mark: from bloomberg world headquarters in new york, i am mark crumpton and this is "bottom line" the intersection of business and economics with a mainstream perspective. to our viewers in the united states and those of you joining us from around the world welcome. let's get you to the top stories we are following on this tuesday. national guard troops are patrolling the streets of baltimore, maryland, after a day and night of violence. riots -- riots interrupted monday following the funeral of

a black man who died in police custody. buildings and cars were torched demonstrators threw rocks and bottles at police, injuring 15 of them. maryland governor larry hogan declared a state of emergency. governor hogan: my number one concern is jobs, what i've been focused on, creating more jobs and opportunities in baltimore city. today the focus is on the emergency actions that need to take place. tomorrow we work on how we work together to create more jobs. mark: baltimore mayor stephanie rawlings blake has imposed a 10:00 p.m. curfew starting tonight. businesses are feeling the aftershocks. t. rowe price has closed its headquarters in the downtown part of the city. southwest airlines has canceled 10 baltimore departures today. public schools in the city are close. and the orioles game against the chicago white sox, major league baseball, that game has been postponed. in nepal, the finance ministers says it will cost more than $10 billion to repair the country

following the killer earthquake. to put that in context, $10 billion is about half of nepal's economy. authorities say about 4300 people were killed in the earthquake. national football league commissioner roger goodell says that the central office will become ataxic will entity. -- a taxable entity. the nfl has been tax-exempt since 1942. he informed teen owners and members of congress of the decision, saying he was a eliminating what he called a distraction. in a statement, the commissioner said "every dollar of income generated through licensing agreements, sponsorships, ticket sales, and other means is earned by the 32 clubs and is taxable there." commissioner goodell says the change in filing status will make note difference to the business. the united states supreme court began an historic session today. the justices are hearing arguments in the case that could legalize him sex marriage

nationwide. -- same-sex marriage nationwide. supreme court reporter greg story joins me now. who are the parties involved and what is likely to be a landmark case? greg: there are roughly 31 adults in this case. they are both people who want to get married in a state that does not allow same-sex marriage or people who are married elsewhere and want their state to recognize their marriage from out of state. for example, to have their name on a birth certificate. mark: greg, did we get a sense of where the justices were leaning in the case, and justice anthony kennedy, who wrote the prior gay-rights decisions, is he still considered the swing vote? greg: he is certainly the swing vote could we got a little more sense of what the justices are thinking today, but the questions from him and the other justices went up ways today. you have to look at what the court did a couple years ago with the big gay-rights decision and how the court has left so

many -- let so many states start same-sex marriage because of the movement since then. we now have 36 states where gayus can legally get married and that may be the biggest evidence that the court is moving in the direction of saying that it is a constitutional right nationwide. mark: greg, you mentioned a movement that the court has let happen. is this something where we can go back to the road v wade decision that legalized abortion, and critics have said that the court at that time did not let the movement happen? greg: that is certainly something people will talk about and one of the people who suggested that criticism is justice ruth bader ginsburg, who is one of the most liberal of the justices. she says that the court moved too far, too fast on roe versus wade. on gay marriage, the court could have issued a ruling two years ago but decided not to. they decided to let the number increase on a state-by-state and let popular opinion

move in that direction. it may be that this is a different case where the court has actually waited long enough that the decision will be accepted by the public. mark: one of the arguments in favor of same-sex marriage, as you know, is that landmark loving versus virginia case in 1967. the court ruled that preventing interracial marriage is unconstitutional. what are the similarities between the cases? greg: there is certainly a similarity in that the parties are you arguing that this is a fundamental right and we want equal access to it. it is the same thing that the cases that the couples did in loving versus virginia. -- same thing that the couples did in loving versus virginia good for the states defending the same-sex marriage ban they are saying that traditionally marriage has been between a man and a woman. it was not the case in loving that the definition of marriage meant that it had to be two people of the same ethnicity. they say that this is a real fundamental change in marriage.

