Headlines today. It yang yang has the latest details of the launch of the latest spacex program. Cook andin with peter the latest on the crisis in ukraine. Good afternoon. Good afternoon. G7 nations preparing new sanctions aimed at russia even at this hour. The crisis in ukraine escalate even further on the ground. That aorts of Violence Team of international monitors from the osce had been taken hostage by this prorussia activists. They did nothing to ds glade he crisis and the escalate the crisis. Is president saying the u. S. Prepared to further isolate russia economically. President putin is not a and recently acknowledged this has already had an impact. Certainly, if the situation gets worse and sanctions are broadened to the entire sector, that will have a more severe impact on the russian people. More signs of the economic for a fifthing straight day after the s p lowered the Sovereign Rating to just above junk status. The ruble has lost 9 against the dollar as well. In terms of sanctions, there will be no new sanctions announced today according to two u. S. Officials kne. This could change by the start of next week youre the president is traveling right now. It seems pretty clear that the u. S. , eu will take an action against russia. How deep will it be or how far will it go . In u. S. russiaon tensions is putting some american ceos in a deposition. Some are planning to join Vladimir Putin in may will stop is that still on . The state st. Petersburg festival is still on. It was originally scheduled to participate in the session in may. The group included labeling fine up goldman sachs, a whole host of American Business leaders and pepsi as well. It is putting the companies in a particularly tight box. You have these rising tensions with russia will stop a lot of them do a lot of this mess as well. Some of the companies talking about why they would know here. They have officials going to understand better the current economic environment. You have a statement about why the company is going to continue to participate. We continue to watch it closely to determine what impact if any there may be on our ongoing business. That couldompanies be willing to risk some concerns on the part of the United States government by going to this event. Just in the last few days Michael Corbett of citigroup announcing he will not be attending as initially planned. One of the considerations for a host of americans doing businesses in just a few weeks time. Heard anything from capitol hill . Has there been any comment from any of the house or Senate Leadership about american ceos continuing on with this forum with resident food and in russia putin in russia . There will be critical of any ceos who make this trip. We have not heard any official proclamation. Congress is on recess. You have members of congress who are arty criticizing the administration for not doing enough in terms of sanctions, calling for even structure tougher sanctions. Go companies that choose to into city business in russia are doing so at their own risk. Peter cook, thank you. We are receiving word that the saying that he will not be in attendance at that conference with president. Utin in st. Petersburg sinners and purse has announced a Sovereign Rating outbreak on the crisis in ukraine ill stop they cut it from negative to stable on march 21 because of the Economic Impact of u. S. And European Union sanctions. We will talk about that and a lot more with don chambers. This is about in 10 minutes on bottom line. The latest chapter of space is underway as elon musk holding a News Conference moments ago. It yang yang is back in joins us now in washington. The contact is quite a mystery. That is true. Late last night, overnight, we heard that we got an email from spacex saying that elon musk will make in a Norman Spacex announcement today at 1 00 p. M. The venue to be announced shortly. Very mysterious. It happened to be the National Press club where it elon musk said the company said it would file suit in a claim claims court to protest the rocket launch monopoly held a united. Aunch anions alliance what we are contesting here is program is a 70 billion markets. It is the government answer to reducing the cost of military satellites spaced launches. It is the only company with a certification to do so. Back in december it was awarded a block grant for 36 more much is over the next five years. That is what elon musk is protesting today will stop what he wants to do is open this up. He said it is wasting the taxpayers billions of dollars at spacex can do it on the cheap. Heres what he had to say. This is not spacex protesting and saying these lunches should be awarded to us. We are just saying they should be competing. If we compete and lose, that is fine. Juston musk saying he wants the contract that has arty been awarded to be reopened to make it competitive. I asked him why. One of the arguments was that why couldnt the air force have just waited a few months when the air force had awarded this contract back in december . One of his answers was that he and spacex did not actually know it was a sole source contract until march, one day after he and michael gatsby appeared before the senate. Since then he has made no progress in discussions. They had no choice but to bring this lawsuit foreword. It is a very big deal. Elon musk suing the air force. He will not make any friend to help him. This seems to be a play date want to make to make themselves more competitive. One thing he did mention was good news. He confirmed that spacex did successfully launch and return the spacecraft. Cory johnson joins me in studio. What are we to make of his comments . There is the Business Aspect and the discussion of the rocket