Richard fisher, we know how he feels. S ugust beckongs you wonder what the fed people think. Jackson hole is three weeks away now. Richard fisher is known to put out a lot of things. The Kansas City Fed meeting begins. Should rates go up or down . Earningsd cummins, before the bell. After the bell herbalife. Timber and returned overnight from his mideast travels. I hope you got a good nights sleep. Lets do an exhaustive a data check. Call it a turn. The yield still under 2. 5 . The euro churns, but still weaker. Hydrocarbons we will talk about that. Under 13. The dow is slightly under 17. 30 year bond is in. Putthe ruble goes against in. Lets look at that. Just a little bit of her personal. Reversal. What is the role that mr. Putin has amongst economists . Look at that connection. Somebody just played with a wire. We have had all kinds of adventures this morning. Yours. To reaboot frontpage israel, andrry, gaza. Pressure is continuing to mount. This is the third week. U. S. Demanding an immediate truce, saying they will not initiate attacks. They shelled a site in northern gaza. Israel plans to still destroy tunnels used by hamas to infiltrate israel. More than 1000 palestinians have now been killed. I am sure you sell Benjamin Netanyahu went on all of the talk shows. He was stopping at the truce h amas had proposed and he rejects the u. S. Proposals. Did notnk the churn work. The third ground war in gaza in six years. You have to wonder what is different this time . We will speak with her middle east editor. Is there any hope for lasting peace . D . W has the u. S. Role change i cannotthe headlines, see how anything has changed. It seems to go on and on. We will see this morning. John kerry will report to the president personally. What else to we have . Rupert murdoch is back in the news again. The fox and time warner deal has been kicked around. 21st century fox shareholders prepared to offer time warner some states on the board. There have been some concern about the dual class structure. They were not going to have enough representation. The idea is that perhaps he is looking to sweeten methe bid. Lets go to some breaking news now. Lets get your immediate frontpage. We have a couple of things going on. The first is the dollar tree story. Forget dollar tree. It looks like Virgin America is filing for an ipo. It is a placeholder. Only about 100 million that is the big beale. That is one of the original brat packers. He has nurtured them forward through thick and thin. This speaks to not the top of the airline market, but the resurgence in profit and cash flow. The word is finally, they can do what he has wanted. American airlines came back last week, initiating a dividend for the First Time Since 1980. Theyre coming out of bankruptcy in the merger. Family dollar lets get this. Dollar tree and Family Dollar are merging. Flying by. It looks like dollar tree dollar inmily cash and stock. 15 in stock. This will be the first in week, even this monday. What is important is this lowend of the market. And what is in the middle dollar tree is not in the middle. Theyre competing with wal mart. I want to clarify that you got this right. It is a combination of cash and stock. A total of 74. 50. B Family Dollar ceo will remain with the company. About 16 will support the deal. You have to wonder, amidst this flurry about creating value. How much of this is contagious . Adam is getting a new puppy. Cash flow. That is my youngest childs name. There are great deals in this time. We will talk more. No ceasefire in gaza after plunging american diplomacy. The u. S. Does not recognize hamas. John kerry has returned home. Israel, hamas, and the people of gaza have no time to wait. Elliot, good morning. When we look at monday, i see a quiet set of headlines. What is actually going on in israel on this monday afternoon . Well, there is a lull. That is the word used by the Israeli Military when i spoke with them earlier. It is not a ceasefire yet. They will not carry out any air strikes. No ground operations beyond the continued objective to find and destroy those tunnels. Only when they are attacked do they retaliate. Let me ask you the question i asked at 3 00 this morning. What percentage of the tunnels have been taken out . I do not think we have a percentage, per se. Depending on who you listen to, they were taken out a few days. They have discovered about three dozen so far. In fact, the military took journalists into one of those tunnels on friday. There is an entrance under a greenhouse. Elliot, i am stunned as we look at images. This is a massive undertaking. Where did all of the money come from . Israelis will say that it is coming from people like qatar, and perhaps s yria. They will also say the reason we cannot allow unfettered access is because, this is what hamas is using it to make it is using it to build tunnels. There are huge amounts of money. It must have cost 12 million using Something Like a 6,000 tons of concrete. This crime the support that mr. Netanyahu has of the israeli people. Support a of israelis ceasefire. The majority back the current operation, backing the prime minister. Science, iust rocket think the israelis would be less concerned. They talking about how hamas had planned to launch a massive strike over the jewish and ports trying to kill us picked up was possible. This inspires terror into israelis. That is why they feel that this mission is one that has to be carried out and finished. Thank you so much from tel aviv. This hour, we look across economics, finance, and technology. Our guest host was steve he barely describes the excitement of his new duties. Fromuest host is mark, asset management. He has this great optimistic perspective. Loomnt to frame the g that i hear over the weekend. Bubble was the word in the literature. Are we in a bubble . No. You are in a bull market. Bull markets have great deals of enthusiasm. They always look a little bit silly. It is not the late 1990s at this point in time. Aspects may look familiar. Youre talking about m a. I think the fed is doing a good job of doing the background for a bubble. But, where we are right now, no. Knowu more than anyone i has a perspective of 1999 to 3 2014. What is different about the technology froth now . We are getting a lot of froth. The symbol of that is this app called yo. Olivia wants to scream at me. Yo. Oes but on the other hand, the Key Companies there are really focusing on trying to make their mark there and stick to their plans. I saw you can kind of go over company by company the big ones. The key is facebook. Facebook really killed it last week. Mark andreessen is the venture capitalist. He has been doing a series of tweets and facebook posts, posting the words of pundits who said that facebook would never make it. They should have taken the money. They should have taken this buy out, criticizing microsoft for making an investment early on. There is a faction of what facebook is the zuckerberg now worth more than brin and page . Are you for i was finishing my last story. He fallout began at medium we are still crying. Now you just go to medium. All right, we will keep going. Lets talk about Virgin America filing an ipo. It is a placeholder. What this really does he speak to the resurgence of the airlines. We have seen that in the earnings of delta coming united, and american airlines. They also announced a buyback for the first time and they are since 1980. And another deal. This is in the retail sector. Dollar tree has agreed to buy Family Dollar. About 23 premium. Not what you would pay for a biotech stock. Carl icahn and mr. Peltz involved as well. Peltz said we are not satisfied. I think theyre satisfied this morning. They had better be. Hasher company, google spent 4. 