The banks are trying to keep employees from quitting. U. S. Special Operation Forces raided a location inside syria the summer, but foley and other hostages had already been moved. Of our top stories, bank of america is prepared to announce a 17 billion settlement to settle invalid overions investigations the improper sale of mortgage bonds prior to the crash. This will definitely be the biggest. Jpmorgan paid 13 billion late last year. Citigroup paid 7 billion last month. Bank of america is paying the biggest settlement so far based the mortgage related acquisitions. Merrill lynch had a hand in this. Inc. Of america acquired Merrill Lynch in the dark days bank of america acquired Merrill Lynch and the dark days of 2008. Forthey being penalized that now . A lot of it has to do with countrywide, the largest some prime subprime mortgage issuer. Countrywides stock was declining and it looked like it was a good deal of the time. Merrill lynch had a lot of mortgage bonds on its Balance Sheet when they acquired it. They are either being punished being doj by this or punished on the m a side of this. 17 billion is a lot of money. Where does it go . Any to the homeowners . Half of it is going to go to consumer relief. We are not sure how they will set that up yet. Word is the other half go . Right to the u. S. Government, dry to the Treasury Department right to the Treasury Department. Consumer relief. Doesnt actually get to the people or is it bureaucracy . That is something we will have to watch very closely. Government gets the right amount of money to the right people. How to suss that out has been a challenge up to this point. It will be continue continue to be a huge challenge for bank of america and the government. Questionst a lot of as to whether or not this works as a deterrent. We have breaking news. Family dollar board of directors rejecting the proposal from Dollar General based on antitrust issues. Scarlet fu is that the breaking news desk with more . The headline here, Family Dollar rejecting a proposal from Dollar General. That, they also reaffirmed the recommendation in support of the merger agreement with dollar tree. This is all part of the dollar store consolidation as they try to take on walmart. Family dollar rejecting a proposal to make a purchase from Dollar General. Dollar general shares are trading lower following this news. No trade on Family Dollar yet. The wars continue on who will take over the Dollar Stores. Thank you for bringing us that. , we learned that the u. S. Attempted and failed to rescue james foley back in july. Incident sheds light on one of the ways the Islamic State funds its operation, through ransom money. For more, i would like to welcome a brookings fellow who joins me from london and White House CorrespondentPhil Mattingly. Phil, first of all, tell us about this attempt. More than two dozen u. S. Troops set foot on Syrian Ground for what turned out to be a failed operation. Thats right. Than two dozen u. S. Personnel representing every branch of the u. S. Military, most notably special operations forces, did set foot on syria based on several streams of intelligence, including people i have spoken to. When they got there, they did not find the u. S. Prisoners, including james foley and two or three other americans. They found multiple Islamic State militants. A firefight ensued. There was a wounded u. N. U. S. Military personnel during the process. The u. S. Says multiple Islamic State militants were killed. It was a failed operation, but not a catastrophic failure. The administration did not want this out. Concern that the public distribution of this operation could threaten that operation or hostages that have been taken. , news outlets felt they had no other option than to report this late last night. Kidnappingon is this as a means of supporting islamic . Tate do other countries pay ransom fees . Extortions and other means in and the looted banks , as they managed to capture well as the antiquities being smuggled across borders, all these are means contributing to the gigantic financial machine that is funding isis and other al qaeda splinter groups. You mentioned gigantic funding. What kind of money does it take to run a Terror Organization like the Islamic State . Initially, it relies on support and funding from isis sympathizers from various countries. Over the past year and a half or isis hasperation of controlled Lucrative Oil assets. 60 of the producing assets in and they all reportedly nearly controlling seven fields in iraq. I want to go back to Phil Mattingly who covers the white house for us in d. C. We were saying earlier that the u. S. Does not pay ransom fees. Are there other countries who are willing to do so . There are. That raises Major Concerns within the administration. There is no coherent International Policy without to do with kidnappings. The u. S. And u. K. Do not pay ransoms. Six prisoners held by the Islamic State were released, they were from spain and france. They do pay ransoms. In the millions of dollars. The concern within the administration and within the Journalism Community is when there is no coherent policy. They set an expectation and but u. K. And u. S. Journalists and aid workers in more danger because the u. S. Simply is not going to comply. If there is a precedent set when and the u. K. Liance and the u. S. Decide not to do that, those individuals from those countries, there is a view that those individuals are put into more danger. Thank you very much for all of your perspective. Thank you very much. Moving onto the fed. In annual fed symposium jackson hole, wyoming is kicking off today. Investors are wondering if janet yellen is going to use the opportunity