Transcripts For BLOOMBERG Bloomberg Surveillance 20140718

A missile hit on the plane. At the same time, russian saysdent Vladimir Putin the ukraine government bears ultimate response ability. All 298 people aboard the boeing 777 were killed. In the middle east, Israeli Forces launched their biggest military operation inside the gaza strip in five years. Tanks and troops are trying to stop palestinian missile attacks on israel. Initial reports indicate that 20 palestinians and one israeli have been killed. Israel says it is targeting terrorist infrastructure, but as says the goal is not to get rid of hamas, the militant group that controls gaza. The United Nations has called on israel to show restraint, and meantime, says it will redouble efforts to reach a ceasefire. Scarlet, we are covering both of these stories from all angers. Les. Chilcote, we have othert gotkine, and guests. Is a Real Movement with the ruble this morning as well. Ryan chilcote of course is very familiar with the International Relations of russia, and also with ukraine. He has traveled to kiev this morning. Brian, how has kiev changed in the last 24 hours . Well, the story was a regional one in many senses. The russians would like you do think it was a domestic one, but now of course it has become a global one because if you think of the number of people that were killed in this plane crash, when that plane was down yesterday, it is almost equal to the total number of people that were killed in those conflicts since it began, so it has taken a big step in the direction, as they say, of escalation. Ukrainiano the foreign minister earlier today. He says they have proof that the prorussian rebels are behind this attack on that airplane. Have a listen. Ofwe intercepted a number foreign calls between the terrorists who were talking hitting, shutting down the plane. We have translated the phone calls in english and other mind witches is, and we will put it on the internet and news channels to provide the clear proof who shot down the plane. They have been playing one of those audio recordings all day on ukrainian television. Ukrainian government says it is between a prorussian fighter, who is actually at the cry site during the audio recording, and his Russian Military minder, if you will, Russian Military like agence official, supervisor. In it, the Intelligence Officer asks the fighter on the ground, do you see any evidence that this was a military plan, any weapons. A guy says no, this looks like it was a civilian aircraft. Has justanscript, he come across one of the fatalities, and he says in fact i can see that i right now looking at the backpack of an Indonesian University student. This was definitely a civilian aircraft. Anyway, ukrainian tv playing that nonstop today. The foreign minister was born studied physics in moscow. The interdependencies here at ukraine and russia were shown never more clearly yesterday then in the comments of Vladimir Putin. What was the reaction in kiev and what you have heard to the comments by mr. Putin that this is ukraines responsibility . Those kind offind comments obviously audacious, and the most recent comments from the Russian Foreign ministry i think of your gradients find even more insulting. The Russian Foreign minister in the last halfhour saying that he has not heard the ukrainian say a true thing in the last two months. He thinks that perhaps the rebels he said he doubts the rebels had anything to do with the downing of mh17 and that ukrainian antiaircraft weapons were active, not necessarily fighting, but were active, deployed in that region yesterday. All of these allegations are vociferously denied by ukrainians as being ludicrous. Ryan, thank you so much. Ryan chilcote joining us. Jordans on the phone, john mcgraw, the former faa Flight Standards aerospace consultant. How does commercial aviation adapt given the fact that honestly at this point its world is forever changed . Well, they will have to be more cautious about any of these conflict areas. Each airline has their own security office. They try to analyze the threats based on the organizational data and make those decisions, but i think you will see them having to deviate widely around any of the conflict areas because these systems are wider spread than aircraft systems. It that ata as well as euro control had not told airlines before yesterdays horrible event to avoid the area . It seems so logical. Well, you typically do not respect a threat at that altitude. What they do is try to very carefully look at the threat information and determine just the area where the real intense right is an deviate around that. I think they will broaden that. There is always uncertainty with the intel. Now certainly that uncertainty some of it is taken away. At john and adam, i want to highlight some of the comments the commodity relation transport ministers press conversations. They say other airlines had path hours before. They also mention there was no lapse in infrastructure. A if the crash occurs in countrys territory, they are supposed to recover the black boxes. They can ask for assistance from other countries in determining what the black boxes reveal. It has been reported that these went to moscow, which really does not do a lot for transference he in this situation given russias involvement. It would seem you would need an International Coalition of folks to take a look on these to really determine what happened. All right, john mcgraw, thank you for joining us. John mcgraw, formerly of faa. Of course two major stories. Lets turn our attention to israel and gaza. Count may be over 60,000 troops called up. Lets go to our Elliott Gotkine in tel aviv over the events that changed last evening. How big of a surprise was it to see these events at about the 10 00 hour for tel aviv last night . That depends on your perspective, tom. It was a surprise in the cents earlier in the day that i named anior officials had said ceasefire brokered by egypt was in the bag, so in essence, people were taken off guard even though no one else was able to confirm those things. They were preparing for the possibility of a Ground Invasion throughout this conflict, so it was not completely out of the question at any point, either. When you look from your perspective at the last six or even eight hours, how successful has been the commission by crossingth the army the north, the navy bombarding the south part of gaza, it is it a success . I think it is very early days to tell. Parts of the early this operation. According to some reports, they have only penetrated two justeters inside of gaza, staking out territory right now to decide that we what to do. The israelis said they have killed Something Like two dozen militants so far. The israelis have had one soldier killed. Those numbers will rise quite considerably in the coming days i imagine, tom. Elliott, what is the willingness of israel to support people going back in . I dont think anyone is looking to see israel remaining in charge. The Prime Minister has talked about a potential reoccupation of gaza, but i do not think anybody sees that as being something permanent. The general prevailing view even among netanyahus cabinet is that you need to have boots on the ground there to complete this operation, namely to stop the rockets being fired into israel, and in particular to do with these underground tunnels that hamas has been digging to get into israel to try to carry out operations. That is on the israel cannot really deal with from the air. Alea dokken, thank you for joining us from tel aviv. Gotkine, thank you for joining us from tel aviv. Reaction, seras are most joins us from oppenheimer. I want to get to you in a moment. Anders, let me turn to one of the major risks we see, which is the reaction to what we see in hamas. In your note last night, you third and if the data. What would the leakage of isil the over to hamas . I think what we are seeing big picture is a rise of the sunnis in the air of the world, whether that is iraq, syria. You have got sunnis really pushing their territory out, getting some territory now with isil. Da, i. S. I. S. , there is a danger that hamas, which is sunni, would link up with that also sunni. Yeah. And israels shares a border with syria, which is where is outstanding. When you look at this market reaction, there was a rush to safety yesterday. It was not extreme. Treasuries rose, gold prices increased. Does that process as we get more headlines . It really depends on who is the culprit and if this actually puts pressure on putin to back up a little but, we could see this calm a little bit. But if he displays nice for a few days, my guess is russia axes will remain weak. Why hasnt oil move more . Wouldve a lot less volatility across all Financial Markets in the last month or two, so yesterday, even though it looks like small moves, they were large compared to the last few weeks. This ball is so low everywhere, but generally speaking, there is complacency about Political Risk right now. Lets look at equities, bonds, currencies, commodities. I will go right to the 10year yield. Well under 2. 