itself. There is a lot of money out there to be made launching these government satellites. The government needs or demands are only to do this. There is a very big business ksre that mus company is facing. The knee get to the cool stuff, trying to and then you get to the closeup, trying to get to the new technology. This is not an applied to the space industry lately it ever. And a lot of them are about mattel are material science since the 1960s. This notion of reusable rocket. Iit is a difficult thing to pull off because the tradeoff. , you need more propellant in the rocket to get it to fire upon her entry. That means less room for the satellite. It means less revenue for the business. While the cost of the actual thing i go down, youre also talking about lower revenue. Am always a skeptic when it comes to the numbers. Theres something Thelonious Monk said. The only cats he mean anything are the cat t who take chances. These are the things here going after. Johnson,ght, cory trying to find a way to weave elon musk and thelonius monk. Nicely done. 4 at this hour. Russias creditworthiness, the last time s p downgraded russias was december 2008. The chairman of the sovereign rate committee. Well get an outlook when bottom line continues in just a moment. Standard poors cut russia to its lowest Investment Grade of the Standard Poors rating service. He joins me from his office in new york will stop welcome back to bottom line. Say that it p did would reassess the risk to russias creditworthiness. What have you seen in russias external profile over the past four weeks that led to todays our grade . We have seen continued outflows in the balance of payments and the First Quarter. We estimated to be about 50 billion. About 50e it to be billion. It can continue in the next four months. Russia still has about 450 billion in reserves. This is a trend that warranted taking the rating down a notch. You spoke of the outflows. How much of a threat and russias Overall Economic growth . I think it will take it down to about 1 which is quite low. It will complicate policymaking. There is Downside Risk to the 1 gdp growth for 2014. If sanctions are turned up, it could be more much worse than that. Bank raisedcentral Interest Rates and is trying to keep the inflation rates under 6 this year. Going to be enough to stabilize the ruble which is the second worst performer among 24 emerging Market Companies . It will help. The issue for russia right now is they have a lot of external debt and needs to be rolled over. Mostly with the banks and with the corporations. Probablynal creditors are going to have other considerations when they are looking about rolling over the external debt. Such as . Such as sanctions. Such as the credit standing of their counterparties. In a Bloomberg View column today, contributor wrote the following standard and poors downgrade of russia to one notch above junk trade makes sense as a reaction to political news from ukraine, not as an economic judgment. Do you have any reaction to those comments . Can make at views market. Otherwise you do not have a market wil. Not a veryays had constructive view on the institutional settings and russia. Really have not changed. They have been validated i think. I think what motivates the change today as opposed to a month ago or in 2013 is the deterioration and the lower growth. You spoke about the institutional aspect of it all stop do you expect action from moscow to deal with the structural obstacle that threatens the longterm growth aspects . What is needed for s p to changes negative outlook . Improvement can come on a number of fronts. In terms of deep structural reform to make russian less reliant russia less reliant on Energy Exports and productions, i have very low expectations for that. Also saying the same thing a afferent way, it it is [indiscernible] society. As what he could take, i think if the geopolitical attention it eased you with ce using on the islands of payment. That would certainly help. President obama and european leaders discussed a possible expansion of sanctions against russia. Secretary warning that russia is running out of time to ease tensions in ukraine. If more sanctions are imposed on russia, what is that going to mean for the countrys mediumterm Economic Growth and for its Credit Outlook . It would bring the mediumterm Growth Prospects down. We think they would be running around 2 . It could certainly make it hard for them to achieve that this year and next are or the year thereafter. Heck of a pressure on the rating. It depends on the extent of the sanctions and whether they are effective and what the response is a moscow. In our last minute, before all of this started before this back and forth between russia and ukraine and before crimea, what was s p lost thinking about the outlook . At the end of last year we had a triple be bbb rating. That when negative about a month ago. With our downgrade now, the rating is still investmentgrade will stop it is one notch rating at bbb minus. Does this all hinge on geopolitics . I would not suggest it all intels geopolitics. It all entails geopolitics of the that has been interviewed her. Contributor. Thank you for your time. We appreciate it. The tale of two regions in foreign motors Earnings Report. A strength in asia and europe but weakness in america will stop i will be joined by Matt Miller Wim bottom line joins in just a moment. Welcome back. Ons is bottom line Bloomberg Television and streaming on your tablet, phone, and bloomberg. Com. Ford reported a big drop in firstquarter profit, earning nine percent, well short of estimates. They blame warranty expenses and the bad weather. Matt miller is in the newsroom with more. A big mess here. For came out with earnings per share. After onetime earnings of . 