Right e hyndeo is and it might pass north of right monday or behind, and it might pass north of hawaii monday or tuesday. I authorize two operations in toq targeted air strikes protect american personnel, and a humanitarian effort to help save thousands of iraqi civilians were trapped on a mountain without food and water, and facing almost certain death. This is anmistake, escalation of the u. S. Role in iraq. Houseerg white correspondent Phil Mattingly joins me now from the white house. What was the single Tipping Point that led to the . Residents decision u. S. Officials i have spoken to are genuinely surprised at the sophistication and efficiency of the latest Islamic State attack. They felt like they had to react, and you also heard from the president , there is a humanitarian crisis. Tens of thousands of people are spot. Ad it is something the president address last night. Take a listen. Let me be clear about why we must act and act now. When we face a situation like we do on that mountain, with innocent people taking the prospect of violence on dash facing the prospect of violence at a terrific scale facing the prospect of violence on a scale, i believe the art states cannot turn a blind eye. The humanitarian side and the strategic impact of a potential nearby are. S. Forces reasons the president decided there was no reason not to act. The u. S. Has already completed its first humanitarian air drop. Are we likely to see more of that aid . It looks like it. In a conference call, senior Officials Say what was dropped yesterday was the equivalent of enough food and water for 8000 people. We have seen estimates that there are tens of thousands on this mountain nor in this region, and the u. S. Officials made it clear that there is a real possibility future humanitarian airdrops will occur in the future. They did not give a timeline, but 8000 is not enough to feed tens of thousands of people. It is safe to expect further airdrops will occur. The limit here to his operation. Within a rock it was q. Thin your act within ira there were questions about whether this includes syria, and the answer was no, but it goes throughout entire operations in iraq. If there is a threat to baghdad, where strategic assets, there is a possibility the u. S. Will use. Irstrikes there, too it will be with incorrect, but there will be further escalation. Markets are red around the world. We seem to be seeing a bit of a comeback taken early in europe. For todays session, it has been volatile. You saw stocks getting crushed early in the morning. Was getting hammered. Lastat the dax over the two months. In june, there was a lot of happy talk about the ec peep. Since then, we are down almost 10 . Yieldss, german bond went lower. Were looking at record lows for german bond yields. The movie and oil is the move i find interesting. Is the move i oil find most interesting. Most of the tension is in the north of iraq. Is this a fundamental concern, or a kneejerk reaction . We have to differentiate what is happening in iraq, and what is happening in russia. One is a sentiment issue, and another is fundamental. The russian issue is not just noise, it is news, and that is driving markets. Lets talk about the russian issues and the impact of sanctions announced by russia yesterday. Are they starting to hurt european businesses . It is starting to show up in some earnings numbers. Talking about food imports, it sounds like comedy, but we are talking about 10 of eu exports going into russia, and that is a big deal. That we are talking about escalation risks, and we are talking about the possibility of russia actually banning flights through the territory. Lufthansa, air france over 200 weekly fights flights from both of those airlines that traverse to the region of siberia. If that flight path is closed, that means a longer flight route and more time equals more money, and that will have a Serious Business impact. The numbers are speaking to the tension in russia and if the erect situation is just a sentiment issue, listen to me, russia, there is something much more fundamental. , thank you. Ferro with a death toll of at least 900 42, the world health this aation has called public concern. That mean . What does it means there needs to be an international response, but what that could and should look like we do not know. The who says the threat is particularly serious and only a coordinating coordinated response can stop and reverse this. It was at a press conference in geneva that the director general sounded the alarm. Alerts thearation world to the need for high possible cases of ebola virus disease, but by no means implies that all countries or even many countries will see ebola cases. The expectation now is that more International Funding will come rushing in. The world bank pledged as much as 200 million. What they will do with that money is still to be determined. No approved vaccine or treatment for ebola, as you know, which makes this all the more difficult. Without one, the who outlined a long list of recommendations for toected countries on how contain it for all other states, including the united states, suggesting that Health Officials should provide travelers, the general public with relative information on risks, measures to minimize the risk, that they be prepared to manage ebola cases as needed, and that they be prepared to facilitate the evacuation of travelers and employees of companies. They stopped short of recommending a general trade or travel ban, some encouraging news. Less encouraging, the who warns the outlook is likely to get worse before it gets better. Heres the thing the outbreak happen in march. What has taken the who so long . O declare this it is a huge criticism. A question many are asking. Many say they shouldve taken a position months ago. Getting to this point was not easy. Were atl sensitivities play. The who has always viewed itself as a Technical Advisor on Health Issues to governments, and meaning they need to respect the sovereignty of the african nations. Yang, thank yang you so much. Yang yang in washington. Moving and shaking this hour, Warren Buffetts favorite banker. For at least a dozen years, starting when he was at goldman a closerott has been advisor to Warren Buffett. He has been involved in deals involving 10 of the 30 wealthiest people in the world, and among the some other midwesterners like charles and david coke. He also works with the heirs of the family of walmart. He asks for a 25 Million Investment for one of his equity funds. We will have much more on byron next hour. E some of these reporting earnings. Dan loeb is now the largest shareholder in the auction house. Olivia sterns has been looking at the challenges ahead for sothebys. They have made big changes. A little bitook like this morning, which is surprising because there have been record sales this spring. It looks like everyone was putting out tens of millions on our. Art. Has the cellsally growth, but they do not have the earnings growth, and that was part of daniel loebs critique. Spent too much time whining and dining clients when they should be focusing on trimming the fat and making things cost efficient. Saying thatps he is whining and dining is getting people to buy the items. The margins are shrinking. Why is that . Even though people have more money than ever to spend on art, the 1 is growing, but there are 300 peopleion in the world to buy or sell a jeff koons. Clients,t over these and have to offer huge commissions. That is why margins are shrinking and that is why they are focusing so hard on trying to get new clients. They are scouring the globe looking for wealthy new clients. Christies flew in dozens of wealthy chinese pet that is why they are focusing on linux and chinese. That is why they are focusing on is teaming upbys with ebay. Thank you, Olivia Sterns. Farmers under fire they just want to farm their land free and clear. The largest homebuilder in new jersey, my home state, if you know by now, if you watch the show, and the six largest in the u. S. Announced they are expanding into the charleston, South Carolina market, after unexpected drop in new home sales in the south and the north east. Chairman and ceo ara hovnanian joins us now. Good to see you. Glad to be back. You have expanded into charleston. We saw these numbers about the southern markets. Blip . At a lip it is easy to get concerned about what numbers, but in any week or month, but we fought this but we focus on longterm, graphics. Demographics. Deaths plus immigration it is predictable. That outlook, almost all demographers are in the same range. 