5 . 2. 4 is by any definition a remarkable year. Oil up to 103. 46. Another world called company news. It was dizzy yesterday for company news. Abbviebusy today, takeover of scheier is valued at 55 billion. The plan has to be filed with british regulators today. Abbvie will lower its tax rate by shifting to shires dublin base. Lawmakers want heads to roll at general motors. Questionsarra facing again yesterday. Some senators say that gms chief counsel should be fired because the legal team stonewalled the problem. The defective switches are blamed for crashes that killed 13 people. And fedex has a date late this month in federal court. Prosecutors say the company knowingly helps to illegal pharmacies. The indictment says fedex delivered dangerous drugs to customers without prescription. A fedex spokesman said the company is innocent and cannot be to blame for what is inside the 10 million packages it ships everyday. Coming up, the former Un Security Council president kish ore mahbubani will join us from singapore. This is bloomberg surveillance. On bloomberg television, streaming on your tablet, your smartphone, and bloomberg. Com. Good morning worldwide to bloomberg surveillance. Two major stories. We will advance those this evening with Political Capital and al hunt with secretary chuck hagel. Look for that tonight at 9 00 p. M. We say good morning to all of you. This is bloomberg surveillance. I am tom keene. With me scarlet fu and adam johnson. The United Kingdom has requested a meeting of Un Security Council that will be in new york city this morning at 10 00 a. M. Kishore mahbubani is the former permanent resident to the United Nations for singapore. He is one of the leading voices on Foreign Policy and of course on asian International Relations. Professor mahbubani, good morning to you. Joining usk at from singapore i should say. Ambassador, when we look at the United Nations meeting, what would you like to see come out of it this morning . What i would like to see is a very clear, strong statement condemning the downing of this airline. This is absolutely unacceptable, and i think the world is outraged by what has happened. That will be the ideal result. Will it happen . No. Because the Security Council will be divided, and a divided Security Council means that they will take a long time before they come up with a clear and definitive statement. You and i have met in. Close before. H17 haveedy of m so many nations and their people affected. How important is it in this debate that so many nations were directly touched . I think it is extremely important that lots of countries , citizens, as you know, and died in this tragic incident, and i think they should all speak out very strongly, but the big result that we want to see come out of all of this is that the time has come to make this, our skies safe for airlines. We have the technology to do it. We have the ability to do it. Lets try to establish clear, bold to let her rules clear, multilateral rules. This is the big lesson we must learn from this tragic accident. Book, have your wonderful the age of innocence. Did we lose our innocence yesterday . We have lost it before. Sadly, this is not the first time that a civilian airliner has been shot down. An iranian jetliner was shutdown i think by a u. S. Plane. A korean airliner was shutdown by a soviet plane. We saw these things happen in the bad old days of the cold war. We also moving toward a more civilized world. Unfortunately what happened yesterday assured that we are regressing, and it is time to apply tough, corrective action, and this is what we should demand that the Security Council should do when it meets later today. Scarlet fu with further headlines. Lavrov says theeergey a ceasefire says in ukraine is needed now more than before. It is the question whether this is rhetoric or whether it will actually sell or get in the way of a ceasefire. Whatambassador mahbubani, would you like to see from Vladimir Putin . What i would like to see is for United States, europe, and assia to sit down and have really frank and open discussion on the ukraine issue and to try and find a way of settling it. And fortunately, there are Political Solutions that are available and that can be done if everyone understands each others redline and how we arrive at a compromise because if you try to get a one winner take all solution, then you will end up in a mess that will carry on forever. Ambassador, thank you so much. Is a formerahbubani president of the United Nations Security Council. Adam. You mentioned his book. You almost wonder right now if we are caught in an age of belligerents. You look around the world at what is happening exactly, a new belligerence. We will try to figure out the way forward. We will hear from secretary clinton, former secretary of state Hillary Clinton. We will be hearing what she told charlie rose last night. This is bloomberg surveillance. We are on bloomberg television, streaming on your tablet, your smartphone, and bloomberg. Com. Good morning, everyone. Bloomberg surveillance. I am tom keene. With me scarlet fu and adam johnson. Any further headlines . We do have some the from ukraine. They received information from rebels, obtaining the missile launcher system on july 14. And we will continue to give an eye on this. They also have a release of tape on rebels moving. Wednesday morning must r we have a morning mustread. Last night on charlie rose, secretary of state Hillary Clinton was begin to him. And there does seem to be some growing awareness that it probably had to be russian insurgents. That will determine require some forensics, but then evidence pointing in that direction, the equipment had to come from russia. What more the russians may or may not have done, we dont know. Like you can watch the full interview tonight, 8 00, and again at 10 00 p. M. Right here on bloomberg television. Corr, let me get your perspective. Are we jumping to conclusions here yo . I dont think so. It is true that the russians have been supplying the rebels. You can call them mercenaries or special forces from russia. The russians have been supplying those rebels, so whether or not it is from russia or not, the culpability or blame definitely lies with russia. How does mr. Putin then try to straddle that . He clearly is trying to put blame on ukraine. Yeah, he has been denying his involvement, but i dont think most experts believe him. His credibility is very lost. Tom, we have seen certainly the world rallying against him, with the sanctions yesterday. I want to very quickly clarify on the flight recorder that we reported earlier, the ft reported a second recorder has been recovered. We will have much more bloomberg surveillance. Good morning. Breaking news at of ukraine, this is from ukraine security. Ukraine has to taint to russians detained to russians at the border. At least one of those russians havent linked to the socalled buk Missile System. Ukraine active on their border. This is not specify where on the border these two russians were detained. One of these detainees had a Russian Military id as well. That is an important detail as ukraine detained these two robles. Theres been real discussion about ukraine being far more active about finding people. We want to give you the latest update on the two big stories. The Malaysian Airliner, ukraine and russia blending each other. State security said they intercepted phone conversations between crowe promilitants having discussions on the plane. They have detained two people. Vladimir putin says ukraines government bears overall responsibility. 