We should get ready for more of the same in the u. S. A few days of triple digit declines and we will have more in the future. This is what the true normal market is like. There is a cliche for good reason. It is true people keep valuations. In syria, the Turkish Border, Islamic States. Has pushed further into the city. Meanwhile, leon panetta says the u. S. Needs to look at islamic as a real threat. I view this, charlie, as a continuum of 9 11. I think when you look at the broad sweep of terrorism, isis is another piece to that. Attackingntent on this country as well. We have to view this in the larger context. We will bring you more from that interview as well. Federer product federal prosecutors, currency rate rigging. That is according to people familiar with the investigation who declined to be identified. Several firms, including one here in the u. S. Prosecutors are looking into allegations that traders share data. A merger could create a new worldwide leader in the Auto Industry. One of the few people in the business to pull off a successful merger so far. He plans to list the shares monday and will step down after the end of the second fiveyear plan, a ways off in 2018. Finally, in baseball, st. Louis is going to the National Championship for the fourth year in a low. A three run homer gave a the dodgers. Over the cardinals will face the san who beat thents, Washington Nationals 32. Also three games to one. Of the biggest names in european politics. Angela merkel will attempt to tackle the entrenched problem for the region growth and jobs. Jon ferro is in london and joins us now. Are their chances . Frame the debate and give us a story here. Let me frame the debate for you. You have Germanys Angela Merkel turning up with a six cent Unemployment Rate since unification in germany. That is a record low. And you have the italian Prime Minister staring down and Unemployment Rate of 12 . Market. He labor soe heard that word reform many times, what does it even mean anymore . Some of the obstacles right now, you exposeig ones yourself to labor market regulations. 95 are 10 employees or fewer. No incentive to grow and it becomes a structural issue. There is very little the European Central bank can do unless they start doing things on the structural side. That will be a big debate with all these big leaders. The Economic Data out of germany has been really bad. Has angela pressure merkel been under . That is the other part of the debate. The biggest drop since 2009. No one here in europe is sensationalizing this, but it is a cause for concern. Germany really is on the brink of recession. We could get another one. This is the other side of the debate. You have pressure on Angela Merkel to change her approach there you are looking at the equity market in the u. S. Opening any minute now. But look at the bond market. You have got yields in germany on tenure money. Is exactly the same as japan. Guess what everyone is asking the germans why are you balancing the books when you can borrow money so cheaply and you should be stimulating your own economy . Now, germany is accounting for one third of eurozone gd the. When they get in trouble, you know it is a cause for concern. John in london, thank you so much for that. Lets come back here to washington for a moment. Tim geithner said a failure of aig may have caused mass panic. The former unit new york fed chief testified yesterday about a bailout in the company. Play outeithner will defense today. He is expected to return for a second day of testimony in the trial. For more, lets go to peter cook. You are inside the courtroom. What is the lawyer theyre trying to get that he needs two days to do . It is interesting he has been on the stand and has been very deliberate with Timothy Geithner, asking him the same question sometimes i throw or five different ways. Trying to get more details surrounding the terms of the aig bailout. Timothy geithner at times has been cooperative, but his memory has not served him well on some of the specifics. Through the course of the testimony, he has defended the bailout, that there would have been mass panic on out global scale had the government not stepped in. He walked through some detail in the actual moment where he broke governmentat the will help you out, but this is a deal were basically take it or leave it. It is interesting to see Timothy Geithner on the stage. Not nervous, but not the most cooperative witness. He was asked about hank greenberg, the reason by the lawsuit. He was the largest shareholder. Timothy geithner said he had a complicated regard and he paused for two or three seconds before he weighed in with that answer. Has he been a reluctant witness in general . He has not been reluctant but not the most cooperative. For someone who is an intimate heyer in these negotiations, helped set the Interest Rate on the loan itself. He helped set the term or it. A lot of these were directly a result of Timothy Geithners actions. Along with others. But he was one of the key players. He has not remembered everything. To a large extent, he backed up the governments case and in areas where david is trying to wentthe government overboard to punish aig and specifically not to give shareholders a chance to vote on the deal, Timothy Geithner again has not recalled every single aspect of those negotiations. Thank you. Peter will keep us posted throughout. Tomorrow, we have not as exciting a guess and then thursday, we have ben bernanke. Tomorrow. Nanke he will be with us tomorrow. Thank you very much, peter cook in washington. Lets go back overseas. Southeastshes in turkey. The limited response to Islamic State militants who are threatening to take down the town just across the syrian border. It is war and the town is on the verge of falling to the jihadist group, which would hand over a key military victory to the Islamic State. However, turkey has done nothing about it. Joining me is a former u. S. Ambassador