Orders for its ipo early because of overwhelming demand. They are right in the middle of their roadshow. Taking aim at russia, tightening sanctions on 15 companies, limiting their ability to raise money. The president of estonia spoke to ryan shook a two Ryan Chilcote spoke to Ryan Chilcote this morning. We have the worst violations of International Law since 1945. We have the annexation of territory, which is in violation of so Many International agreements. Until we return to the status quo, i do not foresee a complete removal of sanctions. They will be in place as long as we have this major violation of the national law. Bloombergs alix steel has been looking into companies affected. For investors heading off to work today, who are the companies affected . The actual russian companies, three Main Energy Companies to look at, Natural Gas Company gazprom, the oil giant, and a transport company, plus there are three Industrial Companies that will be affected, including united aircraft and nine defense companies. On. Adds back in july when we got those stateowned banks by russia that the u. S. It is expected the u. S. Is expected to follow suit appeared will be the biggest impact on u. S. Companies . The biggest risk to follow suit. Will be the biggest impact on u. S. Companies . The biggest risk is to oil companies, services that come with equipment. Perspective, i was talking to someone from raymond james, who says russia is less than 5 of earnings for the Top Service Providers with russian operations. It is kind of a drop in the bucket. Arguably, the biggest risk is from bp. Net. Own about 20 of roz exxon has committed a large amount of money to drilling in the art the arctic. It could equate to almost 900 billion worth of revenue. What about other sanctions . Thats one of the questions we are trying to come up with. Will it affect the Defense Industries . I was talking to george ferguson. He said, not really. We dont really sell that much to russia, russia doesnt really buy that much from us. The real impact would be in the commercial airbus space. Russia doesnt have any sort of replacement for that. Knowing an airbus would want to keep delivering. Boeing and airbus would want to keep delivering. Thank you so much for that, alix steel. Moving and shaking this hour, jp morgan Ceo Jamie Dimon is not letting Something Like chemotherapy and radiation slow him down much at all. The banks cfo says dimon is sh ockingly present. Dimon is scheduled to finish treatment for throat cancer. Warren buffett sent him an email urging him to watch episodes of breaking bad during his treatment sessions. Call also got a treatment from none other than the president. Now comes the tough part. Dimon will have to wait several months to see whether the cancer is still present. Liar those are the words spoken to me by the owner of the Miami Dolphins in support of nfl commissioner Roger Goodell. Believes good l did not see the videotape that shows ray did notbelieves goodell see the videotape that shows ray rice knocking out his then fiancee before it leaked this week. There are prior reports that claim it is impossible godde goodell did not see the tape previously. Ross joins other owners backing him in the wake of the ray rice controversy. For more on these exclusive comments, i want to bring in our columnist, who has right our columnist who has written quite a bit about this story. You say it is no surprise the team owners are supporting goodell. Has made them a lot of money. The revenues last year were 9 billion. 25as pledged to up that to billion. The owners have no choice but to come out and support him. He is very comfortable in that world. They are comfortable in his. How is goodell how has he increased the value of these teams, franchises . Goodells mantra is , which mightields be what got them in trouble this time. You see all of these walkingback comments and all of these contradictory statements, insularity. An attempt to project an image of the league that is contradictory to what we know as a fact. Is it measurable . We can see how the ray rice controversy has impacted the money of football. Has it . I dont think it has, and thats really the sad thing. The league has withstood a lot of firestorms over the years. Concussions, ticket scandals, steroids, things like that. It will be interesting to see how viewership is impacted. I dont think it will be. I dont think advertising would have much of an impact either. The ceo of verizon came out yesterday and said Roger Goodell is a man of great integrity. Unfortunately, i think people will still tune in sundays, despite all of this. We have a chart or table that shows the number of other players who have been accused of Domestic Violence. We are not talking about ray rice being an outlier. This has been a problem for the nfl, perhaps it was a ray rice videotape that brought this out. This is us to stomach this is a systemic, institutionalized issue. There have been 13 total games of suspension. This is not an issue the nfl has taken seriously in the past and we have no reason to believe they will take it seriously in the future. What would it take for the team owners if they did want to oust goodell . It would take a major groundswell of Public Outreach am a first of all, which we are seeing right now. It has been sustained in a way the league never imagined possible, frankly. I dont really think that Roger Goodells alister ouster would be any kind of systemic change. We need an entire overhaul. There would need to be a 75 majority, right . We would need 25 of 32 owners to vote him out. Which is impossible. Do weing female fans see any evidence of that . Not in the slightest. It is really unfortunate. Even right after the suspension came down for ray rice, you had female fans giving him a standing ovation at preseason games. I guess football rules all. Thats what they are going on. In yesterdays game, you saw many of them wearing his jersey, number 27. They are still selling his jersey on the website. Thank you so much for joining us. Our Bloomberg View columnist. It is finally here, apples new iphone is available for preorder starting today. Bey customers might not ready for an upgrade. Companies are picking up on the trend. That is why the trading game has never been hotter. Bloombergs julie hyman joins us now. Which companies are offering the best deals . They all have deals and they are all trying to outdo each other with the deals. Tmobile says it will give you the best deal on your tradein. If you find a better deal somewhere else, it will give you 50 extra. I might be the best deal out