298 people were killed. Airlines around the world adjusting the routes to avoid the area where the plane was shot down. East, Israeli Forces launching their biggest operation inside the gaza strip in five years. Troop surge on the stop palestinian missile attacks on israel. Palestinians a 20 and one is really have been killed. Israel says it is targeting terrorist infrastructure but says the government the goal is not to get rid of hamas. The yuan has called on israel to show restraint and the u. S. Says it will redouble efforts to reach a ceasefire. We will continue to monitor both stories for you. We also have ge earnings coming out. We do. Iss Major Industrial company hinged to what is called organic revenue growth, the actual Topline Revenue within industrial ge that is a 5 statistic. I was just given the First Quarter frozen quarter and what weve seen in the first half, that is a pretty good number for ge as they do . 39 on . 39 estimate. Topline was a little light. Fors the consensus was 36. 4 billion, part of their pivot toward the more industrial side of the business. Headlines, more m a. They will look at ipos into the summer and the fall for various parts, including a Retail Finance part. How big of a success has jeffrey email immelt had . How does a change of ownership in General Electric . This is going on across all industries. We have cash everywhere across these Balance Sheets. These corporations have been whittling down expenses as much as they can, whether it is labor expenses, etc. Theyre going to the next phase which is, ok, we have to expand and show these price increases in our stocks are worth something. In that context, it is nearing the rest of the market going on. One of the other things we sureseen, ibm reducing its cash below one billion shares, i believe was the headline. For the First Time Since about 1990. Buybacks, is that a little bit of an unfair thing for companies to do, effectively lower the share count in order to increase your earnings per share . If you have nothing to do at the cash, give it back to your stockholders. I think that has been going on. Spend the money and gets in return or give me the money back. It is fairly fair. What about you . Joining the staff from washington, d. C. , we continue our discussion on our two top stories, Michael Rubin is uniquely qualified to talk about ukraine and israel and gaza. And former adviser to the pentagon and to the secretary of defense. One of his books dancing with the devil. Michael rubin, when you look at ukraine and you look at the actions between the rebels and Vladimir Putin, are they a rogue regime . Increasing, it looks like they are one. One of the issues we have to be on guard about is not to buy into this play that putin is making of creating this plausible deniability. The head of this dont ask region as a former kgb agent. We have to make sure his return address is moscow instead of pretending he is somehow independent. Michael, if we can change to israel and gaza, what is different this time around from 2008 andaw in 2005 and more recently . What is different in 2014 . We are paying the price for what happened more than a year ago when we had mohamed morsi, the first of a critically elected president of egypt from the muslim brotherhood. He open the floodgates to hamas. Yet all of these missiles flow in to the tunnels into the gaza strip. Israel figures is with general sisi in charge of egypt, if they can get in and get rid of the title and missile infrastructure, they can get the situation under control and hamas wont be able to rearm in the same way. Take a listen to what Hillary Clinton had to say when she sat down with charlie rose. Do you support the israelis in invading gaza . It is an easy question. No, it is not an easy question. I would for not. That is why i flew from cambodia, to prevent innovation last time. I know there has been a lot of phone calls and a lot of outrage in working with arabs and others to try to influence hamas and try to get them to stand down. Hamas may feel like theyre totally cornered. They have got egypt under sisi on one side, it israel not willing to and i dont blame for suffering missiles. Hamas may feel like they have nothing to lose. You can watch the full interview tonight at 8 00 in 10 00 00 right here on bloomberg television. Now that ground assault has begun in gaza, does that accelerate or get in the way of discussions for another ceasefire . The first one proposed by egypt failed. Hamas wants to win for diplomacy what they cant get in the battlefield. I disagree with clinton in that hamas is not motivated by grievance. Its not they are in a corner. Theyre motivated by ideology that doesnt recognize israel at all. Basically, israel has no choice but to move in. In ceasefire is going to kick the can down the road. Literally, it is whether hamas will be defeated. Anders corr, i noticed the further radicalization of the middle east. Where will this play out . Lets say we go on for days and we get a solution in gaza, but is that really solve the problem for the ideology of hamas and others . As israel moves into gaza, youre going to see a lot of deaths. , i think wellhs see more reaction in the arab world against israel. Michael, anders corr talked about intifada from a third intifada. Is that a risk . The interesting aspects is the rest of the Palestinian Authority seems to be exacerbated with hamas. Hamas is going to try to incite public opinion. Not sure whether it will be as successful as in the past. Michael, to let you know, where looking at some live shots of gaza and you can see the smoke rising. Diplomacy has clearly failed. Let me put the question to you. John kerry has canceled an appearance today. He was going to speak at a synagogue but says he wants to him meet with the counterparts. What is the mission right now . The mission for the u. S. Is what you said, deescalate and a ceasefire. The u. S. Has tried to get israel not to do a Ground Invasion into the gaza territory. I think the reason is, a, it is very difficult to knock out hamas. You cannot destroy an ideology by moving tanks into the country. Every terrorist you catch by knocking down doors will create another 10 terrorist in that region. Within a live shots of gaza, and the heartbreak in Eastern Ukraine, Michael Rubin, i hate to ask this question, but i will be brave. What would we expect to see from the United Nations . I was adjust our viewers worldwide have a certain cynicism about what the United Nations can do. What does Michael Rubin think it will accomplish . Theres going to be a lot of hot air that will conservative greenhouse gases, but the United Nations has been relatively unsuccessful in the region. The only time theres really been a major peace treaty in the region between egypt and israel can not just because an war about one of peace, but tried or first 1973 and failed as relief. Alternately, if you try to move the sites away from each other, that will not bring peace. One side needs to be defeated. Michael rubin, thank you. Within the conversation, i thought of president sadat yesterday. You wonder where the sadat of 2014 is . And who can play the peace broker . Is this a failure, anders corr, of egypt . Have the failed . Trying to egypt is put pressure on hamas, which is a good thing. We do what hamas to stop sending missiles across the border. It is destroying the Palestinian People. It is a tragedy for the Palestinian People that hamas is doing that. The question is, why is hamas doing this . What pressures are they getting from outside forces, possibly iran, to encourage them to take actions like this . Egypt and the u. S. And the pope has failed. Nothing has worked. Which is why volatility is spiking. That is our single best chart. Yesterdays 30 increase in the it means for all of us trying to make sense of so many difficult events. We will be right back. This is bloomberg surveillance. Morning, bloomberg surveillance. We have our top headlines this morning. The surge of children crossing into the u. S. From mexico was slowing. The Border Patrol says they have held fewer detainees in the last 10 days, more than 57,000 children have poured into the u. S. Without their parents since last october. Overwhelmed immigration facilities in texas and california. Americas biggest municipal bankruptcy ever was filed one year ago today. Detroits battle with the debt, far from settled, bond insurer is fighting the plan. They won an appeal to make a claim for casino tax revenues. The chapter nine violence totals 18 billion. A big sigh of relief for commuters around new york city, transit strike three days away has been averted. Unions struck a deal with the nations busiest commuter line. Those are the top headlines. Just thinking about all the conversations this morning, what is happening in the middle east, what has happened in ukraine over the past 24 hours, it almost seems try to talk about a railway strike. Otherwise, it would be very big news. It affects millions of people. Electric, the biggest industrial company, one of them, reported results come in . 