>> general motors posse -- general motors's big payout, we will talk to the compensation expert in charge, ken feinberg. the supreme court takes on obamacare. we are expecting a rolling moments from now. the issue whether the company --t pay for the companies the employees birth control even if they are morally opposed. the largest bank in france will be hit with a record fine in the

sanctions case. ."lcome to "market makers the set, erikd on schatzker is joining me from colorado. i am very jealous. what do you have in store? >> first of all, thank you very much for holding down the fort in new york city. i do wish that you could be here with me. as you can see, aspen, colorado is a golden -- gorges place. they are holding their 10th anniversary attract for very big names today. today we will be talking with walter isaacson. the president of the aspen institute, also the former editor of time, a biographer whose biography includes henry albert einstein -- for example, benjamin franklin, and most recently and what people know him best for, steve jobs. he is uniquely positioned to

evaluate the state of leadership in america. what that are topic to raise with him given the luminaries attending the aspen ideas gore,al, including al hillary clinton, a number of ceo's he -- like david rubenstein, with whom we will be speaking tomorrow. following walter the president of harvard university will be sitting down with me and talking about everything from the unstoppably rising cost of education -- would you believe att 10 years ago the budget harvard was $2.5 billion and today it is $4.2 billion? it increased 70% over the course of a decade. withis a topic to raise him. also, the state of the harvard management empathy, they run the $32 million and -- endowment. leaving at the end of the year, it has been a revolving door. mohammed el-erian was there, for

example. how can they bring some stability to the harvard management company? more importantly, make their returns more competitive with those of other ivy league universities ashen mark and the future of education. what is the point of a liberal arts degree? i will be putting that question to drew faust as well. that is also coming in the 11:00 hour. for the time being i will be sending it back to you in new york. >> liberal arts degree, that was pretty much me at northwestern. for now, it is time for the news, we have the top business stories for you from around the world. president obama turning to a former ceo to fix one department. mcdonald is a west point grad who spent five years in the army . the white house report says that veterans affairs has been hobbled by a corrosive culture. ofentina is on the brink default for the second time in

13 years. the country is expected to miss a bond payment today. a u.s. court locked the cash from being distributed until argentina settles with creditors from their 2001 default. has a summer block was run its hands, "transformers age of extinction" has the biggest domestic gross of the year. over $100 million over the weekend. theels are already in works. no surprise, i love bad movies and am excited to see this one. the moment that victims have been waiting for this year, ken feinberg, tasked in april to administer compensation for the ignition switch defect is unveiling his plan right now in d.c.. we are in washington with more. we are seeing some headlines trickling out here in terms of the compensation plan. what are the standouts so far? big one.

a lot of people were wondering how much money gm would set aside for this and the answer is -- as much as it takes. ken feinberg is unveiling the plan right now in washington, d.c.. here are some of the key takeaways. who wants to file a claim can file a claim. feinberg will have lead a session with contributory negligence being irrelevant on this one. meaning that even if the driver was found to have been texting, drunk, none of it matters as long as they can show proximate cause that the ignition switch defect was the cause of the accident. paidble claims will be within 90 to 180 days and they will receive claims from august 1 to december 31, giving the claimant's time to get their paperwork in order. this is just the latest piece of

a very costly puzzle. gm has already attributed the deathsto 57 crashes, 13 -- they had to pay over $16 million in repairs and rental costs. they had to pay a record $35 million fine to the transportation department. this, of course, is just the latest the puzzle. but we will have a better idea just how much this will cost them as soon as the announcement is over. >> gm also said that they would pay claims even if they had been compensated before. any word, though, if that means they give up the right to sue gm? >> that is exactly the case. if they do accept any funds from ken feinberg, they will give up their right to sue. as you know right now there are over 100 cases, 100 lawsuits already filed. anyone who except funds from

this will have to take it to -- will not be able to take it to court, which is what ken feinberg is receiving the big bucks for, to avoid long, drawnout lawsuits. expectedyou so much. to plead guilty today to charges that they violated u.s. sanctions on rogue nations, the french bank will have to pay a record fine of almost $9 billion . richard farley is with us, an attorney from paul hastings and a bloomberg news taking reporters with us as well, carry geithner. we don't have the official announcement yet. what details can we expect? bought --ike bmp para bnp paribassse -- is going to lose their abilities

for up to one year as they could lose clients with that. they are getting ready to pay a huge fine that we have not seen before in this magnitude. >> is this enough? >> i think it is. it is not just that, but they the essentially forced out coo and a dozen other employees. if you look at where this falls in the spectrum of other prosecutions for violation of sanctions, it is right in the middle. i think it is a tough result -- >> to much? >> it depends on how you look at it. if you look at it on a per dollar transaction basis, there were some at much lower levels that paid up to three dollars and finds for every violating transaction. this is about her descent. some were lower, some were

higher, but given the larger number of dollar valuations alleged here, it appears to be a fair settlement. i am really curious about the financial impact. we have been talking about this for a while, but the dollar clearing aspect to be up in the air. do you have a sense of how much business they will lose ashen mark weck it does not seem like a huge impact in revenue, but the fine is going to impact capital ratios and moved them to a place they are uncomfortable with. analysts are expecting them to move back to a place of comfort after about one year of the bank making money and generating revenues. the dollar clearing is really a victory for banking regulators. we have not in this and previous sanctions cases. it is a way for them to move the needle a bit and look like they are cracking down even harder on this bank. >> there are workarounds for this. they can do for business and

payout? >> but no one wants to do that. >> short, if the clients are going to stay with them and then come back to them, that is an issue where they could potentially lose clients aside from revenue. >> some people start to lose their job -- anyone else? our regulars -- regulators going after specific individuals? >> there are about one dozen people on the chopping block to be resigned or fired, but to go after individuals? that would have to be a separate set of cases that would require more evidence than we have now. at theontext if you look amount of the fine it wipes out brings capitalnd down to 9.5 from 10.6, it will essentially take the rest of the year to bring it back up to the magic 10% level. consequences -- again, you can say that you have six months

