Headlines today. Michael mckee examines how hurtas import ban could its consumers. Olivia sterns looks at option plans for sothebys. Lets begin with Phil Mattingly at the white house with the latest on those airstrikes in iraq. Good afternoon. Good afternoon. Wasted littletion time making good on president to get rid ofed artillery pieces and iraq. Fighter jets dropped 500 pound bombs targeting a single or tillery peace. The reason why . A president related out last night. Take a listen. In recent days the terrorist s have continued to move across iraq and have neared a city where american diplomats and civilians serve at our consulates. , i havethe advance directed our military to take targeted strikes against isil convoys, should they move toward the city. We intend to stay vigilant and take action if these terrorist versus threaten our personnel or facilities anywhere in iraq. Officials say that didnt fact happen. Artillery was targeting kurdish Ground Forces in an area where u. S. Personnel were. That cause the u. S. To launch these strikes. This is the second heart of a multipronged push, the second part being humanitarian aid. Population pushed into the mountains last night. We expect more humanitarian airdrops in the days to come. How are u. S. Officials the militaryting capabilities right now . One of the most interesting u. S. S i have heard is officials are stunned by both the sophistication and the are bringingsil with their recent attacks. They have heavy weaponry, most of it captured from iraqi forces wellhey are operating very together according to u. S. Officials. This has caused major problems and it is a primary reason why you have seen the president authorized the strikes. His forces are moving quickly and putting u. S. Risen now in danger. Phil, do we have any sense of the scope or links of action by u. S. Forces . We know the scope. Within a rat only i believe there has been some push by the public and lawmakers to increase the push. Absolutely not going to happen. However, this is an openended commitment. If there are further threats to u. S. Personnel in baghdad, potential threats in mosul, the ability to strike there. This will be reevaluated regularly, but this is not ending anytime soon, mark. Mattingly joining us from the white house. Thank you. My colleague su keenan is standing by. Analysts are scrambling to update forecast right now. That is really the story here, particularly in terms of the bullish outlook for gold, mark. The interesting story in gold is the longerterm outlook is ually perish, this bearish, this on the view that the airstrikes will stabilize iraq. Longer term this may actually be good for supply. The ability to move around has given the militants has been the militants raid a strength and u. S. Air power can take that away. They have spared the production in iraq south, which is the home base of three quarters of its output. That is compared with about 10 million a day from saudi arabia, the largest producer. In early rally faded. We are eking out a small gain for oil, gas and heating oil closing the day lower. The Bigger Picture the combination of geopolitical events in the mideast is causing some analysts to raise longerterm price protections. Barclays is one. They say that the risk is to the upside for oil. Unreliable libyan libyan supplies could boost prices, despite the weaker demand. What about gold . What are we seeing . Safe haven benefits from lots of what is going on. Gold traders are the most bullish they have been since the start of the year on gold. That is due to a combination of world events. Gold is a greater demand as a safe haven and should remain well supported with all of these risks from the standoff between russia and the u. S. To the latest with iraq. It was higher earlier in the day before those gains faded. We are seeing a lot of gold bulls reenter and by, or given what is going on. Su keenan, thank you. Lets turn to russia and the fallout from the crisis in ukraine. It isit is retaliating against u. S. And european sanctions. What is surprising is the targets it has chosen. Bloomberg economics editor Michael Mckee joins me in studio. This is the story that will not go away. It is odd given everything happening in the middle east is stocks are up, bond yields higher. Comments byt after Vladimir Putin that he is willing to mediate and back off in ukraine. That may be because the sanctions are starting to reverberate. Matter of time before russia retaliated. But the targets are surprising. Sanctions include things like beef, poultry, vegetables, milk, fruit. What has analysts scratching their heads the sanctions will have more of an impact on russia than here. Russia imports 25 of its food. About 30 billion worth comes from be sanctioned country. When we talk about the countries were talking about, it is not much to each one. Just over one billion comes from the u. S. , that is 10 of overall exports to russia. The biggest . Chicken parts. Wings and legs. Total u. S. of production. There is also this. The rising beef and pork prices has pushed up chicken prices, to you well. If we are exporting less and there is more supply here, that should ease prices somewhat. And we are selling almost no cattle to russia. So who does get hurt . You do not want to be in slovenia in this situation. The sanctions are 2. 