Obama's New Deal: Bottom Line (7/22)

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July 22 (Bloomberg) -- On today's "Bottom Line," Mark Crumpton provides insight at the trading day's critical hour, with careful analysis of big events for investors. (Source: Bloomberg)

Tonight, president obama repairs to outline a new plan for the economy.

Then s&p chairman gets tough with wall street.

And how data companies are keeping the cloud safe by moving it deep underground.

To our viewers here in the united states and those of you joining us from around the world, welcome.

We have full coverage of the stocks and stories making headlines tonight.

John ehrlichman looks at netflix's conflict strategy.

Let's begin in washington with megan hughes.

She has details on white house's plans for the upcoming battle this fall.

Good evening.

Good evening.

That is right.

The white house is going on the offensive, trying to get attention back on the economy.

The president will kick off his effort on wednesday with a major policy speak at knox college in illinois.

Here is what spokesman jay carney had to about that message today.

He hopes and believes it is essential we set our sights high and that we look more broadly at the state of the economy and where we needthe president will kick off to go as a nation as we engage in the discussions that we will be having in the next couple of months.

Do not expect a lot of details or proposals on wednesday.

This will be one of president morsi's speeches.

He will talk about middle-class fairness, suggesting the american economy works asked when it grows from the middle out and not the top down.

It will be the first in a series of speeches on his domestic agenda.

That is where you could see, down the road, new proposals rehashed -- new proposals, some rehashed.

Wednesday's speech, will it get the attention of the headlines with all these other stories circling the administration right now?

The white house is hoping so . there has been clear frustration around the snowden story.

That has been a distraction.

You can see that in this letter that dan pfeiffer sent to reporters last night, where he says, instead of talking about how to help the middle class, too many in congress are trying to score political points, refight old battles, and bring up phony scandals.

The timing is important.

September is getting closer.

There will be time to revisit fixing the sequestration cuts.

This speech is going to be laying the groundwork for the battle ahead.

September will mark the fifth anniversary of the financial crisis.

It will be a broad look at the recovery of -- under the obama presidency.

Thank you.

Coming up, the chief political strategist at the tone -- potomac search group will be joining me for more on what to watch out for in washington this week.

That is coming up in 10 minutes.

The s&p five -- reaction against steven cohen is not the "last chapter." that is the word from the former chairman of the fcc, arthur levitt.

For more of what lies ahead, sue keenan has details from the newsroom.

Good evening.

One describes stephen: as the most high profile and profitable hedge fund manager in the world.

On the one hand, the administrative charge now charged with insider trading is a sign the government did not have the evidence for a stronger charge.

Since matthew was not cooperating, and was not willing to talk about the 20 minute critical conversation it had with steve: on july 20 of 2008, they do not have the actual words that were said.

In insider trading cases, if you left with inferences and this one spoke to that one and then there were trades, it makes out the civil standard but does not reach the criminal standard.

Frankly, if they had the evidence to indict them, they would have done that by now.

This investigation has been forever.

That is like putting all the money into the manhattan project and coming up larger years later with a spitball gun.

They have nothing.

On the other hand, the administrative charge filed carries a much lower threshold for proof and the s&p plans to prove: had direct knowledge of e-mails that would have been a red flag for suspicious trading.

Stephen cohen is basically going to be in administrative proceedings, probably washington d.c., and it will be a very different menu, different rules of evidence thomas -- evidence, a very different way of how this case is presented.

Hearsay matters.

The sec has potential here to put: out of business because they are seeking to bar him from managing other people's money.

We also got in touch with john coffee.

He is a professor at securities at columbia university.

He called this an alkyl tone style tactic, saying the securities commission is aiming at his kneecaps and not his jugular.

Are other charges popular?

Yes.

His spokesman put out a statement he used the charge and plans to vigorously fight it.

People close to him say he cares that his reputation and wants to fight this.

The attorney's office says the dodd frank act as them much more time to come up with criminal charges and it appears that is also their goal.

