To grow the economy over there. Israels gdp expands less than forecast. This is becoming a habit. Germany contracted. 20. France was flat. Italy also shrank. Economic data, 10 00. Earnings, really only urban outfitters. Lets do a data check. Futures update, 10 year yield up. Brent crude is lighter. Onto the next screen. Resilient equities. , resilient equities. Dow jones, 16,663. Michael mckee will be out there. A great moderation. Basic chart. This is the zero bound. This is your fed staying at zero Interest Rates for a long time. So many ramifications of that. Much longer will the line extend . Does it continue into 2016 . It is the debate that keeps us employed. Eventn extraordinary since 1 00 this morning. Ferguson, missouri had its worst night of violence. The National Guard was called out. Jay nixon was ordering the guard to restore peace. Night, hours before the midnight curfew, Police Used Tear Gas to break up protests. I say they came under attack and gasoline bombs were used. How did we go from jack dorsey of twitter in a peaceful protest yesterday to what happened overnight where how many people were injured . Eight or nine. We also have results from the autopsy. The teenager was shot at least six times, twice in the head. We know the Justice Department is asking for another autopsy. I was thunderstruck. I woke up at about 1 00 and stayed up looking at the twitter feed. Tried to imagine twitter in 1963, david carr writing it up in the new york times. It has changed the dialogue. The misinformation is out there, as well. We need to get away from the misinformation. Good morning, what is the single message you have for our viewers this morning . Say that things have taken a drastic turn for the worst in ferguson. What started off as a peaceful nastyest extended into a situation. Even children were gasseping for air on the streets of ferguson. The geography of ferguson, what will be the many policeetween officers and what i assume will be many more National Guard . How will that change the landscape you observed . It is interesting because the police already have military style assets. They have huge trucks, longrange rifles, so it will be interesting to see how many officers, with the National Guard. Seems like the National Guard will bring more highpowered assets and maybe even more boots on the ground to try to quell the violence we have seen. We can hear noise going on behind you. Is it quiet . Is there continued protests . When i left the site, about an hour ago, it was pretty quiet. The streets were pretty clear. Most of what happened, most of the action took place last night around 8 00, 9 00, 10 00 in the evening. Police were able to clear the street using tear gas. People havenine been injured. You mentioned the police have longrange rifles. Can you tell us how the people were injured . Say howe did not everyone was injured. There were two people who had gunshot wounds that did not come from police, but came from other people. There are some agitators who are using violence to break up the peaceful protest. Are using violence on others and some are targeting the police. For today. A schedule you have been up all night. What would you presume would be the events of this morning and into the afternoon . The local School District has canceled school. It is likely there will be more children who might take part in more protest. There is going to be National Guard rolling in. A lot of people are angry about what happened last night and said they will go out to the streets. This is escalating and it will continue. Withluse olorunnipa, bloomberg news. Thank you. A setback for the islamic rebels in iraq. Kurdish forces have taken control of the largest dam. Been captured by the Islamic State forces. Meanwhile, the u. S. Is widening the scope of air attacks on the Islamic State. Just detecting u. S. Personnel or threatened minorities. From what we are told, roughly a dozen strikes yesterday, where farmers where bombers were used to target humvee vehicles. Jets, drones, bombers, all in certain positions on sunday. To yourt to go experience of the last week with our air force. We have different planes over there. Our airplanes old . When you get in one, do you feel like you feel on the old, beat up, third world airliner . In goes aboutflew 25 years. You can see the wear and yet it has maintained beautifully. The air force takes pride in the people who maintain those aircrafts. They work hard. The aircraft themselves, they are old. Those are frontpage stories this morning. Our guest host, robert. There are markets who consider i cannot convey to you the number of people who said can europe come to the United States. We will discuss this later in the hour. Global growthng slowing down. We have indicators, as adam said this morning. Uncertainty is about where the economy is going. Quickscan that come over . Did they rip up the script and not to labor . I do not think so. I think the fed is focused on mediumterm issues. They have to address what labor market indicators are for their decisionmaking processes. By excluding the financial community, it will be a longerterm perspective on what things they should be thinking about. Those are very important comments and we will discuss those in about 20 minutes. Much deeper than the negative Interest Rates in germany. We have to go to iraq right now. Arrived aorter just couple of hours ago. What can you tell us set the scene in terms of response from the iraqi government. They have been saying how proud they are of the forces who have managed to get hold of most of the dam. There have been 14 airstrikes by the u. S. Supportseemingly more Francois Hollande saying western france should be arriving in a matter of hours. Italian lawmakers will be looking into this in a couple of days time before parliament. Will be adding to military support here. It is no longer just a humanitarian mission. Aliki is out. How is that impacting life there . Not much of an effect from what i can see. I have only been here for a few hours. He is not necessarily going to be able to do anything in the city of mosul. Frankly, giving that he has only been in office for a couple of days, he will have to work hard to get some of the sunni lawmakers onside. On the ground in iraq. Dollar general making a proposal to acquire Family Dollar. Its is an all cash provides an all cash certainty. It looks like it is an all cash offer here. 70. 50 per shower. Total value, about 9. 7 billion. 78. 50 per share. Total value, about 9. 7 billion. They make walmart look expensive. Is not tradingr in the premarket. Dollar general is up to 62 per share after closing on friday at 57. 