39 earnings per share matches the average analyst estimate. Ge has a good track record of coming in right in line with what analysts are looking for. Revenue missing the mark here. Total fullyear framework remains on track will stop industrial segment margins expanded by 20 basis points on revenue and industrials rose 7 . Targeting an ipo for its north american Retail Finance division for the end of july. When the figure out what total your framework means, let me know. At him mention the vix, had its biggest oneday jump yesterday since april 2013. 12 to 14. 4rom 11 to yesterday by the close of trading. Put that into perspective. Is this volatility . Maybe not so much. If you go back to the late 1920s as this chart does, you can see spikes are quite unusual. We had a bunch before world war ii and the left side of the chart. After the 1970s and 1980s, the 1987 black monday crash, and that is the first circle there. Then you had enron scandal, the debt crisis and the downgrade of the u. S. Credit rating. Yesterdays move barely shows up. Is it still cheap enough we should be protecting ourselves . Protect the portfolio . There is some really interesting tale Risk Insurance portfoliosan buy for whether it is in treasuries or currency. Pop is theive, that biggest one since march 2013. We had big russian sanctions but an overnight, a commercial jet shot down, and a Ground Invasion in gaza. Three huge events and we get that move. In the grand scheme of things, it is quite a small move compared to the hottest topic events that were going on. Compared to the big events that were going on. What about liquidity . We know it will not be changing anytime soon. We think next year the fed will hike and that will crank and some liquidity. The ecb is ready to push the pedal in. Japan is not going anywhere. Quickly, are the emerging markets a buy . Not totally yet. I am more of the neutral category. We are a little underweight. Versusng on equities stocks, i mean, we invest in all kinds emerging markets. Corporate debt is pretty tight. I dont think it is a buy here. The sovereign stuff, the Balance Sheets are great. If you want to lend money to a corporate versus someone like brazil, i would put my money with brazil. I did put my money with brazil, and look what it did to my world cup bracket. Nice for her to bring that up again. We will continue to monitor these developments. Where going to take a quick break from these top stories to focus on the big headlines coming out of the tech world. Ibm aligning itself with apple. Yahoo and alibaba and dont forget google and ibm reported results as well. A complete wrapup after this break. We will be right back. This is bloomberg surveillance. We continue to monitor the developments in ukraine and israel, we want to get you up to speed on the big weekend technology. Hp appointed meg whitman chairman of its board. Another story, apple director Bill Campbell steps down from the apple board. Pple added sue wagner this comes on the heels of the Big Partnership between apple and ibm on mobile enterprise. Google plus mixed bag earnings. Microsoft had big job cuts. Analyst joins us. A lot of headlines. Which one has the most enduring impact . The microsoft restructuring was big news from a pretty bold move for largecap company to go through its largest cut ever. We are paying attention to that and implications of that to the purported new microsoft. The appleibm deal is a significant one. The corporate tablet and the corporate handset market is a very growing market, a profitable one. Apple has not had presence there. That deal is a significant relationship. Fox for time warner i forgot about that. It is an interesting development. Media and internet analysts are paying close attention to that and what could happen in that space. Could google, in . Companies orech Media Companies the m a landscape is dramatically changing between the content distributors and producers. re starting to see new the names you mentioned are important. What used to be a very closed the has now sort of lines have gotten significantly blurred. Internet companies are coming in internet a lot of content and distribution. And they have a lot of firepower, too. This was the single most important headline of the week. Because of the continued buyback. This is just a slave of use of cash. You have to deploy cash to shareholders. Do you see any end in sight . Thehe exciting thing is economy and u. S. Is starting to pick up. Once the economy has total traction, companies have to start investing again. Were on the cusp of that. Do you agree with that . The Technology Company has historically been the opposite way, that too much cash on the Balance Sheet not enough to do to know what to do it. Companies have grown up. Theyre buying back a lot of stock. The one thing we will say is we have analyzed a lot of the returns on buybacks. Historically, Tech Companies have not done a good job of buying back their own stock. Dividends have historically, looking at most of these companies that have somewhere between minus four to plus 4 returns on buyback, those are not very sexy. Dividends on the other hand is the capital back to shareholders. They know what to do with it. Are you saying you what a Dividend Increase and not a Share Buyback . No opinion on that one. Damn. We will get another opinion. Alibaba is a company about to have a lot of cash with the ipo. That is a great question. Earnings were ok, but the fact theyre going to hold onto a bigger portion of the ali baba stake for longer was more impactful. Think newer i companies tend to hold onto cash a little bit more longer and they want to get a few quarters under their belt before they start shortly thinking about their use of cash. What will you be looking for in the tech world in the next week . Intel reported this week. The pc industry seems to be is it back from the dead . We dont know. It is a big industry and has a lot of tentacles and other spaces. I want to see continuity and see if the recovery carries over to the Home Consumer space. With microsoft, was this a failure of steve ballmer, these announcements . Was it a repudiation of mr. Ballmer . The fact that most of the job cuts are in an organization that just acquired. A hardware organization, not the software one. Fair enough. Historically, theyre also walking way for most of the android business. If you were to read the tea leaves that way, that is one popular media angle, but the fact is, were looking at it of the job status cuts aside, this is a bold move for a large organization. Thank you so much. We appreciate your perspective. Let me do a report. Yen stronger. That is important. Were going to take a short break and well be right back with a top headlines on ukraine and israel. The United States has a surfacetoair missile killed 298 over ukraine. The west blames rubbles dutch rebels. Vladimir putin places responsibility on ukraine. Israel army tanks attacked northern gaza. Enable those attacked the south naval boats attacked the south. Good morning, this is bloomberg surveillance. Were live from our World Headquarters in new york. It is friday, july 18, i am tom keene with scarlet fu and adam johnson. To give us an update on these international stories, here scarlet fu. First, the Malaysian Airliner will stop russia and ukraine are blaming each other for the disaster. Ukraine state security says it intercepted phone conversations between prorussian militants discussing the missile hit on the plane. Vladimir putin says ukraines government bears overall responsibility. On board thee plane were killed. Airlines around the world are adjusting their routes of they can avoid the area where the plane was shot down. In the middle east, Israeli Forces watching the biggest military offensive in five years. Say 20 reports palestinians and one israeli have been killed. Israel says it is targeting terrorist infrastructure but the goal is not to get rid of hamas. The United Nations has called on israel to show restraint and the u. S. Says it will redouble efforts