1. 6hould be producing about million and 1. 8 million homes per year. We are nowhere near that level, so we are underproducing and that means we have to catch. It is not so simple like that. Math, we woulde all be geniuses. Longterm demand is simple, go,where they are going to and yearbyyear, that is affected by interest rate, what is going on in the economy student loan debt. Absolutely, vladimir putin, direct, that affects daytoday, but longterm shortterm, what will the rocky . I will tell you what is not rocky at all, the Silicon Valley area. It is incredibly strong thanks to job growth. Texas because of the energy corridor. Does that mean you are putting your money there . Our largest market is houston, texas, and texas overall, which includes dallas for us, is a very large market. Big issueout this weighing over the Housing Market, which is firsttime homebuyers . How do you get firsttime homebuyers and quality firsttime home buyers back into the market . That is the key because the subprime crisis really caused an overreaction, which is understandable. We were too lenient as a country and giving loans and now the pendulum has swung the other way. We are overly restrictive. Eventually, things have to go back to normal. You never want to get back to the subprime days, but you want to get back to normal, underwriting qualification standards that worked for decades. How far away are we from normal . We are a ways away still. Getting a little better every quarter is getting a little bit that are, but we are far from normal. What we do get back to normal, the first time home buyer can enter in full force and that will give an extra kick to the Housing Market. I am hearing anecdotal evidence right now in this country it has become cheaper to buy than it is to rent. Was 38 trulia said it soaper to buy than to rent, there are pockets where firsttime buyers are being catered to, told to by this starter home. Is that raise issues for you . Are you getting undercut the competition . We do still build firsttime home buying product. 20 of the home 28 of the homes are sold to firsttime homebuyers. Does the price range . In Silicon Valley, were selling to homebuyers and 600,000 to 800,000. Ishouston texas, it 150,000, so changes genetically dramatically. New jersey, where you are is leadingome state, the country, or at least has seen any strong gains in foreclosures. What is behind the . Behind that . There are different state rules for foreclosures. In new jersey, you connected a foreclosure very quickly. It is a long process. It goes to the courts. Beenhis eight backlog has held up and it is finally making its way through the system. That is why you are seeing the numbers spike up. Does that mean we are not as . Ad as new jersey as florida florida was also late, but not as late as new jersey. Cleararkets like arizona very quickly. New jersey has been slowing the recovery, but that could be a good thing longterm. Stay with me. I want to talk more about the Housing Market and get onto the california market. We are staying on hot property in california. Prices are soaring in a beach town that cut attract everyone from holiday nba stars to money managers. And, a bigger gap between the haves and the havenots. First. Bloomberg. You are watching in the loop , live on Bloomberg Television and streaming on your phone and bloomberg. Com. Good morning. I am betty liu. Resident obama has authorized limited airstrikes against sunni muslim militants in iraq to protect u. S. Personnel and minorities stranded on a mountain. It threeday truce between israel and gaza is over. Rockets were fired from gaza into southern israel is Morning Hours before the 72our ceasefire expired. Israel retaliated. Palestinian militants have said they will not end the fighting unless israel agrees to end the gaza blockade. Malaysia airlines is going private a state Investment Firm is buying 31 of the airline that it does not already 449 million. The firm plans a complete overhaul of the airline that was hit i two major disasters this year i two major disasters this year. It is 26 minutes past the hour. Bloomberg tv is on the markets. Backy futures have climbed from earlier losses this morning. Investors rattled by jill at political by geopolitical concerns around the world, everywhere from concerns in iraq, what is going on in russia, and concerns about growth in russia. We are on the markets again in 30 minutes. Ofk here in the u. S. , is one the hottest Real Estate Markets in california, where a small patch of property can spell sell for as much as a Beverly Hills estate. Is changing from a community of beach bums and bungalows to a destination for big money. We went to find out why pro athletes, hedge fund managers, and hollywood celebrities are drawn to this foursquaremile city and they are willing to wait months, even years, to find a place in the sun. When someone wants to come into men and gates, i tell the many to be patient come into manhattan gates, i tell them to be patient. The Real Estate Market is on fire, but there is no inventory. I have been a developer in Manhattan Beach for 19 years. In the past, in the hottest markets ive ever seen, you have roughly 240 homes available. Currently, we are running at roughly 40 homes on the market. We are very scarce. They are the properties that just came on the market last week. It is only 1300 squarefoot lot. It has 34 offers. Sixhattan beach has four to areas. Along the beach is an area called the strand, the oceanfront properties, and those are through the roof in terms of values. Here,is property right this just sold for 16 million, equating to about 4000 per square foot for land value alone. This property is obviously a tear down. We have some of the biggest facebooknd managers, ex people. Vince vaughn waterhouse. Well. Kimmel as a house as virtually the entire Los Angeles Kings hockey team. They prefer to live here because of the lifestyle versus Beverly Hills, where it is very flashy and fancy. Here in town it is more about family. It just has a real sense of community. It is like a micro economy itself, completely different and unaffected by the other areas of the country. I do not believe this is a bubble at all. I do not see it ending anytime soon. Blocks well, it looks beautiful to live there. Well, it looks beautiful to live there. Still with me, our property player, ara hovnanian, the chairman of one of the largest homebuilders in the u. S. You do not develop in Manhattan Beach but you have properties along the california