It is Market Makers on Bloomberg Television. I am Olivia Sterns in for stephanie. I am thrilled to be here. The emmys are on tonight. There is a great big canada story in the news. Data could be a huge story. If tim horton gets taken over once again by an American Burger chain. It is about the Housing Market. New july homes are in. We have an on extent did unexpected drop. In july they actually fell 2. 4 . Decline inecond as many months. Analysts and economists we surveyed were expecting an increase to 430,000. It this 412,000 is the fewest since march. This is the lower than the lowest estimate. The Housing Market is recovering in fits and starts. I am just looking. U. S. Stocks continue to rally higher. We are at the best levels of the day. The s p 500 is one point away from reaching 2000. Dampenedto not have anything. This is a disappointing read on housing. Scarlet fu with the latest on the Housing Market. These the top business stories around the world. It will be tougher to make partner at goldman sachs. They will name a 70 partners this year. That is the same two years ago. That was the smallest class since they went public in 1999. Named 115. Y biggest making its acquisition in years. The price is 8. 2 billion in cash. Intermune has a drug that is awaiting approval in the u. S. Of shake up in france. The Prime Minister will be forming a new government after two ministers criticized the economic policies. Should focus less on deficit cutting and give tax cuts for households. Versioncould be the in deal that throws congress into action. Burger king is in talks to buy tim horton. They would relocate their headquarters from miami to oakville. Our us to discuss this are analysts from little rock, arkansas. These are one of the crack tax reporters. Julie hyman is with us as well. I am not even sure where to begin. , itld it surprise us surprised me honestly, that an inversion deal would wreak locate an american corporate icon to canada, of all places. We think of tax havens like bermuda or more lease more recently ireland. Attractive pretty place for u. S. Companies looking to relocate their domicile to save taxes. , being familiar canadian, i know a few things about canadian taxes. Canadian government has been reducing Corporate Taxes since coming to power. They are now quite a bit lower i gather than they are here in america. The rate is lower than the u. S. The u. S. Rate of 35 as one of the highest in the developed world. It is easier if youre a canadian country to reprint repatriate profits. This is why they dont like being based in america. Is is all about Financial Engineering . I think there are a few reasons behind it. One is the taxes. That is first and foremost there. Have a gna them to at tim horton. They have stripped burger king of a lot of fancy call structures. Tim horton is under levered. Everybody is anticipating a real every in and dividend event at burger king. Tim horton is less levered than burger king. The canadians dont like being in debt. I it has served us well. You have something to learn. When you look at it as a consumer part of the business, it does not make as much sense. Burger king, like the burger and tim horton would help with the breakfast growth of the business. It is not as though they have incredible rate naked recognition here in the u. S. Could you leverage that name to improve the breakfast business . Is, is that a realistic proposition . Would that add a lot of value to the business . Tim hortons is head problems itself. Are they competing against one another . Would even help . Is the competition really to bully . Canary yes, but not in the breakfast space. Maybe divides some leverage. They have been trying to expand in america for a number of years already. It does not make much money here. Does the billionaire genius behind burger king no how to turn tim horton into something more profitable . Maybe. We have not seen much success here recently. There is a small strategic opportunity to put some coffee and breakfast items into burger king. I doubt it can go the other way. This is very small. Put this in perspective. You are canadian. How important is tim horton to canada. What would this be like if an American Fast Food Company took over this . Wendys owned tim hortons. I spent most of those years in the United States. This did not change that much. The question is whether beyond Financial Engineering they want to mess with the formula. I cant imagine why they would want to. There are some amazing statistics to be cited about tim horton. There are more tim horton restaurants per capita in canada then there are mcdonalds in america. There are three times as many as there are Dunkin Donuts in america. 15 of canadians over the age of 15 go there at least once a day. Sharelaim to have a 42 of the Quick Service business in canada. It is unbelievable. Who is tim horton . He was a hockey player. He played for the toronto maple leafs. He is a legend. He started it back in 1964. How they lost the i am not sure. That raises another question about the ownership. This is the question that olivia raised. To what degree would three g want to tinker with this form of the has brought them so much success. There perhaps a hidden real estate play because from what i , they enfranchise the operations but they often own the real estate underneath the stores. They do. I dont think there would be any reason to tinker with what is working in canada. Has been a good owner of brands. I doubt they would do anything to mess that up in canada. The real estate is another opportunity. Three g is a very savvy allocator of capital. It is untapped value. Do they go ahead and sell that . Do they spend enough . If this is politically tolerable in canada, would they want this . To them i heard they have been wanting to curb their International Expansion plans. Probably so. Would they want this as a country . Who knows. I would assume things get a lot leaner pretty soon. This have to look at potential transaction. Something may happen as early as this week. This may be the first of more. You mentioned ireland and bermuda where places do in version deals. Is canada the next hot spot . . There have been five and version so far. We are in a point where countries are inverting the fastest paced ever. Pace ever. You will see more canadian firms acquired. They are