, but you never want to let a competitor out of the tent and give them access. is the guiltyhere plea, the other one that we saw was with credit tweeze and tax aversion for clients. did not meanhere anything. does this guilty plea means something? >> we are going to see the same thing with credit suisse. same thing as usual, when all is said and done. now you are looking at several prosecutors in how they are packaging the deal. is it enough? is the giant fine enough? how do they package these penalties in a way that makes both congress happy, does not stop the bank from doing business and actually deters bad behavior in the future? >> absent this -- this is a large thing right now, but they

have been a very well run bank, managing to avoid most of the disasters during the 2008 crisis , they were model citizens who can hopefully put this behind them. woundht, but this still up happening under everyone's watch. you how a fewow employees operating in geneva can do things that cause draconian consequences. >> doesn't that say something about the management at the top? were they asleep at the wheel? the ceo isis why stepping down and one dozen employees are losing their jobs. >> potentially. >> this is the same criticism we have seen of jpmorgan over the last few years, who have paid fines on various issues, charges, sanctions, different things like that. is that an issue of management or just how banks are set up? businesses within banks, do they

tend to do things that management does not know about? issues of oversight and compliance digging into the question of how banks are being managed. >> the biggest question, is this a viable deterrent? you seem to think that this is fair recommence for what they ad, but is this enough of deterrent for other companies to change their business model? >> absolutely. >> really? who will be next on the chopping block? >> we will have to see. hopefully no one. if you lose an entire year's earnings -- if you did something wrong in one day you lose your years salary? why that would be a big bummer, but then again i am not dealing and $9 billion figures, so it would be different. thanks to carrie and richard. -- aereo tries

to figure out what their next step will be. they have temporarily shut down after the supreme court ruling. reid hoffman, why has he been so many of silicon valley's most successful startups? stories and interviews are at bloomberg.com/tv and streaming on apple tv and amazon fire. ♪

>> the online streaming service, aereo, temporarily shutting down after it received unfavorable ruling from the supreme court. the ceo posted a letter to customers on the website, stating that they had decided to pause their operations temporarily as they consulted with the court to map out the next step. so, what is next for aereo? temporarily -- is showed for shutting it down just

not today? >> checking on kenosha several said he interviews, he did not see a supreme court -- a future for them if they were shut down. you think -- did something change? not necessarily. i think they are just crossing the t's and dotting the eyes to see if there is some other way out they had not thought of. it is potentially possible they are speaking with different parties after the ruling to see if there is another way to go. >> instead of live tv could they a time recorded tv with delay? >> potentially, but they would probably have to do something different. it starts to get technical here between private and public performance. there are services out there that will record your broadcast tv and allow you to watch it over the internet, but they are devices in your home that you purchase and subscribed to. the reason the supreme court shut down aereo is because they

said they were acting like a distributing programming to everyone like a cable service would do. that route? to go >> they would have to change their business model. >> most likely, unless they came up with some other loophole around the decision. ex at the end of the day these customers are going to find other ways to watch tv, so what does that do to internet tv? who wins with that? >> i imagine that what will happen is not much. wrinkly there were not that many subscribers to aereo to begin with. more was more of a concept than a popular product. stopdea that you could paying retransmission fees, meaning billions of dollars less to the broadcast programmers out there, theoretically a way pay tv operators to stop paying if they partnered or use that technology, that was a big deal for the media industry.

the actual products or limited scope and only allowed you to watch broadcast tv and for the fact of the matter you can still do that if you really want to. you can watch it streaming, you can use an antenna in your house , but most people want cable channels. they want to watch hbo, they want to watch espn. this would be a limited product in nature. >> thank you so much, have to leave it there. breaking news on supreme court decisions coming out this morning. megan, what's the latest? lobby, awin for hobby big win for the pro-life advocates that you see behind me here. was announced, 5-4 decision before the supreme court, ruling that hobby lobby, a privately held company with religious owners could be exempt from this provision of the affordable care act that requires or required until today

that employees receive coverage, including all forms of contraception. noty lobby said they did agree with two forms of contraception, saying that they amounted to abortion. it now appears that the supreme court today again is allowing hobby lobby to opt out of that part of the law. again, a victory today for hobby lobby. justice alito read his decision from the bench. it seems like a victory for hobby lobby today. >> some other cases came out today, one in particular relating to unions. >> this was a decision out of illinois. a bloated union found that are not allowed to be required to have part of their paycheck taken out to go to the union. this was a small group of union in illinois, home health care or hers. it was a blow to public unions

in general, but they phrased it as a certain type of worker, not full-fledged public employees. it could have been a much bigger hit to unions across the board. is thaturse, the worry if they have less money, the less leverage they wind up having. thank you so much, megan. we will be following these cases are out the hour, particularly talking about the impact on businesses that these decisions have. coming up, the so-called paypal mafia. why do they have a hand in so any successful silicon valley startups? ♪

>> time for "on the markets."

rally underway here. if we were able to hold stocks would climb for the longest stretch of quarterly gains since 1996. not seeing a huge jump, still building on the gains we have seen, five percent overall in the second quarter, you can basically attributed this to the jump in pending home sales that we saw, rising in may and april, providing slightly higher -- half of one percent on pent-up demand from the horrible winter season that we had. facebook basically apologizing after conduct in an experiment that influenced what 700,000 readers saw in their newsfeed, with concerns about privacy issues -- i should say, not really affecting the stock that much, worried about what facebook is doing and how they are infiltrating what you wind up seeing. are shares are active, we checking on that because arielle

temporarily shut down the service this weekend. the chairman, barry diller, said last week that it did not have a material impact on the business overall. coming up, lots more for you. talking about linkedin, we will be right back. ♪

>> welcome back to "market makers." i am alix steel, all alone in new york. in for stephanie ruhle, alex -- erik schatzker is in aspen. serial entrepreneur and tech investor, he has been called the start of whisper of silicon valley. he has had his hand in so many technologies and successful companies. emily chang sat down with him to hear the story behind the silicon valley legend in her new series, studio 1.0.

