than buyback shares. about 144thhutting in america. second quarter profits -- it also cut its full-year forecast. the shooting of michael brown. 47 people were arrested overnight. holderl comes as eric makes his way to ferguson today to invest it -- investigate the shooting. says he has his work cut out for him, saying the vigorous prosecution must now be pursued here it the democratically elected prosecutor and the attorney general of the united states each have a job to do. peter cook has been following this story very closely. what is it eric holder needs to do right now? >> he needs to head to ferguson and reassure that community the federal government is conducting its own, separate independent investigation of the shooting of michael brown. he needs to reassure the community of that. he needs to meet with community leaders and talk to fbi officials who have been on the interviews andg investigation for the justice department. they are looking specifically for whether michael brown's civil rights were violated. he has to walk a fine line because he cannot appear to takes eyes on this just like the president. he has to appear he has not conducted a rush to judgment, if you will. he paved his way for a visit with an op-ed. he says, at a time where people -- have confidence to do more to bolster confidence within the community. this is an issue with eric holder and the president. there needs to be an effort to restore confidence in the african-american community that these kinds of shootings are not happening all over the country and becoming more common. >> if you are the parent of a black teenager, you have got a lot of concerns right now and a lot of fierce. we aren fact true that seeing more unarmed black men being killed by police in this county and country these days? >> the honest answer is we don't really know. the reason is there are not national statistics to make the case one way or the other definitively. we have a wealth of information from the justice department on murders and burglaries, but no national database. you have got individual policeties that release shooting numbers each year, but nothing national. let me walk through some of what we have learned from the fbi, but it is a partial pitcher. they reviewed fbi numbers and the paper found on average, law enforcement officers killed 400 people per year. roughly one fourth of those, 18% of those killed, like michael brown, under the age of 21. this is an incomplete picture. only one third of the law enforcement agency provide that information to the fbi. we really do not know for sure what is happening with these numbers. >> thank you very much for the update. target's second quarter earnings results. short of estimates. full-yearing its earnings view and is forecasting next quarter will not be as strong as estimates. it has lost more than $4 billion since its first international expansion into canada last year. shelby holliday is here with the details on this. shelby, this is a company that struggled a lot here at a lot of retailers have, but target especially as a result of the security breach we saw around christmas time. talk to me about canada. what is the problem there and can it turn around? life that is the big question. from the beginning, it has been a mess for target. from the time target rolled out up north, there were empty shelves. it is all over social media. high prices. target customers were familiar with american prices and then saw the israeli prices. promising or said it could turn things around. improvingy announced is admitting you have one. , ithey can come in and prove can buy this on amazon or walmart for this price, target said it would match the price. >> you need economic fundamentals to support you. you need people out there shopping for your product. we have seen other retailers in canada struggling as well. what makes target think it could be different here? very difficult, as we have seen with retailers. norstrom is really struggling. people were thinking target might pull the plug, but it looks like they are really trying to pull things around. if you read about walmart's entry into canada, while ago, they came in as the american invader and they have turned things around and boosted their reputation. they are doing much better. target might be looking to walmart to see if they can do that. the problem is walmart's canadian businesses largely based on groceries and target is stocked goods. no one knows if canadians will go to target to buy those items. >> thank you. a lot of questions right now surrounding employee wages. janet yellen is on the way to jackson hole where she and monetary policy leaders will meet this week. both on the monetary and fiscal policy side that these government officials are confronting is the issue of income inequality. can an increased minimum wage actually fix that? believes it can. he is fishing to raise the minimum wage. you say you think you can $6 billion a year in new wages, that you could give a million workers an extra $100 a week. how will that work? >> it will work assembly. there is a high cost of living in new york city compared to the rest of the state. it does not make sense to simply statewideminimum wage without doing something special in new york city because we need to make the extra money work for people and their families, but also to drive the economy in so many of our neighborhoods that need to have an infusion of dollars to create an economic activity. >> this would be the required wage for every employer to pay in the new york state. >> every study we have seen show that when the minimum wage is raised, it does not hurt business. it helps small business because there is more money to spend in local stores, drug stores, grocery stores. that is what we want to do. we want to make sure we can make takeeople pay the rent and care of children. >> a lot of people that would have been in the minimum wage category do not have worked. -- work. employmentecline in among these part-time workers working in that minimum wage sphere. how do you balance these two? on the one hand, people have more money, on the other hand, you may not have as many jobs. >> especially for fast food and low-wage workers, it makes no sense to work a full-time job at a fast food restaurant and then to find out you still need to go on food stamp, that you cannot provide for your family, you cannot put close and provide for your children. we have a discussion about how we lift people up and lift people to the middle-class. we have gotten away from that. >> what are the unintended consequences in doing that? shouldn't the market have a hand in determining what wages are? in other words, maybe you will not go to work in new york city at a fast food joint if they will not pay you better. maybe there is a supply and demand for the actual labor force also working. createo need to partnerships with private industry. you cannot only dictate to companies. let's put our cards on the table. we have a lot of people struggling in our state and around the country, languishing in these jobs with no benefits, no safety net, no retirement security. it is appropriate to have a conversation about that. what is the solution? we have got to get our kids ready for the economy because that is going to be the next way people move into the middle-class. generations ago, people relied on manufacturing jobs. today, it is highly educated jobs. for allso make a play of our kids opportunities. that you run the risk people will charge more for the goods? we know everything is pretty expensive in new york city as it is. but if you require that employers pay a certain amount are those people getting paid $30 an hour going to get higher prices? not do something to raise the wage, to help people get to the next rung on the economic ladder, we will be in serious trouble. we will create a city for the very rich with no opportunity to get in the middle. we have to recognize we have to be good to our small businesses, but there is a lot we can do all on the way to get this right thomas and to throw up our hands and say we need to keep the wages down, that is an antiquated argument that will drive the economy in a different direction. have been to these neighborhoods and i have talked to small business owners. people want to work but they want to get paid a reasonable wage. as minimum wage is a big platform of yours and diversity as well. look at these s&p 500 companies. 