions of dollars of your. commercehe chamber of saying here? is it against the white house for also? >> not quite. theo not know a lot of details of what the proposal is. it is hard for them to be against it. the obama administration is its plan monday. that the chamber of commerce is coming out of this report today with a preemptive strike. there are dire warnings. taking a look at what it could be. if the white house announces an ambitious plan to cut by 40% in 2030, the report says that the economy $50 billion a

year. $234,000, this report does, would be lost here more than one third of coal-fired to capacity to close by 2030. harvested areas would be southeast to midwest because of fuel mix. the chamber is not taking a position for or against just yet. here is the chamber earlier today. we are not planning litigation before we see any rule of litigation. we might just love it. that being that, we would like in any regulation to be part of it and make it at her and have toustry voice it's concerns show disruptions that may occur in particular parts of the country that the epa may not fully understand very >> keep in mind, the chamber was a huge component to the cap and trade bill, which ended up telling. maybe no surprise early today

very >> the eca has not released its recommendations yet. where did chamber get its numbers? >> it is an analysis of the resources defense counsel report on what the epa could the ashley do. -- potentially do. that estimates a cut in carbon dioxide pollution of somewhere between 21-31% by 2020. the chamber extend that out a decade. it found a big contrast to what we heard in the chamber. a savings of somewhere between $21 billion to $53 billion. their calculations includes damage avoidance from climate change. different perspectives and these group. demand will actually steadily decreaseor actually the chamber, saying it will increase. >> thank you. the professor whose best-selling

memoirs, growing up black and female, made her a beloved storyteller, is dead. she died today in her home in north carolina. "i know why the caged bird sings " was released in 1970. her autobiography sold more than one million copies and was translated into 17 languages and spent two years on the bestseller list. it elevated a once struggling writer to an international literary celebrity. she was nominated for a national look award for her child would -- childhood memoir and a tony award for her stage acting, while winning three grammy awards for best spoken outcomes. she was 86 years old. ♪

>> on a trade mission in israel.

in the nine-day trip, the governor hopes to move more israeli companies to his state. massachusetts was its 12th largest in the u.s. since 2013. and asked him up about industries he is focused and. we are not looking to come home to build things together. we're doing things with the israeli government joint cooperative investments, for the benefit of both massachusetts benefits. >> it is interesting you mentioned water. we came with life sciences and biotech ear the clean tech community and digital technology representatives ranging from cyber tech allergy to big data.

when we were here, and entrepreneur stood up and said, what about water and i said, what about it? they said, we have an interesting crustal -- cluster. we would like to know more about them. built a water cluster and there are a couple of hundred companies doing business and those from israel. >> did i hear or read correctly withtechnology helps also the boston marathon? >> very much so. we had marvelous cooperations and tech companies and security following the marathon bombings last year and preparing for the merit on this year, a very successful occasion. qwest is there healthy competition or rivalry?

>> is a friendly rivalry. there is a very strong start up ethnic in israel. a lot of imagination and innovation in the tech centers here in limited markets. the innovation economy at home in massachusetts is boeing. why wene of the reasons are growing two or three times faster than our national road rate. is really rooted companies in massachusetts are growing two or three times. verygrowth rate has been productive as a relationship for us. speaking at the tel aviv stock exchange. more now on trade. transatlantic trade and investment partnership is on track to become the largest free-trade agreement in the world. studyl recently said progress was made at the fifth round of negotiations. firms a partner in a law

and served as a trade negotiator in the office of u.s. trade representative kirk from 2003-2008. he joins us from our washington bureau. welcome back. it is good to see you again. qwest great to be back. good to see you. about thes talk more u.s. and european union. they are trying to reach an agreement on eliminating tariffs, but they also focused on getting rid of regulatory requirements. how do you reduce regulatory cost without reducing other standards like safe the omissions? >> you hit the nail on the head. the challenge in the transatlantic negotiations is not so much the tariff negotiations. there's our -- those are relatively low. trade areas. the real opportunity and upside for u.s. business and for ae you business is to reduce regulatory

compliance cost. i will give you an example. regulators anda european regulators. reduce and put a duplication and harmonize as best as possible regulatory , safety standards for automobiles is another huge area of opportunity u.s. and european carmakers is trying to level off the standards there. you believe trade engagement in the asia-pacific and with the european union is a top priority for merrick and -- american union. is that now a question? does it throw a wrench in things? >> i do not think it does.

