Transcripts For BLOOMBERG Bloomberg Bottom Line 20140905 : v

The august jobs numbers. We begin with Ryan Chilcote in south wales with details on the nato summit in the ceasefire in ukraine. The nato summit wrapping up. Handful of numbers hours into this ceasefire. Petro poroshenko thinking we have a deal. Why should we think its different this time . The most remarkable thing about this summit was isi Petro Poroshenkos announcement that we have this ceasefire. You have a member of a a nonnato country dominating the headlines. He thinks that he has a decent shot. He has already constructed his army to follow this ceasefire. There appear to be some problems. You have thousands of people on the ground in Eastern Ukraine with weapons. Prorussian rebels. And the ukrainian military. It will take a while to unwind and get the ceasefire in place. We have been here before. The last time the russians and ukrainians had a deal, i was in geneva talking to the Ukrainian Foreign minister and he was so pleased and so surprised, the man felt he had to pinch himself. A lot of people feel the same way this time. Almost all the 60 World Leaders who gathered say they are deeply skeptical, including president obama. But they are hopeful and its a start and this is what the ukrainian president wants, so theyre going to go forward with it. Summit wasch of this dominated by ukraine, a country not in the nato alliance. Much of the talk around a potential new round of sanctions. Where do we stand on this sanctions . Are they now on ice because of the ceasefire . The leaders appear to want to push forward. We heard this from president obama and president hollande and Angela Merkel that president putin, in their minds, has already earned these sanctions. The only reason we have this ceasefire we have now is because of the sanctions. They feel the sanctions should go forward. They were supposed to get the sanctions this evening. Maybe we will get them over the weekend. Is, theseon really appear to be sanctions like the ones weve already had. Restricting Russian Companies access to European Capital markets are much in the same way we have seen it in the United States. If this now threehour ceasefire sticks, we could see the sanctions frozen. President obama is putting out, this will be a long process to get to actual piece. To actual peace. Thank you so much. An airport official says to when ther jets f15 pilots caught up to the plane, they could not see into the windows because they were fogged up. They were to fly from new york to florida. Its a highperformance single engine turbo plane. Not what anyone was expecting. The august jobs report, 142,000 jobs created. Much lower than the 230,000 jobs forecast. What happened . The men with the answers, Michael Mckee dirty is this just a blip or the beginning of a downward trend . Blip for go with the 50. Its a nonsituation. What we have seen in the past five years is august they have a hard time adjusting for the numbers. Releasedh, they have the august figures, they are much lower than what they end up being. They get revised much higher. 242,000 nt, 142,000 to be revised higher. When they do the annual revisions, could go higher yet. Have beenthing they looking at, they all came in pretty good. Unemployment fell, earnings were up just a bit. Parttime workers go down. The number of people feeling they can quit their jobs is going up. Not a terrible report. What is your take away . There are different ways to measure the slack in the labor market. Janet yellen has been focused on wages. Nobody is getting a raise. 2. 1 . For quite some time, its been fairly static. You look at what people might have earned in various different categories and is remarkable. In manufacturing, construction, service industries, its all about the same. 2 gain. The only category that is way up is the people in mining. They are the ones getting a raise. Everybody else stays about the same. Making a lot of money. Were the weakink spots . Retail. Drop in nobody knows why that is. We have not had a big retail gain in a while. To lose that many jobs is unusual. Manufacturing came in flat. All the numbers weve gotten recently for manufacturing have been relatively strong. That does not make a lot of sense. We are hoping it is a blip. Thank you so much. He has a new job as the chairman of the commodity futures trading commission. Today, he sat down with our chief washington correspondent, peter cook for his First Television interview. Peter joins me now with part of that conversation. Good to see you. Hes not one of wall streets top cops. He is filling some controversial choose as well. The former chairman was an unapologetic backrub doddfrank. Cker of doddfrank. I began by asking if he feels a need to strike a different tone as chairman. Really a question of striking a different tone. Its more a question of its a different time and place. Think gary did an amazing job the agency did so much and we are ahead of where all the other d 20 nations are in terms of regulating this market g20 nations. Now, we are in a different place and different time. There are slightly different challenges. Now, our challenges are things like, as we see how these new rules affect the marketplace, were going to have to finetune them in some respects. We have a lot of work to do with respect to our international counterparts. The globale that plan work global framework is harmonious. To think there may be a kinder, gentler cftc, what is there what is your message to them . They have a practical and pragmatic cftc. Very committed to