there. They are all offering something. At t is offering 300 extra offering 300 extra. Sprint will try to match all the other carriers as well. It depends on what model of iphone you have, what the value is, what condition it is in, etc. Then you have the retailers getting into it also. Walmart, in addition to offering tradein rebates, is cutting the price of the phone already. You can actually preorder just the regularsized phone, not the plus thomas for plus, for 179. When you pick up the phone, you get a 15 walmart gift card. Target also has tradein offers. Best buy offering some tradein offers as well. It varies depending on the various phones that you might have. What about the deals on the phone plans . The phone plans is very important as well. Look right now it looks right now like sprint is offering the best deal in terms of the data plan it is offering with the new iphone, 70 a month and up from there. Verizon is the most expensive when you look at the various phone plans, whether it is on the iphone or on existing phones and existing plans. I heard that the Apple Store Website crashed . Apparently it did crash. It went on sale, as you know at 3 00 a. M. New york time, midnight on the west coast. There was such a flood of demand that it caused problems, echoing some of the problems with the screen name a lot of people were trying to watch it. The translation into mandarin simultaneously as they were hearing the english. They were having interruptions to the stream. There have been a few a few snafus. In this new iphone cycle. You cant make that stuff up. Much, julie hyman, our senior markets correspondent. Coming up, congress has made a lot of noise about American Companies moving overseas to avoid u. S. Taxes. Will anything really change . Puts down some roots and buys a big chunk of land in San Francisco for its new headquarters. We will talk to the developer partnering up with uber. From washington to omaha, movers and shakers weighed in t theweek on in version, attack strategy that allows u. S. Companies to acquire foreign ones and adopt their tax rate. Asked burgerdurbin king not to relocate to canada with its purchase of tim hortons. Warren buffett commented contacted senator orrin hatch about in versions. All this after secretary jack lew said a change to the rules is coming. Any action we take will have a strong legal and policy basis, but will not be a substitute for meaningful legislation. It can only affect part of the economics. Only a change in the law can shut the door. Only tax reform can solve the problem in our tax code that leads to inversions. Will the law really change and how . With me is steve rosenthal, a senior fellow at the Brookings Tax Policy Center who has done a lot of work on inversions. What could change in the tax law coming down from the treasury secretary . Thank you for including me. Everyone agrees corporate inversions are a problem. Congress have been on for the last few months, waiting for congress to act. Many believe that treasury could act if congress does not do so. We have a couple weeks of congress before they recess, then people will turn their attention to secretary lew to see if he follows through on what he suggested, that treasury might get act on inversions. What would be the headline from that . What would be the big move the jack lew could make . The headline would be jack lew takes the juice out of tax inversions. Right now, u. S. Corporations that invert sidestep a lot of taxes. It becomes economically attractive for them to flee our country. There are pending legislative proposals to remove those incentives, but many believe that secretary lew can take steps on his own which would remove some of the tax incentives for u. S. Companies to leave. Thats what i mean. Would it is essentially being banning all of these inversion deals from this date on, period . The secretary cannot ban inversions. What the secretary can do is prevent interested actions on loans by a foreign parent to a u. S. Corporation. Invertsu. S. Corporation , it often leverages up with a lot of debt from its parents, its foreign parents, taking lots of interest deductions and reducing and eliminating its u. S. Tax. Secretary lew could try to limit or prevent those interested actions. Know i agree that everybody thinks inversions are bad. There are many ceos who think it is not bad. ,e spoke with one former ceo former ceo of american express, who fully supports these inversions. I want you to hear what he said about how he views these deals. If i run a corporation in the United States and im in new york and i pay state taxes in new york and i decide to move my corporation to texas to pay a lower tax rate, among other things, why wouldnt new york say, wait a minute, thats unpatriotic, you started your company in new york, why are you moving out of new york . It is ridiculous. Companies operate in a way to maximize their business. Why is that wrong . Sure, Companies Operate in a way to maximize their business, but companies also owe taxes. Take working for instance. We inspect their food products. We maintain roads and bridges. We educate and train their workers. We subsidize their health care. And for all of that, we expect something in return. The problem here is we need to defend our tax base. If we allow in versions and companies to selfhelp and sidestep their tax responsibilities, we wont have enough left for the rest of us. All right. However, the company say, look, we are moving overseas. We are going to pay a lower tax rate. It doesnt mean we are completely abandoning the United States. In fact, we are able to maximize our profits if we are able to maximize our profits, we can hire more people and put jobs back in the u. S. For sure when i u. S. Company inverts, nothing changes. Production stays here, jobs stay here. The only thing that changes is taxes. The question is how do we make up for that shortfall in taxes. If we dont make up for the shortfall, the rest of us american taxpayers are left holding the bag. U. S. Companies provide lots of economic benefits, good things, but we also need taxes. Thank you so much, steve. A whole lot more coming up, including some startling figures about the number of troops fighting for islam escape. There are a lot more than the cia originally thought. Also, attacking General Electric on its home turf. We will talk to the ceo of a Swiss Company that is doing just that. You are watching in the loop , live on Bloomberg Television, streaming on your phone, and television. They have reached a deal to replace three Board Members with icahn associates. That will