the top level of the european commission, it continues to be ,ery port of of negotiations the transatlantic negotiations. inhough there was some shift the european parliament, there will be a european commission succeeded in the fall here there is a consider role amount of support. i see those negotiations continuing while making consistent and steady process -- progress this year. i do not see a sick if the outcome problem from the results of the european parliament election. qwest as you know, china is always in the middle of trade discussions. what type of impact might the recent indictment of five military officials on hacking charges, what might that have on bilateral relations, including trade in washington and beijing? >> it is an important question.

there could be several impact here the first and more important point to make is that, while it is an immediate death in relations causing immediate ties, thebilateral expected july meeting in economic dialogue, the highest we have with china, will go on as scheduled in july in beijing. the bigger concern here is really china's use of intelligence services to help the private sector gain commercial advantage over the u.s. and other trading is area that is an intolerable situation. takingto the right wing aggressive action in response to it. a sickness in difference between companies using economic espionage against one another, the one hand, on the other hand, china is using intelligence gain the upperp

hand in commercial markets. that has hurt the administration so much. qwest i have to ask about the new leadership in india. he was sworn in as prime minister yesterday, once are from entering the u.s.. he will have to tease trade disputes with the u.s.. how would you categorize the current trade environment? trade has beenia constrained for some time because of the difficult commercial circumstances. the u.s. orders and companies doing business in india have particularlyse related to intellectual property requirements of a technology transfer, and other localization barriers there the bilateral dialogue between the united states and india has strained for some time. there is hope with the new administration the prime minister will be interlocutors with the united states.

he has a pro-trade and progrowth agenda. we hope that will spill over to bilateral trade as well. let's all right. thank you so much. up next, the latest on the crisis in the ukraine. we will be right back. ♪

>> what was one of the deadliest crashes the country has seen since the crisis began. >> [indiscernible]

milton groups in the ukraine. it would be easier and faster to restore order. >> charlie rose is focusing on the ukraine. withuest host spoke victoria, the assistant secretary of state for european and eurasian affairs. they discuss the outlets of the country now that ukraine has elected a president. ukraine has a new leader, known as the chocolate king. he has made over $1 billion and is known as an oligarch, the shorthand in the region. he also gained enormous respect with a lot of voters because of his support with the demonstrations. one thing that plagued the ukraine since the fall of communism since 1991, is the complete failure of his andtical class on all sides a level of corruption that is remarkable.

why is the sky any different? -- this guy any different? >> you're right it has been a cancer on the ukraine. people went out for a number of reasons, first and most because president yanukovych promised to take them to europe and then reneged. equally importantly, it was because they felt ripped off either leadership. they felt like a money of the official going into pockets rather than being used for their benefit. they are demanding president-elect -- he ran on a plot or of the government. he will have to deliver as part of the imf package of the international monetary on support for the ukraine. you unions have already begun passing the kind of legislative races they need to clean up for but the president-elect will to -- have to not only

talked the talk, but while a walk. he is talking about things like eat governance. we will see. somebody whohe is has a long career not only in business thomas but also in politics in the ukraine. very early in this struggle, he picked sides and he stood with the people of the my don. he actually interposed himself physically at key moments to call for nonviolence. loader atn a front one point when folks were shooting at each other and said,, the is not the way we -- said, "stop, this is not the way we behave". >> jimmy tomorrow, thursday, and i will speak live with

alexander, the ukrainian ambassador to the united states there that is yours day at 2:00 p.m. new york time right here on bloomberg television. 26 minutes past the hour. we are on the market. senior markets correspondent, julie hyman. >> thank you. wheretake a look at stocks are trading this hour. a mixed little changed section and that continues here are the s&p 500 right now is trading at a new record. it is only up one point and a half. we will see by the end of the session. two stocks we are watching, both related. valley and pharmaceuticals has raised its about $49d offer to billion, adding another $10 a share in cash. it also has a contingent value rights $20 per share if they meet their sales goal. in a separate move, it also sold skincare products

to $1.4 billion. or has to make its deal more palatable. we will be on the markets once again in 30 inutes. ♪

