Phil manning has details on the white houses proposed 4 trillion budget. The 1 billion impact for ukraine. Peter cook tells us how the ukraine is fueling the Energy Debate here in the states. Ukraine. The latest on president obama says russian president Vladimir Putin has breached international law. The present spoke to reporters earlier today on the situation in crimea. Thatere is a strong belief russias actions is violating international law. President putin seems to think has a different set of lawyers making a different set of interpretations. That is fooling anybody. Everybody recognizes that, although russia has legitimate interests in what happens in a neighboring state, that does not give them the right to use force as a means of inserting influence. Said heresident also has not spoken to president putin since the weekend. Lets get the latest on the und rumble bloomberg ground from bloomberg. What is the latest in the standoff . Much a tensel very standoff. Theres is an air base down in crimea. It was taken over by Russian Forces over the weekend. This morning, ukrainian troops 300 of them marched back to that base and said they wanted it back. Soldiersf 12 russian greeted them and told them to go away. They fired some warning shots when they did not. That was pretty much it. The two sides then moved apart. What is interesting about this incident is, this is the first time that any shots have been fired in this conflict. These were just warning shots. They were not fired in the direction of the ukrainian soldiers. But it does give you a sense of what kind of tinderbox this could be in crimea were you have what ukraine says is about 16,000 Russian Troops on the ground and the Ukrainian Military there as well right next to one another. Resident putin tried to calm fears about russias actions. What did he have to say echo . He said there are no Russian Troops in crimea. He maintains that those are russians speaking militia. He has no need to send troops to ukraine. He said russia would only send troops to ukraine in extreme cases. He does not think that the situation is extreme yet. He said that russia had no intention of fighting a war with the ukrainians. I think if you read between the lines, this is president putin saying that he does not plan to escalate the conflict. Perhaps he does not plan on sending troops into eastern ukraine. At the same time, hes holding his ground and is happy to control crimea for the time being. John kerry was also there in kiev. What were the highlights of his trip . Fore flew in and was here three hours. He went to independence square, where he went to the shrine of some of the people that were killed in the violence about a week ago. He then expressed his support for the ukrainian people and the Ukrainian Government and promised 1 billion of aid. He continued to criticize president putin, saying that the hol whole world understood what he was doing and he would not get away with it. That was it. He is now flying off to paris. Ryan chilcote joining us on the phone. Secretary of state kerry to kiev was designed to show support for the Ukrainian Government. I am pleased to say that this package includes an immediate 1 billion in a Loan Guarantee to support ukrainian recovery. We return to work with the Treasury Department of the nine states and with others to lay out a broader, more copper has a plan. Exactly how much is that going to help . Lets turn to michael mckee. Is this just a drop in the bucket . Theres less here than meets the eye. At least financially. Listen closely to what he said. U. S. Is not giving ukraine any cash. But if ukraine loses the natural gas discounted gets from russia, they lend the money to make up the difference. At least 1 billion of the loan will be repaid. They said they will send technical advisers from commerce, justice, energy, state and treasury to provide advice to the new government. Not much, but designed to show the world it is moving forward with ukrainian egg. Kerry did offer more. Ukrainian aid. We condemn the acts of aggression. ,e have throughout this moment evidence of a great transformation taking place. In that transformation, we will stand with the people of ukraine. Read this asy easing tensions. It does not look Like Administration is signing on to that view. Secretary kerry seems to be trying to make it clear that there are big risks for russia in this. P in the russian stock market was a big risk. It does underscore the high stakes for putin as many analysts say that he does not care. To attract capital, not repel it. The longterm structural problems growth as plunged. Manufacturing their contracted for a fourth month in a row. Lunch makes inflation a major threat as important goods cost more and threatens russias banks. 6 estimate losses of about billion from the currency. It raised its benchmark Interest Rates significantly. That will make credit harder to get, putting more pressure on the economy. Russia has a current surplus, but small. To putin comes from lower oil prices. Until the ukraine prices had been trending down, they will resume their fall as american fracking increases the global supply. Dependent onedibly oil. Almost 25 of the economy. Michael mckee, thank you. Some in congress wish that secretary of state kerry could have headed to ukraine promising more than just those Loan Guarantees, but also access to u. S. Oil and gas supplies. Peter cook has more on that part of the story. Peter, the crisis in ukraine is adding new fuel to an ongoing Energy Debate here in the u. S. A lot of new fuel to that debate. U. S. Oil and Gas Industries are making aggressive pushes over the last couple of years for expanding exports of u. S. Oil and gas, given the big boom here in the net states. Ukraine prices is bolstering their case. Ukraine relies on russia much force energy. Russia has used