what was the biggest take away? >> of glad i am here to keep you company today, since you are all alone in new york. reid hoffman is one of the most decorated people in technology, which says a lot. , heearly on a pal founder went on to found linkedin, one of the earliest personal investors in facebook, now working at greylock, investing in dozens of companies -- she is now an offer -- and author of two books. the goal of the studio is to find out who these people you -- who these people are unaware they are going. we don't get their back stories on "number bwest." one of the interesting parts of the conversation had to do with paypal. take a listen to what he had to say about what made the paypal mafia so special. like they collected a bunch of people -- >> they collected a

bunch of people who are young and intense themselves. suddenly these folks alike -- what do i do next? youtube.go into elon musk goes and does spacex. jeremy and ross do yelp. yet because we have had the six -- this intense experience together, we still have this really tight network. call for what? >> for example, macroeconomic , i willl bold models call peter. the intersection of interesting business models for business technology, like big eta -- max. for a willingness to just think super big with a risk not being a variable, elon. >> it sounds very much like the paypal mafia, which started in

the late 1990's, is alive and well. he does nottip, like the words mafia. he thinks it sounds of it dark, but it is a term that gets catchy and is repeated, implying it is a very tight network. a nice rolodex to have. did you hear any indication on what he was going to do next? steve case talked about going to pittsburgh and detroit to help you a tech boom there. did he say when he was going to do? >> first i asked him if he ever imagined leaving linkedin. he said it would be a strange universe. i did not get any indication that he wants to leave as long as he feels he can make a contribution. he still has an office there right next to the ceo. he is also an investor in so many companies. he has a hand in just about everything. he is one of the first people that these up and comers call when they need help.

he feels that he really is helping and involved in the and that they can find things useful in terms of the advice he has to give. it seems like he is doing what he wants, working seven days a week it does not seem like he will slow down, seems to be making his life meaningful. >> amazing. emily chang, thank you so much. we really appreciate that. you definitely want to tune into studio 1.0 today at 1 p.m. eastern, a great interview. don't miss it. coming up, general motors wants to settle all the lawsuits linked to faulty ignition switches. who will get how much? we will be right back. ♪

>> on the west coast we are watching for disruptions in the country's largest sport, 20,000

longshoremen could strike a move that may cost the u.s. economy billions of dollars. now withhman joins us more on this story. john, give us a sense of what is going on there. >> for now it is business as usual. contract talks are continuing. the past when these agreements come to an end, they can keep talking without a work stoppage. but you have to talk about what could potentially happen with a work stoppage. because of the tens of billions at stake, they handle a large majority of the imports coming thatasia, it is amazing bloomberg tracks these statistics about what happens. like 600,000ing import containers in the month of may, talking about more than 40% of the total for the country, this is obviously just

the first stop. you have the trucks that take the merchandise across the country -- at the time when retailers are starting to get their inventory together or back to school, just getting through the summer right now -- it is very difficult to logistically navigate around that if the ports are closed. >> absolutely. back in 2002 what were the economic implications then and what can we infer about that now? >> there have obviously been a variety of these kinds of moments over the years. that is what happens when you have labor deals that come to an end. the clerical employee deal can't to an end with rough patches there, but the 2002 example is the one that everyone continues to cite the cousin went or 10 days. the white house basically had to intervene and on paper it affected the economy to the tune of billions of dollars. when it comes to issues like worker productivity, that is what people will be watching. even if they come to an

agreement, what happens to the productivity in the short term now? how does that affect various retailers? >> any word on any kind of alternatives or other ways that we will see retailers get their merchandise even if there is a disruption? that we have seen -- certainly even in the may numbers it looked like there were some increases in activity -- those who are able to the your out what the demand is like were getting supplies for products in advance. i think that that is probably something that manufacturers are in a better position to do than retailers. we live in a click world, an online world where we all shop on amazon and ebay. when those orders come in immediately it is more difficult for the retail to navigate around it. like i also have to wonder how much this will affect other countries, like asia. it seems that 70% of the imports come through there, have we seen any kind of external pressure?

ofcertainly there are a lot groups speaking out about this. you are absolutely right. haveghlighted earlier, you 47% of the traffic coming from los angeles and long beach ports specifically. certainly if you were to compare them to what happens on your side of the country, in newark and new york combined, it is an equally impressive amount of activity, but fielding much of the demand from asia is handle here on the west coast up and oakland andsly in in northern california. i think that people will be watching this closely. as far as the key issues on the table, some of the normal things that you would expect. ofes, shouldering the cost health care, benefits, ports looking to keep their cost down to stay competitive and obviously being able to cater to all of that activity coming from asia. those are some of the things that we continue to watch.

>> jon erlichman, thank you so much, they're in los angeles following the potential longshoremen strike. faulty ignition switches, this plan is headed by the best-known expert on compensation cases, ken feinberg. there will be no cap on payments and they want to settle all eligible claims. bob is one of the key players in the pursuit of claims against gm, working with ken feinberg he joins us now, thank you very much for making the time for us today. what has been the response of victims to this plan? >> cautious optimism. you know, the alternative would be the risks associated with going to trial, which is years of waiting for your chance to tell your story in front of a jury -- what the jury award would be, and then gm trying to appeal. gm has also said that if you do go to trial they will assert

bankruptcy as the defense for the actions that occurred prior to their filing of bankruptcy. that is a big issue. in the compensation plan, bankruptcy will not be a defense. neither will be the contributory --ligence of any individual which is important. >> meaning that, if i can interject, if you were drinking or texting while driving you are still eligible for compensation. >> that is right. that if you die or suffer serious injury because the airbag is not deploy, if you were texting -- had the airbag work, you would have lived to speak.our lesson, so to the plan is going to waive that contributory negligence defense and then it is just going to come down to the values per