and that, they say distinguishes it from the loving case. mark: can we expect a decision in june? is that about right? greg: probably late june, about the same time as the big health care decision. mark: and i know you will be all over that as well. greg stohr joining us from outside the court, thank you. president obama says that trade talks are difficult in japan and the united states but he is confident a deal can be reached. he said this during a joint news conference with visiting japanese prime minister shinzo abe. washington correspondent peter cook is at the white house with more on that story. good afternoon. peter: good afternoon. a beautiful day at the white house. the president had the chance to roll out the red carpet for prime minister shinzo abe. a very warm greeting for the japanese prime minister.

through the course of their press conference, referring to each other by first name. clearly a good moment for the united states and japan in the eyes of the obama administration. the leaders during the quiz of their press conference talked about the alliance and that they are more than just allies, they are partners and friends. they talked about military cooperation, enhanced military cooperation moving forward to that it shouldn't be seen as a provocation to china. and on the central economic issue between the countries, the transpacific partnership, the ongoing trade talks between 12 pacific nations, they knowledge that the u.s. and japan have not resolve individual differences over trade but are getting closer to a final deal. president obama: with respect to trade, we have reviewed the progress our teams have made towards the transpacific partnership. i know that the politics around trade can be hard in both our countries, but i know that prime minister abe like me, is deeply committed to getting this done and i'm confident we will. pm abe: on the outstanding

bilateral issues, significant progress was made. we will continue to cooperate to lead the tpp talks to its last phase. peter: and the hope was when this visit was first announced sometime ago, perhaps the u.s. and japan could announce they had result of own differences, creating more momentum for the larger 12-nation talks to move forward and wrap up later this year. that obviously hasn't happened but both sides are optimistic about the prospects down the road. the president had trouble selling the still too skeptical democrats on capitol hill. shinzo abe goes there tomorrow the first japanese prime minister to speak to a joint session of congress, perhaps offering the president a helping hand to convince lawmakers to jump on board. mark: the president also offered his first reaction to the violence in baltimore, maryland. he says he wants the country to do what he called soul-searching. what do we take away from that? peter: well, it was a long

answer from the president. he was clearly ready for an answer on baltimore and the violence there just hours from here in washington. he expressed concern for the family of freddie gray and the police officers injured in the line of fire in baltimore, but said that there is a larger question here for the country, that there needs to be more focus on the issues that led to this in the first place. take a listen to the president. president obama: if our society really wanted to solve the problem, we could. it is just that it would require everybody saying that this is important, this is significant and that we just don't -- don't just pay attention to these communities went to cvs burns. peter: president lamenting a little bit that his legislative agenda could have helped address some of the concerns in places like baltimore have been stymied in capitol hill but that he would continue to work in some areas where there has been compromise and progress --

prospect for progress going forward in the once remaining in his presidential term. mark: washington correspondent peter cook joining us from the white house. bloomberg television continues its coverage of the milken institute global conference. my colleagues erik schatzker and stephanie ruhle are standing by with the president and ceo of the san francisco giants. stephanie: thank you, mr. crumpton. we are talking baseball out here. who better to speak to that the guy who runs the san francisco giants? larry, let's talk baseball for a minute. many people are saying it is not going to be the national pastime , football is. >> i don't agree with that. football is great and they have done a great job but baseball is a different type of sport. all kinds of attendance records have been set in the last year. baseball needs to focus on youth, and i think the new commissioner and a bunch of owners including myself are

working with him to get the initiatives going. huge redeployment of resources into little league league baseball and youth baseball. you look at the research. if you grew up playing the game of baseball, you will be a fan in your later years and adult years. erik: ok, the emphasis on youth because the average age of the baseball humor is rising. makes a lot of sense. and the changes that have been implemented for play -- games getting a little bit shorter. but is it enough? are you in favor of going to a shorter season? larry: we could look at that, 154-game season. kids are using this to communicate, to be entertained. we will have to be relevant. we will have to be quicker-pace. the beauty of baseball, though is that there is no clock. it is sort of -- a bit of a conundrum. you have got to understand the demographics we need to

increase, and that is the teenagers, who are pushing in a lot different directions with different things at home and out of home. in our market, baseball is at an all-time high in terms of little league enrollment and kids playing this for. 350 consecutive sellouts. it is not that way everywhere, i get it. but i think that the dna of baseball is strong and growing. stephanie: how do you solve the conundrum that there is possibly a need to shorten the season and shorten the game and salaries are only going up? larry: salaries are a function of revenue and revenues not going down in baseball. we are in the content business. being in the content business is powerful. there is there is for content on ulcers of platforms. i think that in some ways some of that is overstated. if you look at the ballparks, the ballparks in many ways our town centers. we compete with going to the movies, going to a theme park going to wine country, --