that gas as a offon in the past. They cut the price, remain a threat in the standoff. Shale boom in the u. S. Means alternative gas. They want to lift limits on u. S. Exports. And speed up approval of liquefied u. S. Gas exports. Chorus,ner joining the saying in a statement, the u. S. Department of energy excruciatingly slower approval process accounts to a de facto ban on American Natural Gas exports that Vladimir Putin has exploited to finances geopolitical goals. They have approved six energy sincenals 2010. Roughly 20 more applications are pending with the doe. There is a lot of interest out there. Ears for mostyou of those to be up and running. Republicans want to speed up that timetable. Calling for the administration to ease the current limits on u. S. Oil exports. Cook, thank you. Coming next, what kiev and washington should expect from Vladimir Putin. We will be joined by former cia official who says the u. S. And europe need to rethink their understanding of the russian leader. That is ahead when bottom line continues in just a moment. , it haseteriorates ramifications in terms of economic activity. I sincerely hope it gets resolved peacefully. Fiat ceoas the speaking with bloombergs guy johnson at the geneva motor show. The situation in ukraine continues, it could dampen car demand in western europe. We continue with our focus on the crisis in ukraine. The Obama Administration is preparing Loan Guarantees or kiev and running sanctions against russia. In moscow, Vladimir Putin made his first public remarks since Russian Forces took control of crimea. He said he reserves the right to use force to protect ethnic russians in other parts of ukraine. My next guest has special insight into what we may see next from moscow. He is the director of the russia endowment and program. Welcome to bottom line. Think you for your time today. Led to be here. Talk to us about what is going on there. R putin defending russian intervention in ukraine saying that he reserves the right to use more military force. What does this tell us . How should the nine states respond . Us that for the time being, he is prepared to escalate the crisis. Which is a positive move in a way. Relative to the problems that the United States and russia already have on their hands. It is a very small step in the right direction. The real problem is now in crimea. Which effectively is outside the control of the Ukrainian Government. Effectively, denied by what appears to be Russian Military personnel. Is quite satisfied with the situation because he sent a powerful signal to kiev that they cannot move to the west as they had hoped. Without his consent. That is his point of leverage. Military forces are in standoffs in crimea and the black sea. What are the odds of fighting . About aless concerned force on force military scenario. Im more concerned about situations accidentally getting out of hand or some provocation from some extreme elements on one side or another. That would be more worrying to me. So far it seems that putin has signaled that he is not prepared to move more forces into ukraine beyond what is a cap list what he has accomplished in crimea. You believe that we should rethink our understanding of Vladimir Putin. Why should we do that . How should the west viewe him . His approach to dealing with the west and dealing with Foreign Policy in general is in some ways reminiscent of the major powers dealing with the world at the time. Europe in the 19th century. It is very hard. It is not based on shared values. Something that is essential to the founding of the european union. Have a clash of values and approaches to dealing with each other. Cia,ven your tenure in the talk to me about the use of masked gunmen in crimea. What does it tell us . Is there precedent for this tactic . Precedents for this tactic. Going back to the georgian war prewar phaseng the of high tension and escalation. The russian side sent military volunteers and that contributed to tensions, of course. It is a fairly standard page from the playbook. Maybe not exactly the same as what was done during 2008. Nobody is reinventing any ways here. Russias blocking cell phones and internet lines between crimea and ukraine. There are multiple reports of socalled promoscow protests being brought into ukraine from russia. What do you make of all this . If it is indeed happening, i am not seeing confirmation on those reports. It is impossible to keep up with everything. That signals to me that the russians are positioning themselves to continue to andcise control over crimea deny ukraine control over the peninsula. And are positioning themselves in case tensions escalate or the situation warrants to take a more active stance in ukraine. So far, theyve only hinted at that possible trouble. The director of the crimean Carnegie Endowment to russia. Thank you for your time and perspective. We appreciate it. My pleasure. The white house unveils its budget blueprint. It is a dead upon arrival on capitol hill . President obama sent congress his budget request today. White house correspondent phil manning lead has the highlights. Good afternoon. Good afternoon. Democraticnt long on policy priorities, but short on chance of moving in capitol hill. The president laid out a 3. 9 trillion budget request today. In that budget request, he included spending like Early Childhood education and job training programs. 