Today, president obama begins a full day trip to europe. Im mike rogers talks about dealing with cyber risk. And Goldman Sachs chairman Lloyd Blankfein coaches smallbusiness entrepreneurs. And to our viewers here in the u. S. And those joining us around the world, welcome. Megan hughes report, keep plan to build a radar system to track space travel. Overe begin with in dear a president obamas trip to europe. What is his main agenda during this trip . The president is in three Different Countries over four days. Objective is to show solidarity with our allies, and also to show a warning to Vladimir Putin that if he goes further with more provocations in europe that there will be more pain to come on the other end. And dont forget, they are delivering the end of communism in warsaw. And it is the sovereignty of the nations in europe that have led to this time of peace. He is trying to underscore that message very strongly and will be meeting with ukrainian newly elected president tomorrow as well. And the next up is brussels for the g7 meeting. What is on the agenda and where do things stand with collective action over russias annexation of crimea . Thet is a key question and g7 will be meeting in brussels. That is a big mess in itself. A big message in itself. It was supposed to be the g8 and it was opposed to happen in sochi, russia. That got called off and russia has been effectively kicked out of the g8 for now. I think at this point, we should not expect any real collective punitive action, because what all sides are hoping for is that president putin will actually continue to pull back and has pulled back some forces from the border. Theyre hoping to reward Good Behavior rather than punish bad behavior at this point. It is really important that this is all going along the backdrop of the still ongoing talks between gazprom and ukraine over natural gas supplies. There is a price dispute. Until that is resolved, there is a cloud over europe about what might happen to gas from russia. The u. S. Cannot replace your natural gas supply. You will still need us, russia, he points out, and that is a fact. President obama will still be trying to keep a united front. But i dont think we will expect sanctions this week. And speaking of a united front, resident obama and they cannottin, avoid seeing each other for the dday observances week. How tense do we expect that encounter to be . That is right. In one way, it will be awkward, but in another, i think president obama will try to capitalize. He said it would not make sense to exclude president pruden from the celebrations of president putin from the celebrations of normandy. This was one of the key element in world war ii that turned valet the battle around for allied powers. And russia cannot be excluded from that. What is interesting is the french, german, and british leaders have already gone ahead and scheduled their own bilateral meetings with president putin and they will take place in normandy. President obama has not done that yet. The white house has not entirely ruled it out. We may see a casual meeting. We may see something more formal. I think all of this will be overtaken by the emotion of the moment, of the one million men who landed in normandy within one month, 70 years ago today, and the last veterans surviving that who will be dying off now. Thank you. And more on the obama trip to europe is coming up. Analyst ateurasia stratford, a geopolitical firm will join us from austin, texas in about 10 minutes. In his First Ever Television interview since becoming the new director of the nsa, trish regan sat down with mike rogers. Here are some of the highlights. Beenmiral rodgers has only at his position for about 60 days. He is already dealing with a slew of new information from former contractor edward snowden, who gave his first Television Interview just last week. I asked mr. Rogers, admiral rogers, how snowdens revelations have hurt the nsa. Take a listen to this excerpt. Foreignwatching those intelligence and counterterrorism targets. I will not make a blanket statement. And willwatching them highlight the revelations and talk about the implications of what they can implicate. That is unsettling to me. He also told me that he did not want watch all of snowden s interview on nbc and had only seen a few clips of it online. I did say, in terms of those make of whatid he he did hear . How did he perceive snowden . His response. We are living increasingly by. Hoice and by chance we are forfeiting privacy at levels that i dont think individuals can truly understand. It is so ingrained, whether it is the cameras out in the street, whether it is everyone devices digital constantly asking you, can i share where you are . Actually, he did have to say that he thought mr. Stone was an intelligent and articulate mr. Snowden was an intelligent and articulate individual and that he seemed arrogant to him. What hehe does believe did was illegal from his perspective. He had much more to say on edward snowden. Recentlylked about the revealed nsa facial recognition program. I will share all of those highlights from that interview with admiral rogers. And i will be joined in the next hour by admiral rogers red assessor at the nsa, keith alexander, general keith alexander. And the former director of the