to reach a ceasefire. We are covering both the stories from all angles. Ando to tel aviv washington. Moving target with a whole new set of headlines here in the last hour. In kiev, Ryan Chillicothe arrived last night. How has it changed since your last visit . What was very much a regional story has gone global. You think of the amount of people killed. It is almost equal to those already killed in the conflict. It has taken things to a new level. I spoke to the foreign minister a couple of hours ago. The blame game is gathering speed. He says they have proved the russian backed prorussian rebels were behind the downing. We intercepted a number of phone calls between the terrorists who were talking about shooting down the plane. Now we have taken these phone were in english and reported to the internet and news channels right away to provide clear proof who shut down the plane. One of those audio recordings has been playing on ukrainian television. We cant verify the opposite authenticity, but a fighter says that he brought the plane down. He is speaking with another progression rebel. Then says it looks like they were all civilians. Within the hour, we have seen headlines of the detaining of two russians on the ukraine bo, is from the Ukrainian Security head. How porous are the ukraine borders . Extremely porous, and that is why this war is underway. Edited 20,000 people fighting in Eastern Ukraine. Extraordinary, yet this crash site smack in the middle of it all in what is an active war zone. Theyre attempting a ceasefire. At the moment, you have a crash site in the middle of a war zone with people getting killed all around. Thank you so much from our news bureau in cap. Peter cook, i want to get to the fact on kerry canceled an appointment that he was supposed to have in front of the cameras. Can you tell us what is likely doing this our . It was last night that secretary kerry was set to speak at an event that a complaint for some time in washington. World events forcing secretary kerry to cancel that. Not only with the situation in ukraine and the plane going down, but also what is going on in gaza, the action by the Israeli Military into gaza. Secretary kerry has his plate full as does the president. The u. S. Molecular one else, trying to find out more details about what happened in ukraine with this plane. I can say the u. S. Officials do believe it was surfacetoair missile that took this plane down, but they do not yet know where it originated from and who pulled the trigger. Secretary of state terri looking for answers, Hillary Clinton weighed in last night on charlie rose. There does seem to be some growing awareness that it probably had to be russian insurgents. How we determine that will require some forensics, but then if there is evidence pointing that direction, the equipment had to have come from russia. What more, the russians may or may not have done, we dont know. You can watch the full interview on bloomberg later tonight at 8 00 and 10 00 here on bloomberg television. Peter, what is the top mission right now for the u. S. . John kerry, mr. Obama, etc. . The top priority is to find out what happened, first of all, specifically, try and determine theyre using satellite imagery and some of those communications the craniums have released to try to determine who actually pulled the trigger and where this Missile System came from. It is easier for former secretary of state to talk about blame and it is for the current secretary of state and for the president. Minimum, what we have heard from the white house, we got a statement overnight saying at a minimum, even though we dont know all the facts, we know theia fueled or help fuel tensions by allowing heavy weapons like this into the conflict in the first place. Upped we know the u. S. The ante on sanctions just about 48 hours ago. The eu following suit as well. And from kiev and washington, we go to tel aviv. What is the quality of intelligence that israel has on the ground in gaza . What exactly do they know about hamas and the relationship of hamas to the palestinians . Israel iscan imagine, one of the most sophisticated intelligence operations around. It has plenty of drones which are able to spy on the gaza strip just exactly what is going on. The fact we have these thousands of israeli boots on the ground in gaza goes to show just the limitations of intelligence and am indeed, of aerial strikes. That is why theyre there, it has to do the things they cant do from in the air or inside israel. My reading of history, day 2 is a risk harder than day1 in warfare. What is the plan in the next 24 hours . Three key objectives. One, destroy the tunnels that militants used to dig their way to israel to try to carry out attacks. Theis to weaken infrastructure of hamas and to. Top the rocket fire i spoke with a Ministry Spokesman and says, look, of course rockets can still potentially be fired, but there is no deadline. So far, israel has killed 17 militants and a tell me they are surrounded and attained detained more. The accuracy of the missiles in ukraine is start versus the total lack of accuracy, it appears, to the missiles that we see within the gaza strip. Just amazing how it is two different worlds. And he will be a very different world as israeli troops actually walk through those walls and the building the building. What kind of support will the israeli army get from israeli civilians going in there effectively on a very difficult building to building search . Something that potentially called up. Rvists this is a small country. Around 8 million people. Isryone knows someone or related to someone who has been called up. I think most israelis will Say Something nice to be done, you cannot keep going and having indiscreet rocket fire from hamas and other militants into israel, even if the iron dome is our defense system. They seemingly will take out all the ones i could cause many casualties. Elliott gotkine, thank you for joining us from tel aviv. Joining us now, just back from donetsk, we spoke at length yesterday. Shelling kills more than 20 civilians. As you look at the mix in Eastern Ukraine, what is next in terms of warfare . I think will be a question of, can the Ukrainian Military really isolate these rebels in one place and maybe try to bring some pressure to bear so negotiations can continue . The shelling has been going on for a few days. One thing people are concerned about is the crash site. As investigators try to make their way there, are they going to be allowed access . The geography to me as roughly 100 miles by 60 miles. How did they get to the site . The roads are pretty open. It is a 20 square kilometer crash site, huge area to take control of, really. There have been reports of local authorities sifting through, and they shouldnt be doing that. Oure will continue coverage. Coming up, we will take the angle of aviation. Airlines have stopped flying over Eastern Ukraine. We get the perspective from an aeronautics expert. Good morning, bloomberg surveillance. Futures up. Certainly a better market. Our guest host for the hour, ceo of gray light capital. Truly one of wall streets experts on the Capital Markets of ukraine. And willem marx, as spent a great time across Eastern Ukraine. Futures up 5. Dow futures up 16. This is bloomberg surveillance. I am tom keene with scarlet fu and adam johnson. We want to bring in hans humes to look at the global distressed market. How have these events that we heard about yesterday and have been covering a some of these Asset Classes more distress as a result . It has been interesting watching the markets. You would think of in the evolution of the news of what is going on in ukraine and the growing realization it is probable that it was the separatists who shot down the plane, you would have expected a little more pressure on russia assets. There was an initial selloff yesterday and a bounce back this morning and now things are trending down. Other traditionally distressed plays in Eastern Europe like ukrainian bonds have held pretty rocksolid. Why is that . Tragedy,s obviously a but the reality is, this is more likely to be a trigger event. If what im hearing from my russian friends that there is a bit more of an acknowledgment, this is probably the separatists, that was a lot of pressure on Vladimir Putin to resolve this politically. You are the first person i thought of when i saw the sanctions across capital from the short term paper ok. These