trying to get these rules right. We all recognize the importance of these markets to a wide variety of businesses. These are markets that most americans dont touch. They dont know anything about them. They seem very esoteric. Yet, they affect fundamentally the prices we all pay for food, transportation, really all the goods we buy. They affect somebody businesses. You have a commission thats very aware of that. A big focus on the crossborder rules. To sei want to ask you if you se the agency has already said its looking at whether banks are trying to skirt these rules in some way. Try to change the terms so they dont fall under cftc jurisdiction. Are banks already cheating . Let me pass on whether its cheating. Lets talk about it this way. The financial industry is very good at morphing and structuring things around regulation. What we are doing is looking at this practice of the guaranteeing. Even if its well within the rules, it may still mean that activity abroad poses a risk to the u. S. Banking corporations which own these dealers. We do this as investigation, we are consulting with our counterparts at the fed becausefdic and the sec it will potentially raise issues for them. We want to make sure the correct there may be a london rule there may be a london loophole . We have Global Financial corporations that are active all over the world. Thesere regulating markets through nationstates. No nation can regulate all the activity that occurs around the world. A harmoniouse need global framework and thats why we are committed to building that. We will also work with our counterparts in the banking ory agencies. There may be risk beyond the reach of our authority that could affect the apparent banking corporation. What is your sense about where the investigation stands . Will we see more settlements . We are still looking at this. There was a lot of bad behavior in this area. We will continue to look at that. We are also very involved in the so it iso reform libor more transactionbased and to look at is that the preferred alternative . We will work with the fed on this issue of working with the industry, engaging with the industry to see if there are ways to develop alternatives that are less susceptible to manipulation. And to reform the way libor is set so it is less susceptible to been in relation. He inherited a host of other big issues. One thing he did not inherit was a big budget. One of his first fight is to convince congress to give him money he needs to get the job done. We do indeed wish him luck with that. Peter cook, thanks so much. Surprisingme, the drop in the august jobs report. A seasonal blip or a signal of a downturn in the u. S. Labor market. American employers hired fewer workers in august than expected. Advance000 was a small this year and far lower than estimates. Lcome back to bottom line its interesting about todays report because, up until todays jobs report, the numbers appeared to be improving. The concern was that janet yellen might bring forward her time for the race like. Raise hike. It does take some of the pressure off the fed at their next meeting. They can now point to the jobs report as a sign that the economy is not rapid the exhilarating. Thats rapidly accelerating. Is not rapidly accelerating. Fourthquarter gdp is adding up to 3. 6 . Thats up from our original estimate of 3 . You look away from the jobs number, we are doing pretty good right now. Are you more concerned that the fed is going to wait too long to raise rates . I think the fed is appropriately cautious here. The fed has to think about this from a Risk Management point of view. We dont have an inflation problem in the. Inflation is a small moving problem. Were not going to get runaway inflation in the next several years. The fed looks at what happened in europe and what happened in japan where they did not get a full recovery and their economy and ended up in deflation or near deflation. That is a much more dangerous thing. Llen correctly understand, get a solid recovery in place that you are confident about and then withdraw the stimulus. They are correctly balancing the risks here. The main risk is not getting a full recovery in the economy. There are other risks, including from abroad. The economy stalling out. Isnt there a large chance that all of these things are going to start winning on you waiting on you . You have weak growth globally. Europe is showing a bit of stumbling. The very lowwage readings out reasonse one of the why we are so low inflation as well. Is notbal backdrop helping the u. S. At all. We are on our own. The fed in the United States is on its own because they cant accept expect any help from the rest of washington. They understand that the risks are to the downside and they have to keep their foot planted on the accelerator. Mario draghi stunned the markets by cutting Interest Rates and announcing a program to buy back some assets. The goal of course is to penalize banks and companies from bidding on cash. Do you think this is going to work . Will it get liquidity flowing into the small and mediumsized businesses in europe . I will say one thing for mario draghi. He is in a tough spot here because he has to somehow satisfy all the different routes in europe, including the bank that wants to do nothing about the economy. This is a nice step, more aggressive than expected. Its one battle in a very long war for europe. They need several years of healthy growth to work through their crisis. They are way behind the u. S. In terms of the healing process. This is a nice step. I