46. Talking about fox and time warner in the same way. There yet, we do not want to report that. Think about tom talking about what is happening in media, what is happening in the airlines, what is trying to happen in telecom. This about synergies, Desperate Companies who cannot grow without buying one another . What is it . It is a combination of all of those. It is topline growth. With nominal gdp growth running at the highend, Companies Need to find efficiencies. See theseue to consolidations. A lot has to do with nominal revenue and nominal growth. I cannot convey the backstory davos in january. Go find nominal gdp. It is not there. Is happening in europe, all of the slowing we have been reporting. There it is. Up, economic recovery for europe. We are going to discuss how the ecb president , mario draghi, is managing deflation. The 100flightline for 77th fighter wing in atlantic city, new jersey. I will be going up with the a little bit later, and im going to take you along. Good morning, everybody. One of the great architects of the Affordable Care act, look for that on in the loop. 8 00 a. M. On Bloomberg Television. I am tom keene. Lets get to fly boy, adam johnson. I had the ride of my life. It was incredible. Hows trying to understand the air force is adapting to life after sequestration. They fly with us, go home, take a nap. Are you ready to go . I am ready. You ready to give it a try . Lets do it. Howre are you feeling . I feel good. Thank you. It feels good to get out of that. An incredible ride. What impressed me is the commitment and pride as everybody there. 121 people for each airplay just for each airplane or the thunderbirds . That is the whole team. With support, theres 20 people for plane. The rear drops, and 120 people come out and they just take over. Abysses like dialogue out of top gun. This is like dialogue out of top gun. Each aircraft can be ready in 72 hours. You load it with missiles. Ride, i spokethe to the secretary of the air force and heres what she told us about iraq. Likely to be a shortterm operation. In addition to the support that you have been hearing about, there are contingency planners who are trying to figure out options to present to the president on what our next moves might be. She was not at liberty to discuss it, but we know what some of the next moves were because of what happened over the weekend. Our Defense Budget was going to go back to 1939. Are you going to fly in a b29 bomber next . I hope not. The b52s, which were first built in the 1950s, have been refitted several times. In theory, in 2040, they will be 90 years old and still flying. They are using the plane you flew on in iraq great the f16. Yes. We will continue to discuss the u. S. Defense budget and what happens next, given all the changes. That is coming up later. In the next hour, the founder and ceo of software is our guest host on Bloomberg Television and radio. He is the lead owner of the nbas Sacramento Kings. A lot to discuss. Tablet,treaming on your you television, and on bloomberg. Com. Good morning, everyone. I am tom keene. It is time for morning must read. I have a morning must read for you. This from robert samuelson. Peril onobvious globalization it will prove economically unstable. The financial crisis is discrediting the notion of income gains. We have only a primitive grasp of how the World Economy operates. With us. E there is gains to the elite globally and a lot of this unrest has to do with poverty. Benefitay there is no to labor, but if you go into useloping countries, equalization of labor across the world. Those at the lower end of the scale see things improving and end have toe higher adjust. Is that the stabilizer that adjusts and moves around to provide stability . It should adjust. That is why the pressure has been on the chinese for over two decades. Is it still undervalued . Yes. It is getting there. Bob sinche on the chinese yuan. Good morning, everyone. Risk on. Up nine. Dow futures and 78. Nymex crude pulls back after kurds, we believe taking most or all of the mosul dam. Lets talk about the ukraine crisis. Deal hasvrov says no been achieved on reaching a ceasefire, but progress is being made on the a convoy. Aid convoy. Every day we have inflow of mercenaries, money. With hans, whoin joins us from berlin. What is the take away . There is a bit of a puzzle. German foreign minister said progress was made. We spoke to two of the Foreign Ministers and it is hard to see how there is progress. There is a lot of negativity. Foreign minister leveled harsh attacks saying money is coming in, clearly there are mercenaries. To see theling reason for optimism. Perhaps, and please help us sort this out together. Sergey lavrov says there is at least progress on the convoy. The only thing on the border issue, maybe they are having him sort of agreement as to who is going to control the border, but, convoy, sergey lavrov, i went to the Ukrainian Foreign minister and said is there convoy going to be in ukraine in 24 hours. He said he had no idea. He said it is up to russia. Let me ask a dumb question. Takee ukrainians in kiev , who are the people with . Or they with the separatists are they going to greet the ukrainians from kiev with flying flags . Ukraine want to be part of russia or do they want to be part of ukraine . I am not on the ground to ask enough people. It gets to the core. Culturally, ethnically, what are these people. Today identify themselves as ukrainian or russian. A 50 split . Ave it gets to the core of what selfgovernance and democracy is about. With the ukraine talks hitting a wall, give us a sense of what to look ahead to. What will you look for is the talks continued. All parties are going to go back to their home countries. One reason or cause for optimism as if there were a meeting between the heads of state, beween they need to addressed at the head of state level. A meeting like that, i will buy into the optimism in that tom was talking about earlier. Thank you for giving us the latest. How about the sealed. 0. 951 . That was the yield earlier this morning. Europe confronts contraction, deflation, and features of depression. Could america catch a breath . It is the fear of everyone. Financialoes this impression continue . Demographic. Is is we have talked about this a number of times. Is at best stagnant and in some cases declining. There is a group of said officials. Are they fighting the last war the next war of inflation . The two year yield is a negative yield. Why is Charles Plosser miserable . They are concerned about what the fed does going forward, how large the Balance Sheet has gotten, what the implications are. Am less concerned boomers, this Demographic Group was going through consumption years. We are now aging. We are not consuming as much. I think that has a lot to do with global deflation. Bob sent, we are aging. We talk about the divisor the divergent monetary paths. Europe and japan are not going to be the source of aggregate demand in the world. The u. S. Fees to continue to export to those parts of world that are