>> from bloomberg world headquarters in new york, i am mark crumpton. line." "bottom what he calls the biggest presentation of his investing career. then, u.s. flights to and from tel aviv are canceled for 24 hours. sales of previously owned homes in the u.s. reach an eight month high. to our viewers in the united states and those of you joining from around the world, welcome. and coverage of the stocks

stories making headlines today. julie hyman details bill's latest bid against herbalife. eat or cook follows developments in ukraine. we began with phil mattingly and conflicting legal rulings regarding president obama's health care law. good afternoon. >> the signature legislative achievement was dealt a blow and then a boost in the course of a couple hours. one u.s. appeals court ruled the law did not allow for federal insurance and subsidies am only those provided by state exchanges. reliesordable care act on 14 state run exchanges. the rest? all federal. meaning millions could lose subsidies. if the ruling stands, the law more or less would not be able to cover the millions. underscoring the fact that there are a separate appeals court, this one in richmond. so basically a mixed day for the

law. administration officials said they would seek a review on the first decision. one where democratic judges hold the majority. momentumprovide fresh and challenges to the law and new uncertainties for users of the federal exchanges. rex was this challenge a threat to the of -- one that the administration salt coming? >> it was. white house justice officials knew there was challenges and major potential here. still, they say they felt and continue to feel comfortable about where they stand. something josh earnest pointed out today. take a listen. >> our confidence is rooted in the fact that the is pretty obvious what the congressional intent was. they're in 10th was for every healthe american to make care more affordable and have access to the tax credits, regardless of state or federal officials running it.

express all comes back to how the law was drafted. frankly, sloppiness. not the intent that has become the problem. there is a line in the ball that state's and subsidies are available to those who role in state-based exchanges. that line of federal exchanges is the basis for the ruling upholding the challenge against the law. legal fight plays out, there will be no effect on tax credit right now. even as this plays out, no impact on individuals trying to insurance. >> phil mattingly joining us from washington, thank you. more than 500,000 palestinians as 500th have been killed fighting intensified two weeks ago. the middle east editor, elliott plotkin joins man the phone now. what is the latest on ground the latest >>

figures and facts are even grimmer than the ones you just read out. 600 five palestinians killed. 150 four had children. 30 israelis have been killed. so the fighting is continuing. rockets are still being fired into israel and israel still retaliating. we are seeing the impact of that as you mentioned in the headline with the issue of it coming in from the united states. >> there are intense diplomatic efforts underway to end the violence. are the talks making headway at this point? >> john kerry has met with the egyptian president, u.n. secretary general. said the fighting needs to stop, then we can deal with the other issues. week.as on the table last

hamas said it was not consulted and then rejected it. it is demanding the release of hamas members who were rounded up when they were searching for the murderers. >> you just mentioned the aviation situation a moment ago. u.s. and european airlines cast -- canceling flights to and from israel. what led to the decision? >> is this ongoing conflict. trying to hit the target. what happened today was a one rocket hit into a house one mile north of the airport, the main international airport. as result of that, it triggered an automatic cancellation for 24 hours of flight from the u.s.. this is an faa internal ruling. the biggest u.s. airline canceling flights to tel aviv, air canada and france.

and austrian airlines all canceling flights. the chancellor of israel asking them, begging them to reconsider so as to not give the prize to the terrorists. >> middle east editor, elliott plotkin joining us on the phone and tel aviv. meantime, the obama administration carefully watching developments in the middle east and ukraine. peter cook is following that story. with the situation and ukraine. the europeans have agreed to step up sanctions. and haveave indeed, met and agreed to expand the list of sanctions against russia. they have agreed to expand the

list of individuals that would be targeting after shot down -- shooting down flight 17. those directly or indirectly responsible for bringing down this plane must be held accountable and brought to justice. as we call on all states and parties to fully cooperate in this, we in particular call on russia to actively use influence over the illegally armed group to achieve access to the site and we urge russia to stop the increasing flow of equipment and weapons and militants across the border. >> a formal list of sanctioned targets will not be released until thursday. sayingma administration they are considering escalating its own sanctions in ordination with the europeans. the president signing of

condolence took. making a visit to the u.s. embassy in washington. a national day of mourning tomorrow. this has been a source of tension forearms day tomorrow. >> still a source of tension. -- arms sales. this is being led by the united kingdom. the big issue has been all along helicopter the carriers being built by france, sold to russia. the deal has artie been done for one. president hollande says cannot do anything about the firstborn but the second one could be more of a controversy. perhaps france could pull the plug on the second carrier. the will likely be put on spot. >> let's switch to gaza and the crisis there. secretary kerry in the region. he seemed to indicate today he was making progress. >> he called the talks so far constructive. this will be a very heavy left.

