He is lobbying the french the ges 17r the billion offer. There was a joint offer by siemens and mitsubishi. For more on this battle between the industrial titans, Matthew Campbell is joining me from london. This is a big day for jeff anelka. A big day for jeff immelt. How much convincing does he have to do . This is absolutely a big day and he has to make his case in paris to the government and the unions. Ge does have the inside track relative to siemens. They have emigrated deal. An agreed deal. Alstom, the target of the transaction, is on board. What siemens was trying to do does not have alstoms agreement, and the noises from the alstom cap is that they see the siemens proposal, which is pretty complex, as being a bit too much try to do and not ideal from their perspective. Jeff immelt has a tough day ahead of him, already underway in paris, of course, but he has some serious advantages. It sounds that way would you say that the simplicity of his proposal, as you were discussing, with the opposing proposal, that gives them the upper hand him the upper hand . Theres the question of simplicity and the question of the value. The siemens side says that their energylues alstoms businesses, which is most of alstom, 2 billion euros more than the ge deal. If you read through the siemens proposal, you can see it getting taken apart again in a couple of years. It involves a number of joint investors, bringing in mitsubishi and hitachi from asia. It is one of those stories where i think the Company Alstom is going to take the sure thing, and the sure thing is ge. The wildcard, of course, is the government. And where do the government, where do they stand now . The government has been an interesting player in all of this. Also, unlike a lot of french companies, is not partly owned by the government. On the other hand, it sells trains and power equipment, and obviously, the french government is a big customer for both of those. Landess hol socialist government is have a role to play here and he and his ministers have not been shy of expressing concerns on jobs and development. But lately theyve backed away from outright endorsing siemens and opposing ge. They seem to say that they won a deal that results in the best outcome for french workers and the french economy, not necessarily a deal from one or other of these 2 buyers. Thank you so much for joining us. Stocks up around the world this hour from here to europe and asia following another record day on wall street, following the latest comments from fed chair janet yellen. Like wiki is here with the real deal on what she said mike mckee is here with the real deal on what she said and why the markets are reacting like this. The fed has been throwing quite a party. Yesterday janet yellen came in and gave the economy a breathalyzer and said that we can leave the punch bowl in place. Theres a lot to like about the economy. No recession on her watch. But will he continue will it continue . They are uncertain about that. 9e used that word Uncertain Times in her press conference. Job growth is pretty good lately , unemployment is going to continue to go down, but it is going down for the wrong reasons could we have people leaving the labor force. Nobody is getting a raise. All of that leads her uncertain. I guess i would say it is important, as emphasized in my own opening statement, for Market Participants to recognize that there is uncertainty about Interest Rates, shortterm rates, will be, and that is necessary because there is uncertainty about what the path of the economy will be. Basically, why they are rallying, she has been saying that rates will stay low for a long time, and investors are finally certain that she believes that. Kind of funny that she says all this complacency on wall street needs to uncertainty. They are certain that she is uncertain. If you look at the median for it. Chart dot charts, does go up for tony 15 and 2016. Look at 2016. It is really the range. They are all over the lot and it suggests that there is no real certainty about where they are going. Also, we have 2 new members day so it coulder be just noise. The low rates are here for a while to come, we are going to party. 2 best selling authors are caught in the crosshairs today, jk rowling and James Pattersons latest titles not available on amazon. Hachette has disrupted the entire book industry. Alix steel is much more on this. How important are these preorders . They are really important. I spoke to one author, douglas preston, on the board of directors of the authors guild, and he says that presales make about a quarter of his overall sales. They are a big driver of getting his books on the vessel a list, and his next novel in august might not even make the list. He and his coauthor are worried about it. Here is why amazon is so important. Hachette fell off the number one spot in the digital book world, amazon has 60 of hachettes market share, with barnes noble away distant second, making the publishes very dependent on amazon. How does amazon have such a lock on this market . Amazon has no problem selling a book below what it paid for, but what is more important to amazon is the ecosystem. Onis a world that focuses sales and not necessarily margins, and it makes it hard for other players to break into it. That is the crux of the fight with hachette. Amazon gets a 30 commission from selling the book and it is allowed at discount of only 30 . Amazon is a Bigger Commission so they can discount more. The other thing is the rise of the tablet. The devices could grow to over thatillion by 2017 and could keep increasing ebook revenue to over 10 billion. Is thee, which secondbiggest publisher in the market, already gets 10 of its total revenue from ebooks. Are thatooks important, what kind of opportunities does this create for competition like apple . If amazon will sell those books, someone is going to be, and it seems to be apple, walmart, and barnes noble. Walmart says that physical book offs have climbed 7 , much hachette writers like patterson. On top five books promoted ibooks all come from hachette. Apples prices today are less than they were even at the beginning of the week. I spoke to someone at Janney Montgomery scott and he said that the company it gives them the chance to win back customers and helps give the retailer a do over, in essence, creating an opportunity for the company. Alix, thank you so much. Bloombergs alix steel. Shaking this hour, tmobile ceo john leger. He didnt want amazon to grab all the headlines about smartphones yesterday so what did he do . He unveiled his latest when. Latest plan. Tmobile will a you test drive apples latest iphone for seven days. He spoke emily chang. A contractor,is International Data roaming, contract freedom him people have artificial barriers in their mind about why it was done the other way. We talked to apple. The way, this is great apple, the awareness level by customers that tmobile has the iphone is very low. This is a chance to testdrive our network, test drive and apple iphone if you have it. Tomorrow the question is going to be for the other guys, why dont you do this . Apple isnt usually one to partner. How did the partnership with apple, abou come about . One of the reasons apple and we are partnering is it is a small update i provide you, emily, tmobile is the fastestgrowing Wireless Company that exists. Way toould like to find be a higher percentage of the business and get the word out. We have very good, strong, evolving partnership with them. Just released its new smartphone, at t the exclusive carrier. You havent been