companies cannot access the Capital Markets. Do you buy it . In terms of are they really blocked out of doing business with the west . They are. There are other ways to go around it, but you have to take your hat off to the u. S. On this one. We did biggest interest in doing this for political reasons, but the i have seen is sanctions not just in the overweight are being implemented, but also the way the government is coordinating with the private sector here. Theyre starting to bite in russia. I think it is making a difference. That is a rare moment of success, in other words, for the u. S. Government at a time when congress cant get anything done. It is easy to knock the government, but we have not done such a bad job. Glad to hear that. More on our top story, the crash of mh17, implications on ukraine and were here with hans humes. This is bloomberg surveillance. E will be right back wil good morning, bloomberg surveillance. With scarlet fu and adam johnson. Lets get to the top headlines. Corrects the search of children crossing the u. S. From mexico is finally slowing. Of childrenrge crossing the western mexico is finally slowing. It is overwhelming immigration facilities in texas and california. Anarchist biggest meanest bull bankruptcy was filed one year ago americas biggest municipal vagrancy was filed one year ago. Detroit chapter nine filing totals 18 billion. The big sigh of relief for commuters in and run new york city, transit strike three days away has been averted. Unions struck a deal. It is the nations busiest commuter line. Those are the top headlines. I should say away from the obvious, which is gaza and ukraine. On mh17. Course joining us by telephone, professor of era not ask and astronautics at m. I. T. Aeronautics and astronautics and m. I. T. Sman, you are at a social event this weekend. Are you going to tell a person their kids can fly at 33,000 feet . Oh, yes. I would get on an airplane today. Within the tragedy of this crush, how would you expect the u. S. Aviation will adapt to distant and her National Flights to distant interNational Flights . There are conflicts around the world all the time. This is something that is normally monitored in conflict areas. In this case, the u. S. Has sent an alert in april to airlines telling them not to fly i think below 31,000 feet over ukraine. Within that, professor, i thought the New York Times had beautiful graphics of air france avoiding the space and of tones and not avoiding the space. Should there be a more coordinated effort on where to and not to fly over . With things like this, it is a risk calculation that you have to make. When there are conflict regions, you do want to allow aviation and there is nothing other than for humanitarian reasons. So the judgment call is when the risk is too great is, it is difficult. Part of it is made by the the authorities can shut down the space but also may buy the airlines who have to decide their own risk levels. I want a highlight what malaysia said this morning in response to the crash of mh17. They made clear they denied speculation the flight route taken by mh17 they also say other airlines took the same the crash ofefore mh17. Finally, no instructions were given to pilots last minute to change the route. Airlines, nothe just malaysia, but across europe and across asia and the u. S. , are voting this particular route, what does this do to the busy flight paths between europe and asia . Does it slow down as a result . It means aircraft have to divert off the route and often that may be the most fuelefficient route. It will require you fly longer or dont have the best headwinds or smallest headwinds. It will have a little bit of an efficiency hit. Theres plenty of airspace in that region, so i dont think it will create significant delays. Be fine at this point. Changes about ukraine will s. Willem marx, can you give us a sense what it was like on the ground and where the rebels may have filed dismissal . Assuming it was the rebels. We do not have evidence it was a missile. T is a very chaotic situation it continues to be today with recent shelling. Essentially, there is no coordination between different cells of fighters. This will be an important thing. Theres going to be that deniability from the rebel leadership, even if it is in this case rebels responsible for the firing of the missile. It will be a list say, that was gavearate cell and no one them the orders. They can isolate the command and control. Professor, i saw a quote from general petraeus in february this year. There was the distinction between the handheld missiles versus the sophisticated systems rumored here. How naive are we . It is a new world. There are thousands of these Missile Systems. What can be a response . The Aviation System has been very concerned for a long time about what we call shoulder launched missiles. They dont shoot to high altitudes, so that is more on the approach or the landing and taking off of airplanes. These more sophisticated missiles that can reach high altitudes are targeted by a radar. The normal rules of engagement are that you have to clear and make sure there are no civil aircraft in the area. John hinzman, thank you so much. Hans humes with us as well. Im never going to fly again at 33,000 feet. As an international traveler, hasnt changed . No. Listen, with incidents like this, it is still probably safer than driving to the airport. Was thinking walking down to a beverage of your choice maybe walking back. It is disconcerting. Whats that fly between europe and asia, you will think twice before you get on that plane. Were going to take a very quick rate. We have a lot to talk about. This is bloomberg surveillance. Lets get you some company news headlines. The border Jpmorgan Chase let Ceo Jamie Dimon collect bonuses worth or the 7 million from a revealed and regulatory filing. The board has stood by jamie dimon despite lapses in investigations that have cost millions. Lion corporation of japan making a confidential american ipo filing according to people with knowledge of the plan. They ran japans most popular messaging service. Morgan stanley is handling the share sale. Rupert murdochs bid for time warner is causing a stir over at amazon and google. One brokers as murdochs move could make the companies see in content. Channels backing new on youtube. That is this mornings latest company news. Futures up 4. Peter cook is looking at many stories in washington, most certainly one of them is israel and gaza. The secretary of state has spoken with the Prime Minister of israel. What do they speak of . The context of the conversation according to the state department after the israelis started a ground offensive in gaza last night, and the basic message same message the u. S. Has been delivering the past couple of days. Israel has a right to defend itself from those rocket attacks coming from hamas, but urging restraint on all sides to limit civilian casualties and specifically, john kerry urged israel to make this a precise offensive, if you will. Target the tunnels where there is so much worry. And also to restore the ceasefire from 2012 that was negotiated by then secretary clinton. There are questions about how long this will last. In 2009, it lasted three weeks and you had more than 1400 casualties in the offensive. Nobody here in washington wants to see a repeat of that will stop you mention secretary clinton. Listen to what she had to say last night with charlie rose. Do you support the israelis in invading gaza . Think it is an easy question. It is not. I would prefer not. I try to prevent an invasion last time. She also added this there has been a lot of phone calls and outreach and working with arabs and others to try to influence hamas and try to get them to stand down. Hamas may feel like theyre totally cornered. They have egypt under sisi on one side and ease world and israel not willing to, and i dont play them at all, for suffering missiles. Hamas may feel like theyre nothing to lose. You can watch the full interview tonight at 8 00 p. M. And 10 00 p. M. Right here on bloomberg. Take initiative under john kerry or go to the United Nations and its response . I think the u. S. Uses every itsle diplomatic avenue at disposal right now. U. S. Relationship with israel is critical. I do not see the u. S. Deferring to the u. N. I think by the administration, members of congress as well, will continue. I dont think they will hand this one off to the