fbi of Cyber Security. That is at 3 00 p. M. Right here. We look forward to that. Also, attending the Bloomberg GovernmentCyber Security summit in washington, republican Saxby Chambliss of georgia, the top or public in on the intelligence committee. He said he plans to open hearings on changes to the program next week. Here he is on the connection between Cyber Security and private industry. Are so farthat we from a technology standpoint that we have been able to stay ahead of the curve. And weve been able to slow down we have not been able to stop all of it, but we have been able to slow down and detect it. I worry that we will reach a place and time where particularly these companies are getting very anxious. You talked about google and oracle and all of them, and rightfully so. If we dont have their full cooperation, then all of a sudden we will not be as far around that curve as we need to be to stop that. Also set anhambliss agreement with senator dianne in california, both saying they are close to an agreement in congress. Preview of the 70th anniversary of the dday landing in normandy. President obama again his European Tour by unveiling a 1 billion initiative to boost relations with allies. He plans to show a unified front in regards to the russian ukrainian crisis. Lauren joins me from austin, texas. She is a strategist with a firm there. Always a pleasure to have you on. Thank you for having me. For the past 20 years, the trend has been toward a smaller American Military presence in europe. Is this all about russia or driving Something Else . It is about russia, but also about the u. S. Having allies in europe at a time when europe is fracturing. Using the russian socalled is the excuse for the u. S. To go in and reassure its position in europe in that it does still have allies. And those allies believe what . After how the u. S. Has reaction reacted to russian moves and to what is going on in syria and iran, are they still confident in u. S. Leadership . There is a fractured sentiment in europe on the u. S. Ability to actually stand up to, lets say, russia. That is the plan that obama laid out today was all about. It is called the european reassurance initiative. The plan is for the u. S. To be putting troops and to be putting equipment and money into the interim rem states in central intermarium states in central europe. Will this have an effect on aericas shift to more presence in the asiapacific region . The United States is still highly focused on asia pivot. At this time, the United States has a fire with russia and ukraine at this time. The United States does have to counterbalance it asia pivot with having a heavy focus in the eurasia alere the eurasia area. How about the russian response to the 1 billion quest from the president . Russia has a multifaceted response when it comes to the u. S. Initiative. Russia has already announced that it will cut counter any u. S. Move with a military buildup of its own. This could mean anything from increase of troops and agreement on its western borders with neighbors like the baltics, or could mean a an increase of russian oteri in places like belarus. Russian military in places like belarus. It came at the start of a trip that was meant to reassure partners and show a unified front in response to russias actions in ukraine. What do the allies want to hear from president obama . Europeallies of central and the interim area, they want to hear what he actually said, that there will be an increase in troop resins. However there is a break within the europeans and within nato on exactly what nato needs to be doing against russia. See, the european states are very happy with what today. Nnounced however, the heavyweight european states like germany or france are much more cautious of a buildup. The other european states are not on board that we can see with the u. S. Plan. Im speaking with Lauren Goodrich for my senior eurasia analyst at stratford. We did receive word today that german chancellor merkel and Vladimir Putin will meet on friday at the dday ceremony in normandy. Does president putin have some explain to do . Chancellor merkel has criticized him for his actions in russia in Group Training in the ukraine and crimea. What will she likely say this week after german chancellor merkel will be meeting with putin in france, and also meeting with french president lalonde as well as and he will also be meeting with the french president hollande as leaders of the u. K. That russiave said needs to deescalate. However, theyve also said that georgia will not be getting into nato anytime soon. Germany has taken the hard line against russia and also taken the russian line in positive steps to keep a warm relationship, or at least a working relationship with russia. Is the line in the sand here at russia says as far as ukraine is concerned, and you mentioned as georgiad as far is concerned as well, we understand there are territorial disputes involved. We did swear national sovereignty, but our line is that you cannot join nato . That is the russian line. No go for either ukraine or georgia. It is something that at least the heavyweight europeans agree upon, even if the u. S. And central europeans are still pushing for it. Lauren goodrich, senior eurasia strategist at stratford joining us from