shy as usual about your thoughts, saying that amazon does not know what sign up for what sign up for. Tell us what you really think. Ok, i will comment on this as long as we come back and talk about music freedom. Along with everybody else, including cory, rivalry was chedring for you, we wat the news today about fire phone, and i was really excited. I was expected something big. I kind of saw an old business ,odel, 2year contracts exclusive with at t, a phone priced as high as any device in the market, and i was a little confused because as a prime customer i thought they would give me a phone, but they get prime service to the other customers. The phone will allow you to point at things and tell you what you are seeing. For me i usually know what im looking at. Late friday night, im not sure having that phone tell me what i am looking at is going to help. I dont know. If it is a great success, i believe tmobile customers can have it. But i believe the bigger event are carrier 5 and 6. I think he likes the color pink. You can hear all about the Subscription Service later today. We will have a full interview with john legere at 1 00 p. M. Eastern time. The federal government turns up the heat on the Washington Redskins. A former nfl player turned entrepreneur weighs in. And we will show you where the government grows some of the purest marijuana on the planet. In washington, republicans will elect a new House Majority leader in the make of eric cantors shocking defeat. Kevinone you congressman california congressman Kevin Mccarthy looks likely to win the election. It may tell about the house gops future than this. I am joined by jonathan allen, who is with me here in new york. Also with me is White House Correspondent phil mattingly. Is a friend to wall street and technology companies, is that right . Absolutely. He is kind of a friend to everybody. Mccarthy,likes kevin that is his success in politics. It is not like he has a discernible ideological viewpoint in the republican party. Very big on promoting Small Business, was a Small Business owner himself. Done well on wall street, not like eric cantor money, but he has done well over the years. Why is that . He is basically your typical probusiness republican. Not an answer beyond that. He is comfortable in board rooms and space filling which i people like Kevin Mccarthy. Speaks the language and people like Kevin Mccarthy. What is the impact of Kevin Mccarthy becoming leader . On the business side i dont think you will see a huge change between he and eric cantor. Kevin mccarthy is externally close to silicon valley. He is fascinated by what they do, he hangs out with them regularly. At one point the last few years he was getting there once every 2 or 3 weeks. Very tight with the lobbyists as well. Certainly rise on this. The biggest thing with Kevin Mccarthy is politically he is known as a bit of a savant. Very tight with members of this conference. Member ofe is still a the republican establishment, republican leadership, and has had a difficult time as whip. It will be interesting to see if you cant put those problems behind him or face them even more. What is the Biggest Issue with mccarthy, jon . Phil really hated on the head there. He is not in the camp of super extreme republicans, not where the Tea Party Folks are on a lot minute, uhs wait a oh. Not just what happens today, but in the whips election, there is not going to be a big change in the republican leadership. The big change was eric cantor losing, a message from his district and the Tea Party Folks in his district saying you ignored us, crony capitalism is at work. Right, a lot of that. Didnt feeltituents like he had a real position on immigration. He had multiple she had been on multiple sites on it he had been on multiple sides of it. What you see today is a status quo election. A lot of people are looking at the election today, but jon hits a key point. Not a lot is going to change. There is another one of these in a couple months and that is where you see the tea party guys is that to angle what you are hearing and what did they do when in 6 months they do this over to . What they did is held their fire. A lot of them stayed on the sidelines for this particular race trying to marshal their resources for later. The House Financial ServicesCommittee Chairman jeb hensar ling is somebody who could do that. Paul ryan from wisconsin, not necessarily a key party guy but popular with the younger set in the house, might make a run for the speakership if john bader leads. There is a lot more to shake out in a few months as you suggest, phil. Is there a whole david versus goliath feeling after cantors loss . In terms of the Tea Party Folks trying to get what they want, they are not able fringes, beating the mainstream guys they havent gotten that one knockout shot what is the knockout shot . If you are in the leadership, in the majority of the house of representatives, you cant let government go into default. You cant keep shutting the government down. They did shut the government down briefly. You ultimately have responsibly when you get into leadership and that has a moderating effect on people who find them selves and the position to make a decision. The threeway race for the majority whip, that will be even more contested, right . That is the contested race. Kevin mccarthy is a shoe in. Peter rostrum, very tight, very tight with the current leadership. Scalise, who runs the study committee, core group of conservatives, how they split votes is going to be fascinating to watch. Thank u so much, phil mattingly, washington White House Correspondent, and of course, jonathan allen, washington. Chief Washington Bureau chief. Problems at facebook we will see if they say anything about the surprise outage today. And a ruling that the Washington Redskins is an offensive name may give the nfl a chance to change its stance o. We will talk to a former football player. You are watching in the loop live on looming television and streaming on your phone and bloomberg. Com. I am betty liu. The Largest Social Network was antisocial for a while today. Users couldnt access facebook or half an hour in cities ranging from tokyo to johannesburg. Facebook says things are back to normal and is not saying what exactly the problem was. Hedge fund manager phil falcone is stepped down from lightsq uared. He wanted to turn it into a rival of the biggest mobilephone providers. And when it comes to beuisitions, loreal may getting started. The Worlds Largest cosmetic maker is on track to spend 5 billion on acquisitions for the first half of the year. Loreal just wan just bought nyx cosmetics and the ceo talked to th bloomberg. We see all the opportunities, we are very selective. We take only the ones that we strategy, that are complementary to our portfolio, that have potential. But we are confident that we can find other opportunities this year or next year. This is the story of loreal. And 26 minutes past the hour, which means Bloomberg Television s on the markets. Equity futures are little changed, jobless claims numbers in a few moments. Dont forget that markets just hit a record yesterday after the fed meeting. We are on the markets again in 30 minutes. The u. S. Patent and Trademark Office yesterday ruled that the Washington Redskins name was disparaging and canceled its trademark registration. The extremely rare move comes amid unprecedented pressure on the nfl team to change its name. Joining us with more is former nfl guard crawford ker, who played for the Dallas Cowboys and the Denver Broncos and is now the president