2 million acquisitions. Andill speak to mr. Levy get his take on why they are spending so much money. We will be right back. This is bloomberg surveillance. Good morning everyone. An important morning with the news on Virgin America. Robert will be in the loop with betty liu. David kush worked with bob ages ago. Them i ampo for a full fan, full disclosure. Good morning. With me, Olivia Sterns and adam johnson. Get us going on tech m a. Business is booming. We saw that with Family Dollar and dollar tree. Nearly twice the level of last year. One of the players is google. They have tripled in the first half of the year to 4. 2 billion. Our guest is stephen leavy. He is here to help us figure it out. Also, michael, the chairman and ceo of asset management. You are the expert on google here. You did an interview with who you say will be the next ceo. They have all these acquisitions. Theyre getting into so many different areas. Theyre getting into driverless cars, drones. What is the glue that is holding all these businesses together . It is the google in the cloud. The smart google that exists that we can access on any device seamlessly. One of the things that i introduced was the tools were doing something on your phone then you move to your computer. You still carry it on seamlessly there. Much of about that money was to buy next. Things,the internet of smart home company. Those people thought that apple would buy that. Was the one who invented the ipod. The other investment was a company for Artificial Intelligence and deep learning. With in your expertise, is this very successful people with humongous cash flow . Or is there an overarching strategy . There is dalliance around the edges. They are not going to draw a firm line between whimsical, which may be the next big business. I. E key is that it is an a. Company that makes big bets on what we know are improvements of technology on a nonlinear basis. It enables Companies Like google to do the impossible. Help me understand how to think about google. I understand amazon wants to sell me everything. What is google . Do everything, be everything. What is it . The core is search and Artificial Intelligence. You by everything for using massive amounts of information that they can clearly store. They know a lot about you. Needsey serve all of your by making use of that information. You to do thee same thing they want to do same thing they do magically insert, they want to do for the rest of your life. Michael, how do you perceive google . Intel, or like apple, or is it a beast on its own . I think it always has been its own, even when it was fiber. You talked about amazon. Zon itself has its own they are buying drones. Looks at itself as a financial powerhouse with a lot of luxury stocks on top of it. Some may be affordable. It is almost like an investment fund. They do have a huge venture firm. Star last week because of their core business. Not Artificial Intelligence. Search was up 22 yearoveryear. Maybe they should stick with that. Look at microsoft. They are a cash cow strategy. Theyre still making money. People are not betting on an mende. M a. They are not mentioned in the same breath with google and amazon. We will be joined by chris in the next hour, wrapping all of this conversation into how you make money. That is coming up at 7 00. Good morning everyone. I am tom keene. With me, adam johnson and Olivia Sterns. Mr. Us this morning, also, johnson has our morning mustread for it Richard Fisher writes the following i have grown concerned about risks from current Monetary Policy as unionization is right into the 2 goal more quickly than imagined. May begin to raise rates in gradual increments. It is not may, it is july. Can the fed get in the way of this bull market . I think they are choosing not to. Theyre concerned about the issue of Wage Inflation and equality. You talked about jackson hole earlier. Labor, labor. Michael is with us as we get ready for jackson hole. And twitter question of the day. Should the u. S. Legally recognize marijuana . Is it high time . Good morning everyone. What color was the storm . Winds rose, wind blew. It is new york city looking at mergers and acquisitions. It has been a gorgeous july as we race to august 1, which i believe will be friday. This is bloomberg surveillance. We have Olivia Sterns and adam johnson. Lets begin with Virgin America. They filed for an ipo. It is a placeholder. 115 million that could be larger. This speaks to the resurgence of the airline business. It has been a theme for a lot of investors. Ofrichard branson, 22. 1 some form of Virgin Americas relationship with Virgin Atlantic. They have to stay separate and all that. Vx holdings as well. Barclays and Deutsche Bank are doing this transaction. You were asking about cash flow. 9. 9 million in the first quarter. I love it. The distinguishing features they decided to do things differently. My perception is i stand corrected. It is a little more expensive than the others. That has not been my expense. Not at all. I am huge Virgin Atlantic fan. That biggest complaint is there is no place to hang up your sutra. Then they say no one else is wearing a suit. What size do you wear . It is custom. Not off the rack. After this weekend you know where he does not shop . Family dollar. Not full disclosure. They have agreed to buy fa mily dollar. Surged,trees shares just shy of the offer price. Carl icahn will be a very happy man. That Family Dollar and dollar tree will be perfect partners. Howard levine will be staying on as ceo. I think of decades ago the consolidation. Michael is with us from asset management. Having consolidation because people need to capture Revenue Growth . They have to go out and acquire it from synergies . I think we see some of that. Some of it is opportunistic. A wheregoing for that m it is defensive. I see it in the tech space even. You wonder what twitter will do. Are there a lot of potential acquisitions in technology . There are. They want to get to a new area and bring it in. Whatnot,facebook and it is just a defensive move. They want the next facebook to be their operation. Let me bring it back. When you look at Family Dollar and dollar tree, was it a defensive move . I think