5000 corporate board seats. women, 17% of those board seats. unacceptable. four percent of women run these companies. someone much wittier than i said, we cannot just have mail, pale, and stale. i do not think i am stale, but a company of ours is getting more diverse, and it makes sense we create companies that have more diversity. likestrengthens people myself who have to make decisions to invest in corporations. we want to make sure companies what thesereflect companies will look like tomorrow. >> stick with me. we will have more. ♪ but first, moving and shaking this hour. the national football league commissioner has a new take on the old idea of pay to play. telling music asked, if you want theerform at halftime at super bowl, you will have to pay us. perry,tes, katy coldplay, but they are not so thrilled to pay to play. year, the super bowl halftime show drew 115 million viewers. that is more than the game itself. coming up, using big data for big-city problems. .ontroller scott stringer and, one of president obama's former top clinical advisors is taking on a different campaign. david is joining the uber ranks. i will hear from him and uber's ceo coming up next. ♪ as >> a must watch interview this morning. all right will be interviewed by our bloomberg managing editor. that'll be at 10:00 a.m. eastern today. you do not want to miss it. you're watching "in the loop" live on bloomberg television. using data to save money and solve problems. that is the problem -- the promise of a new initiative by scott stringer. the city sets aside more cash each year to said -- settle its legal claims. he says claim stacks can cut the number by identifying payout patterns in troubled firm agencies and neighborhoods. scott is that with me here on set now. explain to me how this works. >> what we are trying to do is figure out ways to reduce claims around the city. we are paying out hundreds of millions of dollars for claims when we really should looking -- should be looking at how to change a rule within an agency to stop getting sued. we have come up with a claim isp assess to find out what going on in local agencies. fromf our claims come people who allege police misconduct or other such things. we have to look and find out how to change procedures so we are not paying out all this money. >> how does big data help? >> we have to figure out how to prevent bad things from happening. when you think about what is happening in our jails right now in new york city, what is happening within our different neighborhoods, police brutality, look what is happening around the country. our data can help prevent bad things from happening if we use it correctly. >> are we not looking in any way at this data to try to categorize it as, this is happening here and this is happening there? in the newit now york city comptroller's office. my job is to settle claims that come through my office. we cannot look at it holistically. we have to drill down and analyze data, analyze claims so inventive that procedure, reduce the claims in the city. if i can reduce claims by 10%, we have more money to hire police officers, more money to help children. this is very important in a tight budget era. of claims have you witnessed when it comes to these claims? >> today, it is reported in the new york times, we were able to identify claims against the corrections department among inmates in solitary confinement and other such places. it has shot up an astounding 36%. that is something we should be concerned about because we do not want to see injustice happen within our prison system. we also do not want to have to pay out hundreds of millions of dollars because of alleged mistreatment in prisons. this is a way of analyzing what is happening in different jails. it is very significant not just for new york city. i would argue claims set should be a model throughout the country. a year ago the commissioner started -- where police were able to drill down and see what was happening. now, claims stat can fix the problems. otherims stats or programs like this. >> absolutely. it is not just the correctional departments. sanitation department, the department of d.o.t.. all of these agencies get sued by individuals -- >> is there a resistance at all to some of this technology and the use of big data in governments? ispoke to gavin, who said it a big deal to get the police department on e-mail in san francisco. try to incorporate technology like this, what is the response? >> no administration wants to have a city controller looking over their shoulder. at the end of the day, i believe administrations will look at this data and it will inform them as to how their agency should be more efficient, more transparent, because that is the future for cities all over america and you have to think about that. >> thank you very much. coming up, the u.s. is launching more airstrikes against islamic militants in iraq. now there are talks of expanding them. we will be going live to iraq later in the show. meanwhile at walgreens, they did the math and that led to a high-level shakeup earlier this month. we will get the details on that next. ♪ >> you are watching "in the loop" live on bloomberg television. i am trish regan. here is a look at our top stories. argentina's president will sidestep a u.s. court ruling on these disputed bond payments. argentina will pay its holders currency bonds locally. the u.s. judge locked argentina last month. resolve unpaid debt from its 2001 default. a shakeup at walgreens was caused by a billion-dollar forecasting era -- error. the wall street journal said in july, walgreen cut the forecast by $4 billion. the cfo and the pharmacy were out the door. the fashionwner for trade magazine, women's wear daily, it is being bought. , $100 million. 26 minutes past the hour, which means bloomberg television's is on the market for you. earnings on the retail side, we will have more again coming up in 30 minutes. i want to get to the turmoil we have been watching overseas in iraq. islamic state militants released a video showing the execution of a man they claimed has kidnapped a u.s. journalist. to rescue another american citizen if the u.s. continues airstrikes. for more on the situation in iraq, i am joined by phil mattingly here on set. the u.s. has been expanding its presence in terms of airstrikes in iraq. the this affect anything u.s. decides to do over the next several days and weeks? and if anything, we will have the opposite effect. we have not heard from president obama yet. we had a statement from the white house yesterday saying they were trying to confirm if this video was authentic. intelligence community is in the same boat right now, but it is really sure this is the real deal. that is something you have to expect you will hear from the president at some point soon want this is officially confirmed. if you go by what happened in 2003 and 2004 in iraq where beheadings became an issue as back i thewas a push almosttration, strengthening their resolve, more or less. >> what do we know about james foley? >> we know he was a front-line photographer. the academy of the guy that told us all of the stories most of us are too afraid to go find. he was more or less a freelancer. he had been taken captive in libya at one point by pro-gaddafi forces. his family has been very active on facebook, trying