of ker wing house restaurant chain in florida. Forr, thanks so much joining crawford, thanks so much for joining us. We have a photo up of your playing days. Do you think the redskins should change the name . Is going toan snyer dig his heels and quite a bit but public outcry will make him change it. Why do you think you will dig his heels . Well, he always said he is going to find it and he is not going to change the name, but with all the stuff with the patent and all the legal stuff, i think the nfl will kind of coax him to change the name. Thatthink it also shows there is a changing time here. You have the don sterling controversy and what that did do but the nba,team essentially highlighting that league. Do you think this is the same parallel with the nfl and how they affect or change with the times . Have got to change with the times . Yes, i think with the media, the Indianapolis Colts owner, who got the dui, they have got to punish them like they have been doing with players all along. What is good for the goose is good for the gander and the public and the media will sway him to change the name, like it will be to penalize the coach and owner. How about you personally, crawford . Are you offended by the name . No, im used to the name. Think of the Dallas Cowboys, the Washington Redskins was our rival for many years, but it is a changing world out there and with a lot of things that are changing we are sensitive to Different Things as we havent been before. Issue that the nfl is increasingly more sensitive. O, crawford, is head injuries we have seen these lawsuits filed by former nfl players over the head injuries they sustained in their careers. You yourself spent about eight years in pro football and were forced to retire because of your own injuries. What is your stance on that . Do you think that these the ballplayers have a case here . I think they do because a lot of the Football Players one of my teammates is having a really tough time right now. A lot of times with the pensions and stuff that the nfl has done hasnt been great. A lot of players out there have some issues but we are hearing about jim mcmahon, a lot of players. I only played 8 years, but if i played 12 or 15 or 22, like brett favre, a lot of these guys need continued medical care, and they have suicides and bad ,ublicity and issues like that and fighting dementia with some of these athletes. I think they have a problem. They do have a growing problem. When you say that the nfl should take care of, say, the pensions to take care of these medical costs, should they be putting in stricter safety revelations, crawford . The nfl has always been a tough game, football is a hard game, but layers are getting bigger, faster, and stronger. It has to get a little safer. I think the commissioners trying to do that, but at the end of the day the game is football. They have to do a better job of taking care of retired players because a lot of these layers are hurting and every things about the new players. Some of the older players went through the strikes and did stuff like that. That could help the future. I think they have to take care of them. You yourself are one of the Success Stories out of the nfl. You took your athletic career and applied it to business, opening up the chain of restaurants you have down cell. What was it like going from pro football to being the head of your own company . Very similar, but of t but a tough transition, like it is for a lot of players coming out. If you dont have an uncle or a dad in business or a family friend, you are on your own. A lot of people fail. I was blessed and lucky to do it and keep working at it. I started with one restaurant and kept working at it and it has been successful. We have 24 in the state of florida and i am looking forward to some franchises and moving forward. It is a tough grind and i understand where a lot a players lose money nfl times. Lose money and have tough times. Do you own all your restaurants or do you franchise them . No, it is all corporateowned. Chicken wings, wraps, salads, place where guys like to go, right . Well, betty, if you come down i would love to have you down here, too. No, it is a casual restaurant chain, bar and grill, has finger food, wings, salads. Managementons, great. I have just been really out of football and i got into the Restaurant Business and i havent looked back. Hardest part of this business . The hardest part of any business is the people. It is like building a team, it is hard. In the nfl you drafted players each year. In business it is getting good managers and a Great Team Effort to propel your company. That is trying at times. Quickly, crawford, we are getting jobs data out at this moment. Am curious, being that you are a restaurant owner, you hire wait staff and minimumwage workers, how do you feel about this fight for higher minimum wage . Its tough in the restaurant segment because we have 90 tipped employees, so it is very, very devil get, because in the Restaurant Business very, very delicate because in the Restaurant Business you are working on thin margins. It is very tough so it is hard for you to raise the wages . Yeah, it is very tough on wages because you have to raise your menu all the time, too. A lot of times customer traffic and customer count goes down because of the higher food costs that you have to put on your menu. It is very delicate, and i can understand why a lot of people are lobbying against that in the Restaurant Business. It is very tough. Crawford, thank you so much for joining us, former player with the Dallas Cowboys and the Denver Broncos and now the owner of winghouse bar and grill in florida. Thank you. And little but lower than expected, 312,000 claims, a decline from what we saw last week. Expectations were for 313,000 claims. Michael mckee, you have been digging into these numbers. What do you think . I think economists got it pretty good. They were pretty much right on the forecast. It all evens out. We are really in a range here, betty. We probably hit the bottom of where we can go for jobless claims. For a long time to 200,000 as000 the range where the economy is in pretty good shape for a labor market, and yet the size of the Labor Force Keeps growing. This is an even better number than it would have been 10 or 20 years ago. This number matters because this was a week where they take the survey for the june payrolls report. If we are seeing a very low number, it adds to the feeling that in june will continue the process of 200,000 job gains we have seen the last couple months. Mike, thank you. Coming up, englands workingclass heroes, there are to enough of them anymore, which may explain why the birth birthplacesoccer of soccer cannot dominate the sport anymore. Attention, slackers. Up against theck average american. For some u. S. Investors the road to rio ends and a pot of gold. Very young population, the average age is 27. 