under pressure from boards or activists or they are a furry aid afraid of congressional action . Why should i remain a u. S. Company . Zach, thank you. He is one of our tax experts here at loberg. Some breaking news just moments ago. The stock market continues on fire. Its take you back out to scarlet fu. Above 2000500 posted four about one a seconds. Now they are back below at 1999. That would mark five years for the s p 500 to double in value. It closed at 994 in the 2009. I was just looking at the sectors that are helping arrive the s p. The best groups are cyclical. Those are groups that are sensitive to changes in the economy. Consumer discretionary is up. Health care is up 105 are sent. Industrials are gaining 120 . Technology is up 111 . Individual names that have led way, under armour and netflix round out the top three. The dow industrial is still below its record high. The record high there is 17,138. It did break above that 2000 level. Thank you so much. Coming up, a tale of two central banks. Why it wont the ecb follow the lead of the fed . The emmy awards are tonight. We want to know if the emmys still matter. Things are not looking up for europe. They are following to a oneyear low after week Economic Data comes out of germany. The u. S. Economy continues to improve and europe continues to stagnate. Warns. Raghi weve been hearing about the threat of quantitative easing for two years. Ever since mario draghi said he would do whatever it takes to save the euro. We are at this moment where growth has ground to a halt and inflation is at its lowest point in five years. Inflation is in double digits. No return point of where quantitative easing is inevitable . No. I would not go that far. There are a few things to understand. That we know the fed has a dual mandate. They focus on inflation and unemployment. The ecb does not have that. They were just created to focus on inflation. That is one big thing. The other thing to remember is a lot of people do forget that the ecb mine european government bonds is not the same as the fed buying u. S. Treasuries. There is no common bond market in europe. Or ecb buying spanish italian bonds is you of the fed buying municipal california state property. Several are countries and have a problem with that. The bar is very high. We are stepping closer to qe. Were not there yet. Quantitative easing would not be the same in europe that it does here, would have much of an impact . I think it would. In the United States we have Treasury Bonds for the whole country. The fed uses treasuries to conduct its money market operations. Conducthow they monetary policy. The same is not true in europe. It is a different thing. At bar is higher. If they did resort to that, i would say they have a very vague impact. Announceds already that there would be rate cutting. This will take us to the end of the year. It is unlikely you will see conventional qe before the end of the year. They cut the overnight rates in june. They drove it to negative era tory. Banks have to pay to keep deposits at the ecb. They announced that they would be doing short term liquidity measures in september. This is a form of qe by the end of the year. The problem is and is not a very big abs market. One of the things to worry about banks taken up liquidity in europe, there is another assessment of banks by european regulatory officials. That is not due until the end of october. We think it is unlikely you will see banks expanding their Balance Sheets six significantly before that. The goal here alternately for draghi is to get lending into the small and mediumsized companies. You mentioned the dilemma area steps. Overnight rates are in negative territory. Just a followup on erics question, with the 10year note on german debt is already below 1 , what impact is qe going to have . Will that actually spur lending . They say they will announce the results of this study of bank Balance Sheets by the end of october. It is very unlikely you will see significant expansion of bank Balance Sheets before that. The short answer to your question is it is not going to do very much, at least over the next few months. Stagnated in books the second quarter. There is little investment spending growth going on. Theyree going going to be stagnated for a while. They are worried about deflation. We are going to get a reading pretty soon for august. The expectation is that inflation is going to fall down to 3 10 of 1 year on year. We think september will fall even further. That is the real worry. Want have seen in japan, to get into a deflationary situation, tickets very hard to get out of that. , if deflation is the threat is the French Economy minister right . Austerity is not the answer . They face high unemployment and a sluggish manufacturing sector. Should they be going into more debt and violating those eu promises on the fiscal deficits . That is a very good question. The euroe big reasons is in this mess is austerity. Early in the recovery, they were getsting budget deficits big and recessions. We had a doozy of a recession in the financial crisis. That is not the time to tighten fiscal policy. You get into a negative feedback loop by cutting spending and tax receipts go down and the economy goes down. The time to do that is when things are expanding. That is when you that the deficit. The short answer is yes. Austerity is not the thing. Mario draghi called for stimulation policies. Either way, he is very happy to be back. Larry kantor, thank you so much for joining us from our clays. Another look at the s p 500 hitting a big round number. We will return in a moment. Welcome back. We are approaching 26 past the hour, it is time to go on the markets. The market took five years to get from 1000 to 2000, where we had earlier this morning. Consumer discretionary and health care are the strongest performing. To be honest with you, i find it difficult to get excited about round numbers. I like to look at things in relative terms. Think what has happened since the market bottomed. We have seen valuations go way up into the stock market. Corporate profits are accelerating and now valuations are carrying the flag. It is taken us over the 2000 mark. We we back in two minutes on Market Makers. Live from bloomberg headquarters in new york, this is Market Makers, with Erik Schatzker and stephanie