avert a deal with a battle with icahn. The agreement comes on the heels of the monday announcement of the resignation of the ceo. Ford is recalling more than 200,000 cars, among them the escape and focus. Gm has put a hold on deliveries chevy hotselling corvette. Olympic medalist Oscar Pistorius has been found guilty of culpable homicide in the shooting death of his girlfriend, reeva steenkamp, on valentines day of last year. Global homicide is the equivalent of manslaughter. Culpable homicide is the equivalent of manslaughter and could carry a sentence of five to 15 years. The judge ruled yesterday that he was not guilty of murder. We are on the markets. We will get another peek into the consumer. Retail Sales Numbers for august will be out. We are on the markets again in 30 minutes. Back in washington, the cia has increased its rough estimate of Islamic State fighters. Could fallbers between 20000 and 31,500, up from 10,000 in may. Americas escalated offensive against the organized nation contains complex and challenging components against the organization contains complex and challenging components. The man faced with the job is secretary of state john kerry, someone who has been taking a closer look at the job he has ahead of him is White House Correspondent phil mattingly. Thats right. If you want to know how important the regional allied piece of the administrations strategy is, take a look at where the president has dispatched his top deputies over the past two weeks. Multiple visits to countries like saudi arabia. Today, secretary kerry landed in and kara in ankara, turkey. Alliesre very reluctant in that region who are essential to the administrations push going forward, be it in training or just getting them to back any type of Movement Forward on the Islamic State. It is something secretary kerry underscored yesterday in a meeting with saudi arabia. This meeting could not happen at a more important time. Frankly, it could not include a more Important Group of partners. Every single country represented here today, including especially iraq, will be a critical part of the effort to destroy isils ability to terrorize. Coming out of that meeting yesterday, the secretary was able to secure a communique from 10 Foreign Ministers from regional allies, saying they would be willing to back the u. S. To the extent they were needed in their push against the Islamic State. He high in the scenes, the complicated process is still very clear. Countries are wary of giving public support to the u. S. , wary of giving military support to the u. S. There is no shortage of work the secretary has to do to secure the coalition the president has laid out. Is there one single most important country they need to make sure coal operates with them . There is one for sure make sure coal operates make sure cooperates with them . There is one for sure. But it was the Security Advisors work that cleared the way for the administration to secure saudi arabias commitment to serve as the host for training and equipping of syria s rebels going forward. U. S. Officials are very happy with that development. Another country to keep an eye on is turkey. President or to want perside erdogan met with president obama last week. Turkey refuses to sign on to the communique. The Islamic State is holding captive more than 40 turkish government officials that were seized at a consulate. As long as those are in Islamic State hands, its unlikely the u. S. Will get fullblown turkish support. Thank you so much, phil mattingly, our White House Correspondent. We are only a few weeks away from the debut of our new program with Mark Halperin and john and john heilman. 6,starts monday, october only on Bloomberg Television. Retail sale numbers are breaking they pretty much match estimates. Core retail sales are in line, up 3 10 of 1 . Economics editor mike mckee has the breakdown. You are right, we do get a six 10 a 6 10 gain. That is good. It has been month after month of declining increases until july when it was flat. Everybody was wondering what happened to the consumer. Autos solda lot of during the month of august. It looks like we are also seeing some strength at the mall with a 3 10 gain exautos. Clothing stores are up 3 10. July has been revised for Clothing Stores up to a 9 10 gain. We did have a decent backtoschool season. Department stores down interesting. Ich is eating and drinking establishments. You and i have talked about this before. We watched this because it is a real sign of Discretionary Spending ability. Is up strongly, 6 10 of 1 that is up strongly, 6 10 of 1 . Focus on what goes into gdp, up 4 10. It looks like consumer is, for the month of august, contribute into gdp growth. We will see what that does to gdp estimates going forward. Economicsou so much, editor mike mckee. Coming up, as ge makes deals abroad, one of its biggest rivals is going after the company on its home turf, right here in the usa. Joins me for a look at his new strategy. Settling down further in San Francisco. It inks a deal for a 15year lease. We will talk about its partnership with the Real Estate Developer on this new project. This week, Swiss Industrial Group abb presented a new financial mediumterm target and announced a Share Buyback program to hand back to investors some of the revenue from some asset sales. Billion power and automation giant. It competes with siemens, g, and rockwell. Its ceo has been in the role for just one year. Next leveld a strategy, including a fresh emphasis on engineering and software services. Great to see you this morning. Describe more of this next level and what that will look like for abb. Positioned inngly very attractive markets. It is not about changing where we play, its about how we play. We are trying to push growth to the next level by focusing on aghgrowth segments, like automation in the u. S. , which is very effective for us. We will drive the execution. Weve been very successful in certain areas. The whole thing is aimed at providing very attractive returns. You mentioned organic growth, but youve been really acquisitive. Youve bought Something Like 10 billion or 11 billion in u. S. Companies alone. Are you going to taper off on that . Are you still looking at acquisitions . We absolutely look still at acquisitions at the right time. Wehave one of our divisions are fixing because we have some legacy issues. We have some things to integrate. Weve been very cash generative. We are getting part of the money back to the shareholders. Speaking of acquisitions, i have to ask about this inversion debate, which you must have heard and seen the