dont think its the last thing theyre going to do. Europe is still at risk as a region. They need more help. We were talking about janet king her foot off the accelerator. To tell me about the implications of this divergence between the u. S. Economy and whats happening in europe. Differential the twin where the u. S. Tenure is and germany is 150 basis points. All, what the europeans doing is appropriate. They need low Interest Rates and a weak currency. Needs less u. S. Stimulus than it did before. , the ecbnvironment continue to provide the quiddity. It does imply more down pressure on the dollar. Global Interest Rates will get held down even as the fed hikes rates. The ecb continues to provide liquidity. Both countries are pursuing the right policy. Ultimately, thats whats best for the global economy. Ethan harris joining us from bank of america routledge. Bank of America Merrill lynch. Bottom line returns in just a few short minutes. Will come back to bottom line. We are approaching 26 minutes after the hour. Bloomberg television is on the markets. Where stocks at are trading here. We have had a bit of an upanddown session as investors digest this mornings worse than estimated jobs report, adding the fewest jobs in one year. This view 500 up. 4 . The s p 500 up. 4 . That seems to be the trajectory here. In terms of individual stocks, the dollar stores. Dollar general falling after Family Dollar rejected its 9 billion dollars takeover bid. Family dollar sing it would be harder to get antitrust for the deal than in lower offer a lower offer from dollar tree. The largest recall in china i n four years. There will be nearly 200,000 vehicles affected, going back as far as 2009. We will have more on the markets in 30 minutes. More bottom line is next. Welcome back to bottom line. Im Olivia Sterns come in today for mark crumpton. John kerry identified a coalition of 10 nations that could help go after Islamic State militants in iraq and syria. Elliott joins me now from washington with his perspective. Welcome to bottom line. Today, the president announced this new coalition him of the usual suspect this new coalition, the usual suspects. What is this coalition going to do on the ground . Are they going to be able to turn the tide against Islamic State . Those are the right questions. Everybody is saying no boots on the ground. Fighting forces will be the kurdish army, iraq he army and maybe the Syrian Rebels. They are going to need help. We need to organize that help from all the countries you mentioned. Military aid, training intelligence training, intelligence. Thate president has said he wants the arabs in the region to play a role against Islamic State. Are we going to see saudi boots on the ground were jordanian troops . I dont think you will see their troops. You will see money from the gulf. That is part of this idea. The other part is where with the training be . If we are going to do training for Syrian Rebels, presumably jordan or turkey. There is a role for these countries to play. There are reports that we are arming these calling in airstrikes on the ground. Is this a matter of time before there are airstrikes in syria as well . That remains a big question. We are coming to this late. Iraq and hadto some big threes against then we started helping them more because the government in baghdad said, please dont do that. We need to set that up a lot to help the kurds. Same thing with the syrians. Weve been doing very little for the last couple of years to help the Syrian Rebels. That has to get going if we are going to have the impact we want to have. Is it the right move to launch airstrikes in syria . I think it is. The Islamic State has obliterated the border between iraq and syria. It does not exist in the real world. It is onery is saying theater. If we strike on one side, we are just defining syria as a safe haven and base for the Islamic State. If we drop missiles, arent we helping president assad . Not if we are helping the Syrian Rebels who are opposing them. Do you think there is a Coherent Group of Syrian Rebels that we can be funding and helping arm to take on assad and Islamic State . That want our help . I think there is. It says in the newspapers that weve trained for thousand of them. 4000 of them. If we jump into this, if its clear that the americans are behind this, we will train you and get you money for the gulf, more people will join those rebels. Some of them have moved away from those groups because they thought the americans are not behind this. They wont pay a salary, they are not well armed. If we turn it around, i think we can build these groups up. I sometimes get the feeling that all roads lead to theyre helping broker peace talks in ceasefire talks with hamas. Theyre also hoping the u. S. Negotiate with the taliban by providing what is the qatari role here and what is their agenda . Its a tiny country about 250,000 citizens. Tons of money. They want influence. They want a place at the table. Being so tiny seems to energize them into wanting to play a bigger and bigger role. Their longtime rivals of the saudis, so they would want to as an themselves forward alternative to the old saudi influence in the middle east. They are like the saudis. They have very good relations with the Muslim Brotherhood. That is one of the reasons they are in such a bad relationship with everyone else in the gulf. They seem to believe that the Muslim Brotherhood is part of the wave of the future. That is going to create a lot of friction. You wrote a piece entitled the man who broke