Thank you.

The decision sends a message to the rest of wall street that the sec is under new management.

Peter cook has more on one of their first the decisions as chairman.

Mary jo white said she would pursue a old operation . the fcc chairman in last week decision to pick fights with two billionaire hedge fund managers put the words into action.

Steve cohen was failing to supervise two portfolio managers and rejecting and $18 million settlement deal worked out.

He is taking on very big fish and taking risks.

It should not come as a total surprise a harley rick -- she prosecuted terrorists and mobsters.

She is basically taking the same approach to commission.

This is her trademark.

She is smart and tough.

She makes hard calls.

Based on what they filed, the case looks like it is the proper approach for them to take.

This follows years of criticism the sec has not been tough enough on wall street and is more likely to settle cases than take them to trial.

The: cases would challenge that.

They already announced another change.

A big shift that could mean more cases go to trial.

It also means the enforcement team will have to prove itself in court.

Back to you.

A federal judge has set the for -- first hearing for this wednesday, july 24. the judge agreed to the expedited hearing requested by the city's emergency manager.

The hearing will focus on the city's request to freeze lawsuits from retirees who claim their pensions are protected by the state constitution.

One good thing about detroit clearing -- declaring bankruptcy, they will face their issues and get them under control.

They have still got to make fundamental changes as a thriving city but at least a are facing it.

Detroit is the biggest u.s. city ever to file for bankruptcy.

Coming up, as president obama hits the road to restart the conversation on the economy, we will look at what is up for debate in the economy this week.

Welcome back.

This is "bottom line." let's show you how the equity markets finished today's session from monday, july 20 second, 2000 13. stocks rose as investors analyzed corporate earnings and home sales in an effort to gauge the prospects for continue stimulus by the federal reserve.

Let's look at the numbers.

The s&p 500 index climbed to a record 2/10 of one percent.

The dow jones industrial average is up fractionally and the nasdaq composite index is up one third of one percent.

House republicans want to/the republicans environmental protection agency budget by one third.

The proposal would deny funds were spending on greece -- greenhouse gas rules , the center of president obama's plan to fight global warming.

They will consider cutting $2.8 billion from the agency's 2014 budget.

The panel vote is scheduled for tomorrow.

Congress has also scheduled to take on health care, tax reform, and student loan this weeks.

-- loans this week.

Greg valliere is the chief political strategist and he joins us from washington.

Welcome back.

Always a pleasure.

Great to see you.

This week, the president will give the first in a series of speeches in an effort to draw new attention to the economy.

What is the president hoping to accomplish with this initiative?

He will make good speeches.

That is something he does well.

He has two objectives.

The first is to try to get a head start on what could be a nasty battle this fall on a budget.

Maybe talk of a government shutdown, a big fight over the debt ceiling, maybe a sequester for the next year there you want to get a head start in winning the debate to his advantage.

I think he wants to get a head start on us and i believe he will try to portray the republicans is obstructionists and outside of the mainstream -- mainstream.

What is the point?

I read a story about how republicans want to slash the epa budget by one third.

You hit the nail on the head.

Even if the president is successful, his poll numbers are not bad.

Congress's poll numbers are horrible.

Even he gets -- even if he gets people on his side, he has to do with the house.

, -- the ultimate brick wall.

It will not go along with any new initiatives he proposes this week.

They will not spend an extra dime.

Because of the way the districts are drawn, the chances of the republicans losing the house are very slim.

The tax reform debate is starting to heat up again.

Any chance he can gain traction on capitol hill?

That is an interesting story that is starting to emerge.

Both committees, senate finance and house ways and means will mark of a bill in the next few weeks.

And we will come into a problem.

The problem being the senate wants to raise revenues.

The house says no tax increase.

That is where i think the tax reform battle will grind to a halt.

There will be progress.

For all the lobbyist's and industries in the town, they need to pay attention to see which tax breaks are popular and which breaks eventually, later in the decade, could go when we really get tax reform.