headlines on. You are on the flip side of it. We are talking about u. S. Companies moving to countries like yours in order to avoid higher taxes. How do you feel about that . I think the politicians set the framework and entrepreneurs have to respect the framework and do the best for our companies. In the u. S. , its a different environment than europe. The european side are working hard with the authorities to make sure the tax rate is responsible for our shareholders. Does it trouble you how big a debate it has become in the u. S. . I focus on my customers. It makes me wonder whether youve had companies approach you, for instance, other u. S. Companies approach you and say, look, given all this inversion debate, what about partnering up . It would be hard because we are a little bit big to swallow, to be honest. But the [indiscernible] what about the potential here in the u. S. For the oil boom that people talk about and what that means for your company . How do you get in, being that you sell so much of this equipment . I think it is a fantastic development. The reinvest realization of the u. S. Is for real. We are strongly positioned. We are number one in power supply in this environment. On the automation side, our number one position puts us in an ideal spot to participate and support our customers. There have been a lot of critics of what it potentially means for the environment here in the u. S. There are very well known people, locked like tom stier , who is against the project. If it doesnt get approved, will it have any impact on your business . Is to help the world to decouple environmental pollution and economic growth. We try to have Technology Available that enables us to little oil with as consumption as possible. The rest of the energy that is still needed, we provide very environmentally friendly technology, wind, solar. Abb is strongly positioned in that field. Headtohead competition with france, for example, after the allstar acquisition the alstom acquisition, did that change your course at all . That acquisition has not gone through yet. Thank you so much for joining us. We really appreciate it. Look at what nevada did to win over tesla and become the home of its first. Libabas roadshow a look at the companys first week of meetings. Theyve already filled up their order book. Stay in the loop. Today cost bloomberg big number is 1. 3 billion, the size of the tax break nevadas legislature approved so tesla would build its giant battery factory in the state. Lawmakers agreed to write off sale taxes sales taxes for 20 years and property and business taxes for 10 years. The factory will employ 6500 people once it is in operation. This will legislature has exempted the company from a law requiring the new cars be sold through a dealership, something tesla does not do right now. Speaking about the importance of asation, uber will add more more office space in San Francisco, even though Office Prices will soon surpass manhattan. Manhattans. Work with a company that rehabs hubs in different locations. With the with me is the ceo and chairman. This is an unusual transaction between this tech company and yours. How did it come about . It came about quickly. Huber is an uber growing uber is an ubergrowing company. They wanted a developer to partner with them, looking for certainty of execution and quick timing. That is not so easy today in the city of San Francisco. They are not going to own this property, are they . 49 andg 9 and we we will own 51 . Very unusual structure. It is. They will lease it for 50 years . That is a long time frame for a new company. Were you worried . Not at all. They just raised the last round of financing that valued them at a pretty substantial valuation. We think that Business Model is one that is here to stay. If you take a poll of how many people use uber in and around most of the cities, you would be blown away with the with it. They were one of the first movers, if not the first mover in this business. What exactly are the plans here for this project . Into the ground, which is unusual in the city of San Francisco, and can deliver half a million square feet by the Fourth Quarter of 2016, which will enable them to continue their rapid growth. They are Worldwide Company now. How much is the complete project worth . No one has announced exact dollar amounts. We bought the land for 125 million dollars. The cost of construction has not been announced. We have not filed final plans with the city. It is a sizable transaction, several hundred million. Several hundred million dollars. Is uber going to lease the entire space, or will other Companies Come in as well . It will be entirely their space, sitting next to the warriors new stadium, also a big attraction. And the fact that they wanted to do a 15 year lease, is there concern on companies that rents are going to skyrocket . Yes. One of the problems with proposition and limiting the amount of Office Product that can come onto the market, there is a natural barrier for supply to your prices are increasing pretty dramatically. Tell me the difference between working with uber and some of the other Tech Companies the scienceith and and pharmaceutical companies you are traditionally with . It is similar. They are missioncritical facilities. What does that mean . They need that to operate. It is part of an expansion of their worldwide headquarters, so they are important. Timing and certainty are really important. It is very similar to working with some of the big bioTech Companies. We did googles first campus in Mountain View and we did google xs campus. Are pretty used to it. You are collecting quite a portfolio. We are very honored to work with them. Weve heard so much from canle like , saying we build campuses like that in other parts of the country. We could be in denver or detroit or nashville. Is that really true . Im from denver. We love nashville. The answer is, the real Millennial Workforce that is and highlyducated, motivated, they are gravitating to places like San Francisco, cambridge, boston, new york city. You arent finding quite as many people going to those other locations. If youre going to hire thousands of talented people, it is hard to go into a smaller market. And you dont see that changing anytime soon . I think it is really the opposite. If you look at life science going to cambridge, most everybody wants to be in the heart of cambridge. That seems to be the trend. Great to see you. Up, day five of the alibaba roadshow. We will see what sort of reception the has been for the Company Expected to have the biggest ipo ever in