to raise money and try to figure out some .ind of way to get him back on their facebook page, his mom put out a statement last night. these are the type of journalists in danger every day and tell people the stories they would not get every -- would not get otherwise. >> there is another american journalist said to be held captive, and that is the second person they are threatening to behead? -- correct. they believe it is scott -- he was in a similar orange jumpsuit. this also underscores there are a number of journalists missing in syria. internationally, there are a half-dozen to a dozen. concern on the u.s. official with scott being next, but a number of journalists have been detained and this is something we could see more and more. >> it sort of speaks to how barbaric this can be. >> over the last few months, you have heard the attorney general eric holder trying to hammer home the idea this group is a very foreign threat. groups are going over to serious training and fighting and having the ability to get back. the u.s. has not paid much attention to whether or not there is an international threat here. this underscore is there is a real threat out here, one the law enforcement and intel community happened hang close attention to four months. >> thank you. the fighting in iraq has driven hundreds of thousands away from their homes, leaving entire villages empty. bill went to one of the ghost towns to see what the refugees are leaving behind. hasmerican bombing campaign killed dozens of islamic fighters in recent days. is at an end.ance but for many hundreds of thousands facing a new beginning as refugees, the airstrikes may have come too late. plan,ear the [indiscernible] >> a 25-year-old was one of a handful to return to his home this week. is a local english teacher and though all his pupils have long finish -- long since fled, he came back. >> they don't care about anything. cows, sheets. maybe the end of the village. >> a month ago, this village was a thriving immunity. today, it is like a ghost town. about 100 men left here, all of them armed with flash rifles. the islamic state is 10 miles down the road. those who remain here face a frightening reality. , now almostsince entirely empty. forces now control the dam several miles west. islamic state fighters still hold positions just to the south. [indiscernible] >> this is all you have against islamic states? nothing else? is it enough question mark >> yes, it is enough. culture that survived hundreds if not thousands of years has not been until recently a rarity for islamic leadership. >> they do not help. [indiscernible] abandonedhose who villages like this, many are asking, will they themselves ever come here again either? >> part memoir, part policy platform. one of the rising stars of the republican party, paul ryan, just came out with a book. we will talk with him in the 10:00 hour. we have a preview with mark next. ♪ >> he is one of the most prominent voices in the republican party and maybe even a future presidential nominee. tol ryan is on a crusade shape the direction of his party and the country. in a new book, he is making the case to reform federal poverty to overhaul the tax code. in an interview coming up at 10:00 a.m. eastern, mark halperin and john will be speaking to congressman ryan about his plans. mark joins me right now with a preview. good to see you. foras got his work cut out him in terms of trying to reshape the image of the republican party right now, which, let's face it, does not have a great image. >> it does not. it is a branding problem. he is straightforward in the book talking about how he has come forward with ideas that he will not get able to listen to ideas until people think differently about us. he is young and still relatively unknown and has an attractive family story. in some ways he's a good messenger. in other ways, he is a dangerous messenger because he is going forward with ideas like entitlements. >> things like medicaid and medicare. talking about reforming programs like that, that is something that might strike your in a lot of voters across the country that are in a certain age range. >> president bush and some congressional republicans have taken these fights on. they have lost the courage of their convictions at times. social security, but also look at school choice. politicalng some battles in key states, republicans have largely backed off that issue. the question is, all right talks a good game in his book and says, we have to have these fights, we have to put out our budget is an reform plans and take it to the streets and the people and try to win, we will see if he has the political gift to pull it off. at their most effective politically when they have been able to attack big, broad, republican reform ideas. >> they have to change the message, this message which seems to be kind of mean on its surface. there is an image that the republican party right now is older, male, white, and a little when it in terms of comes to things like empathy or sensitivity. how do you fix that? >> that is the branding problem. the question again is for paul ton and other people wanting put themselves forward as national leaders is, how do you change that? ath ideas, with showing up democratic precincts and independent precincts? ryan is at least thinking about how to do this stuff. part of the criticism of the book and one of the things we will ask him about at 10:00 is, how do you appeal to the base of the republican party? most of the ideas in the book are aimed at the base, and still run out your base. paul ryan is maybe not the most politically adept, skillful person to do it. at the hold the tea party has had on the republican party, how will that affect it as we move forward to 2016? >> paul ryan writes about it the best way. if you take what the tea party mostly stands for in his origins, people wanting smaller government, washington playing a less intrusive role in their lives, that is a winning message, not just for the core of the republican party, but for a lot of younger voters. how do they shape an overall brand and overall message with policies that will impact people in a positive way, not just angry rhetoric at a democratic resident -- president. the tea party was not so successful despite sarah palin's backing, last-minute backing of the candidate. >> dan sullivan is not the favorite of the tea party but he has plenty of grassroots support. democrats did not want this guy to be the nominee. if you're keeping track at home, republicans net what they need to win the senate, he was a good night for republicans. there is no doubt in the minds of most political pros dan sullivan can keep the party energized, get the establishment and establishment money in there, and have as good a chance to beat an incumbent democratic senator as anybody else on the ballot. >> turning to texas, we will talk about perry. he was booked. what will this do to his 2016 chances? life let's see if the prosecutor him forward with a guy who indicted him with a more persuasive case than we have seen so far. assuming there is no more to this than what seems to be an odd indictment, it is probably good for perry. it gives him a chance to talk about overreach, government being too intrusive. he is handling it well so far. it is a little bit of a new rick perry. he did not wear the glasses and a mug shot, but in general -- >> i was going to say he looks pretty good. >> in general, he figured out a which have a second act, was a bad run for president. if you look at the contenders for the republican party for 2016, who are your top three or four on the list? >> i have no idea until we see who runs. i think paul ryan would be strong, jeb bush would be strong . chris christie, if he is able to run with the legal problems he is having. those three guys look to be the establishment favorite. loses, i think they are likely to