coast. We do. Everybody always says i do not think there is a bubble and the Property Market until the bubble bursts. Lets have a reality check is there a bubble in some of these markets . Beach property along california were here in new york theres only so much fifth avenue overlooking central park poverty. It is the same property. It is the same thing in california overlooking the beach. What is the value as long as there is demand. Yes, and there is wealth creation, and there are only so Many Properties and it adds value. You develop everywhere from average price homes to the very highend. Are you seeing any kind of flipping in the highend markets . No, it has really not gotten to be a speculative market, at build. N what we see and we are selling to users, people that are not buying it as an investment or expect growth of speculative play, but people that are buying it to live in the house. When the speculation, in . Crisiscally later in the. That is when we hear there is a bubble. When your taxidriver is investing in three properties, it is time to be nervous. [laughter] in Silicon Valley we have heard so much about how property prices have gone up in that area and that has created strife among residents that cannot afford those kinds of homes. As a business person, i imagine you say prices continued to rise, there is demand, we are going to go there. I believe in the free market system 99 of the time, and it is the free market system at play here. There is a lot of growth in Silicon Valley. There is a lot of employment in the area, and that is driving up him and for housing near that driving up demand for housing near that. What happens if prices go up too high, theyre taking jobs and going out to san francisco, for example, instead of just san jose, and that is spreading demand, and some nonessential roles that do not have to be in Silicon Valley are moving out a little bit and that is typical and helpful to overall development. Is there any difference about selling to Silicon Valley owners, these newlyminted tech millionaires that might be worth a lot on paper, but they do not always have a lot of cash on hand. Is there Something Different going on in that market . They have surprisingly good publication standards overall. Qualification standards overall. There is a lot of wealth, a lot of income. As has been a solid market compared to other parts of the country. Houston, texas, and Silicon Valley are solid markets in terms of qualifying buyers. Where will you develop . What are you jittery about . I am a homebuilder, so i am always jittery about everything. Always paranoid. Generally speaking, we are bullish and increasing presence in every one of our markets, building in 19 states, looking to literally increase our presence in every one. We are trying particularly hard in northern california, southern california, and in texas. When you say investing, what is your highest margin product right now . I cannot say there is a difference in profit by product type. We build everything from the entrylevel to the highend. We build condominiums and we build singlefamily homes. They are all fairly similar and it is more situational. It is more a matter of ok, in this micromarket, is there more demand over the next nine months and fewer competitors, and that will drive up margins more than a product. There is no product that you say theyre inherently will be more risk in building it then there isnt another one . There is more risk, generally speaking in highrise condominiums but you have to make a big investment, but i would not say generally there is more risk in one product to another. Great to see you this morning. Ara hovnanian. Coming up, it is backtoschool shopping season. We have a look at what are expected to be the big sellers this year. Maybe ipads . Scare inrecent meat china, a look at farming regulation here at home and the states that are fighting against it. Stay in the loop. If you live in missouri, you now have the right to farm voters have approved the constitutional amendment that insured the rights of farmers. Some politicians and farmers believe that missouris agricultural heritage is under attack, the farmers are under attack. The villains, they say, groups like the Humane Society, which has convinced other states to regulate livestock conditions and genetically modified crops. Joining us from washington is the Humane Society of the u. S. Ceo, and a bloomberg reporter that covers the cultural industry. You made a effort to win the votes. It was a 2500 vote difference. A majoree this as setback, or what are you going to do . Well, betty, one month ago, the right to farm measure was winning by 49 points, and they 50. 1 to 49. 9. A few precincts would have switched this into our favor. We have momentum. People are skeptical. They are connected more and more to food issues, welfare issues, and environmental issues. I think this was a great showing by our side and it is more momentum that we are building to connect people to their decisions and you have a stake in these decisions. There have been efforts in other parts of the country. Nowhere have they won and what is the state of play in other areas . You are right, what we see is another battle in the nationwide statebystate war over Animal Welfare regulations of the Humane Society has been successful in a lot of different states. You also see work in california with egg producers as far as changing standards for chickens, which they see as an improvement, and you see a pushback from farm groups using ballot initiatives. Misery is a prominent example, but north dakota has right to farm legislation. You can say it is democracy at work. Tell me about the companies that are taking in the meat, mcdonalds, for instance, or walmart, are they funneling money into any of these contests . See money coming in on both sides from different companies, but what i think is interesting and i would love to hear what Wayne Pacelle has to say, you see the knockdown effect from Companies Like mcdonalds that might be taking on more sustainable practices. Chipotle, in their announcements. It is not just the ballot initiative, but the action created. There is no question that the food retail sector, mcdonalds, burger king, wendys, the big supermarkets, kroger, safeway, cosco, they have adopted concerns, made pronouncements. Two foot by seven foot cages. The bodiesarger than of these animals, they are immobilized in these crates for up to three years. I do not care if you are a vegan or a condo board, that his mistreatment of animals, and Food Retailers are saying no, so they have announced policies in concert with the Humane Society to say we are going to change procurement practices and stop buying work that comes from. Com pork that start that comes from these firms. I think we are winning the battle on a lot of fronts. Alan bjerga . At the same time you see a lot of frustration from me part meatpackers and farmers groups, and a lot of state legislatures that say the Humane Society really takes some things out of context with the secret video that they take, some of the publicity that they put out pet a lot of these are extreme cases that are used to tar an entire industry. That is their rhetoric. Oft is their false claiming the issue. The reality is what we have targeted is routine and customary practice. There is nothing magical about what happens to a sow in a crate where she cannot move. She cannot move. Theres nothing doctored about that. The problem is factory farming has become so extreme that it has become acceptable to