austin, texas. Thanks for your time today. Thank you. Up next, we will get you and on the markets update for this tuesday. And later, highlights of Stephanie Ruhle pulls Stephanie Ruhles interview with ceo of Goldman Sachs, Lloyd Blankfein, and Mike Bloomberg. That and more when bottom line continues. Welcome back. This is bottom line on Bloomberg Television and streaming on your tablet, your phone, and bloomberg. Com. There are multiple ways to watch bloomberg tv. We are on the web at bloomberg. Com, on your mobile device, on apple tv, and on amazon fire television. The president says the epa new emissions rules will help america meet the challenge of global warming, but its already generating a lot of heat from critics. Peter cook sat down today with a woman in charge of implement in the proposal, epa administrator Gina Macarthur and gina mccarthy. She insists it will be a net loss for the environment and the economy. We hope it is a turning point from discussions about the science to taking real action, because that is the president s message. It is a moral obligation for us to address climate, and it will be one of the premier actions that this administration is going to take. Thisu are convinced that is something these states across the country can, indeed implement and in and achieve . We are convinced of that. Instead of establishing an arbitrary National Goal for everyone to strive for, we looked at each of the states where they were and what was affordable and tactical. S was something the states affordable and practical. As for some in the states and municipalities were already doing. This is not rocket science. This is a way for us to consistently reduce Carbon Pollution in a way that is consistent with the changes being made. The target average overall is 30 reduction by 2030, but not every state will have to reduce that amount over that timeframe. No . Happens if a state says what if texas says, no, im not going to do this . Others is unlike any Clean Air Act rule. When we establish the goals, those will be federally enforceable. And we have provided an opportunity for the states to come to the table during the comment timeframe during this proposal. If we have done anything wrong or should be tighter or less tight, they will be able to produce that information, and in the end we will have something that we can all achieve. I am confident that states will come to the table augusta gave them ultimate flexibility. But we still need to have those because we gave them ultimate flexibility. But we still need to have those standards. You heard comments from people like mitch mcconnell, a dagger in the heart of the middle class is what he called this proposal. You are putting coal out of business with this proposal some are saying. What we are projecting is that coal in 2030 will still be a significant portion of the electric generating capacity here. What were hoping folks will do is realize this is an opportunity to actually make investments in coal to make them more efficient so that we can have the best and cleanest facilities moving forward. At the optimum choice will be up to the states. Do they want to shift toward more renewable sack or do they want to focus on Energy Efficiency . Do they want to do all of those things together . We will see how it ends up. We know that the reductions that we put in statebystate were based on what states are doing today and what we think they can do in each of those states moving forward in a way that will maintain reliability and affordability of the electricity supply. Placefuel will have a moving forward. They just have to get cleaner. And in the end, we have to reduce the carbon reductions that we need for public health. More from the National Weather service, Tropical Storm morris has formed off mexicos specific Tropical Storm has formed off of mexicos coast. Heavy rain is forecast in the coming days. We will continue to follow this for you as we head into hurricane season, which lasts until november 30. It is coming up on 26 past the hour. That means Bloomberg Television is on the markets. My colleague is standing by with details. That get you caught up where markets are trading. Lets get you caught up where markets are trading. He markets are markedly lower in fact, you could call this flat. If you are bored with the equity market, get excited as you pull up the chart of the eurodollar. Within a month, we have come to one dollar 40 to one dollar 36 right now. Ecb has a target that is at or below two percent. Question, what on earth are you going to do about it . That is a question for mario draghi. The market essentially wants more. Q a qe. Delivering it is all about the press conference. I will be back on the markets in 30 minutes time. Welcome back to the second halfhour of bottom line on Bloomberg Television. Im mark crumpton. Inks for staying with us. Lets check this top stories the top stories we are following this hour. May was a good month for the auto industry. G. M. And chrysler posted sales that beat estimates. For chrysler, it was the 50th month in a row that sales rose. G. M. In the midst of a recall scandal, boosted sales by 13 , thanks in part to the sales of chevy crews and silverado. Factory sales rose for the third consecutive month in april, pushed higher by surging demand by military hardware. 