Phil mattingly reports on Central American leaders white house meeting with president migrants at the usmexico border. We look at new products from starbucks. And if we follow gaza and ukraine. The death of alan is greenberg. He was ceo when bear stearns collapsed ring the 2008 financial crisis. He died today of cancer, here in new york city, at the age of 86. Heres what greenberg explained what he thinks happened in an interview from 2008. It became an avalanche of people. It fed on itself. Im not saying anyone started a malicious rumor to put us out of business. Im not going down that road all. I dont know. Cani know is that a rumor start, and again turned into itself filling prophecy. Thats certainly what it did with us. It almost did with merrill lynch. It almost did with Morgan Stanley and goldman sachs. Cohen. S bring in bill his book house of cards, chronicled the fall of bear stearns. He joins us via skype. Ms. Do greenberg believe that bears collapse was due to the fact that the company was highly leveraged. How responsible was he leading letting the firm build up some much leverage . On this relatively solid day for wall street, t y for having me on. Thank you for having me on. Alan swarts was actually the ceo of bare when it collapsed. Ceo heeplaced as just gave that up in december 2007, before Alan Schwartz came. All of these wall street firms had too much leverage. Bears case, at times they were leverage 50 to one. That meant a 2 decline would why got there at 20 wipe out their equity. Thats what happened in march of 2008, when the Mortgage Backed securities they had built up on their Balance Sheet became worth a lot less than they thought they were. That correction unit at the beginning, and that misstep that i made, is that something that mr. Greenberg was concerned about . Because he was so closely linked with the firm, that people thought he was in charge when that happened. Definitely for our generation, he definitely was the embodiments of bear stearns. He was a roughandtumble. Nononsense. He had a way of conducting himself how much it was very much the way that bear stearns constructed itself conducted itself in the market place. Jimmy kane had this lovehate relationship with ace. It very much about that as well. Very much embodied that as well. You wrote about how the bear stearns cancer had metastasized and spread throughout the world. What were the warning signs that could have prevented that . When the two bear stearns hedge funds began to collapse coming february, march, april of 2007 that was a clear warning sign. I believe that was the canary in the coal mine of this whole process. That is when people shouldve realized what was happening. Those two bear stearns hedge funds they were chockfull of debt obligations. That became literally the cancer that spread around the world. Metastasized because wall street packaged up these securities and sold them off as investments all around the world. When they lost value, that hurt investors all around the world. Used aso were collateral for shortterm financing for these wall street firms. When they lost their value, though shortterm financing markets ran from financing the securities. That was what bear stearns had a face at the end. That was the only way to get financing. What is greenbergs legacy . How do you want people to her member him how did he want people to remember him . Those guysst one of who was absolutely a legend. He and others helped make bear stearns a wall street powerhouse. For maybe 40 or 50 years. Incredible role in that. He helped bring the firm into being a trading firm. He helped again to have the firms taking all kind of risk. He was very careful about his risktaking. Hes just a legend on wall street. His passing is a real moment to note. Im glad you noticed it. Bill joining us via skype from nantucket. Bill,always a pleasure always a pleasure. Consideringamas are a temporary ceasefire offer, brokered by john kerry. In the meantime, the fighting continues. Peter cook is following the latest. Mark, the weight is on right now to see if israel and hamas might accept the terms that secretary of state john kerry proposed. It would extend through next weeks islamic holiday, potentially offsetting any day conflict that has killed many. The truce deal under discussion include a proposal for israel to remain in gaza, to continuous instruction of those crossborder tunnels, while hamas would be able to negotiate with egypt on new arrangement to ease the economic arcade of the gaza strip. Working theen phones, talking to everyone in the region in the last few hours. Key Details Remain very much in play today. Both sides expressing reservation. The white house says it is hopeful that something can be agreed to. In the meantime, the violence continues. It has built over to the west bank. Palestinians have biggest protests overnight. They are expected to hold a News Conference later on today with an update on exactly where things stand. We could learn at that point whether john kerry will be headed back to washington emptyhanded, or perhaps, with a ceasefire in hand. What about the other major hotspot ukraine . Things are as living there as well. Tensions between russia and ukraine are growing. Both sides now accusing the other of crossborder shelling. The United States is weighing in on all this as well. Baker hughes rush of sending even heavier weapons to the separatists in eastern ukraine. The u. S. Ambassador to nato saying the u. S. Believes there are 15,000 Russian Troops on the ukrainian border, up from about 10,000 previously. Thats as Ukrainian Government troops gain ground in eastern ukraine. Its only serving to raise tensions here. The possibility of direct russian involvement has been talked about a lot, and now these accusations are certainly escalating