who also served as deputy senior white house adviser under president carter. You do not look at day over 30. How is that possible . A turkish politician making a comment about how this key city is about to fall, when the country has not only not done anything about it, but is pushing back the citys residents into the hands of isis. The turks have tanks they could have brought in and a whole army. They joined the coalition a couple of days ago. 160,000 bey let stuck between the barbed wire fence of the Turkish Border and isiss sorts. They have done nothing to relieve the siege of it. I am convinced more importantly that the United States has been in cahoots with the turks in not doing enough to keep the falling. It will be the biggest victory isis will have achieved if it falls. For a moment about the possibility. You are a fairly wellconnected man in washington. Haveu have any evidence, you confirmed this in any way . This is all circumstantial evidence right now. Have beenhe kurds pleading for weeks for more military equipment. There have been relatively few area aerial attacks feared it is only in the last couple of days we began to see any concerted effort to take out the heavy military equipment. And yet, at the same time, the United States has been silent about the turks not moving into do more, first of all for refugees to cross the border, and to do more to compel isis. An oped i believe yesterday and you asked the turkson, why would the drive the kurds back into the hands of isis who will do nothing. Why doesnt the u. S. , and bomb the isis strongholds more seriously in order to stop this massacre of the Kurdish People . There fellow travelers. That is exactly what is going on. What apparently happened is the United States has more or less let turkey dictate the terms by which it will join the coalition. One of the terms they have demanded is they have looked mas seen the syrian kurds as perhaps supporters of the kkk, and they said, we are not going to do anything. These forces off because they are our enemies. The president of turkey was quoted over the weekend by saying, there is no difference between isis and those people who support the kkk. I wonder what president obama thinks about that. We have leon panetta talking to thesis is a threat u. S. , and if we let them succeed , it only makes them stronger. Exactly. This is why i raised the red flag. What is going on here . Where were the cruise next the missiles . Out theres were right in the open. Network Television Anchors were standing there showing all of these tanks out in the middle of these hills. There could have been far more help. It smacks of a could a conspiracy in the wake of what turkey is unwilling to do. Thank you for joining us. Ambassador. I encourage you to check out his oped. Want you to get caught up on some breaking news. Earnings season is kicking off. Out with earnings. It reported a firstquarter ongoing loss. An estimated loss of . 24 per share. It seems in line. Is that the case . 27 was the estimate and . 24 was the published loss there. Coming up, we will stick with corporate news. They say breaking up is hard to do. Why are so many Tech Companies doing it . The latest case exploring a split there in a number of others over the past week. Take a look at the blood moon. I saw it on my way to work. The second lunar total eclipse this year. Stay with us. The latest company to explore a breakup. Joinoftware company would another Large Tech Company or others that are trying to make their businesses more focused and nimble over the last week. Separating its businesses into it with me now is the former ceo of paypal and now the ceo of a management firm. I looked at your website. With yourreakup broker. Also with us is the senior markets correspondent reporting on these breakouts in the last couple of days. Have been talking about it and now we look at another possibility. Crescent sells Security Software virus program. It is looking to split up into a data storage company. Is interesting is if you look at how share prices react, it is up, not as big a reaction as you might expect. Over the past five years, it has trailed behind and has a total return of 46 in the past five years, versus more than doubling for the s p 500 companies. What is different now is it has a new ceo. Interim ceo replaced steve bennett. Both are assessors both predecessors made it clear they were not willing to do that. The current ceo is supposed to unveil a new Strategic Plan over the next 30 days. Speaking of these executives, i get the idea that a lot of times executives do not want to do breakouts for their own personal reasons and that it would be more often than not in the interest of the shareholder to actually do it. I think that is the case. Ceo, it is almost like cutting your arm off. Yes, it is very difficult for established management teams without outside pressure to go ahead and split up. She is going to stay chairman chairwoman while she runs the services unit. The latter piece, i would think, is a mistake. If you will split a company, the reason for doing it is their own separate momentum and if you are going to do it, do it all. Ive got to ask you about paypal since you used to run the company. John donahoe made a lot of arguments for keeping paypal and a lot of people agreed with him come important analysts and investors. At the end of the day, he did what carl icahn did a year ago. What do you think about that . There is reason on both sides. If you are ebay and paypal is such an important part of profits and momentum, it is tough. If you are paypal, it is exactly the right thing to do. It is interesting. You pointed out hb as a contender for the split. Emc also exploring its own split. It is said to have expressed interest in the past. Even as the companys breakup, theyre looking to buy each other. I wonder what that says about valuations of Tech Companies. Valuations are reasonably high and no were near the