7 10 of areased percent. Momentum this is seen as the economy regaining momentum after a harsh winter. Beijing, the in 25th anniversary of the Tiananmen Square protest. Dozens of government critics and relatives of those killed in the protest have been detained. In recent days, Google Services in china have been disrupted. That is a look at the top stories in the news we are following for you at this hour. Stephanie ruhle just sat down for a special conversation with Lloyd Blankfein, chairman and ceo of Goldman Sachs, and Michael Bloomberg, founder of bloomberg lp. Honor the recipients of the Goldman Sachs 10,000 Small Businesses program and just announce that mr. Bloomberg will join mr. Blank fine as a cochair on the programs advisory council. Tephanie joins me now it was like church. You could hear a pin drop. But let me tell you, this was let me tell you, this was a lucky, lucky day. I got to sit down with two leaders in their industries, two icons, Mike Bloomberg and Lloyd Blankfein. Not start asin did a Goldman Sachs investment banker. He was a lawyer. And he worked his way up. Mike bloomberg, who lost his job at allan brothers started in i. T. Business with a couple of other guys. And then he was asked to leave. And that sure worked out for him. Sure. The recipient of the 10,000 business award, what can this do for them . One of the things that i learned that the mayor sees clearly is how terrific the people all are. They are fantastic. You would think that the people we talk with today, the couple dozen that we spoke with today were from central casting. With 3500 people that we have already brought through this program, it could all be like that. And very often, the very best thing we can do for them is break the myth bubble that they cannot do something, that it is hard to do something. What this program has done for people is given them a little mini nba mba. They learn accounting, how to negotiate, how to make a business plan. They hear the experiences of others and slowly but surely, they, o, my goodness go from saying, o, my goodness, i cannot do with that person has done to saying, i can do with that person has done. Those who graduated from harvard last week a murmur member, Mike Bloomberg gave the commencement speech. What they are saying is, give it your all, work hard, stay determined, and take risks, calculated risks. It was fascinating because toward the end of the interview ,ou asked with of them sometimes millenials think that they are selling out. You put it bluntly to them, i dont want to work for the man. I dont want to work on wall street. Their responses were fascinating. Mike was basically saying, go fish. You dont want to work for the man, guess what, in five years, they will be unemployed. You have to be in it to win it. Clearly, those two were. Android also said, listen, maybe their shirts are open a little wider and their hair is a little shag are, but they are more passionate than ever. Theyre are willing to work a little hard. Very hard. Maybe it is a bit of miss branding. What was your take away from this collaboration with these two men . How sad it is that we still only want to paint the Banking Industry in the worst possible way. Goldman sachs and its socialist possibility efforts are among the biggest of any companies out there. They give to hundreds of organizations. Mike bloomberg has taken bloomberg lp and devoted much of it to philanthropy. And what do banks do deck they lend to Small Businesses. They helped to fuel the what do banks do . They lend to Small Businesses. They helped to fuel the american dream. But even mike mentioned there are bad actors out there. And there are those in any industry sports, technology. Do you mean to tell me that the Tech Industry has a wide swath of may of women and minorities running businesses in Silicon Valley . I think not. People love to know what in washington who say that thinkers are all bad, what they think when they see an event like this, businesses getting an opportunity from guys like Mike Bloomberg and Lloyd Blankfein. Destiny, thank you. State stephanie, thank you. Stay with us for more on that interview. A reminder, Michael Bloomberg is the founder and parent of Bloomberg Television. Bottom line continues on this tuesday afternoon in just a moment. You can watch charlie rose has full interview with old surprise winning journalist about the release of opera doll at 8 00 of Sergeant Bergdahl at 8 00. Castor has said he intends to remain in office no longer than his current term, which ends in 2018. He took office provisionally in 2006 when his older brother fidel was stricken with a lifethreatening illness. He assumed the full presidency two years later. Fidel castro is 87, retired, and really appears in public. Tens of thousands took to the streets of madrid, barcelona, and other cities in spain for a vote on whether to rid spain of its royal family. There will be an emergency Cabinet Meeting to create a law allowing for the abdication of queen king juan carlos. That is your word word for this tuesday. Lockheed martin is the big winner in a more than 900 Million Air Force contract with an unusual National Security mission, to build a space sense. It is a highfrequency radar system that can see and track space debris. Megan