to push back against the idea that rates may rise sooner. Mike mckee is there in the dark because they are on an earlier time zone. You have already been talking to fed officials about this. What do you think we might here hear from janet yellen . What is really going to make news . The feeling seems to be that she is going to come out and talk about how labor markets still have a lot of room for improvement and maybe push back against the idea that they could raise rates sooner because the Unemployment Rate is coming down so quickly. Nobody has seen the speech. The generals have idea that she is not necessarily going to do that. These conferences revolve around a theme. Theme is changing dynamics in labor markets. It is going to be very wonky. She is the kind of person who is into that kind of research. Propll hear more about theoretical concepts than actual developments in the economy at this point, that is the general feeling going in. A lot of people worry that we are going through change in the labor market, making it harder and harder for people to find good paying jobs. You look at the lack of wage inflation. That concerns janet yellen. It is a very topical time to be talking about employment. What might some of these big themes be . Do we anticipate hearing much on wages . You really put your finger on it. The Kansas City Fed would be extremely happy to be extremely topical. These are the questions everybody is asking. How much is cyclical . There will be a lot of talk about wages. Is going to become a why are this type ofing in environment . Why are people finding it harder to get a job . Cohorts oftain society finding it hard to get it done . To trytral bankers come to understand the issues, not to make policy. You wonder if theyre going to ask the question, what can we be doing as central bankers to try to get more circumspect in our work . You have roughly 8 Million People who are in parttime employment right now that want to be working fulltime, but cannot find a job. Yes. That is a question of probably has no answer out here. We will talk about it more in the next hour. She feels the fed cannot do anymore. This is not a Monetary Policy question anymore. The question of the labor force structure is fiscal rather than monetary. Janet yellen has to convince the not only her own fed officials. Mike mckee live from jackson hole, wyoming. Coming up, 30 quarters and counting. That is a long sales have been falling at sears. We will talk about that and the news about Family Dollar rejecting Dollar Generals bid. That is next. Ok. Family dollar has rejected the offer from Dollar General citing antitrust concerns. It remains committed to the dollar tree deal. Im joined by the ceo of the robin report. News the coauthor of the rules of retail, and which he talks about the rise and fall of sears. Dollar general has been so much in the news flow as late. Everybody wants a piece of the company. Do you see happening with the Dollar Stores . All, the three of them separately and aggregately have been a juggernaut putting enormous pressure on walmart. I do think a merger of two of will perhaps happen. Family dollar may be raising the ante. We will see. There are concerns about antitrust issues. Why . That was not necessarily a problem. But antitrust situation has not been raised in too major acquisitions and mergers in the past because of the economy we are in. They are trying to raise the ante. Wasnt there a concern that they would have had to sell about 700 stores to get the approval of regulators . That is a lot. That is quite possible they had 700 Underperforming Stores but they could target for illumination. Why do you think they are ejecting rejecting this bid it is quite possible they had 700 Underperforming Stores that they could target for elimination. Why do you think they are rejecting this bid . How does sears turn this around . There was a fascinating last chapter in the book. If people read it, they will understand what i am about to saying to you. Has been sinking like the titanic ever since Eddie Lambert took over. I dont think theyre going to turn it around. I think the consumer has walked out the door. Because there is unlimited selection, the consumer has gone out and will not come back. They have been nothing to improve the shopping experience. All Eddie Lambert has done is cut cost. Sears is neither highend nor lowend. There is no store experience. Aremajority of consumers moving toward one kind of retail arm or another. Anybody who is stuck in the middle, good luck. That is exactly right. Sears has been there a lot longer. Mckeever joining me, robin lewis. Thank you for joining me, robin lewis. Premarkething activity. We will be on the markets coming up on the halfhour. Have you used ups in the past year . Your personal data may have been hacked. you are watching in the loop. Im trish regan in for betty liu this morning. Service, ups, the latest company to have its computers hacked. Thousands of customers may have had personal data exposed this year. 51 locations, more than 100,000 transactions were affected. Hewlettpackard has posted its first sales increase in 20 quarters. 