u. N. Others will surly get involved. You heard ban kimoon urging restraint as well. As we try to get through this day or the weekend into the sunday talk shows, let me ask a basic question. What is the difference between the state Department Policies and efforts of secretary clinton and secretary kerry . What is the nuance there . I think the nuance, it wont be all that different. The nuance is john kerry invested so much time in the middle east peace effort that as others before him have found, it was unsuccessful. And now were back again with a similar situation. It is replay of so much of what weve seen in the past. I dont think you see a dramatically Foreign Policy come are medically different Foreign Policy come from john kerry. At the end of the day, it will make the case that israel has the right to defend itself. We will see how long this plays out. Peter cook, thank you so much. Willem marx, is the word restraint understood inner ukraine . I think it is. ,he digging in and donetsk theyre expecting streetfighting. Between whom . The separatist rebels and the ukrainian army. I knowf people that there have already left because theyre so worried about the fighting. Street to street fighting. Hard to imagine. Lets get a data check because we need to keep an eye on what is happening. The s p 500 fell the most yesterday since april. Sincex jumped the most april. 10 year yield moving back to 2. 54 . Good morning, bloomberg surveillance. Interviewsl of our out on digital media. I am tom keene with adam johnson and scarlet fu, following the events in Eastern Ukraine and also in israel and gaza. We bring you the perspective on the Capital Markets of Eastern Europe. And willemjoins us marx from Bloomberg News on his recent travels and on the ground travels in Eastern Ukraine as well. Hans, you spoke earlier about the markets and disassociated from the geopolitical events. And there is a tipping and. What will you try to observe to see when things really locked in our investment markets with what we see in International Relations . I think on the general market sentiment, you might get into a situation where if you get this confluence of bad news of certain events, you might start finding the confidence is ebbing. You could see some real pressure on the u. S. Markets. On our markets, people of god to the were they really do look people have gotten to where they do look at the situation on the ground. Areasve these different latin america, asia, Eastern Europe and they will be driven by their own news. And i would imagine their little more used to chaos, to cacophony that we are in the u. S. Markets . Yes. It is kind of nice. If it were for that, i would not have a job. The unintended consequences of the government decisions. There is a lack of appreciation in some countries of what might happen if they make a dumb decision. You get these things all the time. The little flareups on the ground, be it warfare, blood in the street happens more often in these countries. Hans humes with us. We want to bring in tiffany timothyfessor snyder, a professor. The blame game between russia and ukraine. As we try to figure out who is ultimately responsible for the missile attack, Vladimir Putin is increasingly been isolated. Does that push the envelope in terms of timing for disclosure on whether russia actually provided the missile launcher and the missile . It in deeper background, it is very unlikely a either ukraine or russia would have made this kind of mistake. State attached these kind of systems to radars. Almost certainly what happened is someone who is prosecuting the legal terrorist war in eastern illegal terrorist war in Eastern Ukraine that triggerhappy. It would be good for there to be an investigation. In general, a display of what the russian war in Eastern Ukraine looks like to ukrainians every day. It opens the eyes and the transcommitted he to what the ukrainians are ready injuring, which is a situation planned the legality. And for these things not to happen in the future, the overall situation will have to be brought to an end. Mostur oped is one of the single pressure as a we have seen on ukraine. Here is an important quotation from early february what would you see is the response of germany and United Kingdom . Is an all european problem, which is the phenomenon of money driving politics is not russian or ukrainian, but inside the European Union. Theres a second pressing problem, russia is trying to coordinate far right politicians inside the European Union to weaken the union. What this event will be is a kind of test whether the russians will be able to succeed in making this murky, just like everything else. Theres been a whole series of fault about what happened in ukraine, none of which was remotely true, which i then bought or have bought by the west european and even the american public. This will be a test as to whether people can realize theres a difference between what the russians proposed as reality and reality itself. This is an opportunity for europeans and americans to take stock of what has been happening in general. Timothy snyder, thank you so much. We are going to continue our coverage of this story and the Malaysian Airlines crash maybe evidence for some kind of next up resolution between russia and ukraine. Good morning, bloomberg surveillance. Tonight at 9 00 p. M. , the secretary of defense needless to say, theres a little bit to talk about. Chuck hagel tonight with al hunt. Important conversation on Political Capital. It morning, this is bloomberg surveillance. With scarlet fu and adam johnson. I should say our entire team has worked overnight on these two international issues. We will continue coverage of these issues throughout the morning. Joining us right now is betty liu. What will you be focusing on and who will you have . We will continue the great coverage you have had on those international events. Turner, seniore member of the House Armed Services committee will be joining us. Pretty much at the top of our program to talk about what information he has. We are still sorting out in ukraine who was the 1 which side fired the missile that brought the malaysian plane down. What new intelligence does he have, as he gathered overnight. Looking forward to that conversation. Morning movers. This is important. Ukraine is talking to the rebels about the corridor. This was discussed yesterday. Heres the headline we were talking earlier about how it is a really wide space in a pretty deserted part of Eastern Ukraine. Miles radius is some 10 across according to the latest writeup on bloomberg. Com. We continue our coverage of this top story. Malaysian Airline Flight shot down, prorussian rebel leaders has no black boxes as of yet have been found in the wreckage according to the associated press. The conflicts with the previous statement that was made by an aide to the rubble military leader. Previously, he had said one of two boxes had been found. That is the cacophony at the moment. We have different reports from bloomberg, ap somewhere in the middle lies the truth. With that is from the associated press. Once the black boxes discovered, what would it tell investigators . If it was a missile attack and happened so quickly, willem marx, any remarks . They have the ability to figure out an acoustic footprint. They can decide what kind of strike it was, whether was a bomb or missile. We have heard from the u. S. Government it was indeed a missile strike, but it may be up for to get a better sense of timing a be able to get a better sense of timing and its impact on the aircraft. Theres no risk it could have destroyed the black box . Aviation expert saying today these things are really, really indestructible. We have seen it time and again with other aviation crashes. And earning season. There are markets out there and copies this is our earnings edge brought to you. On monday, we have chipotle, netflix and texas instruments. I will be trying one of those this weekend which one . Chipotle. We will be right back will stop this is bloomberg surveillance. Good morning, bloomberg surveillance. I am tom keene with scarlet fu and adam johnson. The conversation with steve miller, one of the most interesting people in american industry. Steve miller, aig chairman. Goodly, better than earning season. Right now with to get a company news from the files a bloomberg west. We start with alibaba adding a little suspense to the ipo, not going public until