ruhle. Youre watching Market Makers. It is monday in new york city. I am Olivia Sterns. Hollywood is tuning into television tonight. The emmy awards are tonight. The nonbroadcasters could be the big winners. Does a win mean big money . Andill ask Brian Steinberg a scarlet fu. She is our inhouse tv watcher. Thank you for being here. Lets start with you. The the emmys matter . They do more than it used to. They could give a boost to shows that you could watch on netflix it around. You should watch this now. It adds some prestige. Is that to say that the emmys are much more important now than they used to be because we live in an era of timeshifting . Thelet has given us schedule as a time shifter. Oneverybody watches things dod or dvr. The Netflix Emmys are for shows that you can watch all at one time. Netflix is playing changing the game. These days, you can watch it again and again. Madmen is a perfect example. The ratings are not very good. The aftermarket, it is a big deal. That is incredible to me that netflix has more candidates to win an emmy then the Big Broadcast networks. The only major broadcast drama in consideration is downton abbey. And that is pbs. Cable is making things more of a touchstone. They are rolling out great dramas that go beyond things like from the minds here minds. Riminal thate advertisers want target demographic. Does that what he ateyearold the 28yearold female care about the emmys . The show itself . Does it matter how may awards house of cards wins . People started watching orange is the new black because house of cards was great. When the Tipping Point is the show start winning a few emmys. The actors become recognized and it becomes part of a cultural buzz. When it gets cultural prestige, when big hollywood actors go to television rather than looking for the next movie after the oscars, people talk about the power of winning an academy award. Are people Walking Around buzzing about how many emmys . This. How many emmys you win. It says that the viewer might want to watch it. That is a push. We are in this golden age of tv. The quality is incredible. If Matthew Mcconaughey wins, it is not what it was to win an emmy for friends. There was a cinematic quality role. You dont seeedom on broadcast television. A good example of a broadcast show that has done very well and does well and if eyes the convention that broadcast shows get water down. Letso losing out to next netflix . This is what Reed Hastings will talk about. He will always make a comparison to hbo. On a relative basis, netflix has so much more content than hbo does. They are getting 30 nominations, but for fewer shows. Hbo has the amazon deal now. This could be a hold new game changer for time warner. Do you think it means that appealing toent is transfer tv . It says a lot about where people are going. Shows get great guest stars. , is stillthat drama working on it. Drama really is drawing m a lot of great talent. I keep waiting for brad pitt and Angelina Jolie to show up on a tv series. I am trying to figure out how orange is the new black is a comedy. It is more of a miniseries and it is a fullblown drama. The point you make about comedy is a good one. . What is an emmy worth . True detective is amazing. A sitcom that is up for an emmy is not amazing. It is worth an emmy. This is what we of done. She has been mistaken for her. Gotten to cut the line at airport security. There you go. It is a very popular show with tsa guys. They all love orange is the new black hair coat black. At my passport and it clearly says Olivia Sterns. They told me that they love my new show pillow. Clearly, an emmy has the ability to help make something hot. It makes something that is new even hotter. What about a show that has been around and has low ratings like 30 rock. I dont think it adds immediate audience. Player, ita new helps you out a lot. I dont think it does that much for you. Does it do anything for the show for overseas audiences . These are very popular overseas. They watch it both legally and illegally. Doesnt that give some sort of cachet . Not everybody has access to it. Watch this. They need to watch. Forhe emmys or on monday the first time in 40 years. Seth meyers is hosting. What do the emmys do for seth meyers . He hosted the sps. This is the first massmarket awards he has done. Deal forbecome a big him. It could be great for his latenight show and his brand. I will be watching live. Berg, thank you. Up, alibabas dealmaker behind the scenes. Youre watching Market Makers on Bloomberg Television. You probably never heard of him before. He is the man behind the scenes of alibabas ipo. He is making the decisions in brokering the deals. His masterminding a corporate roach structure that allows them to bypass chinas government. Jack motte is the name most people associate with alibaba. Who is this guy . He is the yen to jacks yang. Perfect the purpose complements. He is the guy behind the scenes iraqi executes the deals. Is making sure all the financing is negotiated. There have been a lot of those lately. Why doesnt he have a higher profile . His very humble. He prefers to work meticulously behind the scenes. Goes, he is up until 430 in the morning. He is not the guy who gets onstage wearing a lion king costume. He just doesnt operate like that. He was a sports star. Tell about his degree. He was a lacrosse player at yield. Andame from taiwan emigrated to the states to go to boarding school. People who know him provided an anecdote about he worked. He is just a series of anomalies. He promoted gay rights. Lacrosse players would not do this in the 1980s. He wound up as a lawyer for one of the white shoe firms. Was lacrosse the key to getting that job . His family actually. He came from a series of lawyers. His father was a prominent law firm in taiwan. They grew that firm into being a massive enterprise in asia. He took after them and became a lawyer. About three years into his career, he did not want to practice law. He wanted to be executing things. He switched to private equity and worked in two firms. He met jack through internet capacity. He was so impressed with jack that he was willing to work for free. He gave up a 700,000 a year job. You would not expect him to do that. The credentials and gets along well with jack. The chineseern is legal situation. Is he going to be able