the goal to get an immediate cease-fire in hostilities. we have not seen that yet. collings for restraint on both sides here. clear what the end result will be. secretary of state remaining in cairo. he will stay there for the moment, trying to make some sort of progress. acknowledging that john kerry has a tough target ahead. >> chief washington correspondent peter cook horning as this afternoon. existing home sales in the united states at an eight-month high in june. we will take a look at what the housing market may be gearing up for. is there a late summer push in store? we continue in a moment. ♪

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watch bloomberg television. we are on the web, mobile device, apple tv and on amazon higher tv. welcome back. results of a the two-year investigation into nutritional supplements company herbalife his goal was to demonstrate once and for all the -- fraud. a quad julie hyman in midtown manhattan where he made what he calls the most important presentation of his career. good afternoon. bitou cannot be a little anti-climatic when you are so that kind of marketing ahead of time. i have a party favor afterwards, 60 pages of the research. as the centerpiece of that is something at the centerpiece of the company, a nutrition club. it sells its product through an army of distributors. frequently now they are opening the nutrition club's where for a membership the you can go daily

or weekly to get singleserve portions of the various products. he says essentially the nutrition clubs are fraud. listen to what he said. >> 40 to 50% of the revenue from nutritiony called club. it is itself entirely fraudulent. they have fake customers. these are not customers, people who are buying into a mini. scheme. we have facts. >> basically he says they are a fraud because most of the customers coming there are not coming for the product itself but part of a training exercise so that they will get certification and be able to open the nutrition clubs themselves. he said on average it is $12,000.

it all comes back to the idea of the peer amid scheme. does herbalife get more of the revenue from trying to recruit new members or actually selling product? bill ackman says it is recruiting and the ties are style -- tied to actual product sale. >> talk to us about the feeling in the room while bill made the presentation. what was it like? >> interestingly, there were a lot of young people in the room. seemed to be some students in the room. there was another who asked the question who was from and why used -- and why you start school of business. -- nyu. there were a lot of people that ended up leaving during the course of the more than three out were recent tatian. pressure plate toward the end the room was more than half empty. he did have a few friendly's and the crowd. his father asked a question and asked him to clarify what

entails a pyramid scheme. at the same time, the mood in the room was a relatively friendly one today. the stock price was going in the opposite direction. about 13% when he was speaking. more than recouping the losses from yesterday as they anticipated the presentation. >> julie hyman joining us from midtown manhattan. >> sales of existing u.s. homes climbed to an eight-month high in june. the national association of realtors said sales rose 2.6% last month with all four u.s. regions reporting gains. michelle meyer's at bank of america merrill lynch joins me in studio. welcome back. good to see you. trend,th does not make a

we all know that, but how encouraging is the latest data? >> the third month of gains. that is encouraging. we have now seen some gradual the housing market. it comes after what was a string of really week data starting last summer. existing home sales have been trending down. it started in part due to the rise in interest rates, the harsh winter weather. does not feel like -- does feel like the data has gotten better. races, so off to the a lot of challenges but encouraged by the recent data. >> you talked about the fed. what impact has the drawdown in monthly bond purchases had? >> it is a good question. we heard that from janet yellen and her testimony. and it is a point of the economy

that we have obviously had extraordinarily hard from the crisis. interest rate sensitive part of the economy. one that the fed feels like perhaps they have a greater ability to influence and the fact that the data has been weakening since the middle of last year was fairly discouraging. residential investment in fourth quarter of last year and first quarter this year looks like maybe a slight positive and the second quarter. we are not getting the jolt roughhousing that perhaps they were hoping for. >> have the bond purchases, have they had an impact on the stability and direction of the housing market? >> interestingly, the signaling of quantitative easing last spring that led to the higher we sawt rate affordability get hit and home sales weaken a bit. now rates have come down quite a bit despite the fact that the fed continues with the tapering