stefanie: except tickets were sporting events are so expensive these days. larry: at half of our games you can get a ticket for $20 or less. so there. stephanie: so there. larry: i think baseball is an exception. we were the first team to do dynamic pricing for tickets. there are certain high-profile games that will be more expensive. but if you are able to go online and figure out again that is affordable and on two thirds of americans we have tickets $20 or less one of the strengths of baseball is the affordability. erik: how much upside is there on television revenue? larry: continuing upside. it is not just television, but monetizing the content. as we are moving into new forms over the top and other forms being studied hard, majorly respond -- major league baseball and enhanced media, it has largely become a technology

company -- erik: but the viewer has to be willing to pay. the doctors got tons of dou -- doctors got tons of dough but -- larry: there was the failed deal in l.a. erik: what was failed, the price? larry: everything. what happens is that you do with them down the line as he gets to the consumer, it becomes too expensive to make back the dollars on the deal. we have a partnership with comcast where everything works well where it is priced well and the giants are getting the fair rights the and the whole thing works. look, there is disruption. there's a lot of experimentation, a lot of change. a year from now, i think you will see some very unique different kinds of deals with different platforms. erik: like what?

how would it work? larry: over-the-top services -- erik: by market or administered by mlb? larry: no it will be administered by mlb but there will be different deals in different markets. erik: are you going to do that with the giants? larry: we will be part of major league baseball's advanced media initiatives. erik: no, but you have a deal with comcast and they want you to go over the top with somebody else's provider? larry: we will figure it out. why are we talking about bumgarner tonight? stephanie: how about a different kind of play, a real estate play? what is the mindset here? larry: the mindset is that we have had 350 consecutive sellouts and a great experience with the ballpark.

people ask is that you could do it all over again, would you do differently? weerik: real estate. larry: we are developing our parking lot in a mixed use project that will have a big office and a big residential and a big dark and it is an opportunity for us to really diversify and get another business and the way we and i have to look at it is that we have 7 million to 8 million homes in the bay area and we have to compete with the doctors with 12 million homes and new york and this is a way for us to be competitive with markets that are larger. erik: will it be as successful as what the red sox have done around fenway? larry: we are building a neighborhood. it is a $3 billion project . stephanie: working at the berkeley center in brooklyn -- larry: thanks, stephanie. give my regards to dan.

stephanie: i feel like larry might yell at me and tell me to get back to work. [laughter] erik: mark, to you in new york city. mark:you two are having too much fun. stephanie: we are, sorry. mark: thanks, guys. after the break, truck makers off to a strong start with help from the newest cancer medication. we will look at how they take advantage of cutting-edge research and the price tag that goes along with it. "bottom line" on bloomberg television continues in a moment.

mark: three of america's biggest pharmaceutical, and is, pfizer

merck, and bristol-myers, reported better-than-expected earnings today. cynthia kunz joins me in the studio. what is the strength behind these numbers? cynthia: part of what is driving the results are the new cancer drug launches. with pfizer, merck, and bristol-myers, there are cancer immunotherapies that of come to the market and breast cancer drugs, and their getting an uptick in the initial launch in the market. mark: why are the therapies doing so well, given that they are so expensive? cynthia: the drugs can be $100 to $150 a year for patients. but at the moment patience are paying for the drugs so cancer centers are able to use them. mark: cynthia, we're looking at the graph on the screen. what are we looking at? cynthia: these are the three different drugs. keytruda and podivo -- opdivo

help the immune system to attack the cancer. ibrance will get broader approval as the year goes on. mark: all three of them over six figures. that is expensive. what is the outlook for these new drugs coming to the market? pcynthia: they are studying these drugs in a lot of different types of tumors so presumably this is the beginning and in cancers where there are much bigger patient populations, the angle is being able to take these therapies and applying them to different patient populations in combination as well as on their own. mark: what are the major risks in these outlooks? cynthia: basically the drugs compete with one another and they get tough on pricing. it hasn't happened yet so we have to wait and see. mark: for this pharmaceutical

copies from of the prophets keep going up. cynthia: how many different exhibition populations can they reach into and how long will they be able to sustain the momentum? mark: when we talk about these therapies, is there anyone where the companies are saying, you know what, it's so promising that we may be christian and is not a cure but to give people some hope that may be close to announcing not a cure but to give people some hope? cynthia: i think what the community sees really is that once their particular, they will have better result. i don't think anyone therapies stands out as is the real hope of the future. what the investigators are looking at is how can we see far better results in cancers than we have ever seen before? mark: cynthia koons thank you so much. appreciate it. up next, made in detroit.