that that space is probably being squeezed at the margin. I do think that they will get together. If you look at some of the deals happening in the late 1990s, i think there is a contact acquisition. Youre not saying anything as crazy as that now. Some of them, you just wonder what they are doing . Everything is microsoft probably wishes his predecessor had not bought in nokia. You think . An exclusive come out front which, surface, will that ever amount to anything . Good question. The basic year he is wrong. People do not want to carry around laptops. They do not do those productivity tests. Microsoft is pushing in the wrong direction. It feels like it. Brief us on hst. It sounds like a consultant came up with the name. It is a maker of injectable drugs. I am thinking about dan and. They make yogurt. They are thinking about selling it off. There is more in dealmaking and its environment. You said we are not yet in the defense environment . Stephen, you mentioned the whats app deal. Let Mark Zuckerberg is trying to do there is by office competitors. It is that a relatively small level. At the end of the 1990s 19 billion . It is not that big for facebook. This is an m a cycle that is starting to mature. I think it will be a significant driver of returns going forward. We are not in the world where you would literally wake up and look at the transactions and simply scratch your head. They make sense, youre saying . They make sense. Theyre not being maltreated by the market. You are not saying that the company doing the acquisition is being given a significant haircut. The market is reasonably patient with the mergers taking place right now. If you look at the total deal william, we would more than double what we saw last year. It would be 3040 more. Is that sustainable . It has taken a long time to get the cycle going. Last year, it was not a big hurdle. I look at a division of abbott labs. Can i just editorialize these names . What are they . Did you not major in microbiology . Primerica. T give us a morning mustread on these tax dynamics. Abbott labs, what are they going to become . They already split off from abbvie. They are now trying to buy shire. Why . Because they are going to pay a 14 tax rate. Wrote inury secretary the Washington Post this morning. He says there is nothing wrong with acrosstheboard mergers. But these activities should be based on economic efficiency, not tax savings. That is clearly not what youre saying happening. Pfizer tried to buy astrazeneca. A lot of people say it is unpatriotic. Anyou are the ceo, you have obligation to try to pay less tax if you legally can. Michael has been on both sides of this equation. They constructed to pay the least amount of tax that they can. What do you think of the president s comments . He is naive. You live in an International World and you cannot miss that other countries have a more sensible policy. We have an extremely high level of taxation. It does not work in cities like new york. It is one of the things making it a less competitive place to do business. Do you have any out to miss him that washington can come to a solution . No. I think there is zero chance. I think there is zero chance that they will do this to make it legal. Really . That is exactly what jack lew was talking about. He will not have the power to put these into implementation. Orrin hatch is also trying to do it. Everyone is looking to abandon the solution to this issue. The question is whether it will be retroactive. You do not think they are getting anything done . I would be amazed. They cannot agree on how to deal with the children on the border. Stephen, way in. These things are happening and old businesses, as opposed to your technology. A lot of the companies in my these operations in ireland or Something Like that. They managed to avoid a lot of taxes. And apple and google and amazon got a lot of criticism for paying very little taxes. The subsidiaries were all the businesses. That is what this is about. This putting that cash overseas to work. Tom izzo worked up. Bloomberg terminal sprio was designed by the crystals consulting. Are you kidding me . So sensitive. What is a spirot . I will not even do a data check. Nothing is going on this week. I know a bloomberg means. It means bike. Mike. Injectable drugs. Please. Altrius. S, what is an alternative to full morris. We have an alternative to any number of things. The New York Times is taking a stand on what . Throwing support behind those who think that pot should be legalized. What do you think . Tweet us . That is our question of the day. Good morning everyone. I am tom keene. Scarlet fu will return sometime this week. Adam has top headlines. Israeli warplanes targeted hamas this week. They said hamas started firing rockets into israel once again. There was a 12 hour ponds in the fighting on a major muslim holiday. Says they will improve firing into ukraine. They have Satellite Photos to support their claim. At least eight civilians have been killed in the fi ghting. Of bola outbreak kills one liberias top doctors. Two americans are infected. The outbreak has killed 170 people in west africa. Health workers trying to fight it are specially at risk fo. [audio deleted] thank you so much. Futures flat. A big topic of conversation something you know nothing about. The art of time. My mom . She is pretty square. I have never smoked pot. Way to jump the gun. They came out in favor of legalizing marijuana. The number of americans favoring it have become the majority. These numbers come from pew. 78 of americans thought it should be illegal. In 2013, for the first time in prohibition was a minority position. You have to wonder what happened in the last 10 years . How do we go from a bill clinton saying i did not inhale to president obama being ok. Everyone shrugged their shoulders finding out he smoked pot. I had no clue. I am not up to speed. There was a source of conversation this weekend. A lot of people said, including president obama, there is evidence that shows that it is less that the nocall. I lived with it. I saw a lot of people wiped out in college. I never smoked pot. The guys i grew up with who did it there was a screw loose. It is not what i observed in school. I saw people destroyed. But give back to her news. We have to go back three years to february 2011. This shows what mario batali talked about, which is patience. There is a 50 to 60 feel. Here we are today. Reaping the rewards. That is when the chief Investment Officer joined the board of Family Dollar. This is something that they have been working at for a very long time. Obviously very happy with the news that Family Dollar has come out and agreed to by dollar tree for 74. 