individual. seems, bob, that people must prove their injuries. how do victims feel about having to do that? >> it is a detailed plan and you are right about that. so much of the discretion lies with ken feinberg. a couple of times and i work hard to get elements into the plan, but so many requirements are prefaced with -- sole discretion of the neutral administrator. mr. feinberg must now show that he is neutral, that his awards are fair, and that he intends to do the right thing for the victim and not behave as if he is the attorney for gm. my hope is that that is the case. >> your help, of course, there was a lot of criticism from the department of justice, who accused ken feinberg of trying

to save bp money in that oil spill in the gulf of mexico. what do you think? the only other time he has represented a private company as a result of that companies conduct, he did not do so hot. this is his second time and this is his second chance. since the plan is voluntary if you don't like the award you can pursue litigation. and then he has a short leash, so to speak, regarding what he is going to do. i am aware of bp and the criticism leveled against them. some of it was very justified. i am on high alert to see what he does in order to assure my getnts as i help them through this plan that mr. feinberg really is independent. that he really is neutral and understands the need to have

everyone see him that way. i think that mr. feinberg really believes that he has that reputation, that he can do the right thing. >> bob, quickly, how many other clients do you expect to take this compensation? are you actually recommending it? >> it will not be a blanket recommendation. for some it may fit the plan better than others. i will give them recommendations. my intent right now is to look at all of my clients individual fact patterns, what the damages are, give them what i believe there award would the end of the plan and let them look at the trial and thento make recommendations. it is not an all in or all out, it will be very dependent on the facts. >> we really appreciate your insight, bob. we will be talking to ken

feinberg in the next hour. breaking news out of washington, companies with religious objections to contraception can refuse to pay for them. megan hughes has been covering the story. megan, go ahead, take it away. >> thank you so much. obviously a landmark case being decided, saying that privately held companies do have religious rights. joining me now, thank you so much for being here. >> thank you for having me on. >> can you give me your take on this decision? >> it was a great decision for religious freedom. the court ruled that american families should not lose their religious freedom just because they open the family business. rights have not been extended to all corporations, it was limited to small, family businesses and closely held companies like hobby lobby. >> what you think about what we

heard from justices kagan and soto mayor? that this would open a pandora's box? that companies could oppose things like immunizations, blood transfusions, things like that. directly.dress that they were not granted those rights. those cases can come later and be decided later. the decision today was narrow and careful. the decision have been brought her? would you like to see public companies have these rights? >> we are very happy with this decision. we want to make sure that families are protected and we think they are. >> how do you decide what laws companies are able to opt out of going forward? >> they said that you have to religiousis as a exercise and then see that their motives are strong enough to outweigh the burden on religious freedom. the court has been striking that balance pretty well for 20 years.

>> hobby lobby in their arguments, they had two specific types of contraception there were -- they were opposed to. dozens of companies would like to say that we will not cover interception at all. do you see them -- see this applying to them as well? >> we will probably see decisions, like we saw before, for religious ministries who say that they cannot in good conscience provide this. a good sign for those cases. >> what about the employees? what about employees who want that kind of contraception? >> hobby lobby employees have the same rights they had yesterday. nothing changes. the only difference is the government cannot drag the family and and force them to provide something contrary to their faith. >> did you get any reaction from the green family? >> i have not spoken to them yet, but i know they will be happy with today's decision.

>> thank you for joining us, lori. both sides are very fired up here. alex? >> thank you so much, megan hughes, on this very passionate day outside the supreme court. "market makers" will be back in two minutes. stay with us. ♪

>> the cubicle was designed to make us happy. this coming from the author of "cubed, the secret history of the workplace." it became the symbol of everything that we hate about work. >> the cubicle is one of the more ironic creations in the american office. >> the inventor wanted to take people from the anonymous spaces that they were confined to.

remembers the images of offices in the early at 20 -- early 20th century. "madmen," "the apartment," just row after row of desks. the inventor of the cubicle, said that the office was a wasteland and that it needed to be thick. the solution that he came up with was the action on the best. . three wall space of wood the idea was to give workers a space of their own that they could personalize. it the way that you needed to. it was meant to be autonomous and independent and a real success. people thought that it would change the way that -- the way that we work, and it did -- just not in the way that we intended. it started to become this tool

for companies to cram in as many people as they could into as little space as possible. the cubicle occupies a strange space in contemporary culture. it is definitely one of the most reviled objects in the workplace. there is dilbert. there is "office space." the symbol is uncaring. stupid company, basically. >> we have sort of a problem here. >> the fact that people hate it so much leads to the kinds of designs that are seen as liberating. i think that open office plans have a lot to offer in that they do offer interaction, but studies show that people prefer to work in closed-door offices. people thrown out of cubicle out intod are thrown an open space find they miss

their cubicle. it is a twist. >> i am a posted girl. i have posted several are, i miss a wall. where i can put them. maybe i am alone in that. coming up, aspen, colorado, where we will talk to harvard , as well asew faust walter isaacson, the author of steve jobs."y on " -- author of the get -- the bike -- author of the biography on steve jobs. ♪ . .

>> live from bloomberg world headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> a defeat for obamacare -- the supreme court says some companies can opt out of a requirement they pay for contraception for women. general motors pays us -- the automaker said to pay fund to pay compensation for defective admissions. we will talk to ken feinberg. the higher cost of education -- how much is too much? we will go to the aspen ideas festival and talk with harvard's president. makers."o "market

holding down a very lonely set today because erik schatzker is day linedith a killer up. what do you have? >> i have to say i'm very excited about what's about to happen. artie minutes from now here in this extraordinary outdoor rockies, i'me going to be sitting down with the president of harvard university and we will be talking about the future of education, the future of harvard, and it is an apt topic indeed because just minutes ago, she was engaged in a debate about the feature of education and the future of harvard with none other than larry summers. is a former president of harvard university and the two have very different ideas about what universities need to do to of all and adapt. i think it's fair to say if i could short-handed for you that larry summers thinks university need to be more dynamic in their