hughes joins me now with more on the story. What is the purpose of this space fence . To be clear, its not a physical fence. We are talking about a radar system that will ideally be able to help astronauts navigate around some of this brief. I dont know if youve ever seen that ise gravity, but definitely what we are talking about. Astronauts in that movie have to deal with space junk flying at high speeds, potentially very dangerous. Nasa says it is a real threat. More than 16,000 pieces of space and more thanbit, 20,000 are larger than a softball. They can travel at speeds of more than 17,000 miles per hour. That could very well put ellites and the National International space station at risk. They say this is a security aree and that is why they spending this money. What are they going to do . The government is paying the that to develop systems will ideally detect, track, and in catalog the debris. The new radar system will be built in the Marshall Islands in the pacific ocean. Aeres the possibility for second radar system to be built in australia. The total price tag, 950 million and it is supposed to be operational by 2018. And we are pointing out that lockheed beat out raytheon for this contract. How have astronauts dealt with space junk in the past . Old system. A very the air force system was installed in 1961. A representative from Lockheed Martin said, were going to know a lot more about what is in space, what kind of debris we are talking about with this new system. The Current System candidate the can detect debris size of a basketball. The new radar will be able to detect it the size of a baseball. We are talking about old satellites, rocket boosters, even old school bags, a spatula, all of it from earlier collisions. Perspective,ore they have about 20,000 pieces of that debris catalog. This new system is expected to bring that number up to 200,000. They will have a lot more data. And nasa says something as small as a speck of paint can actually cause damage because of the velocity we are talking about. This is an important investment. Why is a spatula floating around in space . Well, you know, any kind of collision that you are talking , you have a satellite that explodes, everything on board will be floating around. They need to cook up there. I dont know why these bachelorette was up there, but it was up there, or it is up there. Megan hughes joining us from washington. Thanks. Coming up, what is a sports franchise were . We will look at what Donald Sterling to billion dollar payday means for the value of American Sports teams. Donald sterlings to billion dollar payday for the sale of the Los Angeles Clippers could be good news and bad news for the nba owners. This is the second most money ever paid for a franchise of the u. S. Sports team behind the baseball Los Angeles Dodgers deal. Lets take a look at what it means for the value of the franchises with the executive director, charles grantham. What comeback. Good to see you. Nba owners, you told my they cannot hide from franchise value anymore. Talk to me about how much leverage the proposed to be in dollar clippers price tag will give players in the next collective bargaining round. But hopefully, it will wake them up. Usually, the players dont understand the value of the equation in this business. That is, people come in and purchase with a return on their investment. And the harder the cap is, the more value it is to the team. We see the forward, nba going international. It is sort of primed for more and more movement over the other major sports. Ever since the olympics in 1992, this whole thing has been growing at a much faster rate. You talked about the players waking up. Does that mean that they have been asleep and have not cared about this . I think they cared as long as salaries were increasing, though they were not increasing at an increasing rate. But now that the cv true value of what a franchise is, basically, they could have gotten much more. That is one of the thoughts, and the other is that over time, the teams have not been truthful about the kinds of moneys that have been made in this business. Sports owners, as you alluded to, they are always reluctant to discuss franchise value. Do you think they will remain tightlipped after this . There is a procedure to audit. How long is that procedure . That lasts for about a month each year. At the end of the season, you get a chance to look at what some of the numbers may look at look like. Youd on the revenue actually share. But i think what this will do is that the that concept nba business is slowly growing. This 2 billion is a wow offer. It does set the stage for an agreement for negotiating in the. Ext two or three years table fromacross the david stern. What was that like trying to find out what these franchises are worth . It is not that difficult. Because it gives you an idea of what they represent. But the idea that this one raises the bar to of to raises the bar to 2 billion and 2 billion to a team that has not been valued that way before. Onand it will have an effect whether they have their own arena. They never had to have a vote to vote sterling out. Vote and owner out that had etc. , thatl remarks, was at the stage for a different kind of vote. There had been some unanimity and the old the owners had