to help allay concerns . He lives in hong kong. He was educated in the United States. His childs ties in china are not great. He gets a lot of attention because of the legal structure that allows Chinese Internet Companies to circumvent the restriction on foreign ownership. Has deemed it would be possible for the Chinese Government to dismantle that. Structureated their to tie less of their revenue to that structure. A he is associated with Corporate Governance structure that some people consider controversial. If either of those things a blows up, if the Chinese Government rules of illegal or dismantles them or people grow uncomfortable with the way alibaba is governed, who wears that more . I think they where it together. They have been very forthcoming in saying that we agree on the major tenets of this country. Company. They championed the Partnership Structure when they were in hong kong. Is true with that structure. If it blows up, it is on their hands. Is he going to be an overnight billionaire . Worth 7. 1e will be billion. Wow. We are in the wrong business. Thank you very much. Leslie covers ipos and other things here at bloomberg. Speed itake at this mean catastrophe. The hottest high lets talk about teamwork and what they could teach the business world. You are watching Market Makers anarcho we look at urbanization that is sweeping the globe. Megacities are springing up around the world. We want to know which is the most influential. Scarlet fu is back with a study to try to determine the answer. Tophen you look at the three answers, they are familiar names. We have known that these are among the most influential cities. It is interesting to see the rise of asian cities poke up across the middle. Is london. One of course. It is a physical bridge between asia and the United States. In london,creating you will catch the end of the asian day and the start of the u. S. They. Number ofrised by the asian cities that have topped up in the pop 25 or 30. You have hong kong, beijing. Others are really starting to resonate. Shanghai, beijing. I was surprised to see dubai there. It is an airport hub. That is all by design. That was a planned move. That is why it is up there. Awardsand frankfurt when as the most connected cities. The author of the study points out that there is a Human Connection that you cant this cap. Back in the 17th century, amsterdam was a worldclass city. 45 of its population was foreignborn. To buy ranks behind for foreignborn workers. It is a small place. Brussels is the Political Center of the eurozone. Toronto surprised me. You need to spend more time north of the border. Have you ever been to its important tim horton . Before that, portuguese and italians. I did not know it would be that much higher than new york. The survey is about how international the cities are. Not necessarily. They used a lot of criteria. I am just picking and choosing a couple. Taxes. I dont know to what extent. What weis based on hear. To see so much coverage between the french and immigrant populations in paris grade you would think that the immigrant population would be large that. The impact is not as great as london or new york. We are confirming londons preeminence. Imaginative line jets. That is what the thunderbirds do almost every day. They are the elite airshow squad. They have teamwork down to a science. We ask them how their message could translate to the business world. To become a pilot, it takes a lot of rack this and experience in order to apply for the team. We have about 10 years of fighter experience. A minimum of 750 hours. There are three pilots selected each year. They represent the air force and do it with rescission and professionalism are in. To ensure that we are all on the same sheet of music, we begin by executing a mission breach. Wenobody has any doubt what are going to do. We fly twice a day every day. The communication with the team is very important. Everything we say and the tone how we aree and saying things and the inflection is what they are teeing off of to make sure they are in the correct position. The margin of error for flying these airplanes is very small. Them over moms and dads and grandparents. There is no movement. With any operation, you will hit road bumps. We are never perfectly in position. We always fight to get back in position. Safeallows for the execution of the formation. That . E it is all about the tone. It is all about the inflection. Thes approaching 56 past hour. We are going on the markets. The s p is at 2000. That is a big number for the first time in history. Been led by Consumer Discretionary and healthcare stocks. This is a placeholder. Erik schatzker is not very excited about it. This is a psychological threshold. For some people it is not important. That is ok. We added what hundred 50 points. About grubhub. Lk we know it here in new york city because it owns seamless. This is how we do take out in this town. They are down one and one quarter percent. They just filed to sell a very large stock. They are selling more than 10 million shares. It will double the public size. That money is going to go to the company. Eight point 7 million shares are being sold by existing shareholders. We are back in two minutes. Live from bloomberg headquarters in new york, this erikarket makers. With and stephanie ruhle. A milestone for wall street. The s p 500 climbs above 2004 the first time. Speculation about a european stimulus keep the rally going. Burger king talking about moving its headquarters out of the u. S. For tax reasons. We will see if this is the one that drives congress to take action. Uber of the skies. Why shouldnt you be able to share private planes like you do cars . This is Market Makers. I am Erik Schatzker. I am Olivia Sterns and four stephanie ruhle. The s p 500 has crossed a big psychological threshold. Scarlet fu is here with the numbers behind the rally. We are about 2000. Took us a little bit less than five years to double in value. The last time it closed below 1000 was back in september of 2009 when it was that was when it was at 9944. It is like a virtual Straight Line up. Performing group since 10, most of them are cyclical. Consumer discretionary, homebuilders up 172 during that time. Technology shares up 107 . Tailwind fromig obamacare. The enemies are tonight. What are the individual