5 of that countrys gdp. It is not a big deal for the eu. Who might really get hurt though is the russian people. Russian consumers, many of the products they take up will be in short supply. That will raise the price, raise the inflation rate. Analysts say it could add 1 to 2 to their inflation rate. Bloomberg economic editor Michael Mckee. Coming up, elon musks spacex commits to building a space launch facility in a town that borders mexico. I will talk to brownsvilles mayor in just a few moments. Brownsville texas is basking in a futuristic low. Last month spacex, the commercial Space Transport firm headed by elon musk, and announced plans to build a launchpad just east of the city. What are the economic benefits and what will be city mean for americas Space Exploration goals . The mayor Tony Martinez joins me. Mayor, thank you for your time today. Thank you for having us, mark. Mr. Mayor, the decision to brownsville is being told strategic. Why your city . Geographically, we are positioned perfectly to begin with. We have also worked really diligently over the last three years to hopefully begin what i would call the origins of a space hub in texas and in brownsville. Mayor, this project, it has been three years in the making. Tell us what it is going to mean in terms of jobs in brownsville and Economic Growth . Youll have Capital Improvement close to 85 million to begin with. You are going to have construction jobs. Then youll probably have an annual payroll of about 50 million that will be generated once the construction is completed, which we hope will be between 18 and 24 months. So, you are going to impact the influx of capital and moneys in the city, and that will impact the taxes, whether they be sales taxes or property taxes. So, besides the energy it will create and the enthusiasm, i think it has a lot of great economic benefits. We are looking forward to it. Sir, tell talk to me about the supply change supply Chain Logistics you and the Development Council will have to work out. We have what i call the Network Cluster of supporting cast. Different types of industries, manufacturing, etc. We have not really defined all of that in its totality, but we do know it comes with a cluster of other types of manufacturing that are required, and not to mention, the transportation of a lot of different arts from all over the world to get this project underway. I am speaking with Tony Martinez. He is the mayor of brownsville, texas. X launch facility is slated to be constructed in his city. What incentives did brownsville in the state of texas offered to , andthe deal with spacex did you face resistance because of the Environmental Impact, part two dealer early on the adjacent state park that is part of the Rio Grande National wildlife refuge . Privilege to go watch a couple launches in florida, and quite frankly be impact is negligible. That is probably hard to imagine, but it is the truth. Andad the faa come through we had over 500 people attend those meetings, and quite frankly out of all that, we had one or two naysayers. For the most part, even our director of the zoo in brownsville was in favor of this particular project. Has been a it thorough job done by the environmental people, and they find any impact that will be affecting that area. So, i think we have done a great job, and i think you will see the environment will not be affected. Sir, you use the word negligible. As you know, the word negligible does not mean 100 without risk. Are you comfortable the Environmental Impact will not effect onetrimental your town . I am certain of it. I really am. I do not want to be overconfident. But i think the amount of Due Diligence and all of the investigation that we did i happen to be a trial lawyer and have done a lot of environmental litigation. I am satisfied. And i think everybody else, all the organizations, all of the agencies were likewise satisfied that when you say negligible, yes, it can mean a whole lot of things, but it is not enough to have any risk involved with it. Spacex ceo elon musk says not only will be rounds will facility create jobs, but it will inspire students. You have called the facility a barrier breaker. What are the educational benefits and which barriers were you referring to . The would like to convey message across to investors or Business People or whatever we have a lot of great talent in our university there, at the university of texas. And a lot of the folks, once they get out of their formal education they probably have to go somewhere else to look for jobs and make a living and i think this will provided you to full time, a beautiful time, not only for when they are in school, perhaps to do work with spacex, but also their after thereafter. It asof them referred to the brain drain. We will not have that. And with that we will have other people coming in. We will be breaking barriers in a sense we will be affording Educational Opportunities to other people. Mr. Mayor, the facility will be located near the mexican border. Concerned about Migrant Workers seeking construction jobs to the detriment of local citizens who need work . The thing about it, the Border Security as we know it, those of us living in the area, it is actually quite good. This influx of children from Central America or the different adults that are coming through, they dont try to cross and turned themselves in. The worker situation, i think, is also a great opportunity for us to address them up the Immigration Reform that is perhaps up there in washington. And noee no problem effort that has to be highlighted with regards to Illegal Immigrants coming across for that purpose. Mayor martinez, we have a little less than one minute left. The Johnson Space center in houston was born from the idea of conquering what president kennedy called the new frontier of science and space. Do you consider the spacex facility a new chapter in that frontier . Without a doubt. I quoted president kennedys moon speech that he gave here in houston in 1962. I think we are exactly there. This is a great opportunity for brownsville and the state of texas. I welcome all of the opportunities that will come my way. Mr. Mayor, when do you expect the first launches . Construction is supposed to be 18 to 