growing. Those parts of the world need to grow domestic demand. That has been the question. Would china and india be able to grow enough to get their income levels of so they could be more engines of growth, which we do not see a lot of in the world. Should we be focusing on countries, given the problems outside the u. S. We want to be focused on Competitive Companies. What we have seen in europe and japan, companies are not that competitive anymore. Industrial production is lower than it was in the beginning of 1995. They have outsourced so much from japan. Developed among nations in terms of production is actually the United States. We are seeing european companies, planes, the like in the United States. Flexible labor markets and chief energy, those are the things driving growth. It looks like those will continue for a while longer. In place, europe is strapped by what they want to be, arent they . That is part of the negative Interest Rate moment. What they are finding out, they do not work. Are struggling to figure out how to get to a better place. Going totment process, more flexible markets, the adjust them in process is not pleasant. Germany struggled. They went through that adjustment process. They are better for it. I think this issue will not go away. Our coverage of the said. Michael will join us. Demand fromd about china. Coming up, why prices for luxury diamonds and fine wines are falling. This is bloomberg surveillance. We will be back. Good morning, everyone. Our twitter question the events overnight in ferguson missouri. What is the solution in and for the people of ferguson, missouri . We need your thoughts and opinions on what you observed on ferguson. This is bloomberg surveillance. With me, scarlet fu and adam johnson. Headlines. Our top pope francis is calling on koreans to end 60 years of division. He challenged the north and south to reject a, confrontation, and conference and competition. Challenge ahead for atlantic city. How to avoid having empty shells left by the closed casinos on the boardwalk. End ofll be shut by the the summer. Possibilities include corporate headquarters, timeshares, or condos. Dollar general is making an offer of its own, the deal with the with nine be worth 9. 7 billion dollars. It appears to be a threeway conundrum. A global slowdown in sales of luxury goods has spread to the highest quality diamonds and fine wines. Seee call it up, you can the purple line tracks fine wine prices. Down about 31 . The white line, the price for top quality diamonds down. The yellow line, lower quality smaller diamonds. The past twod over years. The reason why, one reason, Chinese Government policies aimed at discouraging ostentatious behavior. If you are one of the 87 million communist party members, you are careful about what you buy. Now, you only get polished diamonds. Diamond is not the highest quality grade. Something that needs to be dressed up a little bit more. China is the second largest diamond market. China overtook france as the number one market for fine wines. , end diamonds the be all all . Jade arend traditionally the preferred gems over diamonds. They are trying a Marketing Campaign to encourage people to look at diamonds in the same way americans do. Is this a quirky observation or does it state to some sort of larger comment about luxury . You cannot flow capital out of china and what they would do is consume things that presumably had valuable add value. Interesting. Speaking of stores of value, he has been stored in the ecuadorian embassy. , i have lostange track how long he has been hiding in the four walls of the embassy. That is a lot of watching of little britain. He is leaving. E Caroline Hyde is standing by to fill us in. What was the catalyst. Why is he leaving . It is very cryptic. We do not know. There was a press conference and it seems as though it has been reported his health, the founder of wikileaks has been prone to and might as of late be exiting the ecuadorian embassy. He has been there for two years. Trying to avoid the detention order from sweden. The police and media are waiting to see whether he will be giving himself up today. If he is going to leave the embassy in london, who would welcome him . It seems to be assumed is that immediately he would be sent over to sweden. Faces fourhe years ago, allegations of a Sexual Assault case. For four years he has been trying to avoid that. Been seeking has political asylum. He claims he is in the sense of allegation inault sweden. He fears being extradited to the United States. It is all about wikileaks. Documents highly classified. It increases the transparency of the government. Were going to speak about the air force next generation bomber. 550 million per plane. Is an f16 and cost less than 30 million. This is bloomberg surveillance. We are streaming on your tablet, your phone, and on bloomberg. Com. This is bloomberg surveillance. Lets get you some company news. European officers taking a page from american counterparts. More than 1000 writers are taking aim at amazon. They say they are lying to customers about the availability of books. The dispute centers on ebook prices. Pokemon online trading card game will become an ipad app. Became the first to sell one Million Units along with the super mario brothers wii u. That is todays company news. The u. S. Defense budget is the largest in the world at over 625 billion. It is triple chinas and exceeds the next 20 largest budget defenses combined. Money, how much of that goes to developing the new systems made by companies you analyze . The research and Development Budgets are only about 70 billion. Should be more . We have a substantial fleet that is aging at a rapid pace. Yes 16 fighters you talked about earlier are 23 years old on average. We have been unsuccessful in bringing forth a new platform for fighter markets. We were talking to the secretary of the air force about the bomb are under development. 550 million per plane. Itsked her if she thought was worth it. Heres what she told us. Timeframe for developing the bomber will be quicker than our normal development programs. Importantly, we built from thelity in beginning. 