25, analysts were looking for . 31. We were looking for a higher number. It is also a 39 up from last year. When you look at the problems and what happens, the biggest was a 400 million charge for warranty and recall cost. I talked to bob shanks the ceo and listened to the conference call. It is or past issues and for the. Ossibility of future issues the company lost 100 million due to the bad weather. Some of the issues were shipping issues. Rained and part were delayed it is not in the sense that folks do not go to dealerships of but actual problems with operations due to the weather. There were also issues in south america. We saw the same thing with general motors, the venezuelan currency issue. 7. 3 inins were down to the First Quarter. Ford is a company, a carmaker famous for its fat margins, over 10 in 2013. It is a level other companies wish for. It will get back to 8 or 9 for the coming year. Any information on when alan mulally will hand over the keys . I asked about this morning. Bob shanks about what to tell me when it was going to happen. This is probably the most open secrets in the corporate globe right now. For has not made an official announcement. I would expect it relatively soon considering the fact that it is so out there. The company is not really denying it anymore. They are hardly even offering a no comment. It looks like a good set up for mark fields will st. Theyve put out this kitchen sink on purpose to get fields ready for the new job will stop matt miller in the newsroom. It is 26 past the hour. Julie joins mean. We are bouncing off the session lows of al. A lot of this has to do with various Earnings Report at we got particularly from amazon. About 1. 8 . S down there is concern about reigniting tensions in ukraine and russia. It is also talk about individual stock. This earnings was a positive one. This climbing the most interiors after it beat firstquarter earnings estimate. Theyre forecasting it will sell off up to 1 billion of assets at years end. We have pandora. Humbly the most in a year following the most in a year. Theyre forecasting the recent this quarter. Youll have more we will have more in 30 minutes. Welcome back to the second half hour of bottom line on Bloomberg Television. Lets check some of the top stories were following for you. The ballplayers of Northwestern University could change the face of college sports. They voted in secret ballot whether to join a union. Directorh a regional for said they are eligible to organize. Results of the unprecedented vote will not be revealed anytime soon. Weeks or be sealed for months as northwestern challenges the efforts. It is made of woven fibers and is the latest version of a in 1998. Ine debut rising rates have pushed mortgage lending in the United States to a 14 year low. The value ofr says new Mortgage Loans a fell 50 in the First Quarter from a year ago. The average homeowner has risen almost a full percentage point in the last year to 4. 5 . That is a look at the top story on the news. Export import bank has wrapped up its annual conference in washington. It highlighted the ongoing efforts to finance u. S. Exports abroad will stop it comes at a time when critics on capitol hill are threatening to close the banks doors all stop peter cook spoke to Export Import Bank fred about the looming fight over the banks future. We have 1200 people here. We have exporters who want to do business. People meeting and making deals. Last year to which 5,000 25,000 jobs were saved. You had a pretty starstudded event here. Elon musk thomas Larry Summers to name a few. For someone like elon musk, what are they doing for the various businesses at this point in time . Withe major one we work elon musk on his spacex. He competes intensely with the french and the russians. They are both supported by the government. We make sure that he can compete against them. For bulgaria. You are providing financing. The money is not actually going to spacex and elon musk. To themoney goes overseas buyer he was using the money to purchase from the United States. It goes to the overseas buyer but comes right back here. It is to buy products made in the United States stop spacex has 4000 employees they have working for them. The money goes to pay those employees. Spacex is a Domestic Company if ive ever seen one. Theyre launching it into outer space for foreign customers. That makes the demand for the rationale step do know some of the criticism . If you do not get the reauthorization, there are critics on capitol hill who say why do Companies Like a spacex or boeing need that kind of help from the federal government from taxpayers . Subarus customers like spacex and boeing are beneficiaries. I prefer them to buy from the United States. All the other Government Support their rocket industries. If we want to compete toe to toe, we have two have a level playing ford. We have to have a level playing field. The customer can choose the best product and the best service. What is the outlook for reauthorization . You have this before it prevailed but it is a battle. Were better prepared at the export bank. President obama asked for a fiveyear reauthorization and 160 billion in x poster cap. That is the total amount of loans. We have a very strong bill will stop we have done a lot of work with congress. We had a very strong bipartisan vote last time. We have moretly, and more companies from space spacex but mostly small businesses. 98 that we work with our small companies. You have the chamber of commerce promising this time to do more to help. How important is that support to you . Last year i gave tom donohue the chairmans award because he doesnt a spectacular job. They do