5 years. In the next 5 years we are going from 35 to 45 of the population being working age. The cell produces what the world needs soy, beef brazil this is what the world needs soy, beef could we have a dramatic shift of the population out of poverty. Are other investors, some of them brazilian, who disagree, including cristiano piquet, a wellknown rea wellknown racecar driver turned real estate developer. Istiano, thank you so much for joining us. Why do you disagree with tom and say dont invest in brazil . Hi, betty. Actually, i dont disagree with tom per se. Tom is right with everything he said. Of braziliansot coming to the u. S. To invest here and are no longer looking for investments in brazil like they were before. Why is that . All the reasons that tom outlined, why dont they want to put money in their own home country . Im talking about real estate, so we all know in real estate the secret is to buy envelope and sell on the high by on the low and sell on the high good right now brazil is on the high. On the high and cant go higher . We already saw that it is slowing down. The brazil market is not as hot as it was before. Brazilians know that the prices are going up in miami and new york, so they are coming in big numbers to invest here. They are, some would say, all the money like what you are seeing out of brazil and other countries driving up prices in florida number that we are seeing bubbles in florida real estate. Where are they exactly putting their money . Luxury real estate. At one point were responsible for 70 of all sales above 1 million. 70 of all sales above 1 million . Correct. At one point brazilians were dominating the Real Estate Market here. Olney wek scott had an event and rick scott came and he told me that brazil saved floridas economy. Certainly the Real Estate Market it sounds like it. Brazilians looking at other cities, other places now to invest in real estate . Yes, yes. We are going with them to they are looking for orlando and we opened an office in orlando, and in new york, and we also opened an office in new york. Thank you so much, cristiano iquet real estate. The English Soccer Team is facing its own challenges of the world cup as its talent pool shrinks. A rising middle class has been pushing athletes away from playing soccer, which things have traditionally viewed as a sport for the working class man. For more on the calendar and we are joined by our resident brit. Token brit. I will not go to the brit first. What is with this antieducation sentiment . Just the way that soccer has been viewed in england, going back a century, a workingclass man game. People didnt focus on education. They had a workers mentality to it. Lets learn onthejob and not think too much about it and go out for drinks afterwards because we put in a hard days work. Added up, plusrs the concept that unintentionally they had focused recruiting on the working class people in the country. The working class has shrunk because so many people have gone to the middle class and that is reduced the pool for them to recruit from and the people they recruit you think about the game in the same way that the dutch and argentinians think about it. Is a sentiment that soccer is a gentlemans game played by thugs and rugby is a thugs game played by gentlemen. I look at the england team this year and they are privately educated. For the most part they come from the working class. The interesting thing is what is happening in other sports , the privatelyer educated make up quite a majority of these teams. If you look at the Great Britain team india x, 25 of them were privately educated, and only 7 of the population is privately educated. The Public Schools when i say Public Schools in the u. K. , it means something different, but the statefunded schools dont have resources to compete in other sports. Traditionally it has come from the working class. That is actually a slight change in the trend now because if you look at the book he goes back, from the 1998 world cup and looks at all the players who played for the english team in the world cup, and a small percentage of them had backgrounds outside the working class. But do the coaches and the managers frown on any kind of intellectualism . Yes i am going to jump in. Yes. You had a traditional angus manager, they dont english manager, they dont want to think about it. They dont want their guys reading newspapers or books . Let me take you to the 2010 world cup, where the england players were complaining because they wanted to have a night out in south africa and wanted to go out for a pint of beer. This is the world cup, they wanted a pint of beer. He allowed them to do that but he could not connect to the culture of these players. He was used to professional players who were strict with their diet and then you have these british players who wanted to go out for a beer. To get the latest world cup analysis, head to bloomberg. Com rio. Coming up, when an 8 million bonus is not enough for you. You may have you may have to work for Goldman Sachs to understand this problem. , thet is a potheads dream purest marijuana in america being thrown by uncle sam. American attitudes are changing on marijuana and none more so than on the medical side. The substance remains a schedule one drug by the dea. Investigates. University of mississippi, home to william faulkner, ole miss football, the only federally funded marijuana farm in the country. Wait, what . For all intents and purposes you are the governments sole producer of marijuana. Correct. He oversees the university of mississippis marijuana project. Its mission, to aid Law Enforcement and produce pot for federal study, mostly related to addiction. Theyfide research can get their material from our program. Arm in the a pot fr middle of a College Campus raises some, shall we say, security concerns. So the university installed a little security 20 highdefinition cameras, double barbed wire fencing, and armed guards. Satisfies the requirements. The security is all over the place. Ago whenhan 40 years the university launched its project, legalizing pot was little more than a joke, but now a majority of americans favor legalization. This is the only place to get fortioned and funded pot study. The shift in Public Opinion on marijuana has coincided in the for Research Requests from the plant, but that is not an easy process. It involves many acronyms. First, the contract to grow the pot. Hhs to sign off on the products. The fda also has a say. Of the dea must approve storage, handling, and transfer of the marijuana. This can all take months, or even years. There is no shortage of interest in doing this research, but if you talk to upandcoming researchers and scientists, they will tell you that the time, the money, the energy, the effort required to jump through all of those troops is just not worth it. Sense for Research Purposes that the process is too onerous now . Well, it might be. Is counter to his critics, Research Takes years and if you months a few months wont hurt. Though mattingly, oxford, mississippi. We will be back in at 2 minutes. It turns out we are not too busy to have a good time. This is the labor departments annual survey of how we use our time. The average american slaves under nine hours sleeps under nine hours a night and spent two hours watching tv. Activity we do less of a now than in 2003. Men spend more time commuting to work than women and women spend more time in the lives working around the house and touring for family members. Bloomberg television is on the markets. Equity futures are slightly higher. Jobless claims are pretty much in line with estimates. We are on the markets again in 30 minutes. Back in a 2. We are about 30 minutes away from the opening bell. Futures indicate stocks will open slightly higher as a close is a record high yesterday as the fed said Interest Rates would stay low for some time. Oil prices are spiking because of the violence in iraq with brent crude at a ninemonth high. Struggling smartphone maker blackberry surprised wall street this morning. It reported a smaller loss than expected. Cost cuts and asset sales are helping turn blackberry around. Is out as the ceo of American Apparel. Why did it take so long . Julie hyman has the story. The