the middle east, referring to president obama. This story is one of failure and danger. We did point out that you used to work for george w. Bush. You are wearing your politics on your sleeve here. What is it you think president obama so misjudged in the middle east . We were also hopeful back in 2009 when he went to cairo and gave that speech. What did he get wrong . Things wrong. Ral the idea that we could get to an israelipalestinian peace right away was just wrong. More seriously on syria come his own cabinet, people like andetary pineda and clinton secretary kerry and David Petraeus were urging support for the Syrian Rebels 23 years ago and obama said no. Its in that vacuum that he created that the Islamic State grew. Fastso pulled out much too from iraq, creating another vacuum there. There is a lot of errors that he made, very often, turning down the advice he was getting from his own cabinet. Thank you so much for your time. In debt. , deep why the city of stockton, california is very interested in detroits bank rossiya ring detroits bankruptcy hearings. Welcome back to bottom line. A quick update on a developing story. Jamaican Ryan Chilcote<\/a> in south wales with details on the nato summit in the ceasefire in ukraine. The nato summit wrapping up. Handful of numbers hours into this ceasefire. Petro poroshenko thinking we have a deal. Why should we think its different this time . The most remarkable thing about this summit was isi Petro Poroshenkos<\/a> announcement that we have this ceasefire. You have a member of a a nonnato country dominating the headlines. He thinks that he has a decent shot. He has already constructed his army to follow this ceasefire. There appear to be some problems. You have thousands of people on the ground in Eastern Ukraine<\/a> with weapons. Prorussian rebels. And the ukrainian military. It will take a while to unwind and get the ceasefire in place. We have been here before. The last time the russians and ukrainians had a deal, i was in geneva talking to the Ukrainian Foreign<\/a> minister and he was so pleased and so surprised, the man felt he had to pinch himself. A lot of people feel the same way this time. Almost all the 60 World Leaders<\/a> who gathered say they are deeply skeptical, including president obama. But they are hopeful and its a start and this is what the ukrainian president wants, so theyre going to go forward with it. Summit wasch of this dominated by ukraine, a country not in the nato alliance. Much of the talk around a potential new round of sanctions. Where do we stand on this sanctions . Are they now on ice because of the ceasefire . The leaders appear to want to push forward. We heard this from president obama and president hollande and Angela Merkel<\/a> that president putin, in their minds, has already earned these sanctions. The only reason we have this ceasefire we have now is because of the sanctions. They feel the sanctions should go forward. They were supposed to get the sanctions this evening. Maybe we will get them over the weekend. Is, theseon really appear to be sanctions like the ones weve already had. Restricting Russian Companies<\/a> access to European Capital<\/a> markets are much in the same way we have seen it in the United States<\/a>. If this now threehour ceasefire sticks, we could see the sanctions frozen. President obama is putting out, this will be a long process to get to actual piece. To actual peace. Thank you so much. An airport official says to when ther jets f15 pilots caught up to the plane, they could not see into the windows because they were fogged up. They were to fly from new york to florida. Its a highperformance single engine turbo plane. Not what anyone was expecting. The august jobs report, 142,000 jobs created. Much lower than the 230,000 jobs forecast. What happened . The men with the answers, Michael Mckee<\/a> dirty is this just a blip or the beginning of a downward trend . Blip for go with the 50. Its a nonsituation. What we have seen in the past five years is august they have a hard time adjusting for the numbers. Releasedh, they have the august figures, they are much lower than what they end up being. They get revised much higher. 242,000 nt, 142,000 to be revised higher. When they do the annual revisions, could go higher yet. Have beenthing they looking at, they all came in pretty good. Unemployment fell, earnings were up just a bit. Parttime workers go down. The number of people feeling they can quit their jobs is going up. Not a terrible report. What is your take away . There are different ways to measure the slack in the labor market. Janet yellen has been focused on wages. Nobody is getting a raise. 2. 1 . For quite some time, its been fairly static. You look at what people might have earned in various different categories and is remarkable. In manufacturing, construction, service industries, its all about the same. 2 gain. The only category that is way up is the people in mining. They are the ones getting a raise. Everybody else stays about the same. Making a lot of money. Were the weakink spots . Retail. Drop in nobody knows why that is. We have not had a big retail gain in a while. To lose that many jobs is unusual. Manufacturing came in flat. All the numbers weve gotten recently for manufacturing have been relatively strong. That does not make a lot of sense. We are hoping it is a blip. Thank you so much. He has a new job as the chairman of the commodity futures trading commission. Today, he sat down with our chief washington correspondent, peter cook for his First