>> welcome back to the second half-hour on bloomberg television. thank you for staying with us. let's talk education. less than stellar credit history may find it easier to pay for their children's college costs. the government proposed a plan to ease credit standing for parents whose financial landing disqualify them for loans. i am joined now with more on this story. thank you for your time today. what are the parent roles? >> a parent loan is offered by the government to help pay for your child's college education.

the loans started in the 1980's and were met to provide liquidity for parents and maybe did not have all the cash, and as time went on, congress allowed them to bar of to the schools,ome private and to be $60,000. it allows classo pay for college. why did the government change the law? it would allow parents to do for payment, and could this us the lead to over borrowing? theye first major change mentioned was allowing to borrow up to the cost. in 2008, at the height of the credit crisis, congress passed other laws an edit on it or vision that allowed parents to defer payments. if they did not have the cash, they this would help to postpone the payments. if you are are owing a significant amount of money and not paying potentially for four

years, economist's i spoke with said, you may not realize it back we how much you are hanging and you could also borrow for another six months after the child graduates. to be 4.5 years, 5.5 years, if they take longer. >> the educational department allows parents to borrow potentially a lot of money and they do not mess is rarely have you show they can pay the money back. how is that possible? >> they do not have a provision called ability to pay. consumer advocates have been trying to push the department to make this a consideration because otherwise, you could really borrow a lot of money and may not be able to pay back. requested teams as you were telling us a minute ago, the credit would be loosened. >> yes. there is also an issue of access. the department is worried herein

are we giving people the ability to pay or borrow her college. they are trying to strike a balance between access to higher edge nation, and potentially as consumer advocates are worried, could they be taking out too much. another reason parents take these loans is because they do not have access to other credit markets. you saw home equity in credit taken out before the financial crisis, as a way for parents to get additional credit. that is how many parents are able to pay for college. now the value of their homes are lower or they may not home -- own homes. >> in the financial crisis, a lot of people were using their homes like an atm. some of theok at loan characteristics here, it is one experts had in my story. people who can take out quite a lot of money, potentially hundred thousand dollars. they do not have to make payments for

potentially years, and they do not have to show they can repay it. it sounds like a subprime mortgage. >> no doubt there in our education correspondent, janet, thank you so much. staying with the college theme, a recent study finds a college degree is no guarantee for recent get -- graduates looking for a job. john schmidt co-authored that study and is a senior economist at a washington-based think tank and joins me from d.c.. thank you for your time today. does this mean parents and students who are taking out these loans, are they wasting their money when it comes to college? >> no, college is a great investment on average. we focus on our report not so much on whether it makes ends for an individual to go to onlege, it -- what we focus is what is happening to young, black, college graduate, people

who have done the right in, gone to high school and college and missed. we see they are suffering enormously in the current labor market. >> i was going to say. i looked over the report. findings are very disturbing. he looked at data from as far as 1970. what were your key findings caution mark >> what we focus on is the current situation. we are several years now into the economic recovery. if you look at unemployment rates and -- or under employment rates, recent college graduates, you see there has rarely been a recovery at all. we have an unemployment rate for 27-year-old african-americans with a college degree that is a sickly exactly where it was at the lowest point in the recession, about 12%. we have a situation where over one half of young black college graduates work in a job that does not require a college degree at all.

that means the economy has failed to provide them with what we would have expected before we went. >> is the problem structural and does racial discrimination in the job market have a role? >> yes, we focus on two main causes of the situation facing young college graduates right economy isrst is the performing badly. whatever that does, youngest workers in the workforce are the ones that suffer the most. the least ties in the labor market and the fewest networks. the second issue we focus on his four young black college graduates, they face a double this advantage. they are young and face significant labor market discrimination. we see this across the board in the numbers we show. >> i'm speaking with john schmidt. john, what impact of the unemployed and underemployed black college graduates have on the overall college economy?