named . Netflix would rank pretty high up there. Armour up 1100. Line. Com. Chipotle. These are the new Economy Companies we talk a lot about. Netflix a disruptor. Chipotle getting the millennials. Interesting though even though the s p has doubled, valuations have not doubled from where they were in 2009. Profits have recovered. Or per profits have recovered. Margins are at their peak right now. Some wondered if they have peaked. It is worth pointing out the s p 500 is clothing trading close to 18 times earnings. The last time in this was september 2008. We know what happened then. Back there were some data spikes in the middle of all of that. If you were to smooth it out, you look back to september 2008, the last time we were on a normal pace. Like that is the key thing, a normal basis. The new normal, and the new neutral, who knows . An important psychological milestone. Mediumhigh am meantime, ester fire recipe for indigestion. Especially if you are president obama watching another u. S. Company plot the partner for cheaper taxes. Burger king and talks to redomicile from miami to a toronto suburb. Will this latest deal involving wanting one of americas most recognized brands be enough to spur this into action . We are asking Phil Mattingly from washington this morning. Standing right outside the white house, how appropriate. You have been watching this in version trend very closely. Trying to game out the probability of some kind of action, whether it be from congress, senate or executive action. What are we in for . This is a big deal. A whopper of a story you might say. I think that greatly increases the chances the senate will act in september. This is an iconic institution. Most of the previous dealscompanies no one had heard of. Walgreens decided not to. But of course everybody has been to burger king. Momentum. T democrats i think the senate may act. I think the house will not act. All of the pressure then will fall on the treasury department, which we think may issue regulations in the next several weeks to curb the deal. We are all holding our breaths waiting for congress to act. What are the president s options . What are the president s options if congress does not get on rd with tax reduction . Obviously has been in Marthas Vineyard for the past two weeks. He did return to washington for a couple of days. One of the meetings he had was a meeting with top economic advisor, including a top economic official who we believe is drafting the options to curb inversions through treasury. Whatever treasury puts on the tabnot not stop the problem the administration has basically pointed its finger out. They do feel there are options to undercut companies to try to do this. I do think while they will not cut on comment on specific companies, they will put a lot of pressure on congress to start making moves now so they do not have to rely entirely on executive action. You pointed out the house is unlikely to act. Why is it inversions continued to be framed as republican ursus democrat issue thats going i think we have had this conversation before but many republicans and democrats feel the same way about them. Yet at the heart of the entire issue is the issue of or per tax reform. The house view is we do not want to do things piecemeal. We want to include it all in one big tax reform bill and i actually think next year we will see therapy quick action by paul ryan. A year from now we might see a bill through the house. Where do you think Corporate Tax rates are headed . Tim hortons trying to move to canada. That looks a lot more rear reasonable than irelands 13 . What is a reasonable rate for the u. S. . I think for the next several months nothing will stay nothing will change. It will stay at 35 . The effective rate fight a bit lower. Until congress does something to reform the system to retard economic growth, you will see more deals like that proposed deal. Companies want to maximize profit. You cannot blame thing for doing for shareholders and congress refuses to act. Lex i want to replay an excerpt of comments by president obama on this very issue, and then i want to ask a question. They are renouncing their citizenship even though they are keeping the business here. It is just an accounting trick. It adds to the deficit. You do not have that option. And a right. It aint right. Chosen tosident has make and version and issue. We have heard several time from jack lu on the issue. . Hy is it is their data to suggest this is a subject, a topic that resonates with americans . If people can still go to burger king and get a burger and jobs do not leave the United States, do they care . Yes. A simple answer but when you listen to the remarks almost sounds like running for something. The fact of the matter is, he is. Democrats senate holding. Details of what an inversion deal is does not. The idea companies are using accounting gimmicks to get out of paying taxes about whether middleclass workers will have to pay is something that resonates and they think works very well. They roll this out and wanted to see how it was going to play. The fact that they are still hammering at it means theyre looking at data that still works. It means the candidate, many of whom will decide whether congress looks like next year will be hammering on the issue over the next three months. Whether it is burger king that happens to be controlled by the billionaire or any other company under pressure from the board, activists every time one of those Companies Announces or even talks about considering an inversion deal like this much does that make it a gift to the for reelectionng in november . I agree exactly with what phil said. We now have a situation where the democrats are looking at a pretty rocky election. Theyre looking for it issue on this and will hit hard on this. How . What is the strategy . We can debate for whose approach is more effective. What is the most effective way for them to drive this issue as a wedge into the voting public such that they moved to the side they would like to be . I think there will be a lot of demagoguery directed to the companies. The patriotism will be questioned. No one ever accused politicians of being subtle. I would say the redeker rhetoric will get nasty. I think that is why walgreens decided not to do the deal. They did not want to get the