500 Million Dollars per copy sounds like a lot of money, but for the capability we will be achieving, it is considered to be affordable. Affordable . Could you characterize 500 plus million per airplane . Beit has to be, we would not doing it. There is an economic tradeoff. The program is faster, but more classified then it has been in a while. Sense that itnice has not gone up since 2010. We have a belief in quality of our does our defense system. Is it the same processes and quality that it was 10 years ago, 20 years ago, 30 years ago . It is on a faster pace, using a little bit more commercial developed technology. An effort to avoid cost overruns. Do other nations have jets like he flew in . Are we in a jet warfare with other countries . B52s are over 50 years old and as a result of that, we have to root race them. We have to replace them. Often, there are spillover effects tween the commercial and military sector. This is part of Global Development and maintaining Competitive Companies in the u. S. You hope there is benefit to the u. S. Commercial airlines from this. I would save is going the other way. Boeing has pushed the edge with some of its commercial development. Some of that will spill over to help the military. Composite jetliner the 787 is. It is the most advanced aircraft in the world today. Why are we not using that in some of the military aircraft . In some cases, we are. The f22, a precursor to that, way there. Of the we learned about communications and precision weapons. We talked about drones, another realm of the future. Secretary Debra Lee James had to say. Remotely piloted aircraft are part of our future because of surveillance,us intelligence, and reconnaissance capabilities. They provide certain strike capabilities. One of the kernels i was flying with the scribe to drones to me as crack for commanders in the field. You can get the intelligence without risking the highlights. As i said earlier, we had a headline eight months ago thats it where going back to the Defense Department of 1939. May i presume that discussion is over . Ukraine has raised a lot of questions. Gaza, as well. Policy isent, public going down. It is not up. The budget does not turn on a dime unless there is an event of significance. We had fiscal drag. Drag. Did have some fiscal that is lessening now. A lot of this shows the dynamism of the american economy. This is why Growth Continues here. This is why production continues here. Companies have this dynamic impact on the economy and growth. Thank you for joining us. We gave we greatly appreciated. Lets do a forex report. Yen, 102. 47. Some calm in russian ruble. Owner of the Sacramento Kings will be joining us. We will be right back. This is bloomberg surveillance. Missouri governor jay nixon activates the National Guard as me under police co assault, with gunfire and gasoline bombs. The kurds retake with u. S. In your start. And the Sacramento Kings adjust Steve Ballmer and the la clippers. It is wednesday, august 18. I am tom keene. Joining me, scarlet fu and adam johnson. With us is Vivek Ranadive. In china, new home prices dropped it also, israels gdp expands less than forecast. Our own house and data with the housing index earnings. After the bell, urban outfitters. There you have it, a brief brief. Lets get you some company news. Dime what is the latest company in the cross hairs of chinese regulators. Antitrust officials have evidence of decisions by mercedesbenz. Preparing ana is offer for a brazilian broadband unit. Is bid for vivendis gvt worth 9. 4 billion, according to people with knowledge of the plan. Telecom italia competes with telefonica brasil. Aredollar wars officially on good Dollar General has made a 9. 7 billion counterbid for Family Dollar. The challenges the takeover offer made earlier by dollar tree. Tom . 1. 2 billion here, 1. 2 billion there. Who is counting . Family dollar. Oh, i get it. Dollar tree. Townsend joins us. My head is spinning over these transitions. Were you surprised by this announcement . Not really. We heard over the past week having seen the worst potentially. Dollar general has always been seen as the better suitor for dollar tree. It is not a surprise. What does this mean for carl icahn . There are different names out there. I dont know the soap opera, to be honest. Is he comes up as one or is the miserable . Investwhole play was to in Family Dollar and you should sell yourself. Dollar tree came in and the expectation was that Dollar General would eventually make a bid, and they did. The stock was trading above the original offer from dollar tree. This is what the market seem to expect. There are differences between Dollar General, dollar tree, and Family Dollar in terms of size and scale. Why might there be synergies in combining them . Dollar general and Family Dollar have similar models and that they sell a variety of goods, different price points. Dollar tree literally Sells Everything for basically a dollar or less. Dollar tree has a different consumer a little bit more middleincome, a little different locations. Family dollar and Dollar General are in low income areas, economically depressed areas. To me it was a little bit more synergy between Dollar General years, at, the last 10 dollar at a time, would you like to make 13. 4 per year . Yes please. That works pretty good. Thank you, carl icahn. How worried is walmart . Or should it be worried . Walmart has a lot of issues right now, and they are trying to go for the smaller format. I think most analysts and investors see that as potential challenge to walmart. In certain neighborhoods, certain parts of the country but walmart has tons of other issues right now. You so townsend, thank much. What you going to do when you go back to your desk and look for another bid . Yeah. Earnings previous. Get carl icahn on the phone. Never a dull moment in the retail industry. Unfortunately, it was not for ferguson. While you are sleeping, ferguson blew up. The National Guard alden by governor jay nixon of missouri called in by governor jay nixon of missouri. Our reporters in ferguson, missouri. As the sun rises across missouri, will the National Guard be immediately present . That is a good question. That is what the governor said he would immediately deploy. It seems like they should be on their way and we will be seeing them here in missouri very soon. I know the reporters are gathered near the target store. Others were pushed aside and around by police as they confronted the protesters. Where would be the best deployment of our National Guard . There is an area about a square mile where we have seen most of the events flare up. It is actually pretty close to the place where Michael Brown was shot to death last week. That would probably be where they focus when they show up later. , last night was the most violent since the shooting of the unarmed teenager. To extent might arrest be spreading to other parts of greater st. Louis . Is there any evidence of that . So far it seems pretty concentrated within ferguson. Different parts of the ferguson areas. It hasnt spread out very much beyond the city. It hasnt gotten into the city of st. Louis. I was there last week in irving them was pretty safe there i was there last week and every thing was pretty safe there. The concentrated so far. Yesterday the cofounder of twitter, a sinuous resident, was marching in a peaceful protest of sorts in ferguson. How much overnight did what and b what had been a peaceful protest become so violent . The last two nights, hundreds of people in peaceful