all said, you know, we cannot tolerate this. And it raises the question in all sports, what is overt racism . And should that be addressed in the collective bargaining employers, are they going to be able to maintain their bargaining powers, especially when nba contracts and labor agreements are starting to resemble the National Football league, arent they . And there is something about guarantee versus nonguarantee. In the next challenge with negotiations, they will be working to maintain the guarantee. All sports and be the nfl collective Bargaining Agreement and would like to get closer to a hard cap and no guaranteed contracts. Why are they not there . In three years when this opens up, that will be the big challenge. The players will have to feel this big concept called a lockout. Why did nfl see the light . See what light . In terms of may be dealing with it like this and now everybody else is catching up. Well, no, on the other side of it, the nba players should not be interested in a hard cap with no guaranteed contracts. It should be the flipside. You want to maintain a guarantees that you have and make sure that things like the rookie wage scale and others dont prevent free engines free agent from getting the money they are getting. We have about a minute left. A lot of smallmarket teams will be priced out of the freeagent market because they are not worth the 2 billion dollars that the clippers are worth . I dont believe so. It anchors the nba basketball that is on degree, because it makes them more appealing for those who have an interest in owning a sports team. We have the miami heat and the san antonio spurs. Who do you think will win . Im thinking miami will win again. You have to go with the team that has the best player in the world. How about san antonio . San antonio will be a bridesmaid again, i think. You never know when these guys play. Formerles grantham, director of the nba players association. Thank you so much. We will have another check of the Market Movers on the other side of the break. Bottom line continues in a moment. Get the latest headlines at the top of the hour on Bloomberg Radio and streaming on your tablet and at bloomberg. Com. That is up for this edition of bottom line on Bloomberg Television. Im mark crumpton. Thank you for joining us. On the markets is next. It is 56 it is 56 past the hour. Lets check the equity market first. The price action is pretty subdued. Now, you wontd be in the second half of this week. Ecb thursday, jobs friday. To sum that up in a word, busy. Lets check the treasury market because the actually seen in the past couple of months sort of gave up in the end of the day. Lets get down on the sectors, though. We will talk about financials. Bank stocks have not kept up the rally. Mike reagan joins me with a look at what this means for valuations. What is going on . Like you said, the banks in the s p 500 are down about a percent in the group as a whole. It has created some eyepopping valuations. Banks trading for a little bit more than book value compared to 2. 7 times book value for the whole s p 500. The discount for banks has been the biggest since 2000 on a book value basis. On a price to earnings basis, it is the biggest discounts and 2004. Showing a lot of lack of confidence still in the bank, maybe some anger from the financial crisis. Also, the rally in treasuries is depressingly longterm interest rates. Aint like to borrow shortterm and landed out longerterm. Banks like to borrow shortterm and lend it out longerterm. Got it wrong with a record high echo it all depends on the yield with the economy. For a lot ofry people why yields are as low as they are. Some analysts are predicting yields will increase, and we will see that in the last few days. The steepening yield curve also signals growing confidence in the economy, which is obviously good for banks. Are these guys bullish on this spill yet to i just read a report from Kevin Reynolds and he is in the camp that believes the bond market is wrong right now. That is, economist assessment for u. S. Growth at three percent later in the year are, he believes, sound. And he believes the bond market will adjust to that and widen up the Net Interest Margin for these banks. He is looking for the Net Interest Margin based banks that. Re most sovereign and he is singling out the smaller cap names, names like income shares, bancorpsouth, renaissance corp. , centerstate banks, Smaller Banks that he says could benefit the most if this yield doesnt rebound. Very quickly, the Eurozone Bank is coming back from an investment bank. Are there any massive opportunities for banks in the u. S. . As far as as with revenue. You are seeing these banks coming in day in and day out at various times with the regulators. Im sure they are looking at that retracement in europe and whether there are opportunities. You. Ank stay with us. Street smart is up next. It is the threat that is threatening and humiliating corporate america. Cyberattacks are exposing information, compromising data and giving companies little resource but to beg their customers to change passwords. And it is not just hackers for two biggest. The economies in the world threatening allout trade war. I have no relationship with the russian government at all. I am not as five. I am n a