Television<\/a> interview. Peter joins me now with part of that conversation. Good to see you. Hes not one of wall streets top cops. He is filling some controversial choose as well. The former chairman was an unapologetic backrub doddfrank. Cker of doddfrank. I began by asking if he feels a need to strike a different tone as chairman. Really a question of striking a different tone. Its more a question of its a different time and place. Think gary did an amazing job the agency did so much and we are ahead of where all the other d 20 nations are in terms of regulating this market g20 nations. Now, we are in a different place and different time. There are slightly different challenges. Now, our challenges are things like, as we see how these new rules affect the marketplace, were going to have to finetune them in some respects. We have a lot of work to do with respect to our international counterparts. The globale that plan work global framework is harmonious. To think there may be a kinder, gentler cftc, what is there what is your message to them . They have a practical and pragmatic cftc. Very committed to trying to get these rules right. We all recognize the importance of these markets to a wide variety of businesses. These are markets that most americans dont touch. They dont know anything about them. They seem very esoteric. Yet, they affect fundamentally the prices we all pay for food, transportation, really all the goods we buy. They affect somebody businesses. You have a commission thats very aware of that. A big focus on the crossborder rules. To sei want to ask you if you se the agency has already said its looking at whether banks are trying to skirt these rules in some way. Try to change the terms so they dont fall under cftc jurisdiction. Are banks already cheating . Let me pass on whether its cheating. Lets talk about it this way. The financial industry is very good at morphing and structuring things around regulation. What we are doing is looking at this practice of the guaranteeing. Even if its well within the rules, it may still mean that activity abroad poses a risk to the u. S. Banking corporations which own these dealers. We do this as investigation, we are consulting with our counterparts at the fed becausefdic and the sec it will potentially raise issues for them. We want to make sure the correct there may be a london rule there may be a london loophole . We have Global Financial<\/a> corporations that are active all over the world. Thesere regulating markets through nationstates. No nation can regulate all the activity that occurs around the world. A harmoniouse need global framework and thats why we are committed to building that. We will also work with our counterparts in the banking ory agencies. There may be risk beyond the reach of our authority that could affect the apparent banking corporation. What is your sense about where the investigation stands . Will we see more settlements . We are still looking at this. There was a lot of bad behavior in this area. We will continue to look at that. We are also very involved in the so it iso reform libor more transactionbased and to look at is that the preferred alternative . We will work with the fed on this issue of working with the industry, engaging with the industry to see if there are ways to develop alternatives that are less susceptible to manipulation. And to reform the way libor is set so it is less susceptible to been in relation. He inherited a host of other big issues. One thing he did not inherit was a big budget. One of his first fight is to convince congress to give him money he needs to get the job done. We do indeed wish him luck with that. Peter cook, thanks so much. Surprisingme, the drop in the august jobs report. A seasonal blip or a signal of a downturn in the u. S. Labor market. American employers hired fewer workers in august than expected. Advance000 was a small this year and far lower than estimates. Lcome back to bottom line its interesting about todays report because, up until todays jobs report, the numbers appeared to be improving. The concern was that janet yellen might bring forward her time for the race like. Raise hike. It does take some of the pressure off the fed at their next meeting. They can now point to the jobs report as a sign that the economy is not rapid the exhilarating. Thats rapidly accelerating. Is not rapidly accelerating. Fourthquarter gdp is adding up to 3. 6 . Thats up from our original estimate of 3 . You look away from the jobs number, we are doing pretty good right now. Are you more concerned that the fed is going to wait too long to raise rates . I think the fed is appropriately cautious here. The fed has to think about this from a Risk Management<\/a> point of view. We dont have an inflation problem in the. Inflation is a small moving problem. Were not going to get runaway inflation in the next several years. The fed looks at what happened in europe and what happened in japan where they did not get a full recovery and their economy and ended up in deflation or near deflation. That is a much more dangerous thing. Llen correctly understand, get a solid recovery in place that you are confident about and then withdraw the stimulus. They are correctly balancing the risks here. The main risk is not getting a full recovery in the economy. There are other risks, including from abroad. The economy stalling out. Isnt there a large chance that all of these things are going to start winning on you waiting on you . You have weak growth globally. Europe is showing a bit of stumbling. The very lowwage