protest, jordan, celebrities, politicians. But there are agitators who have taken advantage of that and some of showed up with firearms and dilute and to loot and they have taken over and place have responded to them and everyone got caught up in that. It is what we have been seeing the last couple days. Toluse, thank you so much. Adam . I think we should close our twitter question of the day. Please tweet us your thoughtful responses. Shortterm, longterm, anything at this point. Any solution, we will take it. Difficult to segue from what we saw in ferguson, missouri. We are thrilled to ring you one of americas great successors in Digital Science and computing. Us, and heive joins has a side job as an owner of a possible team of a basketball team. His Balance Sheet has been adjusted by steven ballmer. Sports, as you know, with your heritage in india, great for the indian culture, cricket, for example, or basketball with an american. Within america. We have seen so much animosity before mr. Ballmer and the clippers. What would you like to see the nba do this season to help america heal and come together . I talked to our commissioner i thought that our commissioner adams over acted decisively adam silver acted decisively and very quickly. I welcome stephen to the nba fraternity. It will be a fantastic season for the nba. It is a global sport. We are taking our game to china in the preseason, offseason. I expect a lot of the troubles of the past two be behind us. With what we see in ferguson, missouri, sport has always brought america together. Some reluctantly i can remember some of that as a kid. What needs to be done right now, given the events of the past week . We actually have a player, ben mclemore, was from the st. Louis area to my yet great sympathy for the protesters and used in posting to instagram and he is in china representing the kings. Full fans parent see is what everybodys asking for. As you said, sport is the great unifier. All we care about in basketball is do you have game. That is what america is about. Becamember when yao ming the First Chinese player in the nba and you have brought in the first indian player. 75, 360 pounds. House is going to change the name . How is this going to change the name . I believe basketball could be one of the most popular sports in india. Markets like india and china are going to help make didnt get comp tickets to the world cup, right . No, no. In many ways a basketball teams like any other business. Are selling basketball tickets, airline tickets, banking products did you end up with 50 in your pocket when you much m. I. T. . When he went to m. I. T. . Well, that is true. You could only have a little bit converted, so i had about 50 when i showed up. Very good. I hope you do not switch and an American Express because you wouldve gotten killed back then. Vivek ranadive with us. So much to talk about about his success in computers. Coming up on bloomberg, a big comeback for the banks, according to their secondquarter earnings report. Themation continues to dog. We will discuss all of that coming up. Futures up 10. Dow futures up 85 points. Scarlet fu and adam johnson with me right now. Right now we go back to fly boy. It waske being called the experience of a lifetime. Did you want to throw up . I did not throw up but i do not eat breakfast or lunch that day, either. This is me flying last week in a thunderbird. Mma fighters, they fly with us and go home and take a nap. The ready to go . You ready to go . I am ready. How you feeling . Feeling good. Thank you. Feels good to get out of that. We went down to figure out how to come back from sequestration. They have done that. They had to pull some strings because they were grounded for six months and now there are more and more missions happening. Over iraq over the weekend, about a dozen. So that is the actual plane and the aircraft that we flew in can in 72 hours be converted to combatready aircraft. Apron onare put on an the smoke generators and they can be literally flying over iraq. How long were you flying up there . One hour 45 minutes. How much of getting thrown back . 9 gs. As we went into a dive, my peripheral vision is going black, black happens here on friday on bloomberg surveillance. Adam almond that is wonderful. Adam, that is wonderful. Good morning. Good morning, everyone. Bloomberg surveillance. I am tom keene. Did scarlet fu and adam johnson with me. , ceouest, Vivek Ranadive of tibco. Adam, lets get you top headlines. Keeping the peace in ferguson, missouri. The state governor has called the National Guard. By suburb has been wracked violence since the shooting of an unarmed black teenager a week ago. An autopsy found Michael Brown separate times. Security versus and kurdish fighters took back the strategic site. Islamic. Should it weeks ago. Islamic rebels took it weeks ago. Julian a son should might be ready to surrender. The wikileaks founder will leave ecuador soon. Assange has been staying there for 2 years. He is wanted in sweden for Sexual Assault charges. Lets talk about banks. U. S. Banks posted 40 billion in net income last quarter. Second highest profit in 23 years. The rebound reflects increased lending to companies and individuals even as investors count the costs linked to regulation. The president and ceo of the mecca Bankers Association and former governor of oklahoma is joining us from our Washington Bureau third welcome back to surveillance. What is the real cost of increased regulation if the banks are posting near record profits . The good news is that this was the best quarter, second only to the First Quarter of last year, for bank profits. That means hopefully that people are out there interested in borrowing money and interested in building a business. That is what banking is all about. That is good news. Community bankers tell me that anywhere from 10 to 15 to 20 in some cases of their operating income is going to regulation. Think about in new york, where you are, if a restaurant had to spend 10 to 20 of operating income keeping the new York City Health department happy. You would not have a very good steak. Are in manytrols cases discouraging to form to whom mortgage finance. It is good news to see people willing to go out and borrow money. I want to get your take on a cover story in the financial times. They are reporting the global tos may not assume access the discount window, putting two people familiar with the matter. Hasnt been confirmed yet. Does that mean that the fed is no longer the lender of last resort for global banks . I dont know the particulars of that potential proposal. Each one of the top 11 that apparently didnt do satisfactorily from the fdic and the fed were given an effect an individual who had worked with them to make sure it that whatever they submit and it will work for them hopefully and for the overall economy in