pick the nominee. >> i look forward to your interview. we will see you then. , be sure to catch him and interviewing congress men paul ryan coming up here live at 10:00 a.m.. next, a sellout crowd. why is this company struggling? we will talk about that. ♪ >> all right. it is a little turbulent. and air flame flight makes you queasy, this is not the right for you. take a look at this. daredevil maneuvers here in the red bull helicopter. a civilian pilot licensed to inform helicopter aerobatics the u.s. he got his pilot license when he was 20. he was a traffic reporter before. quite a move. it is time for our weekly look at the top linkedin headline. joining me now is the professional networking site's senior editor. john, one of the articles is about the marketing lessons to ice bucketthe als challenge that went crazy on social media. >> it went crazy. it has gone nuts. from a marketing perspective, it is brilliant. it is a simple thing you can do. good causeinto a people are aware about. the most interesting thing is that it involves a call to action. a celebrityst saying, i believe in this and you should as well. a celebrity is saying, i believe in this and am demonstrating that and you should do it as well. it is a pass it on thing. >> it has been incredible. what are some of the other big headlines you have watched this week? a stafford professor wrote about robin williams, who had a tremendous outpouring on linkedin. it shocked me how many people wrote in greece about his passing. a small world connection with him. they had a similar heart condition through a mutual acquaintance, he and robin williams had the same heart surgeon. the real connection was when bob was doing his audio book, the engineer had also worked with robin williams and he said, who was the best and worst person you ever worked with peer the worst come i will not name. you will read the story. the best is robin williams. he was compassionate, he spoke to them. he was very memorable. to have that kind of connection with normal people is a big deal. >> people were talking about the value of working with someone that is a good person, a kind person. >> absolutely. this is the kind of manager you want, the kind of culture you want for your company. you want the big person walking around on your floor and being accessible. headline that got a lot of traction for you guys, the science behind the most successful careers. >> there is. bruce wrote this piece. he pegs it on a study which found people who had a bad night's sleep in an experiment were told they had a great night's sleep and they were given gobbledygook why they did. they believed it and performed as well on a test as people who actually did not have deeper sleep. if you actually believe in something, it actually affects the outcome in a positive way. same as the negative way as well. he said look, if you're going to have a good career, you have to believe you have a good career. if you think you will do well on something, you probably well. the converse as well as true. believing and there is science behind it. the placebo effect really works, even in your brain. >> it makes sense. john abell. coming up, uber politics. barack obama's 2008 campaign manager is heading for the tech startup. we will hear from the man who hired him, the ceo of uber, next. ♪ >> uber wants your vote. it hired a campaign manager. it just tired david plouffe. huber said he will start with the company in late september. both was a strategist for of president obama's presidential campaigns and he was a contributor to bloomberg tv. we will all miss him here. i have to say, congratulations on his newgate. david plouffe and uber's ceo, both join me on "street smart" just after the announcements. >> uber is running a political campaign. the candidate is uber. we are lucky enough, i am lucky enough, to have partnered with the best campaign manager in the world. that is what it is about. we are in cities around the world. we need to get the positive story of uber out there. there is an incumbent candidate. the taxi cartel is in every city you are in. they are resisting the progress we are rain to cities. guys david, you had a phenomenal career in washington. why go to work for a start up now? spent quite ai bit of time talking. i was a strong believer in the company and travis and i had a great mind meld. he had a great company here with great people and a great mission. the opportunity to be involved in something like this could be a once in a generation experience. i am passionate about the mission, providing transportation alternatives should not be controversial. creating jobs, helping parents and workers and businesses move around the city and live their lives in a more productive way. ultimately, this kind of progress is changed. it is hard to stand in the way of. people put up a fight and we will be aware to make sure we're fighting for the transportation that uber represents. >> you will be fighting regulatory challenges not just in the u.s., but all around the globe with uber trying to expand. we were just covering the protest happening recently in europe. how did your experience within the u.s. side of things lend itself to this global atmosphere? similarities. fundamentals, a good campaign, as travis talked about. -- huber has a remarkable group of customers out there and drivers so passionate about their product, and relying on the -- with people on the ground. you have to listen carefully to people out on the state. -- generalnitor managers around the world who know those communities and headquarters is there to support them and do their jobs best. those people and headquarters support the drivers and their customers in the region. >> let me ask you about allegations recently. list said uber is playing dirty tricks. they are accusing the company and having both roughly 5000 rides and then canceling them. what do you say in response to that? >> a lot of this played out on the insider track, inside baseball last week. at the end of the day, competition is good for the consumer. are out onay, if you the court, if you are lebron james, you're going to want to dunk on somebody. competition can be fun. at the end of the day, it is better for the consumer and the driver. >> did the employees do it? >> 10% of all requests ever made on our system are cancellations by people who are just using the system. that is a natural thing. there was never any kind of intention or anything like what was being proposed. we just categorically deny it. accusation in the the first place was a real dirty trick. andber ceo travis kalanick david plouffe. blumer television is on the markets for you. let's take a quick look at futures for unc slightly lower there. let's see how this handout one we have earnings this morning. we will be on the markets again for you in 30 minutes. coming up, move over new york city. costs continue to rise with more and more tech companies coming in. the businesses most expensive u.s. city. you are watching "in the loop" live on bloomberg television. ♪ >> ok, everyone. we are 30 minutes away from the opening bell. i am trish regan, in today for betty liu. here is a look at what we are working on right now. futures market indicating that stocks will be little changed at the opening. the s&p 500 is just 3/10 of one percent away from its record high. argentina wants to sidestep the u.s. court ruling that blocked on payments. the country wants to lead buber -- bondholders governed by -- target forecast slumping sales. lowe's cut its sales forecast for full-year. ♪ moving and shaking at this hour, the former microsoft ceo steve homer is now ending 34 years of direct involvement with microsoft. he has resigned from the microsoft force. that happened just yesterday afternoon. lastly, he formally took over the los angeles clippers. he told me in a phone call yesterday just as soon as the news process, he