immobilize animals for their entire lives. Animaltalk about welfare, animal rights, whatever lexicon you want to use, but animals should be allowed to move, and what is happening is we are questioning this intensive confinement and mistreatment of animals, and the public is staying saying lets stop this abuse. This is what i am curious that, Wayne Pacelle, in contest in missouri, many of the democrats were behind your position, and certainly over one dozen newspapers wrote against amendment one, which is what this constitutional amendment is, or what i am puzzled by the democrats in the end, like the st. Louis mayor, congressman emanuel cleaver, and other prominent democrats flipped and ended up supporting the meet lobby. What happened there . I think that was just dirty political dealings. I think there were interactions between some of these bigcity politicians and the meat industry, particularly the farm bureau, and trades that were occurring, and these folks sold out their constituents. The people of st. Louis voted 73 against this right to farm measure, yet the mayor of st. Louis that a lastminute robo call. Emanuel cleaver, congressman from kansas city, a strong supporter of Animal Welfare through the years, he outlined the last minute with these folks as well. So, the me say that was just the politics. T was a conservative vote 62 went for guns rights. We had an amazing vote on this issue. Alan bjerga, can you explain that away, just dirty politics . The vote margin is interesting. What you have seen on both sides is an effort to find friendly states to set precedent. A right to farm amendment will do better in a heartland state like missouri then perhaps a coastal state. The same thing with what the Humane Society has been looking at, states where they have a good chance of winning. This says something about the debate. This is a democratic process at work. Some,mane society has won lost some. This is a victory for the farm lobby. Barely so, and we will speak again for sure. All right. We will leave the conversation here. , ceo ofu, Wayne Pacelle the Humane Society, and alan bjerga, who covers their cultural industry for ashby thecultural industry Agricultural Industry for us. Coming up, the rich get richer. Every cloud has a silver lining, and so do hurricanes. A look at how between storms taking aim in hawaii could benefit one industry in particular. Stay in the loop. It is time for todays bloomberg big number, 31 billion how much money the ncaa is guaranteed in broadcast contracts over the next two years. Not included in the number, other sources of revenue including ticket sales, boosted donations, and sponsors. Atlantic coast, the big ten, pac12, and southeastern conferences are by far the biggest money makers, which is why there is so much turmoil within the ncaa and other College Sports the fight for more of that cash. Therecent Development Means region richest schools got richer. The ncaa has given partial autonomy to 65 colleges in the socalled power conferences, a move that could lead to athletes getting a piece of the multibillion dollar industry. I want to bring in Bloomberg Businessweek paul barrett who wrote about this issue. Good to see you. Tell us about the impact of this decision. Crack so far it is a procedural decision. The ncaa so far, it is a procedural decision. The ncaa has said they would allow these five conferences to propose their own rules, so they can pay small stipends, provide Better Health care, and allow the players to have better contact with agents. They can move toward being the sports business is that most people understand they already are. . The motive behind it to prevent those fiveday big conferences from breaking away from the ncaa altogether, and making it clear that they are not tied to the traditional notions of amateurism. The ncaa does not really have an option. Outside of the gates of the ncaa, you have antitrust lawsuits being filed by the athletes. They want a bigger piece of the pie. They want to be paid. Exactly. Its a complicated situation and i do not think yesterdays action is the end of the story by any means because the lawyers representing the athletes are not saying were talking about an additional 1000 or 2000 a year. Some lawyers say we want a free market, resembling what you have thehe nfl and the nba for top talent in College Sports, which would completely turned upside down the entire model of College Sports. For opponents who say they do not want this expanded, what is the big reason why . Basic College Sports is about andeurism and education, games and commercialism should not dominate on campus, but that is an argument that seems to be losing force overtime. Are potentially College Athletes going to be paid what, paul . If you put them on the free market, youre talking about hundreds of thousands of dollars, because as your opening stats show, this is a multibillion dollar industry and without the athletes this all collapses. These guys on the free market could be worth a lot of money. I would have thought you wouldve said more, maybe even millions. Well, i suppose that its possible that some schools, but that raises the huge question, if millions are diverted to the full wall and basketball players, what happens to the field hockey team, womens sports, all of the athletics. They are not bringing in the spectators. That is the problem, and not in union eyes bringing in the eyes to the Television Sets and in fact they cost money. We have to admit that football and basketball have become the big businesses that they are. What is next for the ncaa . The next up is sorting out exactly what the power conferences want to do and the ncaa will be internally debating that in the coming months and there will be pushback from smaller schools. Those schools can resist. The ncaa has complex procedures and it is possible yesterdays action could actually be overridden by some of the other schools. If that happens, i think you have the very real danger of mutiny on the part of the biggest programs, but then you have pending in federal court in oakland this series of lawsuits, which in a lot of ways are an even bigger threat to the current structure of College Sports. All, great paul, great to have you with us. Paul barrett of Bloomberg Businessweek. Vegas odds makers are now saying the Cleveland Cavaliers speaking about basketball are now the favorites to win the nba championship thanks in part to a huge move the team just made. It is backtoschool shopping season, so you have to get out and buy those supplies, but the biggest area might not be a new parachute is our genes for your kid, but maybe something else. We will tell you what it is, straight ahead. Tonight james cameron, one of hollywoods most successful anybody . , titanic he will join charlie rose tonight at 5 p. M. And 10 00 p. M. Eastern time. And it is 56 minutes past the hour. Bloomberg tv is on the markets. Futures, we have mentioned, have climbed back from the lows of the session. We are now indicating a stronger open on this friday. We are on the markets again in 30 minutes. Coming up up, one Peterson Institute economist calls it really bad Economic Policy workout is russia policy. Is russia shooting itself in the , andwith its import ban you will meet the man who has left the best job he ever had to spend more time with his family. We are about 30 minutes away from the opening bell. You are in the loop. Futures indicate stocks will open higher. The Dow Jones Industrial average begins the day at the lowest level since april. Another example of income inequality