50. Rging in theis su premarket. Family dollars becoming a Stronger Organization that will drive value for shareholders of both companies. As you say, it goes to show how patients can pay off. It is fascinating to see how this goes against walmart. Michael, are you up to speed at all on this . I am. I would not say we have a general feel that the margin pressure will be on the low end. We do think about wage pressure in particular. It is starting to become an issue at this point. Your consolidation becomes it comes in. Theres another story in the news. Herbalife will come out later. We talked about activist investors. Think about what a different role they played with Family Dollar. Versus what the activist moves we have seen here today a lot of activists come in and try to shake up the board. Carl icahn is an activist extraordinaire. Another win for him. Think about how Many Companies he has been the right side of. Family dollar, dollar tree howard, a frequent guest on the show, friend of the show, retail analyst, describes them as businesses that make walmart look expensive. They are still very much a place where that kind of company is in the economy. Isthe combined value 51,000. Walmart is 2. 2 million. Wow. I did not realize that. Amazon can help raise walmart. Good news for the discount retailers. Coming back, we discuss the changing landscape for original content on the web. By every medium is looking for a slice. We are streaming live on your tablet, phone, and bloomberg. Com. We will be back with the man who is leading the charge. Good morning everyone. I am tom keene. Stocks are room and to return sometime this week. Futures are flat. There is a flatness to the market. 2. 4 yield. Twitter founder Evan Williams created medium as they go to website or stories about technology. Now we snatch away to stephen levy from Newsweek Magazine for edgy commentary. You have written seven books. Awards, one literary what is job one . I will not be the editorinchief of all of medium. There is a new kind of way to Cover Technology using this platform that they created. It is a platform that anyone can post things and write. It is like posting blog items there. These items go backtoback with professional writers there. We decided it would be a great idea to start a series of verticals. Writers become magnets to other people to show their stories. A respectful jargon what is a vertical . That is an area to focus on a specific comment. You can think about is spatially. You see content organized in verticals, like tech. Very visual. I am younger than you. I cannot believe that the show is so intense. The idea here i have been blown away. Boy, has a gun smarter with all of the geopolitics. Wheres this all going to be in five years . If i am at Huffington Post or the New York Times, do i care about medium, levy, and buzzfeed . With the return of quality to online journalism success notres its in page views, but in time spent read. That is a big philosophical shift. Instead of saying we will lure you to this page specifically, or do a list which means some list where you wereo page through, going to give you something that you want to read. It is something fresh with an original point of view. It is something that brings you on there by the quality of content. This is actually brilliant. By measuring the amount time, you know if people are really interested. You can go to advertisers and say they really care. Is that what is going on . Certainly, it will have a lure for advertisers. I suggest the most important essay of the year was written by gentlemen at citigroup on digital exhaustion. Michael, you have listened to this conversation. I am digitally exhausted. I sit in front of a bloomberg terminal all day long. I have all the news that i want. Let me rip up the script. Can you repeat that . Im a complete terminal junkie. Thatssion of the future is sooner or later, five or six of these will get together. You will be back to where you started. This ekend, i had to read every word of this cover story in the sunday New York Times about the failure of math education. If i read every word, i do not have time to go to medium and the rest of them. How do you suspect he will compete for Olivia Sterns time . If that story had appeared on medium, you would read every word as well. I would. We will produce great stories. Like that, like other things. The kind of stories they cannot get anywhere else. We feel the people come there. Other people also be inspired to write their own. Youre like a grizzled pro at the hall of fame. Is there too much product out there now . There is product like a reckoning. It is the type where things are growing there, not a zerosum game. We were talking about yahoo . This is exactly what they are doing. They want to build up the tech vertical. They brought in my former colleague from newsweek. Angle is like an open platform where anyone can contribute. Is that a good thing . I think it is. There is going to be a high bar. If someone does something brilliant, theyre going to find their way in. Thank you so much. Hour. Phonous lets look at the cacophony of foreign exchange. Google weaker is what you need to know. A tumultuous weekend in ukraine. Olivia . Coming up, christopher, a gabelli fund associate, will join us. Were just getting started. This is bloomberg surveillance. Than sunday quieter as sporadic fighting continues in gaza. The United Nations demands an immediate truce. Use of cash is on the rise. And after a terrible year of aviation deaths, who writes a check to the families of the dead . Good morning everyone. Were live from our headquarters in new york. It is monday, july 28. Joining me, Olivia Sterns and adam johnson. Our guest host this at work, is Chris Marangi, a gamco investors. Lets get to the morning brief. Chinese stocks rose on continued government stimulus. Stocks are up 6 over the past few weeks. We have purchasing Managers Index had 9 45. That is followed by pending home sales. The activity index is at 10 30. We have tysons and cummins earnings before the bell. In other news, john kerry is finally back in the mideast. He landed in washington overnight. That is it for company news. M a. Lot of and the day. Dollar tree is buying its rival, Family Dollar. The Fund Management pushed for the sale. It is 7. 