60 billion to expand tax credits like the earned income tax credit. What it also does is pays for crop including insurance subsidies and cutting back on certain types of tax loopholes. What this underlines is a new reality for the Obama Administration. It is an election year. Has startedpicture to improve. Take a listen to what the president had to say that. Is a roadmap for creating jobs with good wages and expanding opportunity for all americans. At a time when i deficit has been cut in half. It allows us to meet our obligations to future generations. From the heard president , deficit picture is looking better. Much so that levels will be below where they were before the budget crisis. How do republicans react to away from the emphasis on deficit reduction act out . John baeder came out and said that this was the most irresponsible budget yet of the obama has proposed. The president laster put out an all french to republicans and said he was willing to make changes to social security, medicare and other entitlement programs. Those are all gone this year. For republicans to look at these budgets in the lines of what the established last year in terms of topline numbers under the agreement, this budget is something that will not move in the house of republicans. Are viewed asts more of political documents as opposed to policy proposals. That really is right. Especially this year. Yep midterms coming up in november. The white house wanted to lay out policy priorities Going Forward to follow through on over the next eight months. The president laid a bunch of these out in his state of the union. Inequality issue. What you are seeing here and now is those policies put into writing. Senate democrats have already said theyre not going to do their own budget. This probably the most detailed proposal you will see from democrats that lawmakers can pull bits and pieces of on the campaign trail in the year ahead. Bloomberg is on the markets. Alix steel is here with the details. The dow was up 200 points. Were still seeing a record rally in the s p. Often times, about half an hour russia fired an intercontinental ballistic missile. S p, up 1. 3 . A couple of individual stocks that we are watching. First is dish network. Ae company reaching groundbreaking deal with disney to offer its programming. That includes espn and abc. All part of future webbased subscription to be. More Internet Television is. Verizon ceo passing that the company will have up to 100 tv channels ready for mobile viewing by the end of the year. Also announcing that the company is looking to acquire more airwaves and is focusing on making more video move seamlessly to mobile. Back on the markets in 30 minutes. Welcome back to the second halfhour of bottom line on Bloomberg Television. Things were sting with us. We will check some of the top stories were following for you at this hour. The Obama Administration has prepared 1 billion in Loan Guarantees for ukraine. And threatening sanctions against russia. It is taking control of the ukraines crimea region. John kerry says russia is working on pretext for further invasion. The u. S. Home prices rose in january home prices rose in january. It mightve offset sales stalled by cold weather. They rose. 9 in january. 12 inices have risen the past six months. Arctic air has sent temperatures into the Single Digits in some parts of the midatlantic and northeast. It was four degrees at baltimores airport, breaking a record set in 1873. Dulles International Airport saw a reading of one degree below zero, tying the record for the month set in 1993. It was the second straight day of record lows for the two airports. That is a look at the top stories in the news at this hour. It is time now for the commodities report. Su keenan joins us from the newsroom. Wildmmodities continue to due to the frigid weather ahead. Continued torices defy gravity. That and usually cold weather driving trading today, even though the end of the season is here. Ukraine is not an issue and that gas. Nat gas. We could see oil jumped 10 in the likely event that russian exports of oil are disrupted. Crude slides amid rumors that not disruptl doe oil prices. It is unlikely the ukraine situation gets worse. Not a big threat to the oil market. Therefore, the ukraine turns out to be a oneday wonder. Who does not appear to be spoiling for a war. So crude is therefore in retreat. All of this comes with bank of americas no doubt today that while oil prices could spike under disruption, it would destroy russias reputation as a supplier. He sees sanctions against russia unlikely. It predicted the weakness of emergingmarket currencies, are reversing the brand rally. We are seeing a trend in gold, even though it was a bullish call yesterday. 1400. Were seeing a pullback as russian president putin comments on easing conflict. Gaining 12 yeartodate to date. That leaves prices at the biggest quarterly gain since 2007. Thank you. My next guest knows that while many parts of the u. S. Economy are growing, the housing sector remains and urging concern. He has worked at jpmorgan, Prudential Financial and the new york fed. Welcome back to bottom line. Good to see you again. At head of global strategy pavilion up in montreal. He writes that the Housing Market presents one of the largest real Economic Risks to the u. S. Growth in 2014. The price increases we have seen are driven by constraint supply of homes. Volumes are down. Applications for new mortgages are at a decade low. We just dont see the kind of fundamental support for the market. That you would hope to see. What were seeing is a reflexive market, which is still unwinding from the crisis. Where is this concern coming from . From the feds monthly reduction in the stimulus or the job market or stagnant wages for people who already have jobs . Jobs and income. The thing to look at is the banks. And theof dodd frank rules, they are retreating from the home market. They really will only write mortgages. Give the huge potential of home withoutn this country lenders. The average for fannie and freddie is in that 730 rain try now. You know what the concern was before. There will be a lot of people who could qualify to buy a home but the banks will see them as kryptonite . There is no such thing as subprime lending. You have fully