program. i think at this point the drop in interest rates relative to the high of last year should start to be somewhat supportive like i amsing market speaking to michelle meyer's. merrillconomist at lynch. existing home sales 2.3% of the lowest sales rate in june. how come? >> i think partly due to the higher rate environment. partly due to participating as much. at the end of last year, earlier in the year. that is probably a factor. i think broadly speaking, still challenging for the first time home buyer to enter the market. we are in a healing economy but creditflation is low and conditions remain tight. >> you put out a note recently

that there is still a high share cash buyers. historically low share of first time buyers. how much does this distorts the market. >> not a normal housing market. not a normal housing recovery. it will not be for some time. it has made it hard for people to enter the market that would -- that perhaps would otherwise like to. another difficult question is how perception has changed around housing. do we think about housing differently in terms of his store will? the common belief was homeownership should be available for everyone. we now know they do decline. i think there is a different way of proceeding. at the survey, people still say they would like to buy but i think the timing

may be different. >> we are seeing an improvement in the labor market but does that mean the number of first-time buyers will increase, especially if wages remain stagnant echo >> not just the amount of jobs they are crating but the amount of income creating from jobs. statistic that will be very important is the employment to population ratio, particularly for the youth population. what share that would be the typical first-time home buyer are actually employed? that has been coming up. i think that is problematic. >> what will it take to get the home sale back to pre-recession levels? >> i think it will take a lot of time, that is for sure. i am not sure we will get back to pre-recession levels. i think in terms of single-family starts, we peaked at 2 million.

we may not get to that level again. that makes sense. we have seen a distribution towards more multifamily buildings and that might be the path we're on for some time. >> michelle meyer's joining me in studio. great to see you. fending off rupert murdoch. time warner strategy to fight unsolicited takeover bid. stay with us. ♪

>> welcome back. this is "bottom line." i am mark crumpton in new york. thank you for staying with us. approaching 26 minutes past the hour. that means bloomberg television is on the markets. matt miller standing by with the

details. >> a bit of her rebound in the markets. after red arrows yesterday green across the board. the dow jones industrial average adding 77 points to 17,129. a couple of individual sites we are watching, time warner. they have taken a step to fend off rupert murdoch's unwanted takeover offer by eliminating a provision that lets shareholders call special meetings. the change was unanimously approved by the board and delays untilte by shareholders june. also watching shares of yahoo!. whichng flurry am a analyzes data from smartphone users and helps target customers. people are familiar and part of that. markets in 30

minutes. more bottom line after this break. ♪

>> welcome back to the second half-hour on bloomberg television. thank you for staying with us. the time warner board has taken the first concrete step to fend off rupert murdoch's unsolicited takeover bid. they have amended corporate bylaws. a filing with the ex -- securities and exchange commission they said it was effective immediately. this gives shareholders and 20th century fox fewer avenues to press the company to a potential deal with fox which recently

made an unsolicited $80 billion offer to combine the companies. even if the board were to approve an offer, it would need to get the greenlight from federal regulators. for the past antitrust test? megan hughes looking into that very issue. what would be the red flag were regulators? >> a lot of talk in washington. channel holders would be a primary focus. this would get 21st century fox a lot of control over what people watch. so take a look at the top 10 cable networks according to recent eels and ratings. if the deal goes through, fox would owns four of them. so for advertisers, a large advertising platform under the sum of one company. then you throw in network that do not have the leading premium channel and its hits like game of thrones.

according to bloomberg intelligence, fox own networks would account for 20% of the average cable bill, double the current amount. a significant portion. the concern with that, fox would have more negotiating leverage, ofecially for bundles programming. analysts did not see there be a lot of overlap in terms of content for what the channels are, identities. actually a lot of optimism that a deal could go through. >> are there other concerns for competition beyond that? >> there are a couple of things to give waiters could also look at. number one, film studios. this would mean one owner, to studios. fox and warner bros. ranked number one and number two. they have more than 35% of the canadian box office. combining them could give more negotiating power than some of the competitors.

dealing with revenue splits. the other items they might look at his forthright. a space where there is not a lot of competition right now. if it took over fox warner, that would take one competitor out of the picture. >> talk to us about the process. what would that look like? >> a lot of thinking that fox would not meet approval on the deal because time warner does not have broadcast licenses. what it means is a pure antitrust review. talking about either the department of justice or the federal trade mission. one big question a lot of people are asking, add this to the pending mergers and paid tv. how will they see this as part of a broader band gave? that is a big unanswered question right now. >> megan hughes joining us from washington.