has to do with corporations. A new report says 18 american businesses held 36 of the corporate wealth last year, up 27 since 2009. The u. S. Has conducted airstrikes against Islamic State artillery in iraq. The militants are threatening thousands of religious minorities stranded on a mountain where aid is also being dropped. Lets get straight to washington for more details on these strikes. What do we know . The pentagon has confirmed airstrikes have taken place. They are in line with what the president laid out last night. Artillery was fired against whereh Ground Forces near the u. S. Has a consulate and multiple assets. It was those individuals that the president is very concerned about, u. S. Personnel. If any activity was taken in that direction, the u. S. Would react with airstrikes. That is what occurred. The pentagon has confirmed that. Not just a humanitarian mission anymore. Strikes were authorized and have taken place. The president has received a lot of criticism on foreign policy. How much did that factor into this decision to launch airstrikes . It played a role. I think it has played a role for all the advisors in the last couple of months. It has been an incredible time in crises. We have to recognize the white house is constantly trying to walk the line between not overextending themselves but also making sure on humanitarian grounds and you are looking at potential genocide that perhaps there is a role for the white house to step in. Listen to what the president said last night addressing those critics. One iraqi this week, cried to the world that there is no one coming to help. Today, america is coming to help. We are consulting with other countries and the United Nations who have called for action to address this humanitarian crisis. Today, america is coming to help. A key line from those remarks last night. I think it is something youll see the administration continue to do. This is an escalating crisis. I think theyre trying to do everything to figure out a way to contain this and address it in the days ahead. Thanks so much. No surprise rush is retaliating against u. S. And european sanctions with their own. What is surprising is the target it has chosen. If russianwonders leaders are doing the chicken dance. What do you mean by that . There is a report out of russia putin may be willing to back off and it may be because of sanctions he has chosen. Analysts to just suggest they will backfire. They have been a surprise. Sanctionsns put out a list that banned a wide range of imports from Agricultural Products from the u. S. , european union, australia, canada, and the way. They list poultry, vegetables, milk. What has analysts scratching their heads is that well have more of an impact on russia. Russia imports about 25 percent of its food. About 30 billion worth comes from sanctioned countries. When you consider how money countries we are talking about, the impact on those countries is not that much. About 1 billion from the u. S. , 10 of our overall exports to russia. Chicken parts, largely wings and legs topping the list. 2013,310 million worth in less than 1 of our total chicken production. The rise in beef and pork isis has pushed up chicken prices pork prices has pushed up chicken prices. Cattle, we are selling almost no cattle to russia now. No major impact on the united states. The chickens were good background music for you. Who does get hurt in all of this . You dont want to be a farmer in lithuania. Those account for about 2. 5 of that countrys gdp. Not a big deal for the e. U. Leader, about 16 billion total in all. Who really gets hurt is russian consumers. Many products they normally buy will be in short supply. If they buy them from other countries, it will take a while and raise the price and inflation rate. Percentaged two points to consumer inflation already running at about 7. 5 . Thank you so much, mike mckee. Lets turn back to u. S. Business. For at least a dozen years, he has been Warren Buffetts closest advisor. That into aned Investment Advisory firm that specializes in helping rich families get richer, which now includes the Koch Brothers. Whont to bring in jeff, worked on this story. We talked about this several weeks ago when you had first begun. There are few details about byron trott. He is very secretive the fitting the families he wants to work with. Most bankers that develop a career become experts in a silo like aerospace, real estate, or health care. His silo was rich people. He grew up in the Wealth Management business at goldman sachs. He has developed an exclusive rolodex. Bankers pride themselves on having contacts with ceos. In his are some of the richest families in the world. Ceo for ceo who may be only five years, this generational wealth stays for decades. If you get into a family like rymant or koch or the family in europe cornering the coffee market, you are probably in with them for decades. His relationship with buffett goes back a long way. One of the big moments was buffetts investment in goldman sachs. He was instrumental in that. There was a letter buffett tote in his annual meeting shareholders that said byron trott is the one banker i would trust. At his career affirming for any banker. At the end of 2008, he was the individual that approached buffett and negotiated a deal that propped up goldman sachs. Not long after, he went out his own on his own. He has relationships with wealthy families including with the Koch Brothers. Byron is an advisor but he is also an investment manager for them. Many rich families will put up to 125 million per family with bdt and he will invest on their behalf. He has brought the Koch Brothers deals and transactions in the auto and industrial space. He is not your typical banker working with ceos. He is working with rich families that own good businesses that dont necessarily get attention on wall street that employ thousands of people. Clearly, he is making money, which is why they keep calling him. He is in the process of raising 6 billion writedown. Right now. Thank you for joining us. This hour, shaking nba allstar kevin love is now part of king james court. There is a report that werewolves have agreed to trade him to the cavaliers. They picked up lebron james earlier this summer. He averaged 19 points and 12 rebounds. Minnesota wont be left emptyhanded. In return, is getting the number one pick in this years draft on andrew wiggins. Also another player and draft choice next year. They are coming out well themselves. Takingst or two storms aim at hawaii landed last night toppling trees and knocking out power to thousands. So far, it did not cause major damage. The last time we saw a hurricane hit the island was in 1992. It benefited a certain kind of business. Shelby holliday is here to look at how hawaiis weather helped hollywood. Naturals disasters natural disasters affect is this. Natural disasters affect business. We checked out the Film Industry which has tripled in size since 2006 and generated billions for the state. It turns out bad weather is not bad for filming. The last time a hurricane hit in 1992, they were filming jurassic park. Steven spielberg rolled right through the bad weather. The iconic scenes were filmed in the middle of a category four hurricane. A random fun fact. We dont know if we will see any Iconic Images from these storms. If you look at the movies filmed in hawaii, we would not be surprised. It attracts major blockbusters. Hawaii is a hot spot for movies right now. I had no idea they had filmed draft that drastic part in the middle of a