5 of the Family Dollar. They would have about 13,000 stores in the u. S. And canada. Virgin america plans to sell shares in the u. S. Theyre filing for an initial public offering. Deutsche bank will handle that ipo. A number of shares have not yet been determined. And another deal could be in the works. Dealare planning to make a with dannon. The buyout would let them shift their tax base to france. Companies are trying to redomicile in france. Thanks for bringing that up. That is new. It is a lower tax rate. They will not deal with the French Business environment. They will still u. S. Infrastructure and all that. Very good. Thank you. August 8 of 2007 talk about starting a company at the absolute worst time. 10 days before the beginning of the financial crisis. David from Virgin America. It has been a sevenyear slog. Finally announcing they will file for an ipo. The placeholders 115 million. The ipo could be larger than that. We should point out that as soon as the news came out, this is a relatively small company. Small company, but it speaks to the resurgence of the airline business. Not to be confused with the uproar, when they decided on this project. Mr. Branson was removed. The numbers 22 ownership. That is just one of the deals. The other deal is dollar tree. As tom pointed out, it is a big victory for nelson peltzs management. They go one of their founders onto the board. He is also chief Investment Officer. He is in the board of Family Dollar. They have been working constructively with management. There is a supportive activist role there. They have been pushing for this deal. Carl icahn tweeted that he thinks Family Dollar and dollar tree would be perfect partners. A single sentence from mr. Peltz by joining the dollar tree party dollar is becoming of a Stronger Organization that will drive significant value. Chris marangi is with us. Were thrilled to have you here with the mergers. This really speaks of the new confidence out there. It really does. That isd about the m a being supported by Lower Borrowing costs. The missing element was corporate confidence. Now we are seeing that return. That is going to push the cycle. Acquirer, acquiree it is a nirvana. We are sixmonth out her 12 month out. Perfect. It is too good to be true for tom keene. When does this become diluted, frothy, and stupid. Layer on tax and versions come activists, and change. Companies undergoing significant secular change they have to cut costs. What is synergy worth . 15 . How much is a valued at . It depends on the industry. It would be valued as the multiple of the company. There is a downside to synergy. Think of the downside. Microsoft bought nokia. Now theyre laying off 15,000 people. That is synergy. Chris, you said it is a sign of a corporate confidence. I go back to what tom said earlier. Is this not just a desperate grab for growth . Theyre digging into sales of 18 billion. We saw a similar thing with mens wearhouse buying up with mens wearhouse . Walk in the store, get two free. Is this not just topline growth and a weaker consumer . That is true. We have played out margin expansion. Now, you have to look elsewhere for growth. That comes from getting bigger in the u. S. And bigger internationally. Are we close to the Tipping Point our Profit Margins cannot expand anymore . The storyline has been, yes, they barely beat topline growth. They are getting up there. That is when real wage pressure emerges. That would be the trigger, would it not . Clearly. Is their money up to our eyeballs . Are the private equity people just right up here . It is very easy to do a deal when borrowing costs are where they are. Belli on the valuation of time mwarner. Give us an exact per share value. If it goes. Jeff is being more persistent than i wouldve thought. The news overnight is that murdoch is considering giving them more. Multiple seats on the board. Over 100 per share . At least, including some of the synergies. Jathat is investment rgon. And what we see through the weekend, there is no ceasefire in gaza. Thats good to elliott in tel aviv. Good morning. What is the tgg list for mr. Nunatanyahu . There is a question. One imagines he will be overseeing the aggression that has been ongoing good we had a lull, which was a ceasefire this morning. There have been further rocket attacks into israel. The Israeli Forces have come under attack. The lull that we had seemed to have frayed. One of the distinctions i am reading is the length of the rocket firing. Characterize what a previous rocket would do and how far these longrange rockets can go. Israels defenses have become stronger. Theyre also making progress. They can now reach from gaza all ifa, one of thea northern cities here. They could reach jerusalem as well. In the past, they were just bits of metal, slightly more sophisticated than a firework grid they could not direct them and they would not fly particularly far. Now, they are certainly much more sophisticated rockets. Elliot, i sent a change this weekend. The commentary is very negative against israel last week because of the civilian casualties. Then, the israelis got in and found the tunnels, which suggest a very distinct effort by hamas to wage war. I wonder if that shift that i sent in the media has emboldened mr. Netanyahu. I suppose it depends which countrys media you are reading. Most israelis will tell you that the media outside this country is absolutely against israel. In terms of the discovery of these tunnels, they have been talking about this in the Main Objective to destroy these tunnels. Theyre talking about hamas having plans to launch a massive and alteration via these t unnels on the jewish new year and yom kippur. Cha i dont think israelis nged anything. That is the objective. Thank you so much. Adam . Thatasked about that pivot happened over the weekend. Perhaps talking about israel. The New York Times says that it should be legal to smoke marijuana. That is the twitter question of the day. Should the u. S. Legalize marijuana . Tweet us. Good morning everyone. Lets go to our guest host. He is at jim for all. Gamco. He has confidence of all flavors. Theres a drive organic Revenue Growth. Finally, ceo confidence. You see mergers and acquisitions. She is out there, of course. There it is. Chris, there is a new flavor. What is new for this wave . There seems to be a lot more rationale. There is a real strategic rationale. It is being driven by changes in manchester. I think of the telephone and media. The government says, go at it, guys. Can you do this without regulatory hurdles . I really think it is spurred from the final thought, the changes in technology. That made it possible to consume content. Time shifted, lace shifted. Have forced the distributors to get bigger. What will be the signal to will be theabelli, signal of this is upon us . Is a cash . I think you looking at overall valuation. Again, looking at the time warner deal 12 times ebidta. That is the top end, but not crazy. There is another world, which is the hightech world. How can you ignore facebook . Aware and wey spend a lot of time looking at Companies Like that. They just do not meet our criteria. We hear about manufacturing renaissance. Can there be something that brings all of those values up . You are already saying it spurred by the energy renaissance. And the u. S. Youll see more of that. Is wall street taking part . There are so many distractions. You mean the and mende firm s themselves . It has changed. There are more boutique advisory forms. Everyone will take part. Chris is with us. Coming up, we have a special guest for you. A former admiral with the navy. James will join us from tufts university. We will speak about the geopolitics of july. Stay with us. Good morning everyone. It is the twitter question of the day. Should the United States legalize marijuana . Author of a New York Times editorial puts this front and center at colorado and Washington State guage from the reality. This is