research.ey, head of thank you. time warner, what is it doing to fend off the takeover? >> i think they will have to appeal to the shareholder base that they will have to lay out the argument. so i think it is going to be a tough road for them. pretty good cream yum that 21st century fox put on the table. speculation from the merger arms out there that's rupert murdoch is willing to go much higher or higher certainly on his bid for the company. a lot of immediate value being shown to the time warner shareholders and very difficult to walk away. >> typically holding the annual meeting in june. the extra time, will it give more leverage and will time warner used the next 11 months or so to show it does not meet

fox? >> i think they are. they have really focused the company on the cable network and on the film and television production studio. early a focused streamline company. very high growth margin company. they do absolutely have assets. the question is, with the shareholder base, a lot of people coming into the stock, do they really care? playbookusing the same with dow jones? >> he is. i think what he has done fairly successfully is approach a company, talk about a deal on if they do not get a positive response, link it out to the marketplace and the pressure builds on the target company and shareholders to make a decision. that's where is time warner most will marvel? >> internationally. they do not have the big enters not -- international footprint.

they believe international markets really represent the best growth. time warner has acknowledged that is an area they need to invest in and grow in. conversely 20th century fox a big player financially. >> megan hughes telling us about the regulatory hurdles. >> when you talk to attorneys in the space him antitrust attorneys, most believe the transaction will pass regulatory muster. there are really no broadcast license to speak up. really a concentration issue. this is a global business. what i think they will argue with all of the technology come into the marketplace, so many more choices or how all access market content that validation is probably something that needs to occur. >> other media news to talk about. comcast reporting second-quarter earnings.

more customer signing up for high-speed internet -- internet. forbought a private company a price tag of 690 million dollars. what does this tell us about consolidation in media? >> tells us it is not simply limited to the business or movie business. the old-fashioned media. essentially three big players. they are buying of the smaller layers that have been consolidated. the outdoor businesses and industry that has been consolidated. not much more left but cbs certainly one of them. >> the story has been going on for the past few days. anything that surprised you? >> i think what happened is the distribution side has already started consolidation. please see cable comcast and time warner cable, at&t and the contentt made

owner step back and say of our distributors are getting a care in gaining more leverage, perhaps we need to think about our business. lex what about make in just said? she said what about merger fatigue? >> rate for the shareholders because they are making money over the past several quarters with a merger activity. will be fatigue for the regulators down in d.c.. they will have a very busy summer no doubt. >> thank you. still ahead, they are called mobile slaughter units and popping up around the united states. we will tell you what they are and why they are showing up in affluent areas like martha's vineyard. ♪

>> welcome back. time for today's latin america report. the judge overseeing a battle between argentina and holders of the defaulted debt ordered both sides to continuous negotiations

to avoid default. judge rejected arguments by lawyers by the country who urged him. the judge called it rhetoric and unfortunate and added the case has arrived at what he called a crucial time. the judge reaffirmed the rights of defaulted bondholders saying sensible steps needed to be taken to reach a settlement ahead of the race time on restructured bond payments. appointed manager of brazil's national soccer team. the man seen here. he was at the home of the squad's record-breaking loss of the world cup earlier this month. he goes the team during a record five-time world cup winner.

that is your latin america report for this tuesday. a growing appetite to food products. poppinglaughter units up in some places you would not expect. one place is martha's vineyard. mevisited a unit in joins now from washington. mobile slaughter, how does it work and where is it redolent? lex you have seen more interest in locally grown food. if you are serving more of a niche market, you need someplace workhouse, pigs and chickens cannot actually be killed on the way to the market. you see the ad hoc solution where various units have been created. they can slaughter the small batches of animals and then help grow a local food market. being?is this coming to

>> if you are a large producer the large players may not want to deal with you. -- small producer. it will not take advantage of the economy at the scale of a larger unit. you also have issues in places like martha's vineyard where if you are on an island a farmer would have to take a cow or chicken a long way to go to a slaughterhouse. this is a way to fill the market need and bring it closer to the farm. >> get some really sanitary equipment. it can be surprisingly inexpensive. up.000 for the start the back of the pickup on a hitch. you really have to look at the food safety issue. federal safety standards are pretty strict. a lot are state inspected but still have a federal role to meet. people reallying watch with these, making sure you are getting a product that