approach to adapting to the changing needs of the student body and needs of the economy. a go slow approach. you will hear more about it 30 minutes from now when i sit down with drew faust. in 10 minutes, walter isaacson, the president of the aspen institute will be here. use the biographer of steve jobs, abraham lincoln and others. we will talk about leadership in america and perhaps about the future of media with walter. that's all coming up very shortly. >> really looking forward to this next hour, but now it is time for the newsfeed. the top business stories from around the world. highest court in new york says cities and towns and ban fracking in their borders. that would leave the industry to abandon fracking in new york. the governor has been weighing whether to consider banning

fracking in new york. pending sales of existing homes rose 6.1%. it's the biggest increase in more than four years. economists say we are still seeing a rebound from that terrible first quarter because of all the polls. grocery chains in california want to make the state the first usese -- to ban single plastic bags. the grocery stores could take in as much as a billion dollars in new revenue that comes from a $.10 fee on paper bags. the high court handed down its final decisions today in the hobby lobby case. the supreme court dealt blows to president obama's health care law as well as organized labor. to help me break down these decisions and what it means for big is this, bloomberg's court reporter is live from the supreme court. here with me in the studio is andy pincus who is experienced arguing cases in the supreme

court. great to have you here. what was the biggest surprise of these two decisions we heard today? >> i don't know that either of them was that much of a surprise. the conservative wing of the co--- of the court one on both cases. tocertainly is a blow president barack obama and it is different from what the cord and a couple of years ago when it upheld the health care law but not a surprise. talking before we got on camera about how it was not that big of a game changer. the supreme court was very narrowly focused in terms of what is this can and cannot do. >> the hobby lobby decision is very narrow. the government has already made accommodation to religious employers and basically said if you have an objection to providing this kind of funding, this kind of insurance, your insurer will do it free of charge. what the court said today is that same accommodation has to be extended to other commercial

employers who have similar kinds of relentless objections. >> meeting hobby lobby does not play for plan b but the insurer will? >> the insurer will cover it for any employee who wants it. >> is that going to raise costs for those businesses at the end of the day? >> it does because the cost of pregnancy and delivery is so much higher than the cost of providing contraceptive devices that the insurers end up saving money the more contraceptives a supply. you hear indie taking a very it did not change the landscape too much. does it create an uneven playing field in the market when it comes to contraceptives? >> i agree with andy. this was not a case of like a couple of years ago that had financial implications. this was a fight about principle more so than actual dollars. the government will have to decide that they want to provide the sort of accommodation andy

pincus talked about or doesn't want to find another way to provide coverage for workers at a company like hobby lobby? it's a relatively small amount of money we are talking about will stop >> let's run that out a little bit. what was the biggest impactful decision on businesses we saw this year from the supreme court? verio decisione from last week was huge for broadcasters will stop -- was huge for broadcasters. that is certainly the one you have 2.2. >> how did businesses do this year? did not doreo well. >> generally, businesses did not do as well as other terms in the court. if you look at the cases like halliburton, people were hoping that would strike a blow.

it easier for a company to actually prove everything is working well. >> it ends up and posing a lot more costs and it's great for lawyers but i don't think it's going to make any difference in how the cases come out. , totwo environmental cases class-action cases, the plaid -- the plaintiffs bar one both. there were a lot of unanimous cases were business did well, but in the close cases this year, more often as this was on the losing end of the stick. people in the past have said this is a pro-business court, but now i don't think this is going to make people say this is an antibusiness court. you think about that? i would agree my interpretation is this is a pro-business court. what is your overall take? >> i agree with andy. there are some areas of the law or the court generally sides with business.

it is skeptical about what it sees as litigation driven by the plaintiffs. it's supportive of arbitration which is something businesses like. so there are areas of the law where the court usually sides with business but these cases come up in their own individual contacts and it's hard to ascribe a big victor philosophy to this court or any court when you're talking about business cases. >> you guys are agreeing a lot today would each other. you heard greg say it's most impactful business case we saw. what was your biggest take away from that? directously it had a impact on area's business model and was a sigh of relief for the studios. the other thing that was a release is how is the legal role -- the legal rule going to impact cloud computing and network storage. the kind of storage implicated andsame legal principles

justice breyer, writing the court's opinion, took a lot of care to say the rule you're adopting here is about something that looks like a cable tv system and we are not going to say companies that provide network storage or cloud storage are going to run afoul of the same legal rule. i think the tech industry breathed a sigh of relief. but technology wins versus privacy for now. >> technology was versus copyright. another case where tech companies have done well are patent cases. six patent cases before the court, almost 10% of their docket. it all of those cases, they want. worrying about overbroad patent rights and what it does to innovation in the tech space. >> i appreciate the perspective. argentina is on the brink of default and that's the second time in 13 years. the company is expected to miss a bond payment today.

the u.s. court blocked funds from being distributed till argentina settles from a 2001 default. our latin america markets reporter has been following the latest developments and joins us now. this is very complicated for people who have not been following it. can you explain what the differences between a restructured debt and the bondholders that are holding out from you one? >> argentina defaulted from about 95 ilion dollars in 2001 and held that restructuring. by the time of the second one, they were able to get 93% of creditors on ward with the terms , which were about $.30 on the dollar. not too great. >> by any means. >> says seven percent of the creditors held out for something better. we willrnment says never pay you anything better, it's a lost cause. but they fought and they fought and a suit and they sued and they tried every way to get some sort payment. they've got several judgments in

their favor and argentina refuses to pay them. so they have tried to seize ships and airplanes and everything they can. this last case which the supreme court decided not to listen to argentina's appeal for, was on terms of a breach of contract that said argentina way back in this original bond they defaulted on were supposed to hold all creditors equally. as the court has interpreted it now, they cannot make payment on their restructured bond unless they pay the holdouts. >> is there going to be negotiation? they've tried to pay the restructured debt and were not able to. where there -- will there be real negotiation's? >> 13 years later. >> this is basically the gun to their head situation stop in 30 days, they will be in default on their restructured bond because the court said you cannot repay them.