readings out reasonse one of the why we are so low inflation as well. Is notbal backdrop helping the u. S. At all. We are on our own. The fed in the United States<\/a> is on its own because they cant accept expect any help from the rest of washington. They understand that the risks are to the downside and they have to keep their foot planted on the accelerator. Mario draghi stunned the markets by cutting Interest Rates<\/a> and announcing a program to buy back some assets. The goal of course is to penalize banks and companies from bidding on cash. Do you think this is going to work . Will it get liquidity flowing into the small and mediumsized businesses in europe . I will say one thing for mario draghi. He is in a tough spot here because he has to somehow satisfy all the different routes in europe, including the bank that wants to do nothing about the economy. This is a nice step, more aggressive than expected. Its one battle in a very long war for europe. They need several years of healthy growth to work through their crisis. They are way behind the u. S. In terms of the healing process. This is a nice step. I dont think its the last thing theyre going to do. Europe is still at risk as a region. They need more help. We were talking about janet king her foot off the accelerator. To tell me about the implications of this divergence between the u. S. Economy and whats happening in europe. Differential the twin where the u. S. Tenure is and germany is 150 basis points. All, what the europeans doing is appropriate. They need low Interest Rates<\/a> and a weak currency. Needs less u. S. Stimulus than it did before. , the ecbnvironment continue to provide the quiddity. It does imply more down pressure on the dollar. Global Interest Rates<\/a> will get held down even as the fed hikes rates. The ecb continues to provide liquidity. Both countries are pursuing the right policy. Ultimately, thats whats best for the global economy. Ethan harris joining us from bank of america routledge. Bank of America Merrill<\/a> lynch. Bottom line returns in just a few short minutes. Will come back to bottom line. We are approaching 26 minutes after the hour. Bloomberg television is on the markets. Where stocks at are trading here. We have had a bit of an upanddown session as investors digest this mornings worse than estimated jobs report, adding the fewest jobs in one year. This view 500 up. 4 . The s p 500 up. 4 . That seems to be the trajectory here. In terms of individual stocks, the dollar stores. Dollar general falling after Family Dollar<\/a> rejected its 9 billion dollars takeover bid. Family dollar sing it would be harder to get antitrust for the deal than in lower offer a lower offer from dollar tree. The largest recall in china i n four years. There will be nearly 200,000 vehicles affected, going back as far as 2009. We will have more on the markets in 30 minutes. More bottom line is next. Welcome back to bottom line. Im Olivia Sterns<\/a> come in today for mark crumpton. John kerry identified a coalition of 10 nations that could help go after Islamic State<\/a> militants in iraq and syria. Elliott joins me now from washington with his perspective. Welcome to bottom line. Today, the president announced this new coalition him of the usual suspect this new coalition, the usual suspects. What is this coalition going to do on the ground . Are they going to be able to turn the tide against Islamic State<\/a> . Those are the right questions. Everybody is saying no boots on the ground. Fighting forces will be the kurdish army, iraq he army and maybe the Syrian Rebels<\/a>. They are going to need help. We need to organize that help from all the countries you mentioned. Military aid, training intelligence training, intelligence. Thate president has said he wants the arabs in the region to play a role against Islamic State<\/a>. Are we going to see saudi boots on the ground were jordanian troops . I dont think you will see their troops. You will see money from the gulf. That is part of this idea. The other part is where with the training be . If we are going to do training for Syrian Rebels<\/a>, presumably jordan or turkey. There is a role for these countries to play. There are reports that we are arming these calling in airstrikes on the ground. Is this a matter of time before there are airstrikes in syria as well . That remains a big question. We are coming to this late. Iraq and hadto some big threes against then we started helping them more because the government in baghdad said, please dont do that. We need to set that up a lot to help the kurds. Same thing with the syrians. Weve been doing very little for the last couple of years to help the Syrian Rebels<\/a>. That has to get going if we are going to have the impact we want to have. Is it the right move to launch airstrikes in syria . I think it is. The Islamic State<\/a> has obliterated the border between iraq and syria. It does not exist in the real world. It is onery is saying theater. If we strike on one side, we are just defining syria as a safe haven and base for the Islamic State<\/a>. If we drop missiles, arent we helping president assad . Not if we are helping the Syrian Rebels<\/a> who are opposing them. Do you think there is a Coherent Group<\/a> of Syrian Rebels<\/a> that we can be funding and helping arm to take on assad and Islamic State<\/a> . That want our help . I think there is. It says in the newspapers that weve trained for thousand of them. 4000 of them. If we jump into this, if its clear that the americans are behind this, we will train you