signal it does is send a that the economy is not working well for a large chunk of people. even years now in the economic recovery, we are still not back where we were four young black college graduates where we got there in the first place. numbers are only a little bit better when we look more broadly at recent college graduates. it suggests there is a lot of work to be done addressing the problem of ongoing racial discrimination. >> for those lack college graduates who are getting jobs, are they getting jobs that match up with the degrees they receive? >> as i am saying, about half of the workforce, about 55% of graduates, college are in a job it does not require a college degree at all. even if you look at recent graduates who have studied engineering, a very technical field and one where

workers generally do much better, it is still the case that among groep the -- among black college graduates with degrees, the employment rate is 12% and a third of the workers are at a job that do not require a college degree let alone an engineering degree. >> richard directs the center for college affordability. in a recent bloomberg view column, he noted more than a million college graduates are retail sales, about twice the number of active duty u.s. army personnel. he asks a question i would like to propose to you. is this largely a temporary phenomenon, or is it something else? >> it is mostly a problem of the current economic situation in the economy. if the unemployment rate went up four percent, i think a large portion of the problems we outlined in our report would disappear. the part that would not is the discrimination. that is a bigger list and

something that will take longer to think through to solve this problem. >> john schmidt with the center of economic policy research, joining us from our washington bureau. thank you for your time. we appreciate it. before the start of the world cup, things were not going smoothly in brazil. sales in the latin america report when we continue in just a moment. ♪

>> earlier today, peter cook folk about the intense interest in the fda's opposed regulation andhe e-cigarette ministration. >> we are already getting requests to extend it. we will look at that. we want to move forward in a

timely way. this is very important. we need to have extended authority in the products. for new products likely to come. inside pepsico with exclusive interviews and access within the company's gatorade. only on bloomberg tv, streaming at bloomberg.com or on our app for the smart phone and tablet third time now for today's latin america report. the colombian president will preside at the funeral for the children killed in a fire at an overcrowded bus. bringing them home from sunday school. the service will be held near the caribbean coast. are pressing charges against the bus driver, its own -- owner, and those who contacted the vehicle.

protestersafter battled security forces. protesters felt security personnel would rock and -- for 15 days to go before the world's most-watched sports event kicks off. that is your report for this wednesday. coming up, pimco called it the roach motel dynamic. we will look at investor appetite next. ♪

>> despite being harley a liquid, investor appetite for junk bonds remains huge. checking this trend, lisa, why have investors been following junk bonds? >> investors are not only piling into the publicly traded junk ons, but also bonds that are difficult to trade, even harder than normal junk bonds. they yield more. what we have had since the crisis, with the federal reserve

pummeling the market with cash, flooding it with cash, yields have come down dramatically. they are now below six percent, on average. about the same as the average 10 year treasury yields in the past 30 years. people are looking for more yield and less liquid, the harder to trade bonds are yielding more. qwest is this that the future? have we seen this movie before? >> i hope not area the question is, that does what a lot of investors have asked themselves. there has been a lot of concern past yearver the where people have said, this is debt of companies with the least margin of error. are we willing to accept such low yields? >> it is to jump in at your own risk. qwest at the same time, it is phenomenal. it is up 4.5%e,

and is really solid and still running really well there the question is, if the federal reserve will continue its stimulus and keep interest rates low for a longer time, if you have not these the be starting their own quantitative easing how are theymonth, yields going to go up? where will they go? it will stay the same as low growth environment. higher bonds may be good. >> junk bonds and stocks, how are they different in terms of trading? injunk bonds are not trading stocks. it is a human market. them up traders calling and saying, i am looking to sell this. it is not as trans parent as stocks there to does not move as quickly. if them people are concerned ife is a major selloff or a major deterioration in credit sentiment, people will not get out as quickly.