12 quarters. In moscow, a safety regulator ordered mcdonalds to shut down for restaurants. The reason . Violations of sanitation rules. There is speculation that it may be retaliation for western sanctions on russia. Icahnnaire investor carl is announcing his latest acquisition target, hurts. Hertz. He plans to have meetings with Company Management on how to improve performance. Hertz admitted that it no longer stood behind recent earnings reports and forecasts for the year. By more on this, im joined the associate professor at Harvard Business school. What can carl get done here . The most important thing that he gets done is to make sure that the board does not drop its focus on the problems. Hertz has a bunch of things going on. With the accounting staff, with brings pressure on the board that keeps its eye on the ball. The expectation is he is seats. To get some board how easy or difficult will it be for him to win those . It is not absolutely necessary. The Company Already announced that the lead director that they will have a newly director take charge. New lead director take charge. The company is probably well advised to talk to him and to be involved. These are not simple challenges that the company is facing. There is a credibility issue. Is replacing the ceo the best way to go . Im not sure. But it is certainly worthwhile talking to carl. There are two schools of thought. Some management immediately run to put in and do everything they can to fend that activist investor off and insulate themselves from anything he or she might do. You are advising that the management at hertz talk to carl. Why do you think that is right in this case . In most cases, i think. Poison pills do not achieve much. What is carl going to do . Lets say he gets 15 . The other 85 of shareholders that you have to get to go along. He cant really do much unless their message that they are advocating has meaning. Helpew is that it does not to hunker down and start fighting. It is much better to Start Talking and understand his view. I would be on the phone trying to understand whether they. Greed carl has not said anything publicly on the specifics of what he wants. If i were in the leadership, i would be talking. It is interesting. We are starting to see a reversal. In the old days, they used to go to the poison pill. To your point, it does not necessarily do much. In recent years, a lot of ceos have taken carls phone call and worked with him to try to improve the company. For example, netflix with reed hastings. Carl was in that stock for quite a while and the stock rose to all kinds of new highs while he was there. You could make the argument that he really assisted and helped the Company Along or it was really good timing. Pain celestial hane celestial as well. They realized the poison pill was futile and they worked closely with carl icahn to improve the company overall. In a neweeing a Trend Direction overall. What is your research indicating . Do you think activists really serve the market for the better . Yes. There are activists of all kinds. They do want to hope the market and help the company. You see things like this spinoff that hertz has announced. Activists before. The spinoff and the buyback of shares to help companies, especially not for sale companies. It adds value to companies more often than not. Activists shun the spotlight on Something Like this. They can help the market and keep the boards on their toes in terms of monitoring. Definitely keeping them on their toes. A wild ride. Or think you for joining us. An initial jobless claims up for 298,000,coming in at down 14,000. Below the 300,000 mark. The survey had been forced 303,000. For we had a big decline. Were back below the 300,000 level. We have seen jobless claims come down on a weekly basis from a sixweek high. From 2. 5aims dropped million. , congresseek average likes looking at this because it is a less volatile measure, that ,750. Ased to 300 is year to date mean 318,000. We are well below the annual average this year. Of impact on the markets, not that much at the moment. This is the big moving one. We also have existing home sales coming out after markets open at 10 00 a. M. That will likely have a bigger move. Thanks so much. I want to get some more on these numbers. The fed meets today. Policy watchers in washington are watching anymore that closely. 298,000 is the number on the jobless claims. Coming out better than people had anticipated. Is that good news . Certainly. One of the greatest things that has been going on. Simply put, know what is getting laid off anymore. No one is getting laid off anymore. Consumers spend money because they dont have any fear of being laid off. That is an increasingly normal view for someone to have in the labor force right now. Confidence is a key component of Overall Economic growth. Interesting because labor is going to be a big theme this year at jackson hole. Thoughtspate hearing on structural changes. What are you watching for most carefully from janet yellen . It is pretty clear that she is going to be somewhat dovish relative to market views. , sheu look at janet yellen is clear that there is labor capacity in the marketplace. She thinks there is more the fed can do to help. Politically speaking, what else is she going to say . I have no power, i dont know that i can do it . It does not cost her to say that there was a lot of Spare Capacity and the fed should not should keep rates easy. To say there is a lot of spare labor capacity and by the time she gets to mid 2015 there probably wont be any and then she can justify the rate hike cycle. She is trying to justify what policy is easy now. But i think they should have hiked rates a long time ago. This is interesting. Why . Everything works with lag. There is a lag between the Unemployment Rate picking up and wages dropping. How long is the lag . You are looking at about a year. Ubs went through the breakeven for on a plummet for five months ago. Employment for five months ago. Four or five months ago. People are being paid a higher wage. You see some of it in the news over the last couple days. Junior bankers are being paid more. Up 20 . That is not one where people think there is a problem getting yet people are finding there is a problem