The new company will be the second biggest in the global oil and gas industry. The sale price represents a 50 premium above bgs Closing Price. The way we would look at that is if you look at the carbonation of the companies what we could do with the assets that bg has, we saw a lot more value in that combination. Matt it is the industrys egg is to deal in at least a decade biggest deal in at least a decade. Some Traffic Controllers are not showing up for work. About 40 of french flights are being canceled. Air france says most of its longhaul flights will take off as scheduled. Saddam chicago voters are giving their mayor another four years. At rahm emanuel one a second term. He says the battle will make you more effective. Will make him more effective. To all the voters i want to thank you for putting me through my paces. I will be a better mayor because of that. Matt the challenge from a fellow democrat was a rarity in chicago politics. Rahm emanuel must tackle crime in education problems as well as its 20 billion pension gap. U. S. Officials concede that a Computer System was hacked by russians but they say no Sensitive Information was taken. The incident forced the shutdown of the system for several days. The system is used for scheduling and other nonclassified matters. Friday is a big day for apple watch enthusiasts. That is one watches will be available for instore try ons. You still have to make an appointment. Josh depaul ski got to take one of the watches for an early where. He will join us with his take. You will want one but you do not need one. You can check out the full article online now. Had to bloomberg. Com for his review. Those are your top headlines. The mega in oil. Shell snaps up bg group. The acquisition is the most significant response to the slump in oil prices and could set in motion a series of mergers as Energy Companies aim to cut costs. At hammond joins us now. Ed hammond joins us now. Does this mean we will see a huge wave of consolidation . Ed that is the big question being asked. If your exxon, do you react . This was the big trade to do. They ramped up their exposure by doing this. The super majors will be looking at this thinking they need to react. Matt will they react by putting in a higher bid for bg group . Will we see more people get into this . Ed it is possible. We have seen Companies Come in and this is across any sector with what looks like a very full price and then we see people come in over the top. It is possible someone comes in. For now, it looks like a full price. It is hard to see anyone coming in much higher. Matt our companies being crippled by the depressed oil price . Ed there is an element in oil and gas right now the depressed oil price is having an effect. It is forcing companies to consider selling. We saw it with petroleum. Of a put themselves up for sale. A lot of noise. They actually took themselves off the block and said, we do not need to do it. I think in bgs case, this is by no means them being forced to sell. It is actually shell who struggled with production and has been hit hard by falling prices. They buy a Company Going in the opposite direction. Bg has huge lng reserves. If you are shell and you are struggling you go in the opposite direction, by someone who is doing well. Matt have you got your eyes on other targets or buyers . Ed exxon would be a logical buyer. They will im sure do a meaningful deal. It is a question of when. Ted powell of france is another one involved in the super major circle and may react. The question that is difficult to answer is what does bp do. Bp is getting over the legacy of its disaster here. And is still getting over representation issues. Do they have to do something to react . Matt you look at the u. S. Majors as having a significant advantage because of the Dollar Strength. Ed the currency stuff plays more in favor of the oil companies. If you are a u. S. Oil company particularly someone like exxon who has this unbelievable firepower, they do great rates very quickly. It is the opposite. You can raise capital very cheaply. A great time to buy. Matt at hammond, bloomberg m a reporter. More casualties from the crash in oil price. Earning season getting underway today. We know energy is to blame for the first profit drop as the Great Recession that is far from the whole story. Scarlet fu is here with a breakdown of analyst estimates. Yesterday, we were talking about this, trying to look past the Energy Problem collapse. Scarlet it does look a little bit better. Lets say at energy what during look like. Youll notice that sectors with less of an International Focus are slated to perform better. Health care, one of the better performing. 7 earnings. Consumer discretionary. Technology and telecom as well all slated to earn earningspershare growth. The pace at which analysts are revising estimates. Every sector has seen the bar lowered. We talked about the collapse with Energy Companies 63 plunge in firstquarter earnings. There is a great article which says that there is a lot of money going into etfs that track Energy Companies because they have anticipated that profits will drop so much that if they do beat lowered estimates you might get a pop in shares or arise. Matt it is not only Energy Companies that have seen falling profits . Scarlet half of the 10 sectors in the s p