a luxury goods company is building on detroit's manufacturing legacy. and we will go to the design conference live in san francisco in a moment. ♪

mark: welcome back to the second half hour of "bottom line" on bloomberg television. i am mark crumpton in new york. "bloomberg businessweek" is breaking together the top designers at the design conference in san francisco. brad stone is at the event all day speaking to leaders in technology and design and he joins us live. read:brad: hi mark. i am here with the creative director of shinola a luxury

goods maker located in detroit. before we get to shineola an incredible story, the apple watch. [laughter] we are seeing the watches go out to people. with you guys, the watches are the biggest product category. will watches have a big impact? >> there is room for everybody in the marketplace. brad: i love your ad, a watch that will just tell you the time. daniel: just by looking at it. just smart enough. brad: for people who are not well versed in the actionshinola story tell us why the location of detroit has become such an important part of your marketing message. daniel: the original goal was to make a product in the united

states the first product category we were developing was watches, and it was really about how -- where do you find a workforce that wants to work and has worked on small components and is part of the culture? detroit was a natural place for us to start. it is what the culture and the people in the sense of optimism. every time you are in detroit, you want to go back. it made us face ourour entire company there. brad: there's something about the detroit legacy that is appealing to customers. what is it about detroit and the current status of the city and the manufacturing legacy that is working for you guys as a marketing message? i know that maybe is crass way to describe it. daniel: our stories about people on the people who work in our factories.

and it -- it is also about the city. when you go to the city, you have a different sense of what the city is about. it is not about what you see in the news or here. there is a sense of optimism and excitement. our story is really about our factory in the people who work in it and that is -- it is not about a big designer. it is about the people in the factory. brad: how many folks are you implying now? -- employing now? daniel: in the company about 400 people and almost all based in detroit. there is amazing opportunity for retail, for business. it is a nice place to work. there are great people, great talent pool. the people who are working in our company are some of the most

talented people in the world and we are happy and excited to be part of the city. brad: of course we all have our critics, and there have been some people who view the shinola story somewhat skeptically. you guys have some outside investors, and some of your parts come from countries like switzerland. and you decided quite strategically to locate in detroit. to those who say that shinola is a brand strategically tied to detroit but not authentic, what do you say? daniel: i think we are very open and honest about where the components are from and where things are made. all assembly is done in detroit. there are parts from all over the world and the united states. it is what we say to everyone -- come to the factory and see what we are doing. come to detroit, come to the factory, get to her, meet the

people who are working there and see what we are doing. the only way you can get a true sense of the cup and the and the brand is to see firsthand what we are doing. brad: you are not just making watches. you have leather goods -- daniel: paper. and shoe polish. brad: shoe polish from the world war ii era. tell me how expensive is this brand. what else can you make and what are your plans? daniel: there is a lot of product categories we are working on the blocks in the past year. we have a few new product categories in the works. everything is based on manufacturing. once you can really feel -- fill a strong manufacturing base then you can start the design process. we are working on things that are very exciting. brad: when do we get a shinola store in san francisco? daniel: obviously, san francisco is a huge market for us.

people in san francisco appreciate the quality and what is behind the company. we are looking to expand to a lot stores. i am working on it. brad: thank you very much could mark, back to you. mark: after the break, more from the milken conference. we caught up with jeff staley two years after he left jpmorgan. highlights went "bottom line" continues in a moment.

mark: it is time for today's latin america report. latin america's biggest building company is suspending new investments in brazil. ego says -- the ceo says a looming fiscal tightening and the reluctance to release loans for an oil rig supplier have led the company to put new investments on hold.