founder of the company had a colorful and very controversial year last year. We dont know exactly why he has been ousted. Apparently there was an investigation into misconduct, possibly sexual, on the part of charney by the part of the company. Whatever it revealed let American Apparel to move and it moved relatively quickly because over andill be taking he has much more of a traditional sort of retail background. He was with old navy. He is a much different figure then charney who is a native of montreal and ended up dropping out of college and is a selfstarter and someone with a very colorful history. He is very outspoken. He is an outspoken ceo. I remember in 2005, the infamous profile of him where he fondled himself in front of the reporter and she described it where he was very open about having sexual relationships with employees and did not see anything wrong with that. If you see the ads for American Apparel, many times they are scantily clad and they have this 1970s pornography divide. E. Vib he takes many of those photos and casts of photos himself and he has modeled in some of these ads for American Apparel. History. Tely has his there have been other instances where employees have filed harassment suits against him. This has been a long track record. Well andat would be good i suppose if you were an investor if the company was making money. But its not since 2010. It has lost 270 million writ sales were growing rapidly at one time. To some extent but for the last two quarters, it has hit some speed bumps in the same store sales have been down. It has not just in the profits. The company has to figure out what to do to get the cfo in place as ceo to turn its fortunes around. After the ceo ouster, it may be at risk of default so we will be watching that. Thank you very much. Moving and shaking this morning, former Goldman Sachs trader says his onus for 2010 was unfairly cut to more than 8 million. He wants a most 5 million of that back. Hets what he told his mom would be paid. The year before in 2009, he was paid more than lloyd blankfein, a cool 15 million. In an arbitration hearing, he said he was led to believe his 2010 bonus would be 13 million but then he said it was cut back to 8 million. An Industry Panel rejected his claim and Goldman Sachs called it utterly ridiculous. The u. S. Supreme court could rule as early as today whether antennas toe its capture tv signals and sell them over the internet. The ruling has potential to completely revolutionize television landscapes and the way we watch television. Is with us whoe has been all over this case. Lets play out both scenarios. What if aereo wins in court . It changes so much potentially. The reason why it was brought to work in the first place is broadcasters are complaining because they are taking error signal and selling to consumers and they are not hang us a penny for that. They are typically called retransmission fees. If they win, that is four or 5 billion in these retransmission fees that can be left on the table that broadcasters albeit without. They could also change things on sports rights. Take a blackout if they win, theres still a chance that on top of that, they are allowed to take that local sports signal and send out to someone. Someone in new york and watch the San Francisco 49ers game. Can they go around the blackouts . They could so it is not just for broadcasters. That takes one big lever away from the Cable Companies. There are a lot of things in play, the entire economics of the Television Industry could change in one fell swoop. At the same time, there are deals already locked in that broadcasters have for like three years. There are sports leases as much of seven years and nothing will change overnight but over the next few years, if they win, you will see jockeying. There will probably be a lot of preparation for what will happen in the next 35 years. The broadcasters have time to figure out what they can do. They could take all their signals off air and not go directly from cable. It is not calamitous by any means ifaereo wins but tv will change. Other any indications that Cable Companies that broadcasters will the new theyre only their own Digital Service . They have all invested in different types of technologies and cbs is at the forefront of this. They have invested some and theyve got Technology Ready should ruling come down against them or in favor of aereo. The second scenario is what if aereo loses . Pretty much back to status quo. Silicon valley will be like going back to the drawing board. How can we disrupt television . All mediums have been disrupted and tv is the one that has held out. The economics of television have remained intact despite all the newfangled ways of watching tv these days. It also means that the broadcasters and the Cable Networks will try to figure out a way to meet their consumer demand for easier ways of watching television and cheaper ways of watching television. That will still change at some point. Thank you for joining us and we are awaiting this decision. It will happen in one hour so we will see. Coming up, we will talk trade and the future of the Export Import Bank. Plus, oil prices are on the rise due to the violence in iraq and we will see what that may mean for the Global Economy. You are watching in the loop, on Bloomberg Television, streaming on your phone, your tablet, and bloomberg. Com and now available on apple tv and amazon fire. Economy is facing an old threat from a new enemy, oil. There have been economic slumps in the last four decade and brent has risen to a ninemonth high and now raises concerns as as collating violence in iraq could cripple Oil Production inopecs secondbiggest producer. Founding principal at brookshire advisory and research and a professor of finance at Notre Dame Mendoza school of business. Great to see you. Are you concerned about these Rising Oil Prices . Yes, and i think we should all be concerned. As you just mentioned, iraq now has becomeopecs secondlargest producer of crude. It has been a remarkable story for them that they now produce about 8. 3 Million Barrels per day. That means as the secondlargest producer, they are vulnerable to supply shocks. They are and we have seen the fighting around some of the biggest Oil Production projects in iraq and that has been the reason why we have seen oil prices, particularly brent, rise. The president has said that if there are disruptions in iraq and other opec countries could make up for that disruption. Could they . Are the only country that can make up any production would be the saudis. There is not any other country that can really step up to the plate in a fashion. Even the saudis, it becomes a question of how much could they if there was a prolonged production interruption in iraq. I dont think the saudis have a whole lot of Spare Capacity either. Something if there are any risks to this scenario, i see a fragile Global Economic recovery. China u. S. And europe and , it has been lackluster so certainly increased Energy Prices are a risk on the horizon. So far, they have been rising gradually. We have seen some spikes. At what point will it become a shock to the Global Economy . Right now, if we see crude oil prices and i meanbrent 120rent prices rise to dollars per barrel range, i think there are risks to Global Economic recovery. We dont have to think too far back to 2008 when we saw prices inke up to 147 per barrel the most Immediate Impact will be in the transport sector. This is airlines, railroad, truck transport. It becomes a question of higher Energy Prices impacting their