the twitter question. Should the u. S. Legalize marijuana . It is bloomberg surveillance. Futures 2, dow futures 18. Lets get to the top news. Israeli warplanes targeted 3 hamas planes. After hamasresumed started firing rockets into israel again. The u. S. Says they can prove tillery has fired at ukraine. At least eight civilians have been killed in the latest fighting. Prorussian rebels are battling troops. And the Ebola Outbreak kills one of liberias top doctors. Two americans are also infected now. Infection has killed 670 people in africa. Health workers are especially at risk. Those are the top headlines. Were getting up to speed on this again. Ebola was there, now it is back. The sad thing is, the doctors who were trying to treat patients, are the ones that are dying. It is advancing as a major story. It has been going on for months. Sticking with the headlines, returning to washington and the next up for secretary kerry. There is a grueling schedule of conflict arriving around the world. Phil mattingly joins us now. Catching up on sleep here. What is the most important item on the agenda . Great question. It will probably be what is going on in gaza right now. At the same time, he also had a call with the Russian Foreign minister about russian i tillery. Firing into ukraine. He is still dealing with afghanistan. He flew into kabul to arrange a powersharing agreement. He got an extension to the iran nuclear situation. The amazing thing is come a how do you even put into perspective what is most important on his schedule right now . There are so many hotspots he is dealing with. It is incredible. Sticking with israel, this is the third ground floor. Phil, how do you think that the u. S. Secretary of state, the secretary, the u. S. , sees this change . Theyre trying to referee this conflict. Is there a sense of the role . I think that there was concern within the white house. Secretary john kerry has been doing this in his most recent trips. It was kind of a fools errand. He was setting himself up for failure. There are so many different dynamics that have changed since the 2012 ceasefire, starting with the government in egypt and the popularity of this military offensive. Starting with the ability to work with anybody who can talk to hamas. It is very difficult right now with his job. I think officials were concerned that he set himself up for failure. The return to d. C. Has those headlines following him. He returns to washington in a series of studies. You see the abandonment of the embassy. I see a resurgent i sil in iraq. That has to be a huge distraction. Isil will not go away, will they . They will not. That is the other issue. That underscores the broader sense of what is going on right now diplomatically. Think about what is going on in iraq rid you have isil. You are also relying on irans hlep telp there. Theyre also negotiating with iran on the Nuclear Issue that is extended until november. Ia,n is backing assad in syr against u. S. Wishes. They also have major issues with israel, where the u. S. Is trying to bottom line, the u. S. Is relying on the same countries that are undermining their impact. That shows with secretary kerry is trying to do. There is no sense that any of this will slow down, even as we enter august, which is a slow period for everyone. Secretary kerry is very busy speaking with his counterpart. What is his message to our European Partners in trying to deal with this conflict . It increasingly looks like more of a ground war is taking place. The u. S. Has accused russia of shooting across the border. The message is it is time to ramp up. We have heard from multiple officials. Ishink that john kerry dealing with Sergey Lavrov in russia. He is spreading the word to Foreign Ministers that it is time for them to ramp up sanctions. To not only matchup with the u. S. , but extend and grow up on those. It is time to hit specific sectors. What you saw the master to do before mh17, youll start to see europe coalesce. By the end of july, something will come out of brussels. The u. S. Is hopefully going to ramp up from there. This will be talking later hour about what that could mean for the energy markets. Thank you so much for joining us. It will be interesting to see the sanctions passed over the next five days. Especially to see if they have the appetite. Quite shift over the weekend. We will talk about three Fatal Airline crashes over the past couple of weeks. 2014 is shaping up to be the worst year in almost a decade for passenger fatalities. What does it mean for Insurance Companies . We talk about it after the break. Good morning everyone. It is a busy morning here. Virgin america, Family Dollar, and dollar tree lets get right to the company news. Patrons in china will have to go without burgers for a wild. Beef, chicken, and pork are off the menu. They are being recalled by the Parent Company in the u. S. A company with scott relabeling old me as fresh. And profits are up at nissan. The secondbiggest carmaker beat estimates. Deliveries to those markets topped toyota and honda. Questioned j. P. Morgan executives about a possible conflict of interest. The issue involves Private Banking clients. I want to know if the company scares customers to its own investment product. They have already responded by clarifying sources. That is the latest. Were looking at mergers and acquisitions. Welltimed, Virgin America. Is the idea of a stacked deck. It, itr you want to call really is not all that fair. Christopher is with us. He has been watching for mergers and investments. Iasic idea throughout get taxed the ordinary income rates. They get capital gains. Is there to to that . Is there truth to that . The way we generate income is on a fee visas. Basis. Now, those guys would argue that they are taking more risk and we are not. Is a debate that wraps around the word fair. Is there something new about fair or not fair . Inversions are fueling part of this wave that we have talked about. Theres something about fairness. Is it right . Is it just . Where do you look for that debate to be . Who will be the arbiter of this debate . Unfortunately, they seem to be focused on the problem. Underlying issue is that we have a global tax system with a rate that is too high. 39 is the highest in the developed world. Tom brought up the issue of fair. There is inclusive capitalism. He basically had some very critical things to say about what they are doing. He is destroying the value, rather than creating it. What are we seeing out there . You kind of know when used he it. You see it. There have been examples of good activism. Some companies have activists in them. Unclear where the causation goes to that. Were looking at keeping s nose to the grindstone. When you think about i, jeff from time warner effectively has been an internal activist. You brought this up a couple days ago. Is he an example . Evolved time warner several years ago. That was essentially the plan. I dont think Time Warner Cable native