after labor day. A person with knowledge of the plan says theres still speaking with regulators. The sale could raise more than 20 billion, setting a u. S. Record. The weight of job cuts at microsoft also signals a strategy shift. Most of the 18,000 layoffs were in the nokia handset division. A unit creating original Television Shows is also being closed. The entertainment studio was formed to funnel content into the xbox online service. Powerg whitman gets more at her bid to revive hewlettpackard because the hp board has named her chairwoman. What work is stepping down for health reasons. Ralph whitworth is stepping down for health reasons. Tom, give us a day to check. Subtleties, euro. Nder crude oil elevated. I want to draw your attention to the 10 year yield and its relationship to the two year yield. The spread is flat. The 10 year yield has come down. The two year yield has been a rock. We flattened the yield curve out of this news out of ukraine. It is bad for banks, but i just think it shows that even though we can say a direct link to market, it shows a dampening within the markets in the last 24 hours. I suspect what is causing that spread to narrow in part is the safe haven move into the 10 year treasury. That is the most liquid. If you buy that, that pushes the price up and compresses the spread. And a stronger japanese yen. One of the reasons we want to have hans humes join us, you grew up in a very difficult places. Nigeria, Central America as well. As you explain, never occurred you to not invest in places where there is difficulty around the world. And you put in perspective for us the current state of affairs that were seeing right now . Ukraine, israel, gaza, iraq from afghanistan, syria, on and on, but that in the context of what you have experienced in the past several decades . Somewhat broad question. It is very relevant. We moved to nigeria when i was three years old. That was in the midst of the war. My first memories were of a civil war in a country. My dad loves to tell the story of how i decided to walk home from Nursery School through an Army Checkpoint a mile away. There was starvation. My mother was working in the bush. My memories were of chaos. Armed people, warfare, battles between tribes. That is what youre seeing drop the world. You can point emerging markets but when you get to the point where you see it flare up in yugoslavia and ukraine, it is not a matter of region. The world it just happens to be how things happen when they break down. It does create very good investment opportunities, but on the other hand, you have to be ready for the kind of shock that can flare up. Marx, you look at the stress of nigerian war and how Prime Minister cameron is adopting adapting but to that relation with the European Union and we in america feel comforted by those oceans. We still how does someone like you with your studies in england respond to the idea america is distant from ukraine or we are distant from iraq . I think in a country like ukraine, the world typically looks to the faa and u. S. Investigators to try to help out. Obviously, all countries involved i also carry a dutch passport. Over 100 dutch died on this flight. I did not know that. The fact that the u. S. Can help out and reach out is comforting, in terms of iraq, i think i first went there in 2005. I have been back several times subsequently. It is tragic. If i was a teenager growing up in that country, it would be a very does cursing depressing place to be. Given what happened yesterday with the Malaysian Airline crash, from amsterdam to asia, this is a war being fought on the doorstep of europe. Does this now that europes attention . I think it has to. Gas is one of the major issues when i was there and ukraine. Huge amount of reservoirs that includes ukraine pulling in gas from russia at an unprecedented rate. Going forward, when you get to november and december starts to cool down in europe and people are thinking about heating supplies, that will be something that will impact everybody. Politically, if you see what is happening, not only the u. S. Part of the sanctions, there was an elegy component for the u. S. Were reaching out to ukraine to build up that alternative. Western europe, for example, there is an icelandic delegation going to ukraine to talk about geothermal. I dont know what theyre doing in the midst of this. There is never to make sure ukraine can have some kind of energy i cannot be figured out in a short timeframe between now and when cold weather strikes . No, absolutely not. In an emergency, i guess you just have to star shipping it in. There is no other alternative but to try to create some independence from russia. If we dont we dont talk enough about the netherlands if ever made with the world cup, Angela Merkel 60th birthday and what we know of the United Kingdom, how will the netherlands respond, and the dutch respond, to this tragedy . Theyre not always a huge player, but theyre very important in europe. Have of dutch officials had senior roles. I think will be difficult for the dutch government to ignore what has happened here. Amsterdam is one of the largest hubs in the world. To see that happen from one of the planes supporting there is going to be very impactful. Can they influence german policy with that unique historical relationship . I think so. There were germans on board as well, so theres a reason why germany and the netherlands have been very proukraine until now. Some early statements from the dutch government before theres much clarity were also pretty pointed. I think to your point, there is no way the netherlands isnt going to start leaning on the germans. Interesting talking to european officials. The knowledge their intertwined economically with russia. There is a growing realization that they need to follow what the United States has led. Who exactly . The europeans. The netherlands all of europe is much more intertwined economically with russia than we are. But theyre starting to realize we called it right in terms of which way to go. Anders corr highlighting Royal Dutch Shell in the russian union. Absolutely. We were talking earlier about Vladimir Putin and what happens next with him. Everyone looking for smoking but th smoking gun. On the one hand, you have to understand is probably done with a lot of actions within his country. Some of which might be worse options than he is. Hes certainly is back in the corner. If there is more more clarity this was a separatist and more more clarity the russians were the ones who supplied the weapons if. He is going to have fewer options and theres a greater likelihood there will be resolution. What are the options for distressed investors as they looked of Vladimir Putin to make a further statement . Investors have better options. You might possibly see a maturation of the russian markets. There is good till you there. In terms of distressed investors, i havent seen anything or any huge gaps. As you make your phone calls this morning, beyond how are you . What is the question of your people to the people of ukraine . How is this impacting you and your family . Every one i spoke to in the last week or two has left donetsk and moved to give to kiev. Can they get a quarter in . The Prime Minister singh theyre trying to get her investors in. Willem marx, thank you. Hans humes, thank you so much as well. Loop is next. We will continue to give you the latest details from the downed flight. Good morning. Were live from bloomberg World Headquarters. You are in the loop. I am betty liu. The latest on the down Malaysia Airlines jet and is really sending Ground Forces is really sending Ground Forces into the gaza strip. We will hear from Hillary Clinton on both issues. Congressman mike turner of ohio, Senior Member of the House Arms Services committee. First, heres a look at the top headlines. Russia and ukraine pointing the finger at each other over the Malaysian Air disaster. Ukraine says it intercepted phone calls from prorussian militants discussing the missile strike that knocked down the airplane yesterday. Crossedy troops have into gaza, the first major operation in five years. Israel owned palestinian positions for 10 days but were unable to stop the rocket attacks from hamas militants. Another u. S. Healthcare company will shift its residents overseas for lower taxes. Agreeing to buy the British Company shire promised 55 billion dollars. It looks like ideal is going to get done. First im a