I am speaking with the chief political strategist.

The deficit is starting to come down, not just i a little.

Is this an unintended consequence of the sequester, the automatics and cut it when into effect in the spring?

It is part of it.

Part of three phenomenal reasons why the deficit is in freefall.

You have real ending cuts, as you point out.

There is no new spending.

That will not happen.

Receipt growth is a doesn't surprise.

It is not just because freddie and fannie have had profits.

Right across the board, individual and corporate receipt growth is strong.

We will have, believe it or not, a drop in the deficit of or hundred million dollars between last year and this year.

If this trend continues, the deficit could get close to zero by fiscal 2015. what will that mean or the drag we have been seeing on the economy?

All of the indications is that the economy is heading in the right direction, i'll be its drop -- sluggishly.

I think a factor, maybe not the factor, is this fiscal drag with fiscal restraint firmly in place.

I would argue as long as the republicans keep a house, and that is really likely for the next two years, we will see more fiscal restraint, another sequester next year.

This trend of a declining deficit is very much in place.

Our colleague , megan hughes, was on before you.

She was talking about the president going around the country this week trying to restart the conversation about the economy.

One of the themes will reportedly be that the economy works best from the minute -- middle out, not from the top down.

How does he sell that?

It makes common sense.

He needs to make a recovery more inclusive.

I think he can spin it very well.

That is not the issue.

The issue is, can his spin really yield results on capitol hill?

As good as he is as a speaker, he is not good at cutting deals there that is not his strong suit your why?

I think it is in his dna.

I have seen tip o'neill and ronald reagan, and they were great.

They had it in their dna.

They were gregarious or they know how to deal with people on capitol hill.

This president is very cerebral.

It is not his strong suit to go twist arms and slapped backs.

He is different.

Because of that, -- there are other reasons, but his inability to cut deals on the hill have heard him.

He is certainly not lbj with a finger in your chest.

There it was an article in forbes magazine.

It is written there is no better qualified candidate to fit -- phil ben bernanke is choose.

Is she right?

What about larry summers?

Hans nichols reported earlier he has reported interest in the fed chair.

They have reform -- others have reported about summers.

If you let it be known you are interested, that often backfires.

Sommers has a problem getting along with people.

He has got an astronomical iq and knows the issues.

Within the fed, his appointment would not be greeted positively.

The other claimant would be greeted ecstatically.

People like her and respect her.

She is the overwhelming choice to be the next chairman.

Greg valliere joining us tonight from washington.

It is always a pleasure to have you want and get your views.

Thanks.

Great to see you.

Get a bloomberg tv plus i've had or free -- ipad app for free.

Plus, join in the conversation on twitter.

You can tweet in your comments by using the #btv.

Is netflix's content strategy a formula for success or will it turn out to be a house of cards?

Welcome back.

Superman and batman unite.

The man of steel and the caped crusader will star together in an action movie for the first time.

A new logo was unveiled at comic con over the weekend.

When you take superman and batman and combine those together, and what all the other merchandising possibilities it will add to the warner bros.

Bottom line, it is huge.

It is absolutely huge.

The most important thing is, if you have a great story and a great creative to go with it, then you do nothing but enhance the brand.

Henley -- henry k ville will reprise his role from the man of lannett krypton.

The new batman still needs to be cast.

Netflix made any history last week by becoming the first online program to receive a nomination.

But hollywood's new powerhouse was humbled by reporting weaker than estimated second-quarter results.

John ehrlichman joins us from los angeles.

John, what is this all about?

This is quarterly earnings day for the company.

In the case of the company where the stock price has been rocketing up, there are big expectations.

For netflix, the expectations were not met.

They have been big growth engines over the past year for the company.

The number of people who are subscribing to the business, those numbers did not continue to climb and did not come in at the levels come in wall street thought they would.

In the number of americans who are now using netflix on a monthly basis, the number is a sickly in the 30 million range.

Netflix estimates the number could climb close to one million over the next quarter . overseas, the number of people using netflix, that number also continues to climb.