carl to tell them to do that. Mario likeou and to see more of that . Absolutely. Can they come to an agreement . I need some new tier. There is a price for everything. Deal is, whathis is the value of stock . Both of those seem solvable. Price . Is the what is fair . We have both sides. There are a lot of overlapping shareholders. There is a cash element here. There is an opportunity to overpay. Were very focused on minimizing the distraction that happens in a merger. , with thearangi disruption overload. Very sophisticated. How about Family Dollar . Nelson ed, i apologize. He has been on the board for years, since 2011. What is your take their . There is a difference between Family Dollar and time warner. Cultural aspect. People aspect are probably more important. Theyre putting stores together. Chris marangi with gamco. Lets do a quick data check. Stock futures are down. The yield has picked up ever so slightly. Oil is down. Good morning everyone. This is bloomberg surveillance. Look for a Digital Media as well. I am tom keene. With me, Olivia Sterns. Adam johnson is with us has always. Our guest host is Chris Marangi from gamco investors. It is amazing to think three Airline Disasters in two weeks. Africa. Rie in south sean advises airlines on ensuring aircraft. How much more does insurance cost to this week than a month ago . Probably not a great deal. The amount of money around the world, generally, which you gentlemen and you, maam, well know about is keeping rates depressed. There is an under supply of products to ensure. I read the Malaysia Airlines ensures on average for up to 2. 2 billion. Is that standard . That is not an unusual figure. You look at your esteemed career in london, representing the airlines. Are there ambulance chasers in the business . We see that in america. Olivia cover that in the streets of manhattan. There are certainly amulets chasers. Speaking as a former practitioner in the area if we did not have them, i would not be where i am today. With in that, how do you ambulance chase one of these tragedies that adam mentioned . One of the worst examples was an American Lawyer in a south american company, who turned up iests outfit to offer condolences to the family and left his firm behind. What would a dutch family do with malaysia air 17 . I am trying to be delicate because it is so tragic red how do they represent the deceased estate . The best thing for a dutch family to do right now is to wait and find out how things will develop. I think theres a reasonable chance that there is an action against russia. Andn all that we have heard the fact that appear to be emerging about how those things have been happening. And, if that happened, then it will take many years. It may be that russia can be persuaded to follow the route of libya. Lets not forget that in the shootdown of the korean airline, russia never did cough up. It seems like there are two issues. One is the cut and dry, which is ensuring the aircraft itself. It is nmetal. Then there are people and lives. And the impact their up. How do you quantify what lives are worth . Every country has a different system. One of the big problems is that if you are compensating someone in a relatively third world, poor country, the greater compensation is much lower than if you compensate in the states. Everybody tries to get into the states to get the big bucks. The plaintiff lawyers are usually quite adroit at that. Recent developments have kicked that back. I think of hamilton, bermuda. I think of Warren Buffett. Are the airlines and the Insurance Companies pooled into reinsurance that can be a backstop and profitable for the likes of Warren Buffett . I dont understand how they make money in this market. Market. Ankly a loss the insurance supports the direct insurance, keeping the rates low. There is a huge competition. How long did the case take . Case worstcase or best was 25 years. 25 years. Our premiums going to have to go up . They ought to. Easing stops. Then that will happen. Sean, thank you for joining us. Advising airlines on the complexities of insurance we will take a quick break. Why dont you tweet us. Should we legalize marijuana . Good morning everyone. I am tom keene. Olivia sterns and adam johnson are with us now. She returns she used all of my vacation days. Betty liu is here. A muchneeded break, guys. We have so much news. I finally got a little bit of sun. I got out of the office. We have a wonderful guest. Virgin america filing for this ipo. We have bob on, the former ceo. He will comment about what this means in the pipeline and what it means for the Airline Industry. They are wrestling with so many issues over the last several weeks. We also have a couple of ceos from very interesting companies. One is from urban is the chief of staff at goldman sachs. He started this company that is an online real estate site. They have raised about 40 million expanding outside of new york city. Talk aboutgoing to ebay marketplaces and the privacy breach that they experienced earlier this year. Are they able to get more people back onto their site after telling their client to change their password. We appreciate that. Mr. Crandall coming up the spine. Big mover, dollar tree. Moving on news that they will buy the discount retailer, Family Dollar, form 9. 2 billion. Very good news. They put their chief Investment Officer on the board of Family Dollar in 2011. They should be very happy. Carl icahn also said he thinks that the Family Dollar would be perfect partners. I was amazed by the employee scale. 52,000 at dollar tree. 2. 2 million at walmart. A little different. Margin is certainly better at Family Dollar and dollar tree than walmart. Amazon too, which was 7 10 of a percent . Time for a little earnings edge. Their earnings coming out after the bell eastman capital, plum creek timber. Tomorrow, we have pfizer, and twitter. Twitter will be chris is with us. Twitter is fascinating in the way the Conference Calls occur. Is that a good idea . A Conference Call . Absolutely. Netflix has changed the model with their interview format. It is better than not having a Conference Call. You get on and you see it. He is saying this and that and that. Does it make you smarter to have a twitter Conference Call . Listen, you are not learning a whole lot on the Conference Call. Theres accumulated knowledge about a company that you are gathering. Ok. Compounded, accumulated knowledge. That is true. That sounds like jargon. Like hanging out with Olivia Sterns. Her twitter question of the day, should the u. S. Legalize marijuana . Tweet us. Good morning everyone. On tomorrows program, julia fromado, the grand analyst paribas. She will join us as we get ready for a busy day of economics. The jobs report is really. August 1, that is friday. We say good morning. I am tom keene. With me, Olivia Sterns and adam johnson. Our guest host is Chris Marangi with gamco investors. Time now for company news. Fansrizons unlimited 4g are not so unlimited after all. They will cap data speed for some users. In limits go into effect october. It will effect the top 5 of data users. Game players get an early shot at the xbox1. 