tensions. They are raising questions about what is going to move forward. Whether this crisis will get worse before it gets better. The European Union is stepping up sanctions, agreeing to consider stronger moves against russia. Specifically, we are being told they include the possibility of abandonment of the purchase of state russian bank debt. As well as moves against the energy sector, perhaps an arms embargo as well. Peter cook, thank you. Ed royce is chairman of the House Foreign Affairs committee. Earlier today, he spoke to bloombergs al hunt about the evolving situation in the gaza strip. That ceasefire holds. Thats the only thing i see right now. We have to work with every party to try to get that ceasefire hold. There is one of the thing we should point out the only reason they are able to fire these longerrange rockets, that they are firing at tel aviv and jerusalem, is because those rockets were provided by iran. The host of political capital, joins me now from washington. The unease in the middle east continues. Secretary of state terri is expected to call for a ceasefire. The most interesting thing the chairman of the Foreign AffairsCommittee Said is that wooten has declared war. Vladimir putin has declared war. He has gone a step further. No one anticipated he would do that. He now thinks the notion of much tougher sectorial sanctions, energy, military, banking that the europeans are much more likely to go along now. We thought they would be tagging their feet dragging their feet. Said president obama has a chance use drones on isil in iraq. Is that still on the table . He things they shouldve use drones three or four months ago, d the van says that isis was making. It is under serious consideration. Lets move to iran. The chairman doesnt want an extension on time for ron in the United States iran and the United States to reach a nuclear agreement. Ayatollah isthe playing games. He is skeptical this will produce anything. He says he will hold off on pushing any new sanctions until there is an agreement, or the agreement falls through later this year. Al, also strong words from the chairman about ukraine. The interview, he is not a fan of russian president Vladimir Putin. What does he have to say . Putinsaid that vladimir had basically declared war. He thinks we have to assist the Ukrainian Government more. We need to supply gas to them. The energy is going to be cut off. He is worried about ukraine. He just got back from their couple of weeks ago. He thinks the United States has to act quickly. Bloombergs al hunt joining us from washington. You can see al hunts full interview with ed royce on political capital, tonight at 9 00 p. M. Washington time. Russia raises rates for the third time this year. They will take a look at how their central bank is trying to hold down inflation and stop capital from leaving the country. Bottom line on Bloomberg Television comes back in just a moment. Here is mr. Cheney us on the china credit bubble. Data roblem is that and we take it with a large grain of salt, the data shows that the credit spigot is just completely wide open. That more and more credit is going to support less and less growth. The ground,el on put a building or bridge, that counts as gdp. The problem with that model list when you finish building it, you have to put up another one. Is not based on ongoing consumption. This reform, that the chinese optimists felt was coming for years ago, still is elusive. Rose onan watch charlie Bloomberg Television tonight at 8 00 and 10 00 p. M. And excitedly raise costs for the third time this year as wide sanctions threatened to squeeze its economy. He specializes in european and eurasian security. He joins me from washington. Chris, welcome back to bottom line. It is good to see you. Thanks very much. Will these actions be enough to ward off inflation, and will it be enough to stop the hemorrhaging of l flows . I think it is soon to know for sure. We will have to see how things play out over the course of the next couple of weeks and days. We dont know for sure what will happen with the european sanctions. We have new newsletter brussels today. We are at this tragic loss of life there. Is impactingw that how europeans assess the situation . Is having a much bigger impact than some of us thought earlier in the week, when it look like it was likely that european capitals would kick the can further down the road, and not go through with any new sanctions. It may be that sanctions that have been on the table in brussels arent everything we may have hoped for. But they do go a lot further than some of us initially thought. The bigger picture, this tragic loss of human life and civilian life is really forcing european leaders and the European Public to reassess what the implications of what happens in ukraine are for their own security. A lot of people felt what was happening in ukraine was a long ways off. It didnt really pose any Serious Problems for europe. , with the downing of mh 17, has forced a rethink of that. Of how sense do you get the European Community and International Community is viewing the reaction or nonreaction from russia president Vladimir Putin . I think it is a key factor. The loss of civilian life is the biggest factor. But the fact that Vladimir Putin has appeared to be so entrenched home that hammering this is a war that he has been instigating. There has been a lot more tension over the course of the last week, through the arms shipments he has been given to the rebels. It is making it clear that he is the guilty party, no matter what he says. We could be beginning to see a very significant change. Of possible new eu sanctions on russia is trade in the countries defense sector. What effect with no sanctions have on russias defense give ability, and would france be on board, given that it has a 1. 