the u. S. Turnedow the government up the heat on yahoo new documents reveal just how badly the nsa wanted your internet data. Alibaba is closing the books on its ipo a day early after seeing Strong DemandStrong Demand for shares, according to a person with knowledge of the matter. Sell sharesough to at the higher range for what is expected to be the largest ipo ever. Unique rep Time Research and context, which unique realTime Research and context, which is exactly what we need. Was this a surprise . It is not a big surprise. It is a very big deal very well known deal. What is surprising is they have sold 21 billion they are selling 21 billion worth of stock due thats a huge deal. To cover the price range the valuations are very reasonable, even at the high end of the range. It is no surprise from that sense, from a valuation perspective, that it would be covered. Just the other day, i was reading reports that some bankers were worried that they would be able to fill the books, because it was such a large offering. Exactly. When you are selling 21 billion worth of stock, you have a much more different time difficult time than if you are just getting by and from a couple of investors. With this, you need people to be running to the hills to be submitting orders. It seems like that is exactly what has happened now. What we dont know is where within that range that they will actually price. According to sources im talking with, the scotians are supposed to take place over the weekend. We will have a better indication within the next few days whether or not they will raise the price range or whether they will price within the range. Does this guarantee the stock will pop . It doesnt guarantee anything. The company is doing a great job on the roadshow. I was at the lunch on monday in new york where there were over 800 investors. I look at some of the senior bankers who were representing unders underwriters. They looked at me like, weve never seen this before. The demand built from there. Before they got to their boston meetings, they had boston orders coming into the books. At first day really set the tone that first day really set the tone and created a tremendous amount of momentum for the transaction. Now what do they do with the price range . Do they go above . Do they sell more stock for the company . We will have to see how it plays out over the next couple of days. What happens for the other investors who are waiting till waiting to meet these guys question mark whats interesting about the decision for made, what happens the other investors who are waiting to meet these guys . Whats interesting about the decision they made, these other meetings are still in place and they will still be able to submit orders. The book is closed for everyone else. The books the meetings on the books will still take place and they will be able to submit orders as they would normally. For everyone else in the world youve got to wait. Thanks so much. Paul, i hear you are a sports fan. Baseball fan. We saw a couple of nasty moments in a baseball game between the miami and milwaukee teams last night. Star suffered multiple fractures to the face when he was hit by a pitch. He was not awarded first base because the umpire called it strike two. Then when the next batter was hit, the benches emptied. The marlins werent awarded a base on this because the umpire had called a strike three. The player who was first hit is likely out for the rest of the season. Basically, they both got hit, both struck out, and everybody got angry and stormed the field. It was going to be kind of a boring game. Now it is on espn sport scenter. It was a crazy night in baseball last night. It was. We had this story on bloomberg about how people get hit by foul balls. Anyway it is 56 minutes past the hour, which means Bloomberg Television is on the markets. The markets are a little bit lower as retail sales fell. On the markets again in 30 minutes. Back in 2 minutes on in the loop. We are 30 minutes away from the opening bell. Here is what we are working on. The s p is down a half percentage point for the week. Overwhelming demand for the alibaba ipo is so much that the company will stop taking share orders a day early. In the meantime, retail sales were up a strong 6 10 of 1 . Economics editor mike nikki says you may be how fat mike mckee you may be surprised at how fast it is expanding. Beginning been getting lower and lower, and now if the biggest increase since april. Automakers had a blowout month they were selling cars and trucks of the highest rate in eight years. That was confirmed in todays report which counts dollar spent at dealers rather than unit sales. Up 1. 5 . One well aboutol, cars, we live out gas, we may about building materials, they are counted in separate material categories. This is directly what goes into gdp. So that is good for growth. Chain store have reported very strong backtoschool shopping saving seasons. Ready and willing to shop as the economy continues to improve. So how fast is a growing now . Wasknow how everybody questioning predictions about to r in the First Quarter . Now they are seeing it. Third quarter running course to 4 . Sales may be up, but we saw that drop in the retail employment last month. What is going on here . The job in retail jobs may be a reflection of your stores out there. Or it may be with more and more people shopping on the internet retail employment is going to stagnate a little bit. Thank you so much. Of this spending and how the consumer is doing from the industry perspective i want to bring in the former president of cross developing markets where he helped to turn around brands like oreo and tang. Of fewer, the author bigger, bolder, which talks about how is mrs. Can achieve and growth. Y businesses can achieve focus, quality him and growth. What is the most important job now for a retailer . And has been a good month, but there is still cautious optimism. Overboard. Go ity companies are finding difficult to grow. The job gains are defined by a lot of them are the ones who do not have discretionary income. Those companies who do fewer things bigger and bolder seem to be winning. And that actually means focusing on stocks like you went, differentiate. A great example of a few things that really do them bigger and bolder. A sense where you are trying to create markets rather than just fight for market share. That is significant. That might work for apple, but what about walmart or target . You need to be the onestop shop. Ceo justinas a new installed. He has some great experience but he has also had experience with the