rhetorical bashing that will now come for burger king. It will be interesting to see if anyone actually boycotts burger king. Thank you. Our white house correspondent, Phil Mattingly with us from outside the white house. Fromf the big winners todays burger king news, bill ackman. Pershing square owns almost seven percent of the fast food chain. That made him and his clients more than 170 million richer. If you were to divvy it up, talking about 48 million. The question is it, how many maple bidips . Stealing each others customers. Hard to believe tmobile was talking merger. Why john ledger is talking to us now. Life just hours away from the other profootball season. Why it has seven millions of gamers playing madden. You can find us on your tablet. That half. V plus is streaming on apple tv and amazon fire. It is time for bloomberg west top tech and media headlines. The new group at superheroes harvell rvel marvel karmic lineup carved outube first place of the box office. Lineuparvels comic cartel first place of the box office. Ubers latest move. The start of the simpsons marathon with a ratings homerun run for the fx cable channel more than tripled the normal audience during prime time audience thursday. It ranks number one in basic 1834. Mong men the channel is showing all 550 two simpson episodes in order. The gloves have come off in the fight for number three. Talking about sprint and tmobile. The Wireless Companies have been attacking each other and public while cutting prices for consumers. Talking about the wireless borders with porter bit. And jonathan chaplin, analyst at new street. Is a neutral rating on both companies. Weant to read to you a tweet have from john ledger. Here is one. Our plan data strong network, listen to customers. Sprint lan, trick customers with confusing offer, keep crap network, watch them run. John ledger clearly talking a lot of smack. John legere. Ofthis is the battle disruptors right now between sprint and tmobile. The investors probably will be on the short end of the stick that a great situation for consumers because they both have advocated price cutting. Idea of the his price cut sprint came out with. Offering 10 and 20 gigabytes of data for very low price. The average consumer cannot use more than one. 5. Who does that . Teenagers. Splints network operates about half the speed and most of the country to everybody elses. If you can get it. 20 gigabytes of data on the sprint network. Can you afford these plans . Cutting prices against one another to compete. Sprint of those, especially needs capital. They have to build out the network. They need billions of dollars and are losing customers. Sprint is probably going to fall between now and the end of the year to number four, which is gaining tmobile. This is a fixed cost business. Devastating,e is particularly when theyre going through an investment cycle, which is friends at the moment. Trying to get our attention with the of noxious tweets. Is he getting customer attention . Building a following clearly on twitter. But can you see his effort reducing the cost of Customer Acquisition to tmobile . Is absolutely doing its growing customers at the fastest rate tmobile has in maybe 10 years. The fastestgrowing business in the wireless industry. That is from a year ago being to wear sprint is today. He has executed a phenomenal transformation of business in a short amount of time. Itdaially it destroyed eb numbers. Will ber we think it the highest in history of the company. What does it mean for at t . They are laughing because they are not in the price bottle. Battle. They are gaining customers. With deutschethem telekom. They want to sell. They tried to sell. Sprint saying they want to merge with tmobile. Both of them have tons of resources. Theyre not available to either one of the operating companies. Ergen willr charlie open up one or another. That is still a regulatory issue. Guys cannotthese survive on price cutting alone. I disagree that they get out of this unscathed. I think they will get hammered as well. I think verizon lost customers for the first time ever. At t lost customers in the fourth quarter. They responded to that with the price cut as well. They should. My phone bill in the u. S. Is twice as expensive. Guy who made the bid for tmobile, he is back talking to deutsche telekom. If he can find more capital, he has a threeyearold price for monthly Wireless Service in france. That would kill the u. S. Market. He says he will do that. How much does it matter to they are losing these customers . Customer. E retail at t and verizon have huge corporate client basis. As an analyst, how much value do you put on the retail customer versus the Corporate Customer . Bythe choices are made individuals, not corporations. Most warped rations will give you most corporations will give you [inaudible] exactly. And they lost customers for the first time, they responded. They responded to pretty dramatic price cuts for verizon at the time. Clearly sensitive. When we look at the carriers face, we do not think any of them are growing faster. They are all business space. Margins will compress. Want to own spectrums like dish. These. Ware with oath of happy to be a subscriber, not a shareholder. Order bid, thank you so much. , we might come back take a look of the stock market again. The s p 500 crossed 2000. Plus, a big story about uber for a private jet. Why it may be cheaper to share a private plane. Approaching 26 minutes after the hour. Time for bloomberg on the markets. In another look at what is happening in the broad market. 