traditionally, the biggest wall street dealers use their own inventory to create a cushion. if they saw a big chunk of bonds, they would say, i will buy them for you and then believe them out of the market opportunistically. qwest does it change at all during the crisis? >> yes. it has not kept pace during the expansion of the market. chilean dollars, up from about $700 billion at the end of 2008. a tremendous acceleration in the size of the market. trading bonds have not kept pace. we have not been tested on the other side. what happens when there is a deterioration sentiment? what happens especially without wall street dealers making markets in the way they used to? because of higher capital hold. qwest the overall trading contest, why does this matter? why should investors care? retirees, the biggest pension

funds, huge investors in the market. everyone is trying to just get return. it is not just to even hit a homerun. you need real rate of return. it is now tough to get that. people are going into a riskier debt as a reprieve from the environment. it is a concern because it has not been tested. what happens for all of these people who have and haveto the market, gotten into it through more liquid into the -- liquid instruments and are looking for a quick way in and out of a market that does not move as quickly. qwest what is next for the market? best case scenario? >> it is if we continue with slow growth, but the growth environment. rates do not rise to much, but there is enough growth to sustain higher and have gotten into it through more liquid into the risk companies. the worst-case scenario, if there is inflationary pressure or a real location that causes

credit risks to be a bad word .nd people flee securities >> they are keeping a watchful eye on the fed because, if the rates move and it keeps monthly bond buying and continues to draw down, could we see things flip on their head? >> that is the concern. people do not see a stimulus right now for the rise in benchmark yields. that is why people keep coming in this year alone. another $8 billion in cash. investors come into junk bonds. people are not seeing it in the near future? -- future. find her on can bloomberg.com talking about this phenomenon. inc. you. we appreciate it. stay with us. we continue in just a moment. ♪

>> get the latest headlines on bloomberg.com. that does it for this edition. i am mark crumpton, reporting from new york. thank you for joining us. see you tomorrow. >> it is 56 minutes past the hour and that means blumberg television is on the markets. let's take a look at stocks. hours to go -- an hour to go at the end of the session. there has not been much drama in the broader stock market today. piece of suspense was whether we would close another record if the s&p 500 rises at all. it would be another record but

it is crossing above and below the zero line today. a couple individual stocks we are -- we are watching. shares of the 3-d maker are falling after 9.9 9 million the value forng existing shareholders. ,e are also looking for shares a 50 four percent rise of revenue last quarter, by port openings and strong demand by affordable luxury rods. many of companies with weak balance sheets are actually doing well this year. stocks with weakest balance sheets have climbed eight percent so far. joe did digging into the bizarre trend and is joining me now. you would think a week downs she would be a black mark if you're looking to invest in companies. why is that not happening?

>> investors are not seeing much downside risk. the economy is expanding. earnings growth is relatively good last quarter. people are saying this is the thatto buy the companies may not be so appealing in the market cycle. you have smoothed over interest rates, they will say, bring on the debt and it is not as big a deal. qwest exactly. low interest rates are driving this. midl we see a rate hike next year, this will continue. that is what some of the market analyst expect. >> we have seen the rotation away from the best performance as lester into some of lower valuations docs. that.e seen some of how does that relate to the

balance sheet trend? >> it gives investors another opportunity to play the rotation. it allows them to provide some fast they do not feel are quite so overvalued as in 2000 and. price to earnings ratio for the companies in a company group we looked at that had rebalance sheets, it is far lower than the 31 times we are being for the strong balance sheet ask it here at >> what could turn this around? i guess if the economy gets worse and rates go up. is that the only thing to stop the sum -- this momentum? >> yeah, people are deciding when the fed will decide rates and wed -- when janet yellen decides we might see the shift. taking advantage of lower rates, going out into the future, sometimes up to 10 years. they might have to worry about refinancing down the road when

rates are higher, but they are looking at short-term right now and investors are eating it up. >> all right. thank you so much. we appreciate it. we will have more on the markets later. "street smart" is next. qwest the markets are fluctuating here between gains and losses as investors are pair for a report that many believe show the u.s. economy contracted in the first quarter. "street smart" starts now. ♪ welcome to the most important hour of the session. 16 minutes before the closing bell to go. scaring off off -- on espionage claims. how china plans to redefine its important hour of the session. 16 minutesrelationship with core amer