would be leaving. he said he wants to be a great shareholder and he wants to pay appropriate attention to the shares. between teaching classes and new responsibilities with the clippers and my civic duties, it is a lot. he went on to say, i love microsoft. microsoft's largest individual shareholder. it brings up a few questions do withto what he will his shares and what he might do with all this money. earlier this week, i spoke with ballmer about what his duties might be as the clippers owner and what his plans might be. >> i want the clippers to be the very best they can be. the best team, the best players, the best character, the best coaching staff, the best is this. i want all of that for the clippers. that means we will have to be working to bet better, tenacious, more and more excellent in everything we do. know he will be hard-core and enthusiastic. he will be very busy with his $2 billion hobby. it is not just ballmer who likes to have fun outside the office. matt miller is joining me right now to discuss. this is interesting. i asked him where he would sit and he said, courtside. i think we can anticipate seeing a lot of cheering from steve ballmer. he will probably rival mark on that front. he is sweating hard. >> he will be going crazy. a lot of billionaires like to do that. one of the interesting things about steve ballmer and the way he is financing the deal, he is probably borrowing against microsoft shares or using microsoft dividends to pay for the clippers. it is a huge premium and a lot of billionaires are able to do that, leverage their big stake in huge assets in order to have a lot of fun. >> he talked about the importance of civic duty. his life is very involved in children's programs in washington. he is also very outspoken about the need for gun control. that is a passion of his. basketball will be a big part of his daily life. billionairesother devote themselves to causes and hobbies. think about larry ellison. >> hundreds of millions of dollars. he has got oracle shares and stocks and loans against his oracle shares in order to fund his passion. he dumped hundreds of millions of dollars into it. he owns samurai weaponry and armor, which you collect at his house. he owns a lot of real estate from alec who to newport to rhode island to lake tahoe. he is dumping it into the things he cares about. most billionaires make their money and work until they die. some billionaires discovered they actually have to go out and do passionate causes like bill gates and philanthropy. paul allen. you look at steve ballmer, he made the assets paul allen owns a lot more valuable. if you look at the seattle seahawks, portland, both are worth more now that ballmer has paid some much for the clippers. >> they have to be incredible he high charged an incredibly driven to have been as successful as they have been. backo you suddenly scaled and say, i will retire now. >> i do not think that is the fact. him getting involved with the clippers is a full-time job. he will take as much passion with that as he did at microsoft. >> it is important their personality type. he will be pretty driven to make the team successful just as he is driven in his own corporate business life. thank you so much. coming up, the new york knicks missed the playoffs this year. the company appears to be missing something as well. earnings out today. priceta cisco, the high of success. all of those startups have made office space pretty hard to find and very expensive. does this signal a new kind intact? we will have more on that story next. tech.cap -- in we will have more on that story next. ♪ >> amnesty earnings are out and it is in this for the company. $.15 a share, down from $30.4 million a year earlier. the spies considering billy joel atnow a music franchise madison square garden, selling out shows since january. steve ballmer's purchase of the l.a. clippers raises the evaluation of the next. where is the disconnect? theuld like to welcome former president and ceo of madison square garden and the marketing group international founder. what do you think happens here? why do you think the company is missing? they have a lot of things to feel good about. >> they were a big hit. they had a lot of high expectations. they probably projected one or two rounds. that is a big loss of inventory. a big loss of food and beverage, a big loss of merchandise. they put that together and that is probably a tough in on the business. also, you have to protect those things. you cannot book concerts so you have the playoffs. once that happens, you just cannot put a concert in the building because it is a routing system. >> how far in advance our concerts typically -- >> months. months in advance. book them if you do not have the dates because you think they might be playoff dates. job.ays has done a good obviously, they have their issues as well because they have a basketball team. they have taken away business more than i think they would have. i have been somewhat impressed. the network is really basically the seasons ofts knicks and rangers and until they start up again. think advertising dollars are probably week. >> i'm curious to get your views on the value of sports franchises right now. the $2 billion valuation that was just placed on the l.a. clippers is pretty incredible. i asked steve ballmer about it when i spoke with him the day before yesterday and here's what the deal i i like did. i would not have made it if i did not like the deal. i think this is exciting to me. i think the brand is tremendous. i think the opportunity is fantastic. be ank the nba will appreciating asset. up goes the nba. market.a unique it is a phenomenal opportunity. when you look at tech companies with no earnings and huge valuations, and a lot of were ae, the clippers really well valued team to me. really well valued. there are debt companies with market caps at $150 billion that do not make any money. >> he could have bought whatsa pp. what does that do to the overall value? >> there is a benefit. for the most part, people itieve in the business that was a wacky bit. it was an outlier. it does not make a lot of sense to bid $2 billion even though it is in l.a. a grainyou take it with of salt. it has some impact, but i do not think it has the impact people would think in all leagues. >> what does it mean for the knicks valuation? >> it has an impact, certainly. they need another steve ballmer eventually to come in and by the next if it is ever put up for sale. roughly $3ation billion? is that make sense? requested good. two for the clippers and the garden. but you have to have a deep-pocketed, x microsoft executive to come in and want to buy it. >> how do you get the knicks fans back? >> you win. the fans are there, they still come. they love the uniform. they love the players. hopefullyto win and jackson will be able to spangle dustof his to -- winning on the franchise. if they have a decent run it will be good for the franchise. >> it is also having a story? you look at the l.a. clippers. this is really america's team and there is a sense even the whole country has been following that story so carefully and closely. people feel invested with the l.a. clippers. do you need that kind of investment from new yorkers in the mix? >> i do not believe that. i do not think the clippers are america's team but the new york loves the next. -- knicks. wasve been there when it very successful and i know how new york rallies around it. if phil jackson pulls off a little pat rally -- riley in him, it will be successful. >> thank you. former madison square garden president. coming up, samsung and barnes & noble team up. what is behind this partnership? matt miller joins me after this. ♪ >> barnes & noble has not released a new tablet in years. it has -- samsung has teamed up with it. a drain on the company. barnes & noble is holding an event today in downtown manhattan