the rialto rose to the highest level in eight weeks. there is speculation that the central bank will increase the benchmark rate to market policymakers have raised borrowing costs for four straight meetings to 12 .75%. that is your latin america report for this tuesday. stephanie ruhle and erik schatzker are at the milken conference in california. earlier erik spoke to jes staley former ceo of j.p. morgan investment bank. they began by discussing the unintended consequences of bank regulation. jes: perhaps the biggest response has been a virtual explosion in debt capital markets. the amount of corporate debt issued directly to mutual funds and pension funds and whatnot have doubled in size since 2008. erik: banks know longer holding that inventory?

jes: in part because the banks no longer holding those laws but also because the markets themselves have evolved. erik: demand for yield. jes: demand for you because we have zero long-term interest rates. if you look at the doubling of the corporate debt market, 77 80% of that is funded by mutual funds. retail investors and institutional investors are looking for the yield to put money in mutual funds and the mutual funds up for the money to work supporting the corporate debt market in the united states and abroad. erik: why is that a problem? if i look at the way the banks were funded before, the rub against banks is that they were taking wholesale short-term funding and turning them into long-term lending. jes: the credit market is idiosyncratic. there were different terms with differing conditions and different currencies. it is an interesting market, a

different market to find transparency and liquidity. two things that happened to decrease the liquidity and the transparency could one is the volcker rule. the amount of corporate debt held on inventory on bank balance sheets is dramatically down relative to the size of the debt market -- corporate debt market. in the cash market, the upper spread is much wider. the other thing is that one of the enemies in the financial crisis work better derivatives, or synthetic credit. while the index credit indices or synthetic credits are growing, individual credit default swaps have declined dramatically relative to the cash market -- erik: if i wanted to buy protection for a default against ibm. jes: most of the individual names are around the top 25 names -- erik: no depth to the market at all. jes: after that it is increasingly challenging. erik: we're talking him up the

disappearance of liquidity into parts of the bond market and derivative market. which is a bigger deal? the alarm bells people are bringing are the alarm bells of the cash market. you don't hear people talking about the disappearance of single name cbs as being an unintended consequence of regular she. jes: sometimes we have to get the credit markets to feel more like the equity markets. that has been a goal for a long time. erik: because why? there is liquid toity? jes: one of the suggestions this standardization, debt issuance. use certain dates to roll over your debt, certain standardized documentation to make it seem much more uniform -- erik: so that the citigroup has no longer thousands of -- jes: what began a number of decades ago and jpmorgan was synthetic credit. the five-year cds is simple to

understand, very simple to value . personally, i think synthetic credit is for of like -- sort of like a prescription drug. if they are misused, they're not good. if they are used properly, they can provide a lot of help to the system. i think in this sense, a single named cds is controlled and cleared. erik: if it is clear -- jes: it is not key but we need the clearing rules set up so that if we have the single cds clear, let's do it in a way that makes it attractive to the market. erik: how much of an opportunity does this create for blue mountain? jes: we have a very patient capital, money that goes out to nine years, great investment teams that go down the capital structure from private equity to volatility trading. went markets dislocate, it is very attractive for someone like

blue mountain. when we see a 50% correction in the price of oil and you hit one of the biggest issuers in the high yield space, the emp industry, when you have all sorts of issues going around in terms of capacity, supply and demand characteristics, different parts of the capital structure responding in different ways we spend a lot of time looking into that and we think it poses interesting investment opportunities for someone like blue mountain. mark: jes staley, interviewed by my colleague erik schatzker. after the break, more from the "bloomberg businessweek" design conference. "bottom line" continues in a moment.

mark: the "bloomberg businessweek" design conference brings business leaders together to make design smarter, better,

more innovative. this year's conference is taking place in san francisco. here, the positive benefits sustainable infrastructure can have on society and city life. >> architecture by definition is the art and science of accommodating human life. whenever you do a project, you have this ability to literally change the world. we worked a lot with the idea of trying to make the city more sustainable or make a building more sustainable in a way that becomes a contribution to the neighborhood. quite often we try to bring very different ideas together in unusual combinations so that can be a power plant, like the one we're doing in copenhagen where you can ski on the roof and it can be the dry land, and doing all the infrastructure for

coastal resilience but to do it in a way that becomes the basis for public life. a little campus for google in mountain view. we have tried to bring some of the natural qualities that makes north california so unique bring them back into the workspace. they have the best climate in the world, they have an abundance of nature. but right now it is turned into a typical office park with a sea of parking around it. what we have tried to do now is bring nature back not only to the outside, but also bringing it into the buildings and making sure that it is integrated into the dna of the future workspace. this is the love child of a courtyard building and a skyscraper. what we have nicknamed the co urtscraper.