24 months. I suspect the way this organization will works, probably 18, 19 months from now. All right, Tony Martinez, joining us from our bureau in houston. Your honor, it has been a pleasure. Appreciate it. Thank you. Coming up, sothebys opens its doors to the masses. We have details on why it is listing its collectibles on ebay. Bottom line continues in just a moment. Southerly stock is falling on news that its battle with billion air so the bees stock is falling on news that its battle with billionaire dan loeb is costing it millions. Olivia sterns has been digging into these numbers and she joins me in studio. B is getting what he wants, but it comes at a cost, doesnt it . It looks like it will cost more than sothebys initially estimated. Of download has gotten some what he wanted. He is on the board now. Is overall critique, that still does hold and that critique is is of these is sothebys not a costeffective business. You saw that today. Numbers were out today. Legit compare this to a a majority of companies, sothebys has seen plenty of sales. Both sothebys and christies had record auctions. The revenue is strong, the art market is buoyant, but the margins are shrinking faster than sales are. Why . That is interesting. There are only 300 people in the world, max, in the market for the use of are 20 million and up. So theaid the bees bees compete fiercely. Ys and christies compete fiercely. They will probably wipe out the commission. That is probably why their margins get so small. And they are desperately looking for new customers. They are both pouring over the asia market. Talk about the new online strategy. Teaming upebys is with ebay. It is interesting to hear both of them in the same sentence. Isnt it . You think of sothebys as an elite institution. Collar. Bay is blue well, lets call it mass. What they want to get into the mass market, which christies is already done. Christies is there archrival. Their archrival. They sell 15,000 watches. They are in the lower end of the market. All right, olivia sterns. Thanks so much. 26 past. Bloomberg is on the markets. Julie hyman at the details. Hi, julie. Happy friday. We do have a bit of a rally here. Ctually extending up 9 10 of a percent for the s p thethe dow, up. 7 for nasdaq. We are seeing a bounce back. Also reassurance on the geopolitical front, perhaps helping matters. Lets look at mcdonalds, too. The largest restaurant chain dropped in july. The Third Straight month of decline. Domestically, mcdonalds has been struggling to attract americans to us locations with increased competition. Welcome back to the second halfhour of bottom line on Bloomberg Television. I am mark crumpton. Thanks for staying with us. The World Help Organization has the clear the Ebola Outbreak in west africa and International Public health emergency. It is the largest and longest outbreak of the disease every ever recorded. More than 960 people at been killed by ebola. U. S. Jets are dropping bombs on islamic militants in iraq, carrying out president obamas promise to protect american civilians still stationed there. It is not clear how many militants might have been killed in that strike. Gazatinian militants in refused to extend a threeday truce after negotiations in cairo hit a deadlock. Israel was funded with a series of airstrikes in gaza. Now to look at the top stories in the news this hour. 50 of all cars sold by iconic uvss car maker porsche rs r suvs. Porsches not alone is not alone. We look at the everexpanding luxury suv market. We can finally say it the suv takeover of luxury cars is complete. It is not good enough to have one suv in your lineup. Oh, no. You must have a wardrobe. This is the little brother to firstyenne, porsches suv. It cost conniptions among purists, but then went on to be the best selling suv of all time. Do thise, carmakers can nowadays because it is easier than ever to spin off different models from a common set of parts and measurements. Mercedess new suv is related to its sedan. Acan is related to its corporate cousin, the audi q5. It makes sense. The company was leaving money on the table. Customers who loved these sports cars were going off and buying bmws and range rovers. They would buy a porsche suv, if only porsche made one. Volkswagen was also interested developing a full side fullsize suv. Bw and worst developed a partnership. After dipping their collective toe in the water about a decade ago, Luxury Car Companies are going all in for suvs, and for good reason. Their customers really like them. The ability to carry a lot of stuff, the reassurance of all wheel drive, and higher seating has become a musthave combination. As i speak Companies Like bentley, rollsroyce, and lamborghini are engineering big, tall suvs of their own. Forget about lowslung sports cars and sleek limousines. In the luxury market, the only way to go is up. Up next, we tell you about a dramatic change for the ncaa that might let College Athletes share a piece of the billion dollar industry. Bottom line on Bloomberg Television continues in just a moment. It is time for todays latin america report. Relief may be coming for argentina. Busy rallying investors. Citigroup, j. P. Morgan, it hsbc, and Deutsche Bank have all been involved in discussions with investors. That is according to a person familiar with the meetings. Dropped 1 ,razil the most among equity benchmarks in thericas americas, as a poll showed resident doma recep winning in a runoff. President Dilma Rousseff winning in a runoff. That is your latin america report for this friday. Big changes for the ncaa. The Biggest College athletic programs are being granted hershel autonomy. Lee idol is a professor of sports management. Welcome back to bottom line. Good to see you. Good to see you. Anything i say and that intro that