As we pointed out, there have been skyhigh expectations and the company is also riding a wave of the diamond tied to its original programming.

House of cards, starting -- starring kevin spacey, arrested development, those shows are receiving emmy nominations last week heard a lot hype around it.

The original content is the late part -- small part of what they have to spend to keep the customers happy.

Reed hastings said tonight in this -- the netflix pricing model will not change.

That is right.

This always becomes the issue with netflix.

If people determine subscriber growth, and they have incredibly high estimates internally for how many people they think can use their service, if those , -- numbers start to slow down, does netflix have to push up the price to $15 a month?

They are against that, at least publicly for now, because they feel like they can get more people using the service, that rings in the revenue they need.

It is an impressive growth story, but a competitive one.

John ehrlichman from los angeles, where he is now based for "bloomberg west." thank you.

Tune into "bloomberg west " twice a day.

Up next, stocks in japan rally after this weekend's elections.

North korea turned his attention to a mass gymnastic and artistic performance.

The top stories in asia when "bottom-line" continues.

Welcome back to the second half-hour of "bottom-line." thank you for staying with us.

Let's check where the market finished monday's session as we hit the bottom of the hour on july 22, 2013. the market overcame disappointing quarterly numbers this day.

Up about 2/10 of one percent at 1695. the dow jones industrial average up fractionally today.

The nasdaq composite index was up a little more than one third of one percent at 3600. let's check some of the top stories we are following for you this hour.

Landing gear correct -- collapsed at the airport this evening.

The port authority in new york and new jersey said they had several reports of injuries.

The extensive the the injuries is not immediately known.

The port to the airport has been closed until further nervous -- further notice.

Karen 149 passengers and crew.

The safety board is gathering more information about the incident.

Large crowds greeted pope francis in brazil where he is starting a seven-day visit for world youth day.

The pope rolled down the back window and waved to the crowds, mopping his car as he arrived.

At one point, a woman handed him a baby and the pope kissed it.

The duchess of cambridge has given birth to a boy.

The baby weighs eight pounds and six ounces.

Throngs of reporters and fans have been waiting for days.

The infant will become third in line for the british throne and a name has not been given yet.

That is a look at the top stories in the news at this hour.

Time now for commodities report.

Sue keenan joins us for a look ahead.

They say timing is everything.

In the past two weeks, it has been a good time to be a gold bull.

We know hedge funds increased bullish bets on a rally by 56% last week.

Check out the chart.

They were right on the money.

We have seen the biggest two- week gain in more than a year.

Futures also broke back up of the 1300 mark.

Silver also in rally, also five and a half percent on the day.

Someone from a 16 month high on surprisingly bearish house data.

Everyone is concerned about demand.

Oil might be overvalued here.

Finally to the weather commodity.

Met -- natural gas sliding the most -- temperatures might reduce demand for power feel.

It is about time the cool weather got here.

Investor focus on tuesday?

A lot of buzz from analyst.

Reviewing the rules about whether big banks should be able to trade physical commodities.

His is a big deal.

The question, should the banks be able to own oil refineries or have warehouses filled with gold or other metals.

Should that enable these banks to trade physical commodities.

Industry data shows the largest wall street banks made about $6 billion from commodities trading.

According to regulatory funds, goldman held almost $18 billion of commodities.

Morgan stanley was close behind.

The fed also reviewing these rules, coming at a time when jpmorgan is facing a potential fine for manipulation of energy markets.

They will take a look at conflict of interest, among other issues.

This is really not going away.

Thank you.

Let's look at the top stories in asia.

Stocks are climbing in japan following elections over the weekend.

David inglis joins us from hong kong with the latest.

Good evening.

Absolutely right.

We had a good session on the japanese markets monday.

Reacting quite well to the election.

I should also note we are 30 minutes away from the open, tuesday opening here in asia.

We are seeing a bit of pressure as far as the futures contracts are indicating at this point.