and matt miller is any by with more on this story. what are we expecting here? what we are really expecting is samsung galaxy tablet four. it is a tablet samsung already plans to make separately, but it will be branded here in the barnes & noble milk will run a lot of milk software. a lot of reading content and a lot of reading software that barnes & noble has really made its name with. it has not made its name so much with the hardware. that is why barnes & noble is giving that up. has seen its own tablet sales fall. they fell by 35% last year. the hardware business was really just a drain on what is already for- a tough business barnes & noble. it is added to make this partnership and focus on the software. there are so many people here, it is amazing that a new note tablet would bring out this many people but it really has gotten a lot of excitement. >> why would samsung take this on when we're looking at what we consider really a shrinking tablet market, especially for reading books on tablets? questions really the we are all wondering. you are seeing a shrinking growth in the tablet market. recently, it was said tablet sales are crashing. corning had drastically reduced its tablet growth outlook, saying only the lower end on branded part of the market will lessde 10% growth, much than it had predicted before. why would samsung do this is probably the best question. they will get at least one million sales guaranteed from barnes & noble. the agreement includes one million tablet sales for the next year or 15 months if the sales are really bad. even though that is 1/8 of what they sell at samsung in a month, it is still a decent chunk of change. >> thank you so much. samsung's biggest rivals, apple. investors are buying into ceo tim cook'strategy, producing sales at an all-time high. because of apple's buyback program, fewer shares of apple are in the market, which means it has not eclipsed his 2012 if valuation just yet. -- evaluation just yet. what has changed? >> great question. a lot of concern back then that, what is apple going to do now? steve jobs had passed away. the rains had been taken over by tim cook and the question was, what is the next eight game changing product? since then, tim cook has been really clear on the matter. he said we have got a lot of exciting new products coming down the pike. one of them is wearables. at the same time, he is refreshing the iphone six line. so much moneyeen in research and development and there is a feeling at some point it has got to pay off here at investors can get antsy. they want something in the here and now. this is a company that takes two or three years in terms of its cycle to come out with something new and something big. >> it takes time. company a perfection and that is steve jobs up -- jobs'legacy. they are trying to make inroads in a tv product. those constant providers, the tv, the channels, etc., they do not want to give up the content easily. you have not seen as much or heard as much on a tv product. we do not think that is the next thing coming down the pike. we think it is an wearables. morgan stanley put out an estimate they could sell 60 million in the first year, $9 billion in added revenue. that is a lot of money even for apple. iwatch?hink >> exactly. help you stay fit, look at your apps, listen to music. >> what are some of the challenges for the company? carl icahn saying yesterday he has not told a share of apple. >> you have got to look at china. they have made good product -- good progress from china. but you're seeing china make it a little harder for some foreign companies to do well in that country. they are cutting back on subsidies. that means there will be less of it. it is expensive to buy an iphone , particularly if you do not have a subsidy. that is something to really watch. the other wild card is samsung. they will not give out -- give up without a fight. got the top 10 traits you do not want to miss today right after the break. keep it here on "in the loop." ♪ >> welcome back. i am trish regan. bloomberg television is on the markets for you. we want to get the latest right here on futures in the last moments before the opening bell. you can see a little bit of to thes there as we get open. we have fed minutes coming out today. we will be watching carefully for those poor we will be on the markets again in 30 minutes. let's count down to the top 10. the only stories you need to know about today. important ones. olivia sterns joining me here. i want to start with american eagle at number 10. the retailer's second-quarter earnings fell, a slump in same quarter sales. also issued a forecast in line with estimates. a tough environment right now. take it away. , walgreens.ne the shakeup was caused by a $1 billion forecasting error. this is according to a story in the wall street journal this morning. the cfo reportedly cut the forecast for earnings by more than $1 billion in july. both the cfo and chief of pharmacy were out the door. at&t, theeight, carrier out to beat google in the race to get the fastest internet speeds in silicon valley. it is working on his giga power service, the first city in california to get the service. >> number seven is microsoft. steve ballmer resigning from the company's board eight months after stepping down as ceo. the move ends more than three decades of direct involvement. ballmer still remains microsoft's top individual shareholder. 30 seconds after in an exclusive phone interview and he said, i still want to remain a really strong shareholder at microsoft and i am committed to that. i have so much other stuff going on in my life right now, it is a lot to balance. this is the guy who just bought the clippers for $2 billion. he will make that investment pay off. >> he will be a great manager. number six is petsmart. the retailer exploring a possible sale of the company as well as other options. this comes amid ongoing -- petmart says it just bought 364 $130 million for on the channel capabilities. number five is lows. the retailer beating estimates in the second quarter but a full-year sales forecast. strong quarterly results and it raised its earnings forecast. >> a move on to number four. apple shares surging, a split-adjusted record hit in 2012. tweet that all of the chips are still on the table. the stock is up 25% this year. number three is staples. it expects one of those new apple product to be released later this year. the office supply chain is still feeling a burn from online competitors like amazon. a 20% decline. an announcement to shut 140 stores this year. a car rental service hitting a roadblock. 18% after the company said for your results would be well below forecasts. in addition to a record level of auto recalls, it is getting hit by costs from an attic -- from an accounting review. >> the number one stock of the day as we get closer to the open. it is target. the company is still reeling from last year's hacker attack. it is posting a 62% decline in second-quarter earnings. it cut its forecasts for the year. the retailer is pointing to slumping sales and a money moving push into canada. here we are at the open. you can it looks like a slightly softer open but fed minutes are coming out at 2 p.m. today and investors will pay attention to that and earnings to get through today. i want to bring in the chief at sherry officer trust which has more than $11 billion in asset management. he says there are still growth ahead and plenty of money to be made. good. michael, there are a growing number of people out there and this has just happened within almost the last three or four weeks, that are starting to feel differently than you, that are starting to feel as though this andet may have seen its top is janet yellen and the fed move to hike interest rates at some point next year, we are going to see a more severe selloff. what do you say? >> i think the interest rate