and get you money for the gulf, more people will join those rebels. Some of them have moved away from those groups because they thought the americans are not behind this. They wont pay a salary, they are not well armed. If we turn it around, i think we can build these groups up. I sometimes get the feeling that all roads lead to theyre helping broker peace talks in ceasefire talks with hamas. Theyre also hoping the u. S. Negotiate with the taliban by providing what is the qatari role here and what is their agenda . Its a tiny country about 250,000 citizens. Tons of money. They want influence. They want a place at the table. Being so tiny seems to energize them into wanting to play a bigger and bigger role. Their longtime rivals of the saudis, so they would want to as an themselves forward alternative to the old saudi influence in the middle east. They are like the saudis. They have very good relations with the Muslim Brotherhood<\/a>. That is one of the reasons they are in such a bad relationship with everyone else in the gulf. They seem to believe that the Muslim Brotherhood<\/a> is part of the wave of the future. That is going to create a lot of friction. You wrote a piece entitled the man who broke the middle east, referring to president obama. This story is one of failure and danger. We did point out that you used to work for george w. Bush. You are wearing your politics on your sleeve here. What is it you think president obama so misjudged in the middle east . We were also hopeful back in 2009 when he went to cairo and gave that speech. What did he get wrong . Things wrong. Ral the idea that we could get to an israelipalestinian peace right away was just wrong. More seriously on syria come his own cabinet, people like andetary pineda and clinton secretary kerry and David Petraeus<\/a> were urging support for the Syrian Rebels<\/a> 23 years ago and obama said no. Its in that vacuum that he created that the Islamic State<\/a> grew. Fastso pulled out much too from iraq, creating another vacuum there. There is a lot of errors that he made, very often, turning down the advice he was getting from his own cabinet. Thank you so much for your time. In debt. , deep why the city of stockton, california is very interested in detroits bank rossiya ring detroits bankruptcy hearings. Welcome back to bottom line. A quick update on a developing story. Jamaican Officials Say<\/a> the unresponsive u. S. Plane that they were tracking has crashed on the island of jamaica. The news comes after an air force official says to at 15 fighter jets were scrambled after the pilot of a private plane over the Atlantic Ocean<\/a> failed to respond to air Traffic Controllers<\/a> for several hours. When the 15 pilot caught up to the plane, they could not see through the windows because the windows were fogged up. The pilot planned to fly from rochester, new york to florida. Highperformance singleengine turboprop like the one that has now crashed in jamaica. Time now for todays latin america report. Bonus iris is bracing for the socalled netflix tax. Aires. Os local media him dubbed this the netflix tax named after the popular provider of media content. The tax would apply to all sales and rentals of movies, music and games delivered to any tv set. On new rules go into effect november 1. Brazils annual inflation accelerated to above the. Nitial target range monthly inflation rose by. 25 , pushing the annual rate to a little over 6. 5 . Bull bond the meanest market are closely watching detroits bankruptcy hearing. Municipal bond market. Going up against detroits biggest predators. Bloombergsf Municipal Market<\/a> space joins me now. Start with the key issues. Heading into the trial, it was really about, does detroit cut enough of their debt to be viable when you exit bankruptcy . Nobody wants the city to refile. Making sure the city has a viable plan. You had some to holdout creditors that had not agreed to the debt adjustment plan. They were the ones making their arguments this week. You had some creditors that had already settled. Unlimited tax gao, limited holders coming in. Who are the Major Players<\/a> here . Walk us through their logic. The financial guarantee they had ensured that issue back in 2005 four detroits pension. They think that deal was a fraud because it was done back in 2005 mayorawmaker patrick was they are saying we deserve more than . 10 on the dollar. We should they have made a claim for . 75 on the dollar. Theyre saying detroit has not done enough to raise revenue. I can see where they are coming from. If you cut a deal with a mayor who is now in jail, you might hope to wiggle out of that ill. Out of that deal. The city is saying we have done enough to raise revenue. We cant do anymore. There wasnt some confusion in the courtroom about whether an Economic Analysis<\/a> had been done on the city. If you raise taxes, what effect does that have on the local residents . They made it seem like that analysis had taken place. In the trial this week, they were not sure. Detroit is sticking to its guns saying, we have done all we can. Any early sense of how this judge might be feeling about both sides . More sympathetic to the creditors of the city . It is hard. And theee the light horrible conditions that the city is in. Overall, there are a few different tones i liked to hear. They wered estimated at 650 million. Post bankruptcy, looking at a blooming 3. 5 billion. He made jokes about the methods we used to cap allayed those unfunded liabilities. There were other times when he was pretty stern and made some quotes about, give me a number, name your price. Thats when they said the . 