that's not a situation any government wants to be in. this is the time to negotiate and figure out. , elliottoday management corp., which is a sodout leading the case said far no progress has been made in terms of the negotiation. nothing has come from the stalks. >> gun to your head is your take away. we appreciate you writing that down. bigng up, the next innovation intact -- we are going to ask an aspen man who wrote the book on steve jobs, walter isaacson. plus, harvard comes up short. why is the school's endowment underperforming its peers? we will talk to president drew faust. this is bloomberg television and we are digital anywhere you want to be. ♪

>> a beautiful shot here in the colorado rockies. we are live from the aspen ideas festival. i'm erik schatzker here with the president of the aspen institute with walter isaacson. >> nice to see you. >> this is an elite event. over the course of the past decade, the aspen institute is celebrating the 10th anniversary of the ideas festival. you have attracted some extraordinary talent and extra dairy speakers. who are you most excited about this year? >> there is hillary clinton and tony blair but the most exciting thing are the people with the new ideas. a quarter of the people come here on scholarships.

mitch landrieu dave the best speech so far on violence on the street, black on black violence. just after he finished the speech and showed 693 people who had been killed in the past few years, there was a shooting that night on bourbon street in new orleans. i think it refocused our minds on certain things. that's what i always like. robotics a speech on and artificial intelligence. it's the big ideas. >> where are the most fertile environments for ideas in america today? is it universities or corporations or startups or even i just finished the session with drew faust and larry summers and it's a question of how are you going to create online digital education that will open up ideas to

everybody? it's not exactly universities, but it's this new thing like harvard and m.i.t. together creating a digital university. i think cities are a place now -- certainly bloomberg lp, your media company, has spent a lot of time focusing on the totality of -- on the vitality of cities. even in a world people can live anywhere because you can commute virtually, they like to live in places where there is creativity. >> the people who attend this event pay thousands of dollars to do so. does it feel awkward staging what i might describe as in event for the 1% of the 1% when there's so much attention on inequality here? >> we have spent a lot of time talking about inequality. we are a nonprofit, so there are patriots who spend a few

thousand dollars for tickets but all of the money goes to pay for scholarships. half the people here don't pay anything. atthose, some are speakers some of those are people just on scholarship. they come from high schools across america. i think it is important we do this as a nonprofit and we do it so the people who are in the 1% and pay enough to come here, we appreciate what their money does that make sure half the people coming here are coming for free. >> people know you as the guy who wrote the book about steve jobs. you've also been the biographer of albert einstein and henry kissinger. "time."the editor of you have a unique perspective on the question mark of leadership. where are we starved for leadership? >> washington, d.c. person ifranklin, the

like the most and who i wrote about, in the days of benjamin franklin, you could be passionate the way madison or adams was, but you knew had to come together and say let's figure out the solutions to our problems. that is what we have lost most. what we are trying to do here is take people from all sides of the spectrum, including randi weingarten from the american federation of teachers had a discussion with the l.a. school district superintendent who just won a lawsuit against teachers. where can we come together and figure out what is best for things like teacher tenure in our urban school districts? this notion of coming together around common ground is what we have lost most of the bikes how would you rate the quality of leadership in corporate america? >> i think it has been good. i think in the grand old days of larger-than-life corporate leaders like ted turner and jack

welch, you had people who were disruptors and total innovators. we need a little bit more of that now. i will pay a compliment to your company, including with michael bloomberg, a proprietor that does innovate much more fastly than some corporate america. >> who would you point to is a beacon of leadership? >> i think a lot happening in silicon valley -- elon musk and jeff bezos. >> he's turning himself into a polarizing figure. >> that is what happens when you are a disruptor. doing uberis who is and the mayor of new orleans -- if you are going to be innovative come he have to have things like uber come in. you've how much time spent with steve jobs, people

want to know what you think of the job tim cook is doing. >> tim is a different kind of leader. we were just at a panel with larry summers and drew faust. i said what did you learn from each other's leadership and they say there's different styles of leadership. some people are managers, some are visionaries you drive things. ins good to have a cycle leadership whether it's that a company or magazine. somebody who is a transforming visionary and then you have somebody who knows that to execute. tim cook is excellent knowing how to execute the basic dna of apple which is that ute matters, we make really good products, and he's doing that, but he is a you from leader than steve. maybe we need steve jobs to go to a tim cook -- i've finished

writing a book called "the innovators." it's about how you have to tie visionary leadership to smart managers who can execute. >> always such a pleasure to speak with you. walter isaacson, journalist, president of the aspen institute. humbert television returns in a couple of minutes. stay with us. ♪

>> coming up in the next half-hour, we've got a killer lineup -- making college affordable again. we will ask harvard president drew faust what has to be done. plus from 9/11 to the bp oil spill, he is the man when it comes to victim compensation -- now ken feinberg is running a

similar fund for general motors. we will be right back will stop -- we will be right back. ♪

>> live from bloomberg world headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> welcome back to "market alix steel in for stephanie ruhle. erik schatzker is joined now by a special guest and leader in higher education. >> thank you very much. i am here with drew faust, distinguished scholar and president of harvard university. this is a rare opportunity. doesn't come along very often and i am delighted it has come along here at the aspen institute. as you know, the aspen institute has decided the focus of this

year's ideas festival is the world in 2024. a decade from now. how will harvard be different? >> higher education is in a moment of very rapid change and it's hard to predict where we will be or where higher education will be in the united states or around the world. there are a number of forces we are grappling with and seizing the opportunities within. one is the digital revolution and what that means for the way we teach in the way our students learn. do with the we tools of online learning and online communication, both on our campuses and in the ways universities become less place-based as the digital outreach can be so extensive. we are also learning a lot about teaching and how people learn from changes in the understanding of the brain. how well influence structure our classes and approach our students. we know active learning is much