Customer Experience. Going to fewer categories were they want to double down. Where they are historically good. Fashion, home. The whole idea is to try to build that because that is what makes them differentiated. That is where they will focus, that is where they will be bigger and bolder. That does not mean you get out of grocery, but you put your resources where you can win. To ringhey have the prices down because that is Consumer Mindset . Everyone has to make sure that they are lean and simple because what we have found in our work on the book is that yournies get complex and credit can inwardly focused. The whole idea is not to look at yourself but out the window at the consumer and the customer. The whole idea of keeping things simple, is not just part of retail but for all companies. But isnt some of this being pressured by the fact that consumers are splitting their spending dollars in more places . Wouldrs ago consumers just go to a few stores and spend their money but now they have all of these choices. That is exactly where the work we did in the book, we found that Many Companies are spreading themselves really thin and trying to do more. More stores, more categories, more promotions, more marketing. The seduction of more. I do you go from the seduction of more to the wisdom of less . We have a seven step guide to focus on where you can win. Counterintuitive people. To trust the overall Customer Experience is important, and on the channel experience whether it is bricks and mortar or indeed internet. I do not think it is either or, i think it is often and. One of the things they have been working on for many years is to bet on people. Blank checks are great. There are some that you should not give them to. Will be staying with me. Coming up, forget stocks and bonds you can invest in your fear of all player your favorite Football Player. Radioshacks efforts to fight off in group c bring in new questions for investors. What is worth saving and retail . Brick and Mortar Stores like radioshack, barnes noble, and others have become increasingly irrelevant to shoppers as they go online. I want to bring back our expert, Sanjay Khosla a former executive at kraft. Retailer, what a are they missing, how do some fall apart and others succeed . The key is when the environment is settling changing there isly changes and a massive disruption, there are some Business Models that are no longer relevant. If you do not add data quickly to where the customer is going problems veryto quickly. It is very important to go where the customer and consumer is. It is not a question of brickandmortar, it is how do you go back to the customer, to where the customer is, and they show that the experience you are able to offer is truly contemporary . Show that your Business Model has adapted to the new world and the new normal . Many of these companies that have adapted to the change gotten into different Business Models and heaven on the channel experience where you not just to bricks and mortar but also other win. , have a chance to you talk about being faster on the move and surpassed profitability. Blank checks. Why does that make the company more nimble . It is a counterintuitive thing. It is something we are experimenting with, and have been for over a decade. Essentially it is making a bet on a team and a person. It is all within the strategic framework. You give a blank check to a , the business is flat to declining, and you give an impossibly hard target. Is are youeaction nuts . Once they know youre serious from skepticism to panic to complete fear. What do i do about this . That leads to action. Quickly realize that doing more of the seine, just working harder, does not work. You have to focus on a few things where you can win. That is where the book flows. But then you get into resources, skills, not just money, people. And that is a stopgap against where you want to go. , the manys learned failures as well, you get people to act like entrepreneurs and you break the myth they are out of knowers once you give them a blank check. Entrepreneurs once you give them a blank check. Many of the ones we have given over the years have had a return that is better than the average. The important lesson is that there are plenty of failures. It is very poor to send a signal that it is ok to take risk. , provided heail learned from those failures. Apple, png or some of the companies they are getting it right. Thank you for joining us. The author of fewer, bigger, bolder. Coming up, alibaba and china. Moving and shaking this hour, ali baba chairman jack ma. Plans to quit taking orders because there has been so much demand. This is according to people familiar with the matter. Ma and the banks running the sale have not decided if they rangeangise the price. Ensorship on china face to put out a letter saying that the country needs to put out a more tolerant view in china. Is very clear on where they stand. They say in the filing that they are up to whatever china wants. They agree with whatever china wants in terms of these regulations. That impact negatively or positively the way that they do their business and their operations are carried. I spoke to a potential investor who says that ali baba and the Chinese Government would work very closely together. Never bend the rules because they have such a significant relationship and setting them. Should u. S. Investors at all be concerned . Theytential investors say should be concerned as they look to expand overseas. I spoke to a professor who teaches business in china at nyu and he says it will impact how they expand in the United States and europe as they looked to not only grow their ecommerce platform but also their social media platform because it is social media platforms that are screwed news by beijing. Beijing. Nized by they do not want the word to spread. What happens diffusers break the rules . If users break the rules. Just how strict beijing has become. Currently the president does not just complain, he actually criminalizes it. And they are cases where threeyear term sentences in resin have been sold out doled out for those who post on social media websites. If one of your post has been reposted 500 times who that could want a threeyear term settings. There has been anecdotal evidence when i was in hong kong were people were poached because they were doing Something Like this. It would be interesting to see how this plays out in what investors should could consider. Welcome back. Past the houres which means that Bloomberg Television is on the markets. Here is a final look and futures right before the open. S p futures are a little bit slower. There are some good things going on as the economy is exhilarating. We count down to the open with the top 10 stories you need to know about today. 