75 on the dollar. Itinteresting to see how plays out and important to watch in terms of whether or not this is going to set a president. A precedent. ,ming up next on bottom line a look ahead at whats next on street smart. A quick programming note. On tonights highly anticipated alibabas ipo is highly anticipated. How did alibaba becomes chinas first Global Internet<\/a> company and what challenges does the founder now face . Over 200story hours of archival footage filmed by ali baba employees. Take a look. Playing]g theme more of jack ma. Dont miss the premiere of angtze. Le in the y street smart comes up at the top of the hour. Trish joins me now with a bit of a preview. We had a packed show for you. 142,000,red 42,000 i was absolutely shocked. This really was unlike anything in terms of predictions. The most pessimistic were still not predicting a lousy 142,000. My question is why we are enhancing the Participation Rate<\/a> improve. That is a discouraging sign. People are giving up. For whatever reason, dont need to be looking for work right now. Good sign. A although, you could argue that maybe employers need to be providing more incentive to get these people back into the jobs. I will be talking to a professor of economics at the university of berkeley uc berkeley and the Senior Adviser<\/a> about all of these issues. They have thoughts on what needs to be done and whether we will ever see the fed raise Interest Rates<\/a> now. Investors have bought themselves more time. Looking forward to it. Trish regan. , we are going to take a look at whats ahead next week. For more, lets go out to yang yang. Good afternoon. This week was back to school for students. Next weeks theme is back to work for congress. Lawmakers will return to d. C. From their fiveweek recess. Immediately on the todo list, passing legislation to fund the federal government. Whether they actually get to it immediately or wait until the last minute is a different story. Lawmakers need to decide whether to reauthorize the export import to addressw the unaccompanied minors at the usmexico border. Alibaba is expected to begin its investor roadshow on monday. Alibaba will kick things off in new york, followed by two weeks of meetings in the u. S. Come asia, all before it expected to price its ipo on september 18. U. S. Treasury secretary jack lew will speak at the urban institute about possible changes to the tax system to make American Companies<\/a> more competitive. Expect corporate inversions to be a central topic. Tuesday, apple will debut its highly anticipated new iphone, along with its first ever. Earable device the new iphones will have a 4. 7 m 5. 5 inch screen and include technology for making mobile payments. Is expected gadget to track health and fitness information. Looking forward to all of that. Thank you so much. Stay with us. We have another check of the Market Movers<\/a> on the other side of the break. Get the latest headlines at the top of the hour on Bloomberg Radio<\/a> and streaming on your tablet and on bloomberg. Com. That is it for this edition of bottom line. Alix steel will be here on monday. Have a great weekend, everybody. On the markets is next. Coming up on 56 past the hour. That means bloomberg tv is on the markets. Lets talk about where stocks are trading one hour before the end of the session. Stock sold onto gains here. We saw a dip into the negative, but now the perception seems to have set in that with this mornings worst than estimated jobs report, the fed has more running room. Up over 8 , not bad. Berkshire hathaway is up more than double that. If you cant afford to buy influencekshire can be seen at several etfs. This is not something everybody wants to invest like Warren Buffett<\/a>. You really cant do it. There is no Warren Buffett<\/a> etf. Maybe you should come up with one. There is a bill gross etf. There are some that get tagged as buffettesque. Buffett has used the term wide load for companies he likes. This etf has a process where they looked through Major Companies<\/a> and tag 10 as having a wide load wide moat. Then you get 20 companies that are wide moat, relatively good pricing and that is like a buffetesque kind of play. This one has a lot of turnover. Every quarter, it looks at these in the 20 always very. Its like trying to hit a are on the these dart, but not right in the middle. Lets talk about another one. The ishares etf. Basically the etfs trying to capture factor. Value and growth was popular in the 1990s. Now, its factors. This one is an etf that looks for characteristics and stocks, return on equity, Earnings Growth<\/a> and low debt. Things that buffett likes. These factors etfs are pretty popular. Sque. Ts tagged buffette it is a buffett philosophy, but not exactly buffett. There is dei billionaire the eye billionaire index. The top 10 billionaire investors. It looks that overlap stocks and puts a portfolio together. Icahn buffett is the 11th bestperforming billionaire. He is more of a risk taker. Exactly. He gets connected to the ctf a lot. This etfs connected to a lot. Things a lot. Thanks a lot. That is it for on the markets. Street smart is next. Welcome to the most important hour of the session. 59 minutes until the close. S p near session highs after the weakest stocks report for the year raises the hopes that feds will keep those rates low for a longer period of time. Regan. Ish street smart starts now. Up on the big show u. S. 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