cost structure. Or investors, it becomes a question of those are some stocks to watch because their cost structure could potentially be impacted with the conflict we see now in iraq. What do you make of the widening spread . There is a widening spread between brent and wti crude. This is Something Else for investors to keep on the radar. I would continue to see a widening spread between brent and wti. The brent trade is more susceptible to the increased geopolitical risks, if you will. Now, theso and right itsad is has widened to widest part of the curve we have seen in many months. Its all driven by the impact of this potential conflict in the middle east. Thank you so much for joining us. Coming up, u. S. Trade representative Michael Froman joins us on the fate of the Export Import Bank. About the chances of congress reauthorizing exim bank. The j. K. T preorder rowling bestseller but apple has jumped into take advantage. We got much more coming up. The president s export Council Meets this morning on International Trade and they have complicated issues to deal with including the controversial reauthorization of the Export Import Bank. Its charter expires at the end of september. U. S. Trade representative kirk the from and joins us now with more from the white house. Thank you so much for joining us. There has been many questions since eric cantor lost his primary and him being a big im bank whether this charter would be renewed given the opposition from fellow republicans. Are you confident it will be . Good to be with you, betty. The case for renewing authorization of the Export Import Bank is compelling. It supports billions of dollars other countries are out there competing very effectively for those contracts and means to be on the Playing Field. Are certainly going to work very hard to get it reauthorizing we are hopeful it will get done. Has saidposition things about crony capitalism and they think the bank is giving out loans to Foreign Companies to buy products from various u. S. Favored Companies Like boeing. What is your response to that . I think the export import act has a wellestablished track exportsf supporting from the United States and jobs to the United States including small and mediumsized is this is. Thatf their visitors go to in the u. S. So its not just one or two companies. And dozens of companies that take advantage of it and it allows us to compete effectively on a Playing Field where other countries have much larger equivalent areas. We need to be out there supporting this to support american jobs. Absolutely, but to them, the exim bank just helps big Companies Like boeing, like ups or xerox or any of the other companies that deal in trade. Again, i would say they have a mandate to do 20 of their lending to small and mediumsized businesses and have been doing great work in that area so its not just large companies. Export businesses have long supply chains including hundreds of smaller and mediumsized businesses that fit into that supplychain. For every billion dollars of exports we support, it supports 54005900 jobs in the night it states. As part ofrt bank unlocking opportunity for americans through increasing our exports. Doneat trade issues can be before the elections later this year . Is there anything that can be done . We are working on the negotiations side on the Transpacific Partnership and the transatlantic trade and Investment Partnership and agreements in geneva to reduce or eliminate barriers on Information Technology products and environmental goods and. Weve got a very robust negotiating agenda and we are working with our colleagues in congress to build support for moving this trade agenda forward. There isis that unlikely to be votes before november but there is a lot of good work to be done in terms of moving the agenda forward. Thank you so much for joining us. We are a few minutes away from the opening bell. Weve got the top 10 trade you dont want to miss after the break. Julie hyman as the latest on the futures right before the open. We dont have much change in futures after the record close for the s p 500 yesterday and after a global rally in stocks that was set up by janet yellen and what is widely perceived to be hurt dovish comments. The fed will not be overly aggressive in terms of raising Interest Rates. In addition to that record close yesterday, we had the vxx at a sevenyear low so complacency is here to stay for now. We are looking at a slightly higher bias for the open we will have more on the markets in 30 minutes. To the opennt down with the top 10 trays. Jon ferro joins us as well. Nyxeal agreed to by cosmetics for an undisclosed price. Yesterday thes company is on course to spend more than 5 billion on acquisitions in the first half of the year. Making a nine is kkr 3 billion lace meant for private data. Kkr set 2 billion came from investors. Wireless eight is the carrier. The announcement comes on the heels of the new hardware ship between amazon and at t. Number seven is the Construction Contractor for the Energy Industry and will on go undergo a strategic examination of its business. R revenue has declined for 19 straight quarters. Facebookber six is returning to service after disruption that blocked access to the site for half an hour. It has been working on hardware and Software Changes to reduce service interruptions. At number five is pier one imports. The fiscal First Quarter sales rose that it slashed its earnings outlook for the year. They have continued margin pressure. Number four is general motors. General electric the company will update his bid tom today. Presentelt will modifications to the 17 billion plans today. Right age is number three due to higher55 drug costs and reimbursement rate reductions. It reported betterthanexpected revenue for the quarter and maintained its profit forecast in 2015. Number two is American Apparel, it ousted its founder and ceo following an investigation into alleged misconduct. Is a former executive with old navy and will serve as interim ceo. Number one is blackberry sayer shares are surging after they reported a narrower loss than analysts estimated. . 11 y reported blackberry reported . 11 per share loss better than the average 25 loss predicted by analysts. In the portfolio and he has a bullish call on the s p 500 which he says will rise 10 this year and the 10 year treasury yield will be over three percent in the next 12 months. What do you see . Icy robust Economic Growth going forward. Lousy butwhich was three percent handle on gdp over the next three quarters is not out of the question. You could have a modest amount of Earnings Growth between six and seven percent over the next 12 months and you will get a multiple expansion. I know that margins are at an alltime high on the s p 500. Perhaps you get a modest three and just lower but we think valuations can go a little higher and you can get probably a 2000 s p number by year end which is pretty good. We believe the long end of the yield curve will start to go higher as you see betterthanexpected economic numbers on the employment front as well as perhaps Consumer Trends improving as well over the course of the next two quarters. We had Gary Shilling on yesterday who takes the exact opposite view. He says that yields will continue to be low. He sees deflationary pressure in europe and that will keep our rates low as well. He also said that we have Global Economic risks out there. You look at what is happening in ukraine and iraq. None of that bodes well for any kind of growth beyond 2. 