storm. Despite being a beautiful place to film, what else is attractive for filmmakers . They have a great Refundable Tax Credit Program and no spending ceiling. It is a great place to film. It makes sense for big production companies. State tax revenues have shot up the past few years. If you look back to 2006, the industry is booming in hawaii. Film is helping out estate in a number of ways. We spoke to the Production Office of hawaii 50 yesterday and they said they are not planning on changing anything this weekend. They will be rolling right through the storm. Thank you. Coming up, google is ramping up its ecommerce business. Can the search giant take on amazon . This happened yesterday, google announcing a new push into sameday delivery. It already offered express for Household Items and groceries. It will hook up with barnes games,o offer books, and accessories. Intois a direct salvo amazon territory. Why does it want a piece of the Book Business . Joining me is the ceo of a Software Service firm that helps companies handle multiple vendors. B k is a former executive at n, so you know this industry well. Can you make sense of this google move . Google is trying to be more relevant to retail consumers looking to buy products online. As more consumers move to mobile, you want to get products quickly and want something delivered quickly. Same day shipping is a move a lot of retailers are making. It is expensive, isnt it . Extremely expensive move. I cant get a courier to deliver a parcel across manhattan for less than 15. Google is charging 5 to get a book from the store to a consumer in another borough. Clearly, they are not making money . Not at all. Amazon is not either. No one is making money. The margins are thin if there are any at all. How does this make sense for either . Barnes noble, it is all upside. They have another weapon to combat amazon. They get more foot traffic into stores with returns. Google gets more relevant for retail searchers in some respects. They dont have a digital book strategy, which is a challenge. They have tried. They have scanned looks in the past and do have limited offerings. Why books . I thought books were dying. It is interesting. The trends are clearly going to the digital side. For the industry, 30 of total trade books are digital. 70 are still physical. It depends on which category you are in. Romance, thriller, fiction, 90 are digital. Cookbooks, travel, 90 are physical. That makes sense. There is opportunity. Should amazon be worried . Amazon is still gaining share. Google is playing catchup. Amazon should view this as a validation of their strategy, like we are doing the right things. We are continuing to take first page retail searches from google. Rather than going to google to search for products, people are going to amazon first. This is what google is worried about because it cuts into their ad business. And he missed opportunity is not good for amazon and he missed opportunity is not good for amazon and google. Coming up, ebola has been grabbing headlines. How likely are you to catch it and what could be worse . We have an interesting look for you straight ahead. Backtoschool shopping is in full force. Spending is expected to be lackluster. The survey gives this year a b minus. Julie hyman is here with the bright spot. Is a bright spot for retail is. It is not necessarily for parents. It is school supplies. Everybody gets this list of stuff you have to supply for your kids school. It gets longer every year. According to a Company Called , it has gotten 29 longer this year with an average of 18 items. It is long. If you look at the sectors of backtoschool shopping, clothing is forecast to decline according to the National Retail federation. The backtoschool supplies are one of the bright spots in spending, in part because we are seeing this ballooning of the list of stuff parents have to buy. Teachers also spending a lot of money out of pocket. They always have. That money is going up. The American Federation of teachers says it is up 23 year on year. We are not just buying the stuff we usually buy. We are also buying tissues, hand sanitizer, wipes, storage bags. It is other kinds of things would did not traditionally buy. Thank you so much, julie hyman. We are moments away from the opening bell. We have the top 10 stocks you dont want to miss after the bell. Keep it here on in the loop. Welcome back. You are in the loop. I am betty liu. Bloomberg television is on the markets. Heres a look at futures before the open on a volatile trading week. Backutures higher, coming from losses after the news last night about airstrikes against iraq into iraq. That rattled investors overseas as well as here for a moment. We are on the markets again in 30 minutes. Here are the top 10 stories you need to know about. Julie hyman and Olivia Sterns joining us this morning. Lets start with number 10, lions gate. They reported firstquarter earnings that beat wall street estimates. Thenue fell short as company only released two movies during the quarter compared to three the year before. Number nine, gap. I was talking about a peril not being a strong back to school, but cap i was talking about apparel not being as strong backtoschool, but they reported a rise last month. They forecast secondquarter earnings above wall street estimates. Number eight, we are all worried about ebola. They may have a cure. The fda paved the way for the Vancouver Company to possibly give its experimental drug to people infected. Shares surging in the premarket and up nearly 62 over the last water weeks. Number seven is exxon mobil. Sanctions against the Russian Oil Industry having no impact on the company. They will start drilling a well in the arctic ocean tomorrow according to the russian government. Sanctions restricting the export of equipment do not import affect their plans because they signed the contract before those measures. Were announced. Fromd not stop companies saying the Russian Companies were going to affect their bottom line. It is a was good to have an escape cause if your results are not as strong as expected. I have been doing this a long time. Number six, shares of the energy drink marking getting a jolt. Second quarter earnings beat analysts estimates the revenue fell short. They upgraded shares to neutral. The Weightloss Company said secondquarter profits fell by 20 , heard by a 17 drop in sales. They cut the fullyear revenue forecast to below the lowest analyst estimates. The ceo says gaining new customers has been challenging. Profitsecond quarter topped estimates. Sales fell short due to the lost of broadcast rights to the ncaa tournament. The owner of the mostwatched Television Network doubledip spivack and raised the dividend. Buyback doubled the and raised the dividend. The founder giving up control. He selling half of his stake to private Equity Firm Advent international for 845 million. He also agreed not to pursue a hostile takeover of the company. Incredible how far it has come. I still dont own a pair of their yoga pants. I dont know how that is possible. There are a lot of choices. That is why it is not doing better. The Online Gaming company posting Quarterly Results at the low end of forecasts. Also slashing the outlook for the year saying it is postponing several new games as they transition to more mobile play. Shares falling nearly 15 on the news. As the opening bell rings, mcdonalds is our number one stock. They reported a 2. 