200000 up more than points. Just to put this into perspective, if you remember the dark day in march 2009, the s p five hundred head of its low of 676. You have written stocks up 196 points if you have held on. Live from bloomberg headquarters in new york, this with erikmakers. Schatzker and stephanie ruhle. You are watching Market Makers. I am Erik Schatzker. I am Olivia Sterns in for stephanie ruhle. Is all the rage but not coming to the friendly skies anytime soon. The faa says connecting pilots with private passengers are illegal. Those rt is one of of thoser is one companies. How does it work and how valid is the analogy drawing a comparison between this and uber . Great. Good morning. Thank you for having me. We are an Online Service that are private pilots that repeller driven cessnas and the like who have empty seats find people that want to go to the same places in exchange for shipping and for the gas cost. For pilots, a great thing because it allows them to shape office and makes finding affordable. For everyday travelers, a great way to get around. The worldessible to of general aviation. So it is kind of like uber . One important distinction. The drivers are making a profit. The federal rules do not allow private pilots to earn, traditionally they have not been able to make money or make a profit. Rrated cost sharing. Essentially sharing economy endeavor. Sharing economy endeavor and also flying private. What you need for these things to work is Critical Mass of it to actually function. The people who fly private is the one percent. Does the sharing economy really apply to flying private . That is a great question. People have tried to apply this to the world of jets, which is charitably maybe the top ive hundred of one percent of the population. 5000ally they run about dollars per hour to operate. These sorts of lanes run anywhere from 120 to 250 dollars to operate. A very different markets and universe. Most of the pilots who fly the a hobby planes it is for them, a recreational hobby so the price point and affordability is radically extremely different than the world of jets. The way you describe it, i am having trouble understanding with youre Issue Company and others like it. Help me understand. Private pilots have always ridesharing. Ways to save cost. Traditionally the faa has consider the expenses when passengers skip chip in for gas not to be compensation. Becausea critical point it means the private pilots are not a commercial enterprise and have not had to obtain a forercial operation license certificate to carry passengers. The only thing changed is the internet and modern sharing economy technology. That makes it much easier for all concerned to ride. Tonow the faa has come out save the shared expenses are a form of compensation to pilots. Pilotsre it means the need to get what is called a part one 19 operating certificate. Essentially forprofit air carrier. That is a very onerous process that no private pilot would be able to undertake. Forgive me for sounding facetious but did you not higher enough lawyers to figure that out before hand, and more importantly, what do you do about it now . Thectually our attorney ran faa legal office for operations until about a year ago, so we actually think our attorney is one of the best decision people on the face of the planet to understand the law on this, and in fact, for decades the faa said repeatedly the expense sharing is not compensation. Say pleaset back to clarify this because there is consternation among the pilot community. Comfortableto be that they are complying with regulations. Itself, thereverse faa had to go back to the preamble to a draft 1963 law to that wouldtation determine expense sharing is compensation. Did not mention when the law was adopted, the agency entirely reversed itself on that. Ever since then it has been telling folks expense sharing is not compensation. Based on the historical record, legale, and interpretations from the faa and the best legal advice we think anyone can find, our expert tatian is since nothing has changed except for the that this would be fully compliant with regulations. Right now you are grounded. On . Are your plans further what you have lobby to have regulations changed . Could you foresee the pilot getting the change . What is in this for air poolers . Making . Money are you that is a great question. We launched this on the west coast in april and the response was tremendous from pilots and the general public we had over 5000 people sign up. Tremendous demand for this. We have developed an alternative version of the product that we believe will comply with existing regulations. We have stressed tested with member pilots and the feedback has been extremely positive. Secondly come a we think the now needss a whole clarification from the faa because there is tremendous based on the recent letter to us. We would like to go back and have a constructive dialogue with the faa and have been in touch with the airplane manufacturers association. General aviation caucuses in the senate and house and tremendous support for constructive theogue with the faa so entire industry can benefit. Generally we are in great shape. Innkeeper spending time with us helping to eliminate this beaut. Lewis, the ceo. Thank you. Coming up, one of the most controversial figures in pro football and works on a videogame. The man behind madden nfl rain. Welcome back to Market Makers. Nfllatest edition of madden goes on sale tomorrow. Making billions of dollars off the realism. Pregame and halftime shows. What makes the game so realistic . All about the altar rhythms. Algorithms. For the past two decades madden nfl has consistently ranked among the top video games in america, raking in 4 billion for Electronic Arts. One man helps fuel the success and it is not john madden. Meet donnie moore, the ratings are. From the field to the game. Per 268 players to whom he assigns a rating up to 100 and 54 different categories like string, speed, and catching. Using data from Team Performance , team stats and his own notes. We want the team to look like the nfl team. We do not want to put something in if you give him one speed he is inching along. The old ncaa Football Games is how he got his job. Can push this. I was like we could probably find him this process a little bit better. Helpedhe ratings have Electronic Arts make madden look so good the franchise has sold over 100 million units. Sometimes players disagreed. I know i have gotten better. Active on twitter, donnie is really to take it back from fans, gamers, coaches and especially players about his rating. There is a reason that i am 80 completion. The reason why texans went to enter 14 despite having jj watt. Theyre trying to capture that. We cannot the handing out lollipops to every high rated player. Not even to the highest rated player in the game. I can see i will go to denver and Peyton Manning will walk in the room. You arerry, this year down 86. You are 38 years old. I will not be the guy that tells Peyton Manning that. While anyone else would be focused on hanging out with crowe