expectation probably will be muted going forward. we're looking at 25 basis points tops as far as increasing interest rates mid next year. that does not seem troublesome to us. macro look at the broad economic background, we are seeing acceleration in economic activity in the u.s. as evidenced by the bloomberg economic surprise index which turned positive in april and continues to be so. we are seeing earnings expectations increasing right now in 2014 and 2015. we do not think valuations are all that stretched especially raised upon were interest rates are and inflation. >> where does that leave you? where would you say the markets will be by your and? >> at the beginning of the year, our forecast was for about an 8-10% growth for the s&p. we still remain pretty confident that will be the case and will see acceleration to those levels between now and year-end. in thented to bring international perspective because last time you spoke with us earlier this summer, you had mentioned you were reducing your domestic stock investment and loading up on the emerging markets. the rest ofrformed the world last few years especially last year. that reversed of this year. is this a viable given that the federal reserve is looking to raise interest rates in 2015? >> yeah, rising interest rates will be more troublesome for the emerging markets than they will be for the developed markets, there is no question about it. standpoint, the valuations and relative valuations in the emerging markets right now relative to developed markets are very compelling. the only snafu is that we are worried about the numbers coming out of gdp growth in europe which flatlined last week. ift could be disconcerting we get some kind of contagion affect. contagion is a word associated with the emerging markets usually so it is unusual to use that with developed markets like the eurozone. between europe and japan, where concern right now that the global, synchronized economic recovery of 2014 while still on track is somewhat suspect more so than a month ago. >> let's talk more about europe. italy has fallen back into its third recession since 2008 and the german economy which is supposed to be the engine of european growth shrank by 2/10 of one percent last quarter. overall, the economy is. out in europe. what is the investment case to be there? the weakness near term has been a barnett -- has been a byproduct of the sanctions against russia and hopefully we have a resolution on the ukraine crisis going forward. an alleviation of those sanctions should help expedite growth in the european countries as a whole. most particular germany because a fair amount of their exports are directed toward russia and we are keeping our fingers crossed that that issue can be resolved and 3-6 months. >> i know you think the economy will be on better ground over the next several months. not everybody is in that camp. from theare some sound economist, joseph stiglitz and get your reaction. >> monetary policy cannot really be a substitute for these other policies. they tried it in the united ,tates, monetary policy helped but the economy, the u.s. economy is still weak and stronger than europe but still nobody would describe u.s. as in a good position. >> he is making the case for more government involvement and that the fed has done all it can. do you agree that the fed is out of tricks? >> they can always reinitiate their qe programs. tapering has not had an effect on interest rates. janet yellen has said they can always go back and initiate another qe program in the united states. the gdp growth has been relatively weak. and that is the real gdp growth has been week because inflation has ticked up a little recently. nominal gdp growth is trying to accelerate into four percent which is ok but not great. a 4.5% nominal gdp growth should mirror what revenue growth is. if we start to see revenue growth in that range for companies in the united states, that is double what we have been seeing recently. most of that should fall to the bottom line. >> i know geopolitical risks is one of the tensions out there. place,the events taking where do you see it hitting the financial markets most? would it be and commodities? >> we have seen a little bit of slowdown and commodities, yes. aboute talking commodities a little bit weaken the dollar seems to be a little bit strong. i would look to the currency markets and the commodity markets. they seem to be most volatile and the most prone to changes as far as the geopolitical environment, most particular gold which is had a nice run of late. you think there is plenty of dough to be made of these valuations? what sectors do you want to be in and what are you avoiding? we are overweight in energy, industrials, and technology which are more cyclical. we are underweight in utilities and telecommunications. we see this to sectors as bond surrogates and a rising interest rate environment and they will be hard to produce superior turns. we want to remain exposed to more cyclical industries and sectors in general because we think the economy will continue to strengthen. >> thank you so much. we appreciate your perspective. uber is making big announcements today, new delivery service partnering with big companies and we will tell you all about it in a few minutes. sessionoving into this with the market slightly lower right now. we will see how the fed minutes change everyone's opinion about the market later this afternoon. i will see you back here in two. ♪ >> here is a look at the top tech stories. steve ballmer resign from microsoft after more than three decades. move comes after he purchased the los angeles clippers for a cool $2 billion. he told me he's got a lot on his plate and this will give him the opportunity to focus on other things including his new position at the clippers. the u.s. semiconductor company is about to be bought for $2 billion. no word on who may be buying it. they say a deal could be announced today. uber is everywhere today. deliverystarting a service called corner store which will deliver things like batteries and shaving gel and announced partners with a number of companies. the companies will update their apps to make it possible to hail an uber ride. yesterday, they announced they were hiring the campaign manager david plouffe. you can catch the latest every weekday at 1:00 p.m. only on bloomberg west. if you look at rent for office space in san francisco, you are bubbly have been shocked. puts study by cbre group san francisco to boast the most expensive office market by next year. that is due to growing tech companies. many companies are among some of the many tenants paying up for space in the bay area as well as other cities. trustal estate investment has office buildings and film studio space in california and seattle. i am joined by the company's ceo, victor coleman. good morning to you. i imagine it is a good morning because this is great news for you with all of these rents going higher. what is driving all of it? >> thanks so much for having a. in rents today are moving all sectors and all markets we are in on the west coast. san francisco specifically in the city itself is moving because technology growth and diversification and lack of space is happening. >> i can remember when i lived in san francisco in 2001. it was at a time when rents have been very high but they started to plummet after the tech bubble burst. some timelly taken for the community to fully recover. it looks like we are there when it comes to housing. it has been on a tear lately in the bay area and clearly it looks as though office space is as well. does it worry you at all that we could be going through something similar to 2000 again? >> right now, it really doesn't. the amount of new space coming on market is a good indicator in the office sector. we have one point 3 million feet of space that is being delivered in the next 