the site is beautifully located on the west side of manhattan. but it is also quite far away from central park. it is also sandwiched between a power plant, sanitation garage and the west side highway. what they really need here is an oasis. when you take the typical european courtyard building daylight and sunshine can come down. when you give it the density of the skyscraper, it will be too dark. by making it massively asymmetrical, we can create something where the courthouse as sunlight and daylight. definitely the first time we have done a building that is geometrically a hyperbolic parabola, but something that sounds completely surreal today is made so that it comes with positive social and environmental benefits. architecture is it just a question of style or ugly or beautiful. it is really a question of what

kind of city is it we want to live in. if the city that we inherited doesn't fit with the way we want to live our lives, we have the possibility and responsibility to make sure that it does in the future. mark: and tomorrow we will have a special report on the founder and ceo of spaces couture on "bottom line." coming up, how water rebates may be one solution to the drought problem now in its fourth year. "bottom line" returns in a moment. ♪

mark: we have breaking news at this hour. we are receiving word that the baltimore orioles, the major league franchise in that city, will play tomorrow's scheduled game against the chicago white sox at camden yards but that the game will be closed to the public. as you know by now, today's game

in yesterday's game were postponed due to writing in the city of baltimore. with california's drought in its fourth year, water districts across the state are focused on lowering consumption levels. one solution involves rebates for replacing thirsty turfgrass with more drought resistant options. as willem marx reports some businesses have learned that the program can be profitable. >> here it is. what do you think? >> very nice. willem: grant and kerry got a brand-new guarded this week. >> that is pretty neat. willem: these drought-friendly plants did not cost them a penny, thanks to a private landscaping firm and a rebate program designed to eliminate l.a.'s lawns. >> everybody says you are letting something else have your rebate. no you are letting some of the else have your headache. willem: over the course of a single morning, team of workers

for of the turf and replaced it with gravel. the front yard was transformed for free. annual -- it cut the miller's annual water costs in half and earned a $6,000 rebate. andrew farrell heads this development of the company which has blossomed from three employees to around 500 in only nine months. andrew: these rebates subsidize our work. we concentrate just on turf removal. we become very efficient at it. we are taking advantage of economies of scale and can run a business. willem: this profitable enterprise complement efforts by the metropolitan water district. >> to the extent that businesses help us get the message out in terms of average or they are able to reach customers to help make the transition, i think that that is helping to support our endeavor of helping to reduce water use. willem: with southern california

struggling to secure its water supply, the budget allocated for rebate has increased 400% in the past five years. >> amazingly enough, it has caused a boom in business. willem: this former golf pro turned golf landscaper. his company recently switched from new courses to deconstructing old ones. >> i doubt very seriously if many of the golf courses could afford to come up with the capital needed without the rebate program. willem: one of his clients has seen its water bill almost double since greider out 2010. to cover the cost of converting 43 acres of turf into mulch, the club will receive a rebate worth almost $4 million. willem: we are paying for the water savings that you get when you remove the turf. we see this as something that results in large waters --

long-term water savings that benefit our region. willem: ensuring customers that reduce conception is worth almost any price even if private equity and some private golf courses are among those that profit. willem marx, bloomberg, los angeles, cal 20. mark: get the latest headlines at the top of the hour on bloomberg radio, streaming on your tablet, and bloomberg.com. that does it for this edition of "bottom line" on bloomberg television. i am mark crumpton, reporting from new york. "street smart with matt miller" is next.

matt: welcome to the most important part of the session. this is street smart will. stocks --"street smart." stocks rising back to record highs. we are counting down to results from twitter, go pro, and kraft foods after the bell. plus, economist nouriel roubini will join us, and billionaire investor jeff glen rock gives us his call on european sovereign bonds. "street smart" starts now.