was wrong . No, everything is right. What about partial autonomy and athletes getting a piece of the pie . We are marking a different time for the ncaa and student athletes. They are student athletes, of course, to begin with. Two things we need to be conscious off as we go. One, this is a new time for student athletes. An opportunity to do some work, get paid for it, in a sense. The other, and i think the bigger story is the ncaa as an organization, an institution and where it is headed going forward. They are under fire in the court of Public Opinions and and in the courts as well. They are under a fire under fire from a lot of places, including themselves as well. There is an argument that they are on a march toward becoming obsolete, if it is not obsolete already. For salvationing at this point. Why is the ncaa doing this . Is it opening the door for colleges to act as a business . The ncaa is doing this this. E the ncaa has to do the model that has brought business to the ncaa no longer works. Is Business Model the ncaa working off of his wildly successful. And when things have wild success, things are to happen. You ride this momentum of success. And you stop checking sometimes , butt what you are doing what youre doing it. They got to this point, they rode this wave of success, grasped for more, got more, and then you start to hear, there is all this money swirling about and student athletes say, what about us . To deal with it. Were seeing the real results of it. E, is autonomy code for wealth . What are we talking about . Theses the impact for five biggest conferences . These are the power players, for sure. There are one or two. Other academic institutions that do not fit into those five. It is a a six, but small one. This is the haves and havenots we are really looking into. The five the five biggest conferences will have more power. But as we were talking during the commercial break, this pay for play, that is out of the question. Instead they are talking about expanding scholarships. Said howncellor does this protect the integrity of the collegiate model . Does it . That is the great question. That was what i was getting at a bit ago, looking at why you are doing it youre really looking at the roots of the ncaa , why it exists as an organization, what it was meant to do when it was established more than 100 years ago, versus what it is today. They may be two different things, but it has gone unchecked and the entire world around it has changed. I am speaking to a professor from nyu, talking about that big announcedhe ncaa yesterday. The smaller conference schools, they have little say or influence before. Ir was going to be listened to . Another great question. Maybe yes. The reality is, probably not so much. If we go back to blackandwhite terms, it is a have and havenots situation. Do they have a voice now . They do, but you have these powerhouses that are pushing through, that really have the power and strength and financial wherewithal. The question that is really being asked a lot is whether the smaller schools and smaller conferences should be getting into what they call an arms race . Should they even be involved at the level they are trying to get into . Were talking about what, the sec, the pac12, and these little guys i do not mean to be offensive, but it sounds like they are battling over table scraps while the big guys are getting the bulk of the food here. That is it. It may sound defensive, but it is tough not to get to honesty, what which is what you are really talking about. These powerhouses really run on a completely different model than the smaller conferences. Right now it seems like literally a different set of rules. Bo custer, the president of boise state university, he was not happy with this at all. He told the associated press, for those who think division one athletics has devolved into a business that 200 often a text University Priorities rather than the other way around, it is about to get worse. Are there checks and balances . The ncaa is supposed to be that organization of checks and balances, and come back to the question of where the ncaa is. What do your students tell you . There has to be a lively debate in the classroom. What are they saying . They are literally going to be the owners and athletes of tomorrow. What do they think . And they are the athletes of today. The student athletes of today. It is interesting. At in my you, it is not a powerhouse athletic institution, but in the classroom our todents are really going these powerhouse cools, the tops of the business. And they are really questioning some of what existed yesterday, itt exists today, where is headed tomorrow . These classic management questions, really getting into the structure, the function, the ,ntire business of the ncaa looking at it from the outside in and back out. It is a business. The business of the ncaa. Lee igel. It is always a pleasure to see you. It is great to see you. Coming up, howell wild weather is helping hollywood. Bottom line continues in just a moment. It is friday so we bring you encore, a look back at the most notable newsmakers from the past week on bottom line. [applause] with this particular summit, what we are actually saying to the African People and governments, that we want you as our partners. We recognize your potential. And we are going to work with investment sure our and trade increases. We will make sure there is a secure environment. And we will work with you to make sure the institutions that are required to bring africa up to the standard to which it deserves are going to be assisted by the United States. It is really striking, not just for how rapidly poverty grew and the fact that we are now at record levels. But we have passed the Tipping Point in terms of where the poor