5 drop in samestore sales july. Mcdonalds easels were also hurt by the recent meet scandal in china. There goes the opening bell. I want to bring in the chief market strategize at america rise financial. He has 810 billion in assets under management. In june, he warned he would be a net seller of stocks. That turn out to be a wise call given what we have seen with russia, the military strikes in iraq. Do you believe we will see equities punished . We may be guess halfway through this move. At the same time, there is an rallyunity for a relief if the news in ukraine uses. Eases. I think this will fester. I think we will see support around the 200day moving average. That gets you down to about 1865. That is about the full extent of a selloff if it continues. I have been looking through the relative performance from different Asset Classes this year. Some complaints we get from investors is there is not anywhere else to go but u. S. Stocks. The dollar has not done great tr. The s p is up about 3 on the year. Treasuries have returned if you look at the ensemble, up 3. 8 . Gold is up 8. 7 . Looking across the spectrum trying to figure out where you will allocate money, what are you doing . For the long run, u. S. Equities are probably attractive. The long run i will define as two or three years. Today, there are a couple of interesting ideas. The first is in the commodity complex. If you look at the grains, corn down 55 from its peak. Slowdowns down soybeans down 32 . Think they are likely to find support. I would be a buyer of grains at this level after a record harvest last year and another this year. That is probably the floor for prices. I think natural gas is interesting. The seasonal price right now. I think it is likely poised to move higher into the colder weather. Do you think we will see another thing that might support prices . Do you think Economic Growth in the u. S. Will be robust enough to also give them a lift . I do. Growingwe are probably around 3 . On every part of the economy is doing great thank you not every part not every part of the economy is doing great. The consumer has issues. At the same time, production is doing well. I think we will be around 3 . I think that is supportive. The drag from the fiscal side is starting to dissipate. I think the u. S. Looks good. Been runninghave at about a 1 running rate in the first half. I always question whenever anyone says i see underlying growth at 3 . How are we going to get there in the next six months . We are not going to average there for the 12 months because of the first quarter. But that is behind us. That was clearly an aberration related to the weather. If you look at the second quarter, 4 is not the run rate either. Somewhere around 3 seems to be the underlying trend. The year is probably going to average 2 . The run rate presently is closer to 3 than the 1 in the first half. May be looking at soft commodities, natural gas. One asset or a location julie left out is cash. A lot of big Investors Holding a record amount of cash on the sidelines. More than 55 billion. We know David Einhorn is looking for reacquisitions. They are not able to find choices to put cash so keeping on the sidelines. We talk about the 1 of the wealthiest individuals. Corporations are also getting richer. Hold a record amount of cash abroad. 36 of cash held abroad by the top 18 countries companies. I am wondering what you think of the applications, fact that u. S. Companies are holding a record amount of cash abroad. They are incentivized because of u. S. Tax policy. Instead of bringing it back and spending it on future growth, what are the implications of all this cash being abroad for the u. S. Investor . I think there are two issues. The first is the nature of our Corporate Tax code skewed to incentivize companies to keeping profits overseas. The primary implication is a lot of money wont get invested in the united states. I think it would be simple to reform the tax code. Not politically but simple in terms of what the right incentives would be. The second issue you raise mentioning Warren Buffett and einhorn is one of the reasons i thought stocks would be weak in june is valuations are high. There are not a lot of cheap assets to buy. That is why i thought it would be prudent to raise cash. Case. L think that is the i think we will get a better entry point in some categories further down the road, maybe in the next six months. Cash seems to be attractive. No yield, but at least you are not losing value. Notxactly, at least you are slowly going under Water Holding money. David joy, thank you so much. Julie, you will like this story. Ceos playing mr. Mom. Sometimes the smartest thing to do at work is to take a break. I went to speak with someone who left the best job he ever had, ceo of a major tech company, to spend more quality time with his family. Update you on the breaking news out of iraq. The u. S. Has begun airstrikes in the country. President obama authorized the strikes last night. The strikes will be used to protect u. S. Personnel and the religious minority. Aid is being dropped. We will keep you apprised of any further developments in iraq. In the meantime, turning back to what is going on in the u. S. , and corporate culture, in my new book, i gathered some of the best advice from the biggest leaders in business. A number talked about balancing life and work. Not just the women. But men talked about this as well. Remember Mohamed Elerian who surprised everyone and quit, pimco this quit year . He said part of the motivation was because he wanted to spend more time with his daughter. When your daughter comes to you, as my did minded almost a year ago, a 22 things you have missed as a parent, you realize there are these special moments in your childrens lives. Every parent knows this. I was missing too many. It is that simple. Hes on a trip through italy now with his daughter who gave him that list of 22 things. Another ceo is quitting for his family. He wrote about it in a candid blog post. The outgoing ceo of a billiondollar tech startup joins us with more. Max, i am sure you have gotten this question. Why quit what might be the best job you have ever had . Why . I love my job. I love the company. But it was taking too much time away from my family. It was too hard for me to balance it. I will be stepping down from the ceo role. I will be able to stay with the company in a rule that lets me balance work and spend more time with my family. What brought you to that point . It was the accumulation of missing too many moments. I was on a flight that was delayed. It was post to land at 3 00 in the morning. I woke up on a runway at 1 00 in the morning thinking we made up time. I walked into the airport and saw a sign that said welcome to tucson. I asked another passenger what happened. They said i slept through an Emergency Landing for a cracked windshield. I thought, what am i doing here . In the weeks after that, i came to the conclusion it was time for me to do Something Different. You mentioned early on in your blog post that a lot of people ask women how they balance life and work. But very few ask the men. That was the same for you . It was. Im glad to hear you have been asking the men as well and talking about that issue because i think it is an issue for parents, how you balance work and life. It is an issue for employees in general. Im glad it is being recognized because it makes it easier for men to think about their lives and make these decisions. It also makes it easier for women if it seems like an issue for employees and executives, not just for women. I want to read one part of the blog post you wrote. It is