A lot of expectations right now on getting the mandate.

The first time in six years we have seen something like this.

Still quite positive for risk appetite.

That having to do with a stronger japanese yen gaining against the dollar for a second straight day.

The bond markets are signaling a higher success rate.

In terms of him reaching economic objectives here.

The yield curve is steepening to the steepest level in three months.

The question is what sort of reforms can he now push through.

Expectations at this point are already quite high.

Let's shift gears slightly and talk about japan's next-door neighbor.

A large performance underway.

North korea.

What is that about?

Very large.

Back in 2007, the performance held every we are -- every year, back in 2000 the guinness world records called it the largest . the annual performance to mark the end of the korean war.

Light impressive.

100,000 performers.

Everything from dancers, acrobats, it is mixing professionals and schoolchildren.

The audience takes part.

The play around with these cards they raise around.

It creates this movement or man -- animation.

We have to note as well that both korea are still technically at war because of this final peaceful settlement that has never materialized.

This is what we have.

Let's leave it at that.

Very impressive performance.

David inglis joining us from hong kong.

Thank you.

Coming up, going to extremes to protect big data.

We will tell you about a cloud underground.

Welcome back.

It seems like we store everything in the cloud.

For those in the data services industry, safeguarding that cloud has he come increasingly difficult, which is why a growing number of companies are going to new extremes to protect big data.

Richard reports.

? it is not the first place you would expect to find the cloud.

We are about 105 -- 125 feet below the ground.

This 3 million square foot cave in kansas is called home.

The recent tornadoes in oklahoma threatening to wipe out above ground data centers, increasing number of data service companies are moving their operations underground.

Iron mountain has been storing data in a mine in western pennsylvania since 1998. housing data inside a former air fortress bunker.

The benefits of moving the cloud underground are many.

It is almost physically impossible for someone to put together a more cost-effective solution.

We have the lowest operating costs with the equipment being the same above or below ground.

One of many advantages for global clients.

The temperatures make cooling servers underground more cost- efficient.

The operation cost are 30% lower than above ground.

The cave walls are five times stronger than traditional concrete.

Access to individual data is controlled with advanced biometrics.

While burying it deep underground will protect it from mother nature, there is one threat that 100 tons of rock cannot do anything about.

A hacker with an ax to grind.

Coming up, what can be done to help americans living below the poverty line?

That story when we continue in a moment.

? welcome back.

According to a u.s. census department report, close to one third of one -- of americans live at or near the poverty line.

As many americans struggle to afford the basics like food, housing, and health care and education, congress -- a network wants congress to pass a bill.

A basic income guarantee and board member of the income guarantee network joins me now.

Thank you for joining us tonight.

Thank you.

Glad to be here.

What the guaranteed income bill?

The basic income guarantee is the government insured program to make sure that every citizen posses food, basic necessities, and shelter, our taking care of.

They will get a check from the federal government guaranteeing the economic safety and security.

Kind of like social security for everybody.

As you know, opponents of a basic income guarantee say it is one of the building go up -- building blocks of a welfare state.

It is a disincentive to work.

Would those who receive a guaranteed income be required to work as well?

Know, there would be no work requirement.

That is the same as was recommended by a presidential commission 35 years ago.

What we have today, we have unemployment, it will go up after that.

We do not have enough to take care of everyone.

It is something we need to do to guarantee people's eight -- basic survival.

Just because you are here, people are in titled to live, just like they are entitled to water and air and free-speech and other things.

We need something like this so people do not fall below the safety net, which a lot of people are doing now.

I bring up the point, what about the criticism that it might be a disincentive for people to go out and get a job?

We do not think it will be.

There have been tests and some people probably will but most people want to work.

We have found most people really want to do something with their lives.

They want to create and be important to the world.

Most people will want to do something.

If they do not do anything, if they get this grant, set at the poverty level, if they do not do anything, they will choose to live in poverty.

Not too many people want to do that.

Not too many people of our listeners right now would quit their jobs to go off and lie on the beach.