5 . Gary has a good point of their. Lets face it, household mortgage debt is still decreasing. That is something you have not seen since the great depression. You need to see that actually start to increase and grow by on which is an anchor inflationary pressure. We think the ecb will step in and start to do good oldfashioned qe over the next 46 months and that perhaps will raise the yield curve in the eurozone as well as here in the United States. The economy is not in full throttle. Weare not at the point where had escape velocity. We dont think we will be on till 1824 months out. The long end of the yield curve on the 10 year estimate out of the question. That takes me to jon ferro gaming ofking at the when the fed will hike Interest Rates. What did you find . If i take anything from the Federal Reserve forecast yesterday, its not the median projection of where rates will be next year and the year after. Its the fact that there was no consensus right now at the Federal Reserve. In 2016, youve got a spread were one policymaker things rates will stay below one percent on another sees rates north of four percent. Youve got to look at these forecasts and look at the uncertainty. Does that not concern you . There is only one person to follow. Dont believe any of the dots on the forecast. They are notoriously always wrong. Follow the words of janet yellen. The inflation rate she is watching, she says that two percent handle is the floor, not the ceiling. The ceiling could be perhaps around three percent or so. She will be watching the core p e price index and that topped out at around 2. 5 . She has a tremendous amount of runway not to raise Interest Rates. There is a tremendous around of amount of labor slack. The great recession, it was at a percent and now it is somewhat structural and maybe well go nine percent but the fed will perhaps raise rates 1 4 of a percent over the next recorders. Are you putting too much weight on one persons view . Ando, she is the coach manager and owner of the team and dudley as well has been signaling that they will not raise rates any time soon. I would be more pragmatic about it forecasting that the Federal Reserve will not be out there raising rates by 50100 basis points well into 2016. I think you will get. 25 raise in 25 in 2015 and that will happen in the backend. Ebay is a pick you think we should buy. Tumultuous for ebay in no small part because of beenicahn who had conducting an activist campaign regarding ebay. He was aggressively pushing for it to separate from paypal. It looks like he has not been successful in doing that. Causedlast quarter, this a lot of head scratching with ebay repatriating 9 billion worth of cash and paid 3 billion in taxes on that and got 6 billion of cash is a resultant forecast secondquarter sales that trailed estimates. Despite the involvement of icahn, this is not boosted the stock. It is underperforming the market as well as other heavyweights of this size. Why buy into ebay . It is a value stock. If you take 35 your look at the stock and say i will own this for this long, the earnings will catch up. The forwardlooking multiple is you have the6x and opportunity perhaps rather could be divestiture of paypal. Lets say they dont do that. What will be the growth rate over the next 35 years . We think the growth rate will be 1213 even if you have operating margins that go lower. We agree that Revenue Growth is decelerating but it is not it is starting to become a value play and we look for companies consistently growing and profitable with very little debt and thats what we have here. Its a terrific company, 65 is our price target. Thank you for joining us with your strong call. Bezos unveiledf the amazon smartphone yesterday. Does it have what it takes to be a game changer for the industry . The book that harry potter author j. K. Rowling wrote under a pseudonym just got a whole lot storer on the apple ibook and we will tell you when we return. Stay in the loop. Twitter Just Announced it will buy start up snappy tv. It offers a platform of tools that enable users to edit, share, live videos within the cloud. Google and microsoft will incorporate a kill switch into the next versions of their smartphones. The new York AttorneyGenerals Office said Public Officials have been pressuring mobile carriers during the past year to add mechanisms that allow smartphone owners to basically disable the device if they are lost or stolen. More than 30 of robberies in the city involved mobile phones according to the fcc. Apple is promoting and discounting has shed digital books including the book by j. K. Rowling written under a pseudonym. They have been battling it out with amazon over pricing for books. Booksare 25 cachette priced lower. Relative media, the company known for films like the social network, is planning to go public. Ryan kavanaugh tells Bloomberg Television that the goal is to complete an ipo within 1218 months. Him andchman spoke to joins us now from l. A. Why are they doing this . Ipos, its kind of the normal progression of a company, the next chapter in your growth. With Relativity Media, it is feel that way. Thatkavanaugh tells us refinancing debt and raising capital right now ahead of a planned ipo they are in the movie business but they have also expanded beyond just making movies. They are a big player in reality tv. They now have a massive sports representation business. They pushed into the fashion business. Along the way, they have made acquisition so when we asked Ryan Kavanaugh what he will do with the money tied to a possible ipo, heres what he had to say. I think the purpose of the ipo really is so that our company can be liquid and have the capability of growing at the same speed as other Large Public Companies meeting up there is acquisitions we would like to make in the tech sector, we have a liquid stock to do that. Relativitys name came up recently with other possible deals. They were interested in maker studios which disney acquires a sometimes being public makes it easier to go after targets. Everybody can figure out what exactly your stock is worth. He also said they could list in new york and hong kong . He did, this is a company that has been operating in china for a long time. They are fresh off a series of announcements in china which will expand relativitys presence there. Here is more on what he had to say. We consider ourselves as much a Chinese Company as we do a u. S. Company. There which is our disturbing or and has a government issued as to be some license. We are the only studio to have one so the focus for us is we really understand that those are the two linchpin markets. Pushpect to see a bigger as welywood into china are setting the stage for china to take over the title of the biggest walks office in the world. Thank you so much. You can see all of jon erlichmans interview with the ceo of Relativity Media today at 1 00 p. M. Eastern time on lou merck west. They also have blackberries john chen who will be speaking out on their latest quarter. His strategy might just be working if you look at his latest release after they reported a much narrower loss for the quarter than analysts expected. The cost cuts helped to offset the continued loss in sales. Joining us with more is john butler who covers telecoms. You and i have talked about the struggles at blackberry for many years. Izzy finally getting something right . He is, actually. He is the right man at the right time and he is doing a great job with blackberry. What caught my attention on the the this morning is he said restructuring on the cost side is largely done in the focus is going to turn to a return