makes you feel good but not bad after you eat it. >> it might to assume when you see the difference slaughter houses of the different locations they have to have the requisite paperwork to show people they do meet standards go >> the food and safety inspection standards vary from state to state. they are all trained and inspected. so you do not have to worry. >> what is the market potential of the units? what is there at the very least the goal in the end? >> it is interesting. when you look at these units, a lot of them hope to be transitional. when you see the transition of our culture come the you end up with the hope that maybe it's the -- maybe the small players can come back and create new brick and mortar facilities and you have now created a new

permanent infrastructure for on the alternative food system that could make some of the older units become victims of their own success. >> you talk about brick-and-mortar's. is this a challenge? >> it is a challenge. it is a lot more expensive but if you have a variety -- but if you have it, you have the variety you can slaughter. then they can really have a diversified market. thank you so much. we take a trip to capitol hill to show you how man's best congressman's a best friend. we will explain when we continue in a moment. ♪

>> welcome back. can't "bottom line" bloomberg television. not call the dog days of summer for nothing. there are no rules impacting dogs on the ground. we went to capitol hill in washington to find out if congress has really gone to the dogs. ♪ >> i am congressman ken calvert and represent west riverside california. this is my dog sally. she comes to work every day. i think it is great to have a dog in the office. makes everybody happy. she loves to walk, go down the hallway and go after a ball. members of congress travel quite a bit. difficult for them to have

animals at home with him but great to have one at the office. her other friend is mia. i am ileana ros-lehtinen and a member of congress from south florida. we have our little rescue pup us sevenhas been with years. she is a calming influence in the crazy office. she is checking out who wears food, anybody going to pet me or walk me yea? i never thought it would work out as well as it did. we did it when she was a puppy and now she is a staff member. sometimes she's this and interviews with me with constituents but more often than not she is in a corridor of the office where she has moved in. >> she jumps up on the laughs of four-star generals and licks them in the face.

>> we wanted you to know bloomberg is the only business news service being offered on amazon fire tv. if you missed any of the interviews, you can watch them on bloomberg on apple tv that features live streaming and on-demand videos. stay with us. another check of the market movers is on the other side of this break. wall street trending higher. ♪

>> get the latest headlines at the top of the hour on bloomberg radio and bloomberg. that does it for this edition of bottom line. i am mark crumpton in new york. on the market was not aware is next. i will see you tomorrow. welcome to on the markets.

matt miller here reporting. taking a look first off that where stocks are trading just about an hour to go until the closing bell. green arrows across the board. s&p 500 gaining. backing off from the games we saw earlier. the dow gaining 54 points. today's sector report. we will focus in on automotive profits coming up. motorcycle profits that just came out. kevin kind and joins us from bloomberg intelligence. let me ask you. those results came out. shares are down. why are investors disappointed with profits up 40%? >> the outlook for the delivery of the remainder of the year taken down a little bit. i think being just -- being conservative as they moved to new products. the stock has been on a nice run anyway. looks like the market has taken

a little bit of the profit out of it. >> what do you think about the lower profit? why would they have to do that when the economy seems to be rebounding. i think there is a product transition. i think to a small extent it plays to the longer-term story with harley davidson. you have to get younger buyers in there also. the older guys with money are all well and good but for the future growth you have to pull in the younger buyers. a little bit of a transition right now to transition from imageutlaw kind of biker into higher tech appeal to the younger generation kind of image. >> getting to gm and ford. disappointingee

movements from those as well. obviously gm going to get hit. -- recall costs. >> they will obviously play an issue. that will be over and passed as we move into the second half of the year. have a great operating leverage coming out of bankruptcies and the subsequent years with cost rationalizations. at some point as volume picks up you will have the cost inflation and will be dealing with that. get into have to updating that's an refreshing the product as well. that is all very costly. when you look at the macro economic conditions on down some everything looks good in the industry. at some point you have to put in additional cost into the system in.et new buyers >> adam jonas from morgan stanley wrote in his note on their earnings that they will

see ramp up in the trucks because of pressure from the new f1 50. do you think that is the case go >> yes, and obviously with the f series you will see this. not such a huge story beyond the truck wars beyond ford and gm and ram and toyota. wayind of changes the trucks are manufacturing with greater fuel economy. opportunity there to have a professional advantage. maybe short lived. >> thank you. bloomberg intelligence. ♪

>> welcome, everyone, to the most important hour of the session. 60 minutes to go until the closing bell. stocks are in the green, rebounding from yesterday's highs, and do not look now, but it looks like another record high. i am trish regan. "street smart" start next. -- starts next. coming up on today's edition of "street smart," we are counting