10,s start with number general motors. The automaker issued a stop delivery order under corvettes. They want to fix two potential problems with the hotselling sports car. A parking brake issue and an air bar problem airbag problem. Number nine, lululemon. Shares of 3 yesterday. The rise is only just beginning. Number eight, go pro. Shares falling in the premarket after taiwan they have made the top 10 three times this week. Its firstdeveloping camera that will be a waterproof model that will directly compete with go pro. We are calculating that every day. Number seven, netflix. Now fromght underweight. They are handling the challenges of expanding internationally. Buying a rival for 2. 3 million. Number five, google. The company taking its mobile app overseas, working to market its content of boron abroad in japan. Number four, darden restaurants. That toppedr sales wall street estimates. This came after an investor presented a proposal detailing ways to improve the companys operation. Shares falling in the for the wifi service provider, saying they may struggle to get shares. Shares of the beauty product retailer topping 100 a share after the Company Listed secondquarter earnings above analysts estimates. Per plan to open 100 stores year over the next five years. Ertz. Mber one, h jurors new direct on the board will be chosen by carl icahn. We spoke with the bond king yesterday and heard his forecast for the benchmark security. At thesenk the market current levels in terms of the 10 year treasury, that is fairly valued. This shows the new neutral to a level that they have never been historically. If you look at a broader isge, 2. 5 to 3 where they will be trading at. The argument about fair value is that he can get an a little bit academic. From a trading perspective i would be surprised to see the tenure really get higher than 3 over the next six months given the trajectory of inflation. What bill gross is also saying is that things are going to be pretty stable for the short term when it comes to Interest Rates. He does not see a lot of volatility. But i think that is different from what you see. There is a very complicated discussion that relates to bond volatility. There he simply, the question janet has a lot of leadtime at the front of the rates ino manage response to inflation. There is a laugh and enough lead time where bill gross will be more right than wrong. We have a broader look at equities with a new chart that shows that the stock market is in a super cycle. Long times of flat returns oflowed by 20 year cycles powerful returns. What does that mean in terms of where we are in this market . Where we are right now, we are in the third or fourth inning of this game not the eighth inning. 6th yearere in the does not mean it will necessarily end. Happencess may gradually, it may be a gradual climb up, but people who are not in equities are going to lose. That is a great chart. Look at 1987. That was the biggest dip that we ever saw. By far the biggest crash, and then it was all gone up since then. You see that chart, we are never going to get back to Interest Rates that we have seen historically. There is a case you can make were we are conditioned thinking a recession and then a rise out of that. Right now because what happens demographically, the Economic Cycle is being stretched out over a long time. Im of the view that there is a floor in gdp but also a ceiling. That ceiling is reinforced my the fed. If he gets strong escape you are metrics, calling gdp over the longer time. That is better for equities and a strong surge. Groupant to get into one that youre looking at and that is the refiners. We have seen a lot of volatility in terms of oil stocks and oil prices. A ng below 100 barrel. The higher that church goes, it actually means that the spread is narrowing. Do you agree . Do you think that is a risk for the refiners here . Is a theme i have been harping on for some time. The ex art ban will probably be lifted over a long time. Immediate impact to refiners is probably very small. The question is if these refiners talks have run up a lot, have made a lot of fast money very quickly, for a ofgterm five year holder risk isnts, this new hope for a over that hovering over that. Thingsre a lot of good happening to refiners away from this whole issue. I think it is a real risk. I just think that there are good things happening as well. I think there is some shortterm volatility in these stocks that investors have to be very mindful of. Thank you so much for stopping by. Coming up, twitter raising more money for expansion and acquisitions. Itswitter is expanding first ever debt sale by 20 . The company will sell two 9ible bonds in million pieces. Some other stories on her bloomberg west radar, after a two your absence, he bills going ebay is going back to mobile advertising. Mobile ads are protesting them in 2012 he found that the User Experience was not good enough. Roger is not a liar. Mese are the words spoken to by steve ross, the owner of the Miami Dolphins. He fully believes that the dell. Id not see the video fans are coming out in support jerseyrice, wearing his at the ravens gave yesterday. Up until this year, you probably would have been making quite a bit of money if you had bet on him as a rising star. What theis exactly company does, trade on the future earnings. This whole situation with ray rice, with oil tragic, is not unique in the nfl. You have had other players accused of Domestic Violence. When you try to bet on future earnings, sometimes it can be unpredictable. Risk tously, that is a her. I do not think Domestic Violence is unique in our society. The nfl has more of a spike light of a spotlight. Discovery of of the issue. It is an unfortunate incident \nt. In whenyou priced that youre trying to tell investors that you can this future earnings of a foot off player Football Player . I do not think you can prices something such as Domestic Violence. Not just Domestic Violence, but any number of entities, unseemly activities that Football Players find themselves in. To the cash flow stream. It is no different than any asset that is valued. You look at the future Growth Potential of the cash flow stream and then you addressed for risk. Our discounts have been casho 20 across various flow stream so that if the end of the day the weight of the average discount is actually all the completed offerings between 12. 