general, but all of that is being done bank by bank. How that is going to play out, scarlet, i really dont know. But the lender of last resort is important in scary and very challenging times and i hope that hasnt described that hasnt disintegrated. Good to have you on the show again. He mentioned that up to 20 of operating income for Smaller Banks goes towards regulation. That might make investing in small banks less attractive but is not good for is not good for consumers . If they are being regulated they are towing the line. But no, they have always been regulated, adam, as you well know. Occ, saidhe fdic, in some cases, state banking regulators in every case but regulation has to be balanced, nuanced, it has to encourage the bank to do what it is supposed to but also to encourage people that they do without job assets and income. We cant have the gogo days of the last attended and. Last decade again. I was completely crazy about people borrow money you had no jobs in asset and income. I think that there has to be a reason. Every industry that is regulated needs to be able to breathe and in some cases, particularly for some of the Smaller Banks, these were. I want to go back to the idea that we are seeing lending pick up again. Fastest pace since the financial crisis, and credit has loosen up quite a bit. Is it just a matter of banks and playing looser standards . I think that, obviously, character lending my Community Bank grandfather and twin brother, that is the way a random businesses. They ran their businesses. Character lending is no longer that frequent. I think that is a mistake. To look at me and say, as someone did years ago, you are a hardworking guy and i will lend you money to buy a house, that is a part of banking. To separate the wheat from the chaff in terms of the ability to done. A loan, that is not in the mortgage space, 43 , very rigid debttoincome requirement. Im not sure that is healthy. I think there should be more flexibility. But what you are seeing is a willingness of banks to say, look, i trust you as long as the regulators dont count me. I think you are a good loan. That is what makes capitalism work. So much, former governor of oklahoma and the president and ceo of the american Bankers Association joining us this money from washington. A bigranadive, you played role in digitizing wall street. When you hear about the banks recovering researching, really, what are your thoughts in terms of how much more they should be utilizing technology . I think that more than regulation, a bigger threat to technology. The bank of the future will probably have no walls. It will be a social Network Attached to a computer program. I dont think they will use a lot of technology right now. The best is yet to come. Vivek ranadive, guest host for the hour. This is bloomberg surveillance. I am scarlet fu come here with tom keene and adam johnson. Introduce itsto new model rebound under chinese ownership. The Sport Utility vehicle will be unveiled in stockholm next week. It will be priced between 65,000 and 135,000. Bank of America PosnerMerrill Lynch unit will be a frontrunner. The upper dobby private equity firm plans to go public by the end of this year. And the maker of tire pressure sensors is a target of 1 billion deal. Since anna technologies sense to buy trader international. That is the latest company news this morning. Good morning, everyone. This matters now to our guest host, Vivek Ranadive. Countless Big Companies are interacting with customers. Landed in cambrai to with the proverbial 50 and dreams. After m. I. T. And corporate success come he knows that math is what matters. This is a major american debate. Head of thehe central bank and the booth school in chicago this is easy for indians. How is it easy for americans, who seem to have math phobia . I believe that math is going to come science so it is essential that we have a strong math curriculum for kids growing up. The you can make it fun you can make it fun. You can have fantasies ports which is fantasy sports, which is all math. Everything is a math problem whether you are trying to win a basketball game, cure cancer. I am absolutely fascinated a leader in the nba, and owner of the Sacramento Kings. The math people say that america is a jockocracy. Jocks people say that math is going to get me nowhere but you are one of the few true the bridges this gap. Wewe are living in a time generate 10 times as much data in the last couple years is as existed in the history of mankind. If you can find the patterns, math is essential. Their essential for those who value your company as well. You say you feel your company has been undervalued and the rest also discussion about who would take out tibco. Hewlettpackard, ibm it seems like ibm buys the Company Every eight hours. What kind of business would take out tibco and give it proper evaluation . Is acant say, but tibco valuable franchise with leaders and integration and big data. 2 of the top three priorities for most companies right now. It is viewed as a Viable Company by other giants. Autumn 2014, every buddy is in to the cloud. Have people who have no idea of the cloud, how do you respond . A lot of ideas will be put into the cloud but caps on everything perhaps not every. Some things by government regulation are required to be on premise and we provide integration so all that works together. Is the cloud any different than big data . I were are we going to have overinvestment in the cloud . Just like any other bubble you go through these cycles. The latest buzzword becomes the next big thing. The cloud is very much here to stay. The way people consume technology is cloudbased services. How do you responded to the idea that all the computer jobs go to asia and india . Is that true . A lot the jobs do go to asia, but typically they are lower on the value chain. Most of the innovation is still happening in silicon valley. It is a winwin situation. It is not a wom it is not a winlose. Vivek ranadive with us as well. Lets get you a data check right now. Not a lot of Economic Data on the calendar this morning. Homebuilder confidence index, and industry index forwardlooking, right . But it doesnt move the market all that much. Nevertheless, futures higher, adding to the gains since the minute we walked it. Futures up almost 11 points. Euro is weaker versus the dollar. This is bloomberg surveillance. We are on Bloomberg Television, bloomberg radio, and streaming on your tablet and phone. I am adam johnson, with tom keene and scarlet fu. Our guest for the hour is Vivek Ranadive, ceo of tibco and dont forget, owner of the Sacramento Kings as well. We want to get an update on iraq. Kurds retaking most of mosul dam from militants. Give us the latest with the dam. What if you heard, what if these seem . What have you heard, what have you seen . Overnight there were a strict