10cent is taking holdings. They are trying to get a jump on competitors. Microsoft has said the council would be delivered in september. And the chief of blackberry talked about the company. He discussed the challenges facing blackberry with emily chang. History has been cruel to phone makers. Nokia, motorola, palm. What makes you think you can change history . Well, by not following the same play. We arelook at what trying to do right now, we are trying to broaden ourselves beyond a device. I dont sit there and think, i could make another really great phone and everything will be well. You did vow to keep making phones . Of course. If i make money in this is part of our strategy, i do need to make them. That is todays company news. It is high time to legalize pot, so says the New York Times. They came out strongly in favor marijuana. Ng the editorial is part of several reports that will be released in the next week, examining the history, laws, and regulations. Member of the Editorial Board and joins us with a look at what is behind the move. Good morning. Obviously a very hot topic these days. I am for legalizing marijuana. Tom keene is not for it. Pewe are signs from the Research Firm that baby boomers are even changing their tune. What happened . Why did sentiment change so quickly . How did we go from bill clinton having to say he did not inhale to the majority of americans supporting legalization . The cost of prosecution and the rest is way too high. You have 600,000 or 700,000 people being arrested for mere possession. That costs the government a great deal of money. Most of it is wasted. People who are being put in the criminal Justice System do not belong there. City sent states need that money for prosecution of Violent Crimes and harder drugs. What people think of the politics your op ed was extremely well written. How prevalent is the conservative madness concept in america . There may be a large body of americans that have not changed one iota. I think that is true. There are changes we are starting to see among libertarian republicans, who are starting to see that this is an intrusion into peoples lives. You saw in the house a few weeks ago, surprising vote. They voted to in your study, do you weekly marijuana with alcohol . Yes. The same rules apply to alcohol should apply to marijuana. They should be kept away from minors. The marketing should be limited so that you do not get kids interested in marijuana candy bars, which are very prevalent in colorado. We basically think that the same rules should apply for basically both substances. Take us inside the Conference Room at the New York Times. We all sat around the table and you hashed this out. Was that on their . I believe they heard a pun. No pun realized. Adamant out of his element on this topic. There is no pun we have not made. We have been talking about this for a while. They have never come out in favor of legalization of drugs before. Alizedtes now have leg marijuana in one form or another. Momentum is picking up. And how much hate mail have you done . Most of the comments have been very positive. In favor. 1 the history of how we got here was interesting. How did we get to a point where marijuana was classified as a schedule one drug . This is entirely from the 1970s period when Richard Nixon was pushing a very tough on crime position. They felt that there was no possible use for it. We had just come out in a nice and 60s, a time when it had a different cultural image than it does at this point. Nixon sought as a great way to give voters on his side. Aside, is there any concern that youre encouraging people to endorse smoking . That is not something we want to do. We do not care whether people smoke or not. It should be a choice. Like having a glass of wine with dinner or a martini. It is twice that adults can make. The federal government should not be involved. There are no documented deaths due to marijuana. Bottom line. When people smoke, they do not tend to go out and get violent. They fall asleep. And get hungry, so im told. It is a smaller threat to society. Lets hear what our viewers have to say. We asked, should the u. S. Legalize marijuana . Increased tax revenue, cut out criminal suppliers,and frees police to chase real criminals. It is a nobrainer. 1. 2 Million People smoke. Half of them will die in middleage. That is my argument. Statistics are conducted. Hang on. You are shaking your head . There is no link between marijuana and in a deadly disease. There is no science to back that up at this point. The worst you can get his bronchitis. It is just not there. And what is the third one . Should if any country should know how bad prohibition works, it should be the u. S. The war against marijuana has done more harm than marijuana itself does. What do you bring it back to . Where is the middle ground . The federal government should not legalize this nationally. We are not saying every station go along with it. Take it off the schedule one list. With the states decide. Thank you so much. Event. Time for the agenda. We talk about what were focused on. Kick us off. I hope it is a rested john kerry who comes back. What to do is not just gaza and israel. I cannot imagine a secretary of yearsat 30, 40, 60, 100 the margin this weekend, i thought was interesting. Has becomehed isil across most of syria and iraq. Were actually talking about redrawing of borders in iraq. Not quite as terrifying, but concerning. Pending home sales are out at 10 00. Supposed to decline about 5 . That would be the ninth consecutive month of yearoveryear decline. There is a very cautious call on gdp. We will talk to dr. Schilling. That is a debate. And on my agenda, herbalife. Bill ackman, a popular figure here, he is obviously famously short. He promised a presentation of his lifetime, but did not deliver. The stock rallied. It was a big disappointment. Following 40 . Analysts expect revenue and earnings growth. An anticipated Earnings Report from herbalife. Chris marangi, thank you so much for your perspective on media mergers. Two today . You continue on radio. Meanwhile, a quick break. Betty liu takes over. Good morning. It is monday, july 28. We are live in the bloomberg headquarters. We have a great show ahead of you today. We will get thoughts on how the Airline Industry is dealing with the latest geopolitical fallout to pay its first dividend in almost 35 years. The business goes on in the Airline Industry. We will cover all of the latest and ceon a president robert reston. Russia has fired across the border. Supplying rep weapons to rebel forces in the ukraine. The former owner has one a landmark 50 billion award compensating confiscating their company. Back here in the u. S. , murder monday. A big takeover. A company agreed to tie to buy
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