24 months and 80% is released and the rest of it is under negotiation. you are right, if you look at 2000 where the peak was and where we are today, we just surpassed the peak level from rental rates in san francisco. there is a lot of legroom to get us to the next level. it's also a different tenant mix and it was in 2000. the technology tenants today are driven by the employees and the growth of the employee base around the amenities of san francisco which we never really had in 2000. >> what is the difference? were people more out in the valley back then and you see more city inhabitants now? has happened is the employees are driving where the tenants want to be. the employees want to be 24 hour amenities. you see the valley extremely popular and successful but every major tech company and now the support of companies around them, the ancillary businesses that need to service these tech companies, have offices in seven cisco and they are populating those offices so there are transfers back and forth between the valley and the city and that's what you see which is the biggest difference in the early 2000. >> you say there is more room here. how much more room? at what point do you start to get worried that you might be in a bubblelike scenario? be dependent will on the economy and the growth of these businesses. the room now is based on the demand for space. we still see growth and increasing growth in the economy around these tech companies and the ancillary companies that are still growing. i don't know where the top will be but i can tell you that we have not approached it. if you want to compare peak rents in san francisco versus new york, we are still a ways away. >> have you looked to diversify outside the west coast? >> there is so much opportunity still for us on the west coast between the pacific northwest and seattle. we've got our plate full of meat think there are great opportunities and we have been building our portfolio around those key markets. >> i just talked to steve ballmer about his $2 billion acquisition of the l.a. clippers. i am hearing rumors that you may be interested in looking to purchase a sports franchise. what might you look at? >> you know what? these are just rumors and opportunities are available and i am looking at lots of different things but now my focus is on the real estate market in san francisco, seattle, and l.a. >> no truth to a seattle hockey team? >> we are looking at opportunities out there but i like the seattle market by some i think the populace in seattle is fit for what we are seeing in the growth in the commercial space. we are buying a lot of opportunities up there. i think there may be an opportunity for hockey but they have to have a place to play we're looking at that as well. >> thank you very much, victor coleman, we wish you luck. slowdown in the beer industry and why political tensions overseas could be to blame and we will hear from the ceo of heineken next. ♪ >> germany is preparing to send weapons to kurdish forces fighting islamic militants in iraq. germany normally does not do that sort of thing. france on the u.k. are among the european countries already helping to arm the kurds. one of the world's best-known yoga teachers has died. he died near mumbai today at 95 years old. he began practicing yoga 80 years ago despite asthma. his students were cricket stars to the belgium royal family. third-largest brewer is expecting beer sales to moderate the rest of the year. heineken beast estimates but the ceo talked about the impact of the western sanctions on russia. we are the number four player in russia. the position of russia in our total portfolio has less impact than for other brewers. so far, we have seen the market declining in russia essentially because of tax hikes over the last five years which have been hurting the entire industry. badly in russia. the unfolding situation between russia and the ukraine and the unfolding sanctions between the european union and the united hades and russia have limited impact in our sector. our business is driven from local sourcing. our agriculture producers produce in russia and the packaging is produced in russia so it's a lot of internal business in russia so the impact so far has been minute. for today's it edition of "in the loop." next withkers" is paul ryan. being interviewed. i will see you live at 3:00 p.m. eastern on "street smart" this afternoon to look at the close of trading. have a wonderful day. ♪ ♪ past error minutes which means bloomberg television is "on the markets." we are about 30 minutes into the trading day. equity benchmark indexes are in the red right now so stocks are after theyttle lower were flat. the dow is slightly in the green by four points. the s&p closed within one percentage point of its all-time high yesterday. we had disappointment from earnings coming out from lowe's and target. on the treasury market, here is a look. at bonds. they are selling off a little bit and yields are coming up one or two basis points. investors are waiting the minutes coming out of the fed due out at 2 p.m. in washington bears in the bond market have found their sweet spot even though the u.s. economy is showing signs of improving. investors are plowing into the long end of the curve. typically, that is what you do in times of stress. joining us to explain what is going on is lisa abramovitz. the 30 year debt is doing three times better than just bonds. aren't we supposed to be a recovery? >> you think of long bonds doing well in a time of recession. laster, stocks were up almost 30% in the u.s.. 15% but thisost year they are up 17%. basically, investors are saying we don't see growth accelerating in the u.s. the fed has come out and brought down there and expect patient of how much the u.s. economy can grow over the long time that over the long haul. people are saying we are in this slow growth environment, we will take the higher yields that come with extending our risk over time. we will plow into the 30 year bonds. we get equityat strategists who talk about how the recovery is firming and you see the opposite trend in the bond market. what are these bond investors telling you? longer think we will see rallies? >> i am hearing mixed things. some people say that yes, they think this debt will continue to gain because there is so much demand especially among peasant plans -- among pension plans. want to turn this into safer debt. i hear other people say that this debt, the average or the past decade, was about 4.1% of yield or it now it is 3.2%. in 2007, it was 5.4%. this is way below average. the gap between 10 year yields and 30 year yields is -- has shrunk considerably and i think the risk of this debt selling off is great. you have mixed views. has said the fact that the u.s. has amassed so much debt and has -- >> $14 trillion? >> but that's a dramatic amount trillions up from 4.5 dollars in 2007. there is a theory that that will in p growth over the long term. rather than the u.s. spending its money on programs and stimulus, it will have to just use that cash to pay back its debt. >> what could perhaps trigger a reverse in these money flows? >> what of growth does accelerate and what if inflation grows? that's the bogeyman. people are asking what inflation is. you have acid inflation but not wage inflation. people are not earning more money so if there is inflation, that could cause a change. >> thank you. we will be "on the markets"in 30 minutes. ♪ >> live from bloomberg headquarters in new york, this is "market makers." paul ryan and his way forward, the republican party's rising star sits down to talk about his new book and his political future. at targets are down and source sales. the discount retailer cut its forecast for the full year. >> somebody could make a fortune by coming up with a viagra for under sexed roosters.

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