more effect if an passive learning. what will that mean for the traditional lecture format? we will see very different kinds of classroom experiences and we will see students who are very much more participatory in classroom settings. we are interested in bringing things back from experiential learning to classroom consideration. the digital world is one set. the other is the world is becoming so much more global. our students expect to pursue their careers and their lives in a mobile environment. what does that mean about what they need to learn about other parts of the world and experiences they need to have? how can we prepare them for that? a third element is traditional disciplines are breaking down boundaries. so in the sciences, merging of life and physical sciences through bioengineering. ourselves reorganize

to make those interdisciplinary possibilities readily available and encourage them for our students and faculty doing research. >> just as they were 15 years disruptiontion and are the buzzwords of the moment. do you believe in the importance of disruption? >> disruption has become something of a buzz word and it keeps us on our toes. what is it we're doing that we ought to hold onto? what is it that's being challenged that we should change and appropriately recognize needs to be disrupted? whatd that a university, needs to be disrupted? >> some of the issues we were just talking about. how do we teach and lecture -- >> what specifically of the , whatyou sketched out specifically do you believe needs to be done so harvard is a different and more evolved institution a decade from now?

>> part of it is how we teach and being more dynamic and our responses to digital opportunities, changing the structures of our classroom, changing the fields we think our students should be studying, changing how we define students. we are reaching out more broadly through financial aid in the past decade. how can we take that issue of access and make the wonders of harvard available to people around the world who might be able to get access digitally? different ages -- one of the ways universities will change as there will be less and less focus on the beginnings of careers. .he beginnings of adult life instead the touch points for individuals to route their lives because learning needs to be ongoing. it's not something you accumulate when you're 18 to 21 and then you are set. how do universities respond to that?

>> does higher education and harvard in particular need to to changesnamically in the economy and the labor force? i think of the exhortation so many students receive to study science, technology, engineering or math as opposed to something else because they are told that's where the best opportunities will lie. >> certainly we see students with an increase in the number of majors in sciences and particularly engineering. our engineering concentrators when webled since 2007 established our engineering program as a separate school. students see that is a very important part of what they do and we see students or not majoring in science and engineering fields wanting to take science and wanting to have some kind of experience to familiarize themselves with the world of science and technology. >> does every student need to learn how to code?

>> probably, alternately every student will want to learn how to code. it's like a basic thing which. these i concentrated areas and think about science, it's important for institutions like harvard to make sure we situate that set of skills and understandings in the broader range of what a liberal arts education is. what's the technology full -- what is the technology for? where are we going and what do we value? >> are you worried about the prospects those liberal arts students face in the working world? even if you don't feel like harvard is change -- is training them for their first job any longer. >> i think they're going to do well because they will have the habits of mind at will allow them to a depth to change and make them ready for jobs that don't exist at this present time. it's the versatility and critical thinking that come through that enable you to adapt and change.

studyingbout the folks abroad are to some of the smaller or less well-funded universities in america? bethose individuals had to just like harvard students, aware of the combination of what do i have to offer the world and how do i understand that in a broad time, not just what am i going to do the minute i walk out of the door of this college or university? what am i going to learn that's going to last through a lifetime and make my mind an interesting place to be. what can i do that will enable me to embrace ideas i don't understand yet. >> i look at harvard's income statements -- 10 years ago, it cost harvard $2.5 billion to run the university. $4.2 billion,is

an increase of 70%. 10 years from now, is a harvard budget going to be $7 billion? >> i don't know what the budgets going to be 10 years from now. investing in science has gone up substantially. financial aid has increased because we are committed to accessing opportunity and we find ofselves facing new kinds challenges internationally. we want to be more broad in our international reach and enable our students and faculty to apply internationally. >> where does cost control rank on your list of priorities? cost control is significant. we want to look at what the most important things are but we also want to fund the most important things and say we are not -- they were going to cut and not

grow. we have to also be extremely aware of price. you are talking about cost, but let me emphasize price for our students will stop this is a matter of enormous concern and we've been very attentive to that. plays a role in funding activity that has drawn a lot of attention. theght describe it as revolving door of management that oversees the endowment and some, compared to its peers, lackluster returns. do those things concern you? >> the endowment fund is about 35% of our operating budget. it's a critical element of everything we do. much closer relationship in the university and endowment partly in response to the financial crisis in 2008.

referring to they predecessor. i think doors revolve a little faster. she's been there for a time that has enabled her to make substantial contributions to the organization in the wake of the downturn. confrontedediately by a world falling apart in investment terms. that was a real challenge and she took from that a number of theghts about liquidity and organizations she has strengthened enormously and her close connections with the university and the hierarchies. inwhat would you like to see her successor? >> i like to see many of her attributes will stop she's been a traffic leader and is devoted to the organization and advancing it. thefeels she has

organization repositioned in the and sees a downturn new chapter. that's partly why she's decided it would be a good time to step down and pursue other elements of her life. i would like to see someone else build on that and take us to the returns that are appropriate and in era, the model developed under jack myers in funding assets. a lot of people have figured out the same kind of technique. how do we understand how to position ourselves for long-term growth? it's an area that is quite different from when jane came or her predecessors. to have you. she's the president of harvard university, drew faust. that is it for the moment from aspen, colorado. >> thank you for bringing those interviews to us today. we'll have more from the aspen

davidfestival, including rubenstein, cofounder of the carlyle group that's tomorrow at 10:00 a.m. coming up, general motors says it will pay whatever it takes to settle the lawsuit from the faulty ignition switches. and ken feinberg right after this break. ♪