5 billion warship deal with russia . Sale of that warship is one of the big sticking points in any sanctions that europe could impose. My view is that it is going to be extremely difficult for the french not to go ahead with this contract, which has been in the works for several years now. The Economic Loss of significant. They argue that there are big legal ramifications that they will have a hard time getting around. It will have a loss of jobs. They are in a tight spot. Most french leaders that i have spoken with indicate they wish it was otherwise. It will be very hard to not go ahead with that sale. Start rolling across the border, that could change. I dont think that will happen. This will be a big point of tension between europe and the United States and france going forward. The International Isolation of russias largest corporations has gotten worse, following the crash of the Malaysian Airlines jet on the 17th of the month. Fromtors are pulling money russias stock market. Growth is plummeting. How much longer can russia afford to be shunned by the Global Business community . Degree, you have the damage that is being done by the sanctions themselves. But of course, more significant the that, arguably, are knockout effects. Expectations about what thereve you dollar future looks like. Thats one of the most important factors here. Russia could go on its a question of whether or not it wants to. Thats the idea behind using the sanctions to try and bring about a change in russias policy. We have about a minute left. His whole controversy between russia and ukraine has been going back since march. One of the areas that russia has drawn a line in the sand ukraine and that talk of perhaps ukraine seeking nato membership. Why is this such a nonstarter for russia . Well, russian officials have imed that her many years for many years, going back to the cold war, that any enlargement of nato to russias borders it would view as a major threat to national security. Whether or not we think they actually think that is a separate question. They are i do like to do. Chris is a senior correspondence with the rand corporation. Joins us from washington, a was a pleasure to have you. Always a pleasure to have you. Tracking you down day on the markets, and the story later on online. Not only did starbucks post strong thirdquarter earnings, the coffee giant is brewing exciting new offerings that could change your morning routine for the better. I will have the details when bottom line returns. We are waiting for secretary of state john kerry and ban kimoon to hold a News Conference in cairo. They are set to discuss the situation in gaza. We will be monitoring this for headlines come and bring them to you as they break. You can watch that on our live events channel at bloomberg. Com. Past thes six minutes hour, that means we are on the markets. Its 26ie minutes after the hour, which means bloomberg is on the markets. Heres julie hyman. We do have declines in the week. The s p 500 closed yesterday at a record, but today it is lower after disappointing earnings and Economic Data in terms of durable goods. Amazon is probably the biggest drags. The Worlds Largest online retailer missed estimates for the Second Quarter in a row. Jeff bezos has been outspending the companys revenue, causing a net loss of 126 million. He has been investing towards cloud computing, warehousing, gadgets, and a lot of different areas. That smartphone to chart did start shipping today. Pandora is in the red. They announced user growth that missed estimates, raising concerns that they are stagnating as competition increases. We will be back on the markets in 30 minutes. More bottom line. Bottom line welcome back to the second halfhour of. Bottom line. Im mark crumpton. Starbucks reported under the strong Quarterly Report and offered a sneak ticket to come in profits and products. Yang yang is with us outside of a starbucks store in washington. Strong earnings that the shares are falling. Despite what Ceo Howard Schultz called an outstanding third quarter, the stock price is falling right now amid concerns that for a host of reasons, profits will be going down, going forward. To many new stores, investment in products as well as technology. Ron earnings, which i want to go to weekly. Of 513uarter net income million dollars, a 23 gain from the euro go quarter, earnings per share, . 67, beating estimates by one cent. Growthsamestore sales came in at six percent, for an impressive 18th consecutive quarter of growth more than five percent. Food happened to be the big driver here, two percent of that, sales growth in the u. S. , so they are optimistic and increased its Current Quarter guidance for earnings per share, increasing that by two cents. As copy prices rise, that is a concern that analyst have, perhaps why estimates have been lower. Starbucks dated the sure read Asset Investors that they locked into two percent of their crop prices for next year, so they think they have a leg up on investors. Strong earnings report, a lot of exciting things on the horizon, but as you know, the stock of the price is falling. What else does starbucks say we can expect to come down the pipeline . Has been very successful, so some new food offerings coming down the line, especially at the lunch hour, more 24hour locations, expansion of its partnership with his knee, but perhaps the most exciting thing is you can expect later this year for starbucks to test a mobile ordering app. They have a successful Digital Payment app. In the future you might be able to order your copy and have it ready for you when you get in in the morning. Certainly would shorten peoples commute times and would be a game changer if it succeeds. Thank you. The u. S. Treasury wants to make repayments