the reality of you quitting your job. Recognize by writing this i may be disqualifying myself from future ceo roles. Will that cost me millions of dollars some day . Maybe. Life is about choices. With havingortable left money on the table by stepping away . I am. I am in the fortunate situation that i have made a good deal of money. The company will do well. I think my stock will be worth a lot. At some point, you say that is likely to be enough. With what i earn and my wife earns. Time right now to me is more valuable than more money. To the guys around you think you are less macho . Maybe. Yeah . Give me the reaction. Mostly the reaction has been supportive for men and women. For there happy dialogue and supportive of the choice i made. I have gotten a lot of notes n, some that i know and some that i dont, telling their story of how they have struggled with similar decisions were made similar decisions. Adid not talk to or hear from person that made a similar decision and regretted it. Thank you. A beautiful family you have. The largest it is and longest outbreak of the ebola virus in history. What are the odds of you catching it . Stay in the loop to find out. Time for the global outlook. Recent sanctions on russia will not stop a joint drilling project. Exxon mobil and his partner will start drilling in the arctic ocean tomorrow. Exxon signed the deal before the sanctions were imposed. In iraq, the u. S. Has conducted airstrikes a day after president obama authorized using military force to protect refugees. Militants are threatening thousands of religious minorities stranded on the mountain. The ebola outbreak, who saying today 68 new cases were reported between august 5 and six with 29 more deaths. That brings the total number of deaths to 961. Deadly disease is worse than expected and called for a coordinated response. This outbreak is the most severe and complex outbreak in the nearly four decade history of this disease. The Emergency Committee reached the conclusion the outbreak of the ebola virus in west africa meets the criteria under the International Health regulations for a Public Health emergency of international concern. People panicking whether they may catch ebola or be near someone. How likely are you to catch the disease . Here to take a look at a few threats bigger than ebola arriving in the u. S. Is eric. You look at the stats. Our chances are what . Almost a zero. It is almost impossible to get ebola unless you are having direct contact with a human who has bodily fluid interactions. It is impossible to get it. This is an example of where the emotional part of our brain takes over the rational. It is interesting to follow the news. It is a terrible thing to happen to people, but it is not likely to happen to somebody in america if youre not traveling to africa or hanging out with people who come from there. What are other chances you could die versus ebola . It is very morbid. If you look at the entire history of ebola going back to 1976, only about 2600 people in the entire world have ever died from this disease. That is as many people murdered in new york city in the last five years. That is as many people murdered in the top 10 cities in one year. You are 10 times more likely to kill yourself this year than to have ever gotten ebola in the history of the world. We should be more afraid of ourselves than the disease. But dont you have a list of five things that could affect you more than ebola . Anything could. It could be five or 100 things. Change,isis, climate all these longterm issues we dont talk about on a daily basis. Water running out. This is a story that is so gradual that does not have an impact today. One on the list, electromed and pulses from outer space. Research shows theres a 5 chance would have this pulse that would kill a lot of people. It is the opposite of a sunspot with a big bolt of energy. There was something going on recently that was disturbing. Ebola is not what we should be worrying about at all. That is it for today on in the loop. He has built his business on serving americas wealthiest people. He will talk about where that smart money is placing its bets. That is next week starting at 8 00 eastern. It is 56 past the hour. Bloomberg television is on the markets. Lets show you where stocks are trading. The equity benchmark indexes up slightly by about. 2 after a choppy week of trading following a slight selloff yesterday. It seems the news coming out of the Russian News Agency that russia is seeking a deescalation of the crisis in ukraine is allaying concerns. But show you what is happening on the bond markets. We have seen yields come down. Up and down over the past 24 hours on the news the u. S. Has authorized airstrikes in iraq. Joining me for more on the markets is the chief market strategist. He says this is the correction we have been waiting for. Thank you for joining us. Is the bull market intact or will we see further following if this is the correction you have been waiting for . Those or two separate questions. About the this is the correction. I like when things have a definition. I believe this is the correction. There were two consecutive quarters of negative gdp. That is not applied more. The technical definition of a correction is 8 to to 10 . I dont believe that will apply to this one because it has not been as voluminous as past bull markets. Money has been waiting around for the pullback. Conditions are right for it and we are getting it. Wherever it gets to and turns back up is the correction we have been waiting for. We have seen plenty of sideways movement. The russell has reached over 10 . The dow has been around 5 . That will be enough for me. I never try to pick the bottom on equities. I wait for it to form and move back up. I would rather miss a few points than catch the falling knife. You are not trying to buy the dips. From a technical perspective, how much further can we go . When does the bottom form . I would love to see 6 in the dow. 7 onill translate to the nasdaq. I think we rally in the Fourth Quarter. I think the economy is good. We have geopolitical hotspots all over the world. I am not telling anyone anything they dont know. When you look at these combined with the slow Summer Market and i give the fed may be behind the curve, everything is in place for this to happen. Earnings have been good. Guidance has been ok. I think it will be coming back into play in the Fourth Quarter where everything starts to calm down. The markets start to normalize in terms of fed policy. I think that will be good for the market. The market has been driven by earnings. Better than expectations. Also now 2 3 of Companies Beating on the top line, on sales. It looks like earnings are helping to offset geopolitical concerns. What is your take on the treasury market . That was an interesting move overnight. It was a larger move in yield than i wouldve expected on the 10year. I feel the administration is being dragged into this in a rock. I dont think it will go much further. I would be selling treasuries. It shows how fragile the equity markets are. Intow a much lower move the hills on the 10year than i would have expected. Thank you. We will be on the markets in 30. Live from bloomberg World Headquarters in new york, this is Market Makers with Erik Schatzker and stephanie ruhle. President aq obama says force may be needed to prevent genocide. Holding back the economy a Surprising New report says income inequality is slowing down growth. On chicken ban imports might not be such a bad thing for u. S. Consumers. It