>> general motors today is revealing plans on how to compensate victims caused by faulty ignition switches. they say there may be no caps on payments. the plan is headed by the best-known expert on compensation payments, ken feinberg. he joins us now from washington. take you for joining us on what i assume is a busy day for you. cap on there's no payments and everyone wants to know how much is going to cost. i've seen estimates ranging from $3 billion to eight billion dollars. what is your best guess? >> i

have no idea. it's pure speculation. number of deaths, number of injuries caused by the ignition switch our peers speculation until people file a claim. and we evaluate the claim. was it an ignition switch defect in a car where it could have been? we cannot make that speculative effort. oreven if you were texting drunk driving or were injured in some way, you are still eligible to file a claim. that leads me to wonder who and what is excluded here. >> what is excluded is contributory negligence. as you point out, drunk driving, texting, speeding is irrelevant. you are still eligible. bankruptcy will not be a bar to a claim. andbankruptcy of gm, argument could be made that before the date of the bankruptcy, you would be ineligible.

bankruptcy will not be a barrier to any claim. if people settle their claims years ago not knowing about the ignition switch and agreed not to litigate, rip up the release, come into the program, that that release is not a barrier. as you find out the total amount made available to the claimant. this program is purely voluntary. get a freee in, preview of how your claim will be treated and then, only then make a decision whether you want to participate or not. >> this does not take into account punitive damage. talk to us about that. only eligible cars that make up the 2.6 million recalled vehicles are eligible, listed

right in the protocol. deployed,airbag ineligible because the power is on and it could not be the ignition switch will stop airbag deployment makes you ineligible. that, come on in and we will see what we can do. >> there had been some critiques that this does not and gm's liability because it doesn't address punitive damages. what do you say about that? >> if somebody wants to get punitive damages directed at gm, don't come into this program. this program is designed to compensate victims of these terrible, tragic accidents. if your purpose in filing a lawsuit is to go after general punitived seek damages, that is not part of this program. what i would suggest you do in

such a case is coming to this program, find out what you will be paid in the way of compensatory damages, and then decide whether you want to reject that offer in terms of litigating for punitive award. >> how many do you expect to take up on the offer to come in and file a claim? >> i don't know. we are reaching out with a very pervasive notice program. we are sending out letters to the 2.6 million people subject to the recall will stop we are sending out letters to about a million people who are former owners of these vehicles, so we are hoping to reach everybody lostf they were injured or a loved one, come into the program. hilliard who bob represents some of the victims. he says the victims were cautiously optimistic, but we talked about some of the

complaints that perhaps you are too friendly to bp when you settle the gulf of mexico oil spill. pushback have you been getting on that? maybe that you are too nice to gm? >> that will come. don't forget that in bp, in 16 months, we paid out $6.5 billion. so much for friendly to bp. but let me say this. the only thing that matters, and mr. hilliard is largely correct, the only thing that matters in this program is how fast and how generous are the payments? all this talk about how the program will work, etc., at the end of the day, all that matters and the real judge of the success of the program, how quickly and efficiently and effectively and generously did money go out the door? that the only test. >> can i infer with that which

you have complete autonomy from gm? that they gave you some kind of length check for this? >> that is correct. , right in theays protocol we talked about earlier today, when i make a final determination as to eligibility and the amount of money gm has to pay it. they have no appeal, no right to pushback or reject such a claim, they are obligated to pay it. up there.ms it thank you very much, former treasury secretary pay czar, ken feinberg. we appreciate you taking the time on this very busy day. "market makers" will be right back. ♪

but that's it for "market makers ." thank you for joining us on this very busy monday morning.

tomorrow, we will go back to erik schatzker in aspen, colorado. he will talk to the cofounder of the carlyle group, david rubenstein. that's coming up tomorrow. we are approaching 56 past the hour, so that means number television is on the markets. scarlet fu has more. >> u.s. stocks are little changed on this final day of the second quarter, fluctuating years -- for joining your record highs. the s&p is on track for its largest wretched quarterly gains in 16 years. our guest, a derivatives strategist. we were talking during the break about how quiet it is out there and how little volatility there is. that's the debate of the moment. last questionit mark >> our work suggests people had to strap in because we are set to see low volatility for years to come. we've looked at a low volatility regime that began in 2013.

historically, they last about five and half years. if you project that from where we are now, you're talking about another four years or so of u.s. equity volatility. keep in mind it's incredibly low historically across asset classes and geographies will stop >> will equity volatility remain low even if equities start rising? >> if you look at the vix, low volatility environment equates to spot fix ring in the 10 to 25 range. move. that range, it will we've been plumbing the lows for a long time and we count 51 days that spot fix has been below 15. compare that to the 25 day average of seven volatility events back to january of 2014. could we see moderately higher volatility? yes. that's we are seeing some interesting activities in options.

apple, cisco and microsoft. >> it appears to be one investor coming in and buying what amounts to about 8% out of the money on average calls out right in september. pointe paid about three $5 million in premiums and it demonstrates an interesting dichotomy. on one hand, we say use low implied all ability but it's a great use to take advantage of convexity that options offer, the non-linear payouts of options. person is positioning with nice leverage and it might be in parallel with stock but we like both hedging and taking advantage of the outside. >> volatility is cheap. ise a look at oil which trading lower even though the insurgent movement in iraq has stepped up its action, declaring a caliphate. tracksook at uso, which

wti. it's the most tradable product in the u.s.. what has happened from a volatility surface perspective is that implied volatility has come off sharply and the market is lined up on the long side here. andied volatility is low what we are doing is playing for a move in either direction. if the tensions in iraq ramp, there could be upside but at the same time it could unwind. to august andoff by strangled. -- by 40 strike call and pay about $.70 and you will make money with breakeven set are about 2% away from spot in either direction. upside in k'she iraq does intensify, if there is an unwind of crude prices. >> indications are it will stay in this range and is range bound.

>> if you look at the move up, it has been fairly sharp. it's not really sustainable at this point. >> thank you so much. we are on the markets once again in 30 minutes. "money clip" is up next. downow jones industrials by .1%. the s&p 500 unchanged. ♪

>> welcome to "money clips." i am adam johnson. in voters, maserati turns 100. order ahead with that big mac. mcdonald's has an app for that. the company? to come compensation lays out his message for the gm madness. when really small means really big numbers in manhattan real estate. transformers. brings him a little bit of