Football Players and wide receiver, donnie on the cares about making madden 15 a great videogame. On the mathematics behind madden, bringing in matt miller who plays many hours of video games themselves every single week. Basically donnie moore is jonah hill. He knows more about football baseballh knew about in that film. This guy lives, and sleeps football. Stood he seems to eat old drink a lot of caffeinated beverages. Electronic arts is one of the only companies that has access to nfl films outside of nfl fans. He sits there and watches it all the time. He has a swath of people that can queue of things. He gets that instantly. He calls it up. He is absolutely obsessed. And spent much more time playing video game championships and going to class and that is how he got the job. It isld madden be what without him . It would not be as realistic. One of the reasons he was noted by Electronic Arts executives is he was winning the tournament and went to him and said how can you consistently be everybody else beat everybody else . He said because i noticed everyone else thinks so and so is the greatest running backs but you do not rate him that way. You rate him well. They brought him to change the discrepancies. A lot of the players get disappointed and tweed at him and he will respond but does not leave the office very well. Very much. He is always watching football. Roll out the barrel, whiskey is hot. It is Market Makers. I am Erik Schatzker. You can call this boom and a bottle. Whether comes from kentucky or japan, investors and drinkers are wild about whiskey. Adam johnson has the story. Forget pricey you whine, smart money these days is betting on whiskey, specifically single malt got. Investors cannot get enough of this. A couple of weeks ago a rare bottle of whiskey went for 11,000. Earlier this year, a single malt went for a record 633,000. The numbers tell the story. In the last few years investment returns an average of 420 . During the same time, the fine wine index down two percent. Booming, burden is two. Most since 1970. Last year sales of bourbon and Tennessee Whiskey like jack daniels rose more than 10 . For the first time bergen exports rose over 1 million. Could we be in a bubble . Bourbon companies are betting no. They think demand in asia is point to keep growing. They are building more distilleries. Adam johnson, bloomberg news. That is a lot of bourbon. I myself am a tequila woman but i respect that. Did you know there are so much bourbon in kentucky, over 5 Million Barrels that it is more than the population itself. I will draw a comparison. Tequila makers have an easier time responding to demand. Hot. Say its become most of it does not get aged for very long at all. They can crank it out and meet market demand as it emerges. Whereas the bourbon maker or many years in advance because it will be 812 before the bottle hits the market. But i like a good tequila, i have to say. Up, not done yet. Never seen a day like this one on wall street. The s p 500 goes over 2000 for the first time ever. Money clipis coming up at the top of the hour. Theslamic militants is topic everyone is talking about. Threat to u. S. Homeland. Now we are in conversations between the white house, pentagon and allies trying to figure out what to do and also the situation in the ukraine. There was a report they have moved into the southeastern portion of the country. That is something we are keeping an i on as well. Day,favorite story of the the potential merger between burger king and tim hortons. The donut chain. Conversion therapy, whatever theyre calling it. Burger king, if they buy this, Corporate Headquarters would move to canada. How much would they save on taxes . Trying to pitch it more of a strategic situation. Reducing the cost of getting it up and running hopes to expand the chain internationally. Coffee. They have great coffee. There is a small kiosk in penn station. Coffee is fantastic. We know they need to up their game and coffee. Thank you so much. Past the hour. That means Bloomberg Television is taking you on the markets. Day for u. S. L stock market. Trading about 2000 and topping it for the first time in history. Join me now for todays options inside is jim stroup or, derivative strategist at mkm holdings. Do folks Pay Attention to a rice nice round number on the s p . I think they do. Certainly some people expected the s p to get their input on a position expecting that outcome. In terms of seasonality, people talk about how this is august and not a whole lot going certainly you are seeing something and often options that would politicize this game at . On whatit is reflecting it means for equities into the fall. It has come off shortly. We have chosen implied volatility over time. For the past year and a half we have oscillated from a trough level two budget we afford sloping curve of the s p 500. Curve has flattened. We had just come through one of those. Still relatively benign. All of three point nine percent. What it means for the fall is very constructive. That term structure having gone back to a trough level, we expect it to be sustained into the fall. Year u. S. For the equities have volatility. U. S. Equity volatility typically peaks in late october. Bethink volatility can suppressed of these relatively into october. Obviously that bodes well for u. S. Equities. Certainly a positive sign. Lex coming out of jackson hole, we mentioned european stimulus being a big game. The euro weakened against the dollar, 11 month low versus the dollar. What trait do you have in mind to play off of the Euro Weakness . The euro weakening is not terribly new. What is new is jackson hole was last week. Stocks are up almost two percent. This on the expectation there could the diversity in europe. Looking at the next year, we want to be short the euro. And five dollars kilo to just over five percent. Half of the historical level. Very cheap. January 2015 very simple straightforward way to play the euro coming in. Thank you so much. We are on the markets once again in 30 minutes. Welcome to money clip i am mark crumpton. Heres the rundown. In deals, another u. S. Company looks to relocate for a tax break. In fact, employers are turning to wearable gadget to got there to cut their health care bills. In very different kind of event also gets underway in the u. S. , burning man