5 to 13. 5 are sent. Compare that to a trouble rated bar that yields weut a percent today, with think that is a reflection of the risk associated. And is intentionally priced in. Absolutely. When you talk about injury risk , we pricedd issues at him. I know you have already issued shares and on ipos on several players. There are reports in various papers that it was hard to get invest to buy shares that your company was giving. You had to go in and buy those shares for them . We did have to go with, and we just by doing it for all of. Ur initial offerings things at the discount rate and how would you priced. Are doing that in the future. It was not in the we did not anticipate it. How do you pick the players you want to issue shares of . Likely in the Sports Illustrated where they say up to 78 of Football Players, after they retire are basically bankrupt or in Financial Stress . Do financial Due Diligence on their debt to asset ratios with each player. Isir bankruptcy risk analyzed and monitored throughout the relationship with r the professional athlete. But importantly, the reality is that the bankruptcy happens because it is in the retirement phase. What happens is that the cash flow stream disappears. These ande modeling acquiring these cash flow streams, the more jordy which is , thethey do on the field bankruptcy risk is there but it is smaller. Our goal is to develop the brand so that they do generate cash flows into their career. Hopefully that will mitigate the risk for some players. That is the ross us to start the Due Diligence upfront. Develop a brand that could generate into the postcareer. Thank you for joining us. A very interesting Business Model. Retail sales this morning. We show do that august had the biggest rise in four months. Benefitingay not be from that trend. Millenials are not hanging out at malls, they make purchases on their smartphones. We are now joined by stephanie ruhle. Me, i go to the mall near there are tons of teenagers. Greatestve near the mall on earth, that is an outlier. With ceossitting down who will be saying that people just like you are in those malls. They need to be more tech friendly. With apple payment, that might have more people in the as only 6 is in the ecommerce space. Thank you so much. We will be back in two minutes. Time now for the global outlook. The latest survey is out and it takes a close look at mexico. The survey revealed that corruption is mexicos a guest concern. Bloombergs todd berry reports. In mexico city the large crowds and congestion are heard everywhere. But in the shadows is endemic corruption and few people want to be seen talking about it. As that we not show his face as he is forced to pay thousands of dollars in year in protection money just to keep his business open. I really tried to open my store legally, and it was not possible. City officials admit corruption is part of the system. Is mexico citys mayor aggressively taking it on. It is a war, a permanent fight, and everyday task. It is something that happens in all cities, but if not taken degradey, it can almost the city. It is a permanent objective for us. He took office in 2012, and the corruption audits are up 80 . 56 million u. S. Dollars have been returned to the coffers. People can rest assured that this is not a campaign slogan. This is not an election time promise. Are addressingwe the issue and measures are being taken. Drugs andoffice for crime have worked with the administration in this effort. Attitudes about corruption are changing. In mexico city things are moving. There is the political wind, and also the executive win. s anticorruption goals are ambitious. He questions whether anything for him will change anytime soon. That does it for today on in the loop. Next week because when her will dig me as a guest as we into the elections. Thet is 56 minutes past hour which means that Bloomberg Television is on the markets. We are 30 minutes into the u. S. Trading day, and in terms of activities we are looking at a week. Eend to the the s p ready to close out its first losing week in six weeks. Perhaps making it easier for the Federal Reserve to start raising Interest Rates next year. Germany and u. S. Want yields are moving higher. A 62 chance that they will boost rates by next july. Sanctions to include other energy companies. We have seen a surge in developed companies. You have been covering currencies for a while. What has prompted this increasing volatility . Is it just a return from the quiet summer . We have started to see some genuine news and limit past week that has started to increase prices in developed currencies. Have had an increasing divergence in the Monetary Policy outlook between europe and the u. S. We have had the Federal Reserve come up with Research Papers saying that they were still concerned about the timing of increases liking that of the central bank. At the same time last week we had the European Central bank announcing a new program of asset backed bond purchases. Qe like. A reduction in the key rate. This divergence increasing between u. S. And european outlooks. That is adding to volatility. In terms of this volatility, what people are people thinking . We have an interesting week coming up next week. We have the Federal Reserve meeting and the september 16 and 17th. They might change the wording of their forward guidance. That will what are people looking for . That rates will be held for a considerable time. There is also a sense of whether the outlook is going to be in a willtimeframe or at if it will be at expectations. Giving them a little bit of wiggle room. Who has seen the biggest uptick in volatility . That is going to happen on september 18. Criticalaching in a stage in that spirit almost a three year high in terms of volatility. People are watching the polls very closely. What does this have for other Currency Pairs . Up to the seen it euro volatility, we have seen a ticket in the yen, and has come back across the board for developed markets. We have the sweetest elections and the Scottish Independence oll, everyone will be back at their desk to see where the markets are heading. Thank you. We will be back in 30 minutes. Live from bloomberg headquarters in new york, this is market makers, with Erik Schatzker and stephanie ruhle. It is a sellout. Alibaba will quit taking orders for its ipo a day early because of overwhelming demand for the shares. Crackdown, the u. S. And europe impose new sanctions on russia. Everyone is waiting to see if Vladimir Putin will retaliate. Thrown for a loss. The nfl has fumble before. Concerned that dropping the ball