by u. S. Military bombers, trying to support the Kurdish Peshmerga forces who have been pushing to the west. Those airstrikes seem to driven off the Islamic State fighters. Iraqi state television says they have full control of the dam. However, some local Authorities Say that is not quite the case just yet. Ive been watching live video from local kurdish television and there are still huge columns of smoke from the far side of the dam from where they were filming. Fighting still seems to be taking place in some parts. A key piece of infrastructure. Tell us what this means for the oil business in kurdistan. It is very interesting. You would think with all of this violence that there would be significant problems and there are Major Companies who have been taking their staff out of the kurdistan region that traditionally have been a lot safer than other parts of iraq. But analysts are saying that this is a good time to buy some operators. Aller se are very, very operators used to operating in these kinds of environments. They have been telling me that they are continuing with operations. Iraq on average in july pumping out 3 Million Barrels and only about a quarter of that comes from the kurdish region. Much of it is in the south, much safer. Ofwe have so many images people being assaulted and beheadings, etc. And yet it almost strangely seems as though for the infrastructure it is business as usual. What about for International Companies and people trying to operate just day to day in iraq . Well, the companies ive been speaking to cooperate here have been taking out nonessential personnel, but most businesses ive spoken to on the phone said that we are continuing as well as we can and there are some on the front lines a few miles away fighters are and they are trying to construct a refinery. For a lot of business is year, it is business as usual, just with nonessential personnel pulled out. Ground inmarx on the iraq in erbil. Did i say that correctly . Ive heard about three different pronunciations. I want to bring in my must read, because it ties together what were seeing in iraq and what the white house is doing about the international fires around the world. It is from financial times. Obama and his dont do stupid stuff motif. Oh, right. Was that Hillary Clinton who said dont do stupid stuff was quote in the atlantic was quot he is referring to the fact out the president iced late Richard Holbrook and did not include battle hardened erans into the mets. Veterans and diplomats. John kerry is visiting these different hotspots but how much can one person get that . , our diplomacyve with india mr. Modi visiting nepal in his first visit. Described indias nascent diplomacy. The Indian Community over here as well is all indians are. Xcited about modi right now the indians are looking to how the United States reacts to modi and it is wellknown that he did not have a visa to travel here before. Throwing out the welcome mat for him is youd as extremely important by indians for now. I would suggest that many cultures come you dont do this by telephone or technology. Which is why secretary kerry has been traveling. May be too much for one person. Governor, missouris enlists the help of a National Guard to quell the violence in ferguson. The most violent night so far in missouri. That brings us to our twitter question of the day. Good morning, everyone. Bloomberg surveillance. Coming up at 8 00 a. M. This hour, dr. Ezekiel emanuel, one of the great mentors of the Affordable Care act. 8 00 a. M. This morning on Bloomberg Television. Good monday morning. Advancing 10. 30, futures over the last two or three hours. Scarlet had one of the breaking stories of the morning. General, dollar tree we need to get some sympathy and clarity here. Cut to the greedy chase. Will there be another offer . I would think there is more capacity to raise the offer. I would think that there would be a higher bid. I think that these 2 could get into it a little bit. I am looking at Family Dollar and Dollar General. Shares of move shows a moving high in the premarket. What does that tell you, that the acquirer in the target are both gaining . I think people wanted to see Dollar General get into this deal and there is a lot more overlap between the 2 companies, more synergies to be had and buying power. It is a more attractive deal for the Family Dollar guys as well as more prescient from the acquirer standpoint. Can you help us understand the appeal of Family Dollar . Showonsensus forecasts earnings contraction of 19 this year. I think the appeal is that you can take a business that has been suffering and lower margins lower profitability, i should say than the others could especially when there is such a similarity with Dollar General and they have similar stories and they know how to run the business and do it effectively, much better operator, they should be able to make that work and get more profitability, greater longterm probability for shareholders. It is the kind of deal where they bring in the dollar and four cents on the dollar, actually been doing three cents. We all live in an amazon world. As the chairman and ceo of Home ShoppingVivek Ranadive with us, who does Computer Systems for the likes it is right up your alley, isnt it . It is, and retail is nothing more than a social networktype and this is the real threat that all these companies have. There it is across any number of businesses. Joe feldman come and thank you for perspective. I love what he said more deals. More breaksclusives. Something we will keep an i on. We are keeping an eye on our agenda. Investors are piling into risky investments. We are talking about high yield debt. This is bloomberg surveillance. We are on Bloomberg Television, bloomberg radio, streaming on your tablet and smart phone and bloomberg. Com. Tom, adam, and i will be right back. Good morning, it everyone. Bloomberg surveillance. Tomorrow, he has been in the market but measured in the market and we will the measure his belief in the market. Television and radio tomorrow, 7 00 a. M. On bloomberg surveillance. Still a believer. This is bloomberg surveillance. I am scarlet fu along with tom keene and adam johnson. Our guest this hour, Vivek Ranadive, ceo of tibco and owner of the Sacramento Kings festival team. European authors taking a page from american counterparts. More than 1000 riders from germany, austria, and switzerland are taking aim at amazon, saying that the retail giant is lying to customers about the availability of books. Shares of nintendo surging after its new mario kart 8 videogame past one Million Units in u. S. Sales. Its Pokemon Trading Card game will become an ipad app. And softbank plans to sell bonds for the first time. The move comes after the japanese wireless carrier up and talks to merge sprint with abandoned the talks to merge sprint with