population is located in the country. Between 2000 and 2012, the poor population that thing in the suburbs of our major metro areas grew by 60 5 . That is the fastest growth we have seen across the country and faster even than in large cities that anchor our major metros. Governments, including the United States of america, accepted the National Consensus government and the leadership of president mahmoud abbas. Represents everyone, including hamas, and is committed to what ever we have agreed with the International Community and israel. So, this National Consensus government speaks on behalf of all palestinians and the representatives of hamas and jihad in this delegation in cairo, conducting the negotiation with israel. We have seen infrastructure across the country crumble and our modernday economy is based on cities in the Economic Development that happens to cities. If you continue to have gas leak inand water mains exploding new york city or philadelphia, syracuse, we will not be able to build the kind of economy that will quiz us for leadership in the city. In this century. Madeopical storm iselle landfall last night. The last time a storm of similar scale hit the islands was in 1952. That storm benefited one sector. We have a look at how hawaiis storms actually help. That is right. We have heard about tourism, traffic, tropical fruit. We wanted to look at the Film Industry which has tripled in hawaii since 2006. It turns out what weather is not so bad for hollywood. The last time a big storm hit in ark, jurassic bark p was filming. Those scenes that you see were filmed in a category four hurricane. They did not have to go to a soundstage. They did not fake of the storm. That was a real hurricane. We do not know if we will see any iconic films come out of this weekend. But we would not be surprised. We have hunger games, but 0. La, hawaii 5 has this had on the Film Industry in the state question mark the industry has brought a ton of jobs into while into hawaii. It accounts for 5 of civilian jobs. A lot of job creation. It also brings in a lot of tax dollars and a lot of film permits are warded. A 20 , 25 film credit hawaii gives these companies. What about the incentives the state offers question mark the incentives are the beautiful weather in hawaii. What about the incentives the state offers . The incentives are the beautiful weather in hawaii. A woman in the film office told me you take advantage of these kinds of storms. Great incentive to take your movie or tv show to the islands. Why not . Stay with us, another check of the markets is on the other side of the break. Get the latest headlines at the top of the hour on Bloomberg Radio and streaming on your tablet and bloomberg. Com. That does it for this edition of on Bloomberg Television. I am mark crumpton, reporting from new york. Thanks for joining us. On the markets is next. It is 56 past the hour, which means bloomberg tv is on the markets. I am julie hyman. Lets look at where stocks are trading, about an hour to the closing bell. The rally keeps on going. You do get the phenomena where people do not want to be long going into the weekend, but we have an hour left. We will see. The s p and dow each up nearly 1 . Businesss u. S. Africa summit highlighted opportunities for u. S. Companies in africa, which expects to see gdp double over the next decade. How can investors participate . Play african how to through etf, our etf guru. Interestre is a lot of in this topic right now. And i know are you going to necessarily buy shares directly in these companies . It is tough to do, African Companies themselves. Ofre are not many adrs them. It is an exotic investment, no doubt. But it is growing. The u. S. Is involved, china is involved. Everyone wants africa to drive. With the etf, you can press the easy button and buy shares in africa etf. The bad news is there is only one that covers the whole continent. It is afk. Its holdings are holdings are based on the weighting of the countries. Nigeria and egypt have about 20 . You have kenya, morocco. The other 30 the u. K. And developed companies that derive revenue from africa. I was going to say do some of these countries have enough publicly traded companies . They do not. This solves the liquidity issue. There are liquidity constraints. You cannot make an etf out of something that does not have enough liquidity. This is sort of a backdoor way to do an etf. I think it is not simply a u. S. Play. As those countries get bigger, it will switch over to capture those local stocks. You mentioned south africa is the largest portion of that, the biggest, most mature economy on the continent. Though if you wanted to specialize and take on some of the africa growth, but not as much risk maybe, maybe you would look at a south africa etf . Sure. The largest is the i share africa etf. It came out first. It is a lot bigger. Two issues. It is a little bit more volatile than the broad africa, because the more stocks. Wellouth africa is represented in your emerging markets etf. If you own those, you probably already have a chunk of that. If you go broader, that is when you get the exotic stuff. It is still a solid etf. Really quickly a nigeria etf . This is about a year old. A frontier country. Very volatile. No correlation to the u. S. It is a play on nigeria. Very aggressive. No correlation. Provides a little diversification to a were folio acidly. Ok, got to leave it there. Thank you. Street smart is next. Welcome to the most important hour of the session. 60 minutes until the closing bell. Stocks erasing declines as easing tensions in ukraine outweigh concerns over the middle east. Street smart starts now. Today, american warplanes strike militants from the socalled islamic state, isis, pulling the u. S. Back into a conflict in iraq