nosebleed heights we saw in 1999 and 2000. But the big ones are not terribly mispriced. They are trading not on revenues. Scarlet, thank you so much for joining us. I know we will see you later in the program. The ceostick with me, of paypal. Mike is my guest cohost for the hour. Coming up, the Kim Kardashian bubble. The gaming project takes a dramatic hit. You are watching in the loop. I am matt miller, in for betty liu. Here is a look at Bloomberg Top headlines. Amazon appears before the Supreme Court. Requiredy workers are to make sure they are not stealing that process, it takes as much as 25 minutes and they are not paid for their time. Not allowed to leave the building, but not getting paid anymore. Fullyear profit forecast is cut. Hurtbell said the latest its sales fared earnings per share will rise to extensive 1 . Their chip f their sales out of china. The kardashians may be losing some of their appeal with gamers. The games online ranking fell and in the last month, dropped from 162 to about 89 according to a researcher. Who is playing that game . I will explore that question throughout the program. Teachers take a look here. Were looking at green arrows as the rest of the worlds equity market dies down. Dow futures up 13 14 points. We will continue to cover the markets for you in 30 minutes. Today, jcpenney is hosting wall street analyst to discuss the state of retailers. Some we have gone so far it include the jcpenney ceo. Monitoring the meeting and she covers jcpenney like a hawk and has for years. Is our guest host, the founder and ceo of firm personal capital. Tell us first about what is going on with jcpenney. Hosting analyst meetings previously. Things were going terribly. Things are going in little less terribly now. Today, the ceo said in july, jcpenney had the same number of customer as it did in 2011. That was his mission. He stepped in post ron johnson to try to repair some of the damage done. It was basically a rebuilding, at least getting to the same preron johnson. At least he has made significant progress in doing that. He said the mission of jcpenney to be the preferred choice for the categories they offer. They are aimed at the budgets conscious shopper. Having national brands, having private label brands, and he talks about several growth initiatives, including the revamped home department. Towels, sheets, pillows . Also bigger things for the home. Furniture as well. Growth. Talked about in what it calls the central core, it will continue to do that and will have other forgs in the center footwear, assessors, and other types of beauty. The other growth for them is the big buzzword among all retailers , on the channel. That does not just mean online. It is the integration of online with the brickandmortar experience. Good place. E a you were dead that your entire career. Think about jcpenney . Everyone has sort of studied this story a little bit taking a crack at what they should do wrong and right. What about the omni channel business at jcpenney . I am not sure, but what i do physicalhe move from distribution to virtual distribution, it is happening across every industry. On the channel is a difficult thing to pull off well because you essentially have got the cost basis of doing Business Online and on retail. It is hard to pull off. But i think it is essential. If you look at what is happening with growth rates, the growth rates of online purchasing of even items you would otherwise get at retail, 4060 per year. Areoffline purchases relatively flat. You have to figure out a strategy to integrate. Something like home furnishes, that is a business that does well on mine. I would not have expected it. It is not just about having an online presence. So many retailers now have instore pickup. That has been very successful for many retailers. It is about that and when you are in the store being able to look on your device and getting information about the products you are looking at. It is not just how we traditionally think of, jcpenney has to a half have a website. It is about interconnectivity. Some retailers have done quite a good job. You look at macys. It is usually held up as an example of a retailer that has done quite well. Walmart has even done pretty well in the online space and has been very successful with instore pickup. Although we think of it as a middleoftheroad retailer, to me, macys was more of a luxury by. Obviously, is down on the lower tiers. Jcpenney was a middleclass retailer and they have been squeezed so hard. A lot of it, i think, has to do with the fact there is no more savings, and the middleclass itself has been squeezed so hard. You think about the savings rate obvious and because of your current is this area if you look at that over the last 50 years, it used to be double digits until 80s and never made it back. Savings is a huge problem in this country. Today, it is 2 , the savings rate of families in the country. At the same time, we have moved from pensions to the u. K. Putting retirement from companies to the shoulders of individuals and we forgot to tell people how to do it. Today more than 40 of the households in this country have zero retirement savings. Another 40 have less than one years worth of salaries. Now you get to be 65 and you have got to support yourself and your family for maybe another 45 years. How will you do that . The deficit we have in the country in terms of funding future retirement needs is huge. 10s estimated as high as trillion. Classes part of the problem that the lower four are just not getting paid a real wage . It is. In fact, recent news, families today earn less on an adjusted basis, less than they did 15 years ago. That is the First Time Since the depression of that has been true. And there has also been increasing income gap. The middleclass is not making economic progress. Problems with the savings rate and that is a huge problem for jcpenney. Even mike will have a difficult time. Thank you very