to Revenue Growth. I think he will get there. He is a software man by background. If you look at the assets that blackberry has come in he has looked at the company has more than a device company. He is looking at Blackberry Enterprise Services which is the back Office Mobile management. They have a huge patent portfolio and he is doing a great job with blackberry messenger. They are off to a good start and this restructuring and he is the man to watch. It seems that way but its too early to tell. It is. What do you think will be the biggest revenue driver for blackberry . Its tough to say at this point. I still have my eyes on the device portfolio. I say that because they are coming out with a classic. I still see all these people with these old blackberries out there and the classic is fashioned after that with enough aged operating system. I have yet to talk to someone who has bought a new blackberry who has complained about it. They all say best phone i have ever owned and i love it. We will see. Its early days but we will see. Speaking about phones, what do you think of the amazon smartphone . In my view, amazon disappointed me a bit. It was a conventional phone at a conventional price. I think if you are going to go at the handset market which is brutal, you either have to have a very strong brand which they dont in handsets or you have to compete at the low end of the market and they did not come out with that. If this were a free phone, we would have a different conversation. It is priced at 199 for a twoyear contract on at t. Amazon is a retailer at heart. After is are really raising the average transaction for prime customers. Success, their idea of can they sell enough phones to have the prime users get that average transaction number up . The answer may be yes to the definition of success for amazon may be different. For them, it wont to be about the total it is not the share number. Exactly, how many people can they get to use that phone to use their other services to buy products. Who do you think their customers for this phone will be . I think it will be the heavy amazon user. And they are out there. Will they offer discounts or some incentives . They have one incentive in place which is not bad see you get one year of prime for free which is a 100 value. It cuts the price in half of the phone. There are people like my wife who loves to buy stuff on amazon. Its the easy button. You can have it in your hand and its one click and you are the better off. John, thank you so much for joining us. Chile leadership is short this season year. Stay in the loop. Market raised one point 3 billion in the u. S. Initial Public Offering and the shares listed on the nasdaq stock trquette under the symbol mrk and will begin trading today. The world cup and barbecuing is an issue in chile. Beat spaine yesterday, they asked soccer fans not to have a traditional barbecue at home. Authorities say that after last fridays game against australia, barbecues almost caused an environmental emergency in san filling the city. The worlds biggest cosmetic makers getting bigger. Nyx cosmetics. Ng the company is having a strong year even in markets where it has not done well recently. Southern europe is back in Southern Europe had a difficult six years. Spain, portugal, italy, greece were very top. These arery countries where we were very strong so it affected us very much for six years. For the first time in the First Quarter, for the first time in is years, the market there flat and we are positive. Onthat does it for us today in the loop. Republicans are likely to pick california congressman Kevin Mccarthy as the new House Majority leader today and he will replace eric cantor who lost in a primary race last week. Stay with bloomberg for full coverage leading up to a special edition of bottom line at 2 00 p. M. Eastern time. Rigel will give his reaction to the shakeup in his party as the gop is reorganizing following the cancer defeat tomorrow at 8 00 a. M. Right here on Bloomberg Television. It is 56 pass the error and that means Bloomberg Television is on the markets. We had a record close yesterday for the s p 500 in the wake of Janet Yellens press conference where she indicated that rates would stay low for a long time. On the back of that, we are not seeing much reaction today. If you are looking at whats going on in the treasury market, we are not saying a whole lot of movement there either. As banks keep the rates suppressed, investors are being driven to disaster bonds. Demand for the 22 billion guarantees against natural desires are, Natural Disasters. For more, carolinechen joins us. How do these bones work . Catastrophe bonds or disaster bonds are a way for insurers to put a spread of the Natural Disaster out to the bond market. They are usually tied to a specific event like a hurricane in florida or an earthquake in california. If the incident is not happen, investors are happy and get paid back at a high rate of a hurricane strikes, the insurers dont have to pay anything after that. Afters the bond expired whatever the event is . It is usually for three or four years. There is not going to be a hurricane in florida for maybe the next three years, if that happens, the bond is triggered. Why is this attractive to investors . Weather forecasters have a hard time predicting the weather let alone an investor. With the rate environment, they usually pay a high rate. Investors are searching for yield everywhere right now. The other factor is the diversification. Payicanes dont really attention to what is going on in the market so its a way to diversify your portfolio. What are the risks . You could guess wrong. Correct, you would stop getting payments when the bond is triggered. Thats the this risk they are getting paid for. Some people say that hurricanes are easier to model the human sentiment of the market but it depends which side you are on. We are seeing the bond issuance at a record with just a relatively small compared to the overall bond market by what has been driving the demand . Is it the idea of reaching for yield . . Yes, thats the case on the investor side. One of the people interviewed said is you cannot have something called catastrophe bonds and have investors flock to it or it it sounds funny. Part of it is that the market is just maturing and people are getting used to catastrophe bonds and are comfortable with issuing and buying them. I think we will have to wrap it up there because we have breaking news from General Electric. Thank you so much. We have been waiting for this news from General Electric offering an update on its offer for alstom and it looks like that is happening. G is talking about some sort of alliance with alstom in energy and transport and would establish two point two joint ventures together. If you look at some of the details, the valuation of this offer for alstom remains unchanged and that is something she indicated that it likely would not be any change to the valuation even though the offer from semen is higher from even though the industry is higher than that from ge. A General Electric has its offer as being less compensated complicated. We will give you more updates as we get them at the top of the hour. Stay tuned. Live from bloomberg headquarters in new york, this with erik makers schatzker and stephanie ruhle. Shot down by scandal, the apparel house founder sees allegations of misconduct. And the most viable bank, we will see which of the countrys Financial Institutions wins this title. It is awfully expensive to eat like a caveman. The price of protein source. A