We all want to do that for a few weeks or so, but most people want to do something with their lives.

Is the u.s. economy stable enough to handle a basic income guarantee?

Can the country afforded?

We can.

It will cost $1.9 trillion, but we can do that.

We can cut out $400 billion in our current welfare administrative program, a lot of which just go to the administrators, about 25%. we can cut a lot of tax loopholes which favor the wealthy against the poor.

We can do other things like add a 1.4% sales stocks transaction tax, a wealth tax, which a lot of countries have.

There are many ways to finance this.

We are a wealthy country and we can do it financially.

We have experimental programs, similar in nature to a guarantee.

What were the results?

The alaska one has been going on for the last 25 years.

They gave everybody, man, woman, and child, $1500 a year.

It depends.

No strings attached.

Just part of their revenues up there.

Everyone gets the money.

Most people spend it wisely.

There is no evidence -- there is probably one guy who hops on a plane to vegas and blows it all.

That is a rarity.

Most people spend it on their children's education, or maybe buy a new coat for the winter.

If -- they are very successful.

In 1999, there was a proposal on the alaska ballot to get rid of this.

80% said no, we want to keep it.

On wednesday, low-wage workers from around the nation are holding day of action events and they will mark four years since the federal minimum wage was increased.

Would it increase the minimum wage from its current level of seven dollars and $.25 an hour?

Would that help at all?

A lot of people are had -- are asking that.

It would help in the present time.

But it is not the answer.

There are a lot of people do not work, they are sick, they are disabled, children cannot work.

Minimum wage is fine, but it assumes everybody can find a job.

And the technology coming along and gaining in strength every year, it assures us we will not have enough jobs.

I have about 30 seconds left . there is a lot of partisanship on the hill.

Given the fights in legislation involving healthcare and food cap -- food stamps, basic income guarantee ever becoming law?

It is a long shot.

Only 11% guarantee -- favor guaranteed income.

We will come to the realization soon that we have got to do something.

Jobs are not the answer.

Our slogan has been, jobs are not the answer and it is time to think big.

Basic income guarantee.

If anybody wants more information, they can go to our website.

Basicincomeguarantee .com.

Thank you so much for your time tonight.

We appreciate it.

Thank you.

We want to update you now on a story we told you about.

An incident at the airport here in new york.

The front landing gear collapsed.

Five customers and three crew members were injured and we do not know the extent of the injuries yet eerie flight 345 was arriving from nashville carrying 149 passengers and crew.

All flights bound for laguardia are being held until eight -- 8:00 p.m. tonight.

We will be right back.

That is a look at the futures markets.

Welcome back.

This is "bottom-line" on bloomberg television and streaming on your tablet, your phone, and on bloomberg.com.

Let's get you the bottom line line on what is happening tomorrow.

First in washington, the house judiciary subcommittee holds a committee on the legal status of undocumented immigrants brought to the united states as children.

Several cft commissioners are scheduled to testify on the future of the agency.

The senate budget committee holds a hearing on the effect of budget cuts on national security.

Let's go to sue keenan with the business news preview.

The earning parade continues today -- tomorrow with capital and at&t -- with apple and at&t in the mix.

A bloomberg survey of analysts show they are estimating 2.6 $9 billion in the third quarter.

Revenue by the way is expected to be a little chip -- a little changed.

Five early in dollars.

35 billion in 2-year note spirit a senate subcommittee holds the hearing on whether the biggest banks should be able to own or control power plants.

And oil refineries.

The senate could vote as early as tomorrow on student loan interest rates, which doubled earlier this month.

Thank you.

It is time now for "hot shots," a look at some of the most compelling images of the day.

? harry truman was president when snooty was in miami.

Now, snooty has made history.

The oldest manatee on record just turned 65. the average life expectancy is just 30 years.

Sometimes, they do not even make it past their 10th birthday.

Snooty became the official mascot of the county in --

This text has been automatically generated. It may not be 100% accurate.

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