tmobile. Companythis mornings news from the files of bloomberg west. You remembered nanotechnology. Small stuff. It was all the rage 10 to the minus nine a few years back. Now it is big data. Yes Vivek Ranadive, founder and chief executive officer of tibco. He knows that your llb needs saaf. That enough jargon for you . What is needed is fast data, and it is something that bloomberg lives every single day allsop you need those two seconds beforehand versus the big data after the fact. Many of the 20th Century Companies would have you believe that big data equals big database. Those companies tell you that you have lost the customer or that you have a power outage. With fast data, we prevent the customer from walking out the door. We want to make the customer the offer before he leaves. If i am on Delta Airlines and you represent Delta Airlines is one of your customers, what do you sell that Delta Air Lines on fast data . If there is a weather delay, with slow data what would happen is that the entire airline value chain will be disrupted. I look at a large starbucks, three cups of coffee what about cinnabon . Everythinghey know that is happening in realtime and can combine that with Historical Information and they can give you something to make you happy even before you have a chance to become unhappy. Does that mean they will try to sell me something, or will they give me an article that i might find interesting and want to read . It could be information, it could be the perishable inventory. If you sit at one of my games and you tweet that you had cold pizza, i picked that up. The headstockste conduct of the parking, we give that to you and you are happy before you become unhappy. Talking about hewlettpackard and ibm and getting this discussion started about the future of tibco, why is big tech so cheap . The nonsocial media type company. Why is it so inexpensively priced . I think that is not something that should be the case. I think there is a lot of friends the right now are rampant a lot of frenzy right now about companies that lose largest sums of money. They have good cash flow but dont seem to be viewed as the sexy investments. But i do believe that there is an argument to be made that many of the older companies will get replaced. So there is some justification for that line of thinking. A lot of activist investors have looked at the zoltek companies, think at these old tech companys and thinking there is opportunity there. One said it wanted to actively engage tibcos board in dialogue. Can you give us an update on that . Not really. If you have a Profitable Company that is basically well run, you can be a target of activists. If you lose large amounts of money and has racy multiple crazy multiples, there is nothing that activists can do. It is august. People are getting smarter. You are a scholar at the Harvard Business school. That is the lebron james this was after m. I. T. Of mba. Ebron james what should people study as the curriculum . We looked at 50 gigabytes of than generated in the tightest of the nba, just for the Sacramento Kings. Best of all to me is a big data problem. When i coached my daughters basketball team, i converted it to a mass equation. Mass equation. Should lebron have gone to sacramento . [laughter] how do you take those 30 gigabytes of data to make my experience better watching the games . We pick up everything they put out. We can give you an experienced that is actually customized to you. We know what your likes and dislikes if i tweet i am with my best bud and we are at bump bump bu mp, that gets stored . If you say you have cold pizza or are with you are bud, we can take the sentiment and can at what kinds of things convert action into intention. I dont know if i should be scared or think this is really cool. Literally i am putting all this out there on social media but you are using a little too late if you are putting in out. It is if you opt in. If you opt in you get the cool stuff. At theas grand marshal india gate parade yesterday in new york city. That is why he is in town. A lot of fun . It was a blast. 150,000 people there. Oh, my gosh. One parade . They had madison avenue shutdown and it was a huge honor to be part of it. Tom, why dont you get us started . Shocking to see the series of misinformation and true information out on twitter this morning with News Agencies catching up and culminating three hours ago with the National Guard being called in by the governor of missouri. This is going to be an incredibly important 24 hours for america. All i can say is that it harkens back to 1963, which i remember vividly as a child. We didnt have the media we have today with social media back then. I really thought about that, around 3 00 a. M. This morning. This is going to be an important 24 hours. We asked everyone, what is the solution in ferguson, missouri . Longterm, shortterm, give us a solution. Here are some answers. Are,ght now i think they what forgive me if i get this 3, 4, five black Police Officers on the police force come in a town that is 70 Washington Post had a superb chart on that. They have a long way to go. I dont know. I mean, he should speak about it, absolutely and he has, from his vacation in marthas vineyard. The president was criticized for commenting so specifically on trayvon martin. Thank you, vivek. Yes. Maybe that is why he is holding back. My agenda, we learn that the flew 14ry food 14 sorties over iraq and helped kurdish rebels recaptured the critical dam. I am watching iraq, socially speaking with the secretary of the air force. We will continue to monitor that one could large institutions swooping in and getting high yield debt. There is a lot of concern that this part of the market is overheated and geopolitical concerns could feel a rush into safe haven assets. Vivek, thank you so much. Thank you. Tibco and the sacramento teens as well. Sacramento kings revalued on with other nba teams. In the loop with matt miller this morning is up next. Have a great day. Good morning. We are alive from bloomberg World Headquarters in midtown manhattan. You are in the loop. I am matt miller. Startingampacked show, with the worlds most exotic and expensive automobiles all gathered in pebble beach over the weekend with sales this year coming to a record 350 Million Dollars in just six days. I will bring you the highlights. House that auction for the for ari ferrari a record 38 million. We will hear what they did yesterday and last nights option. First, look at the top headlines. Another shot has been fired in the takeover for Family Dollar. Dollar general is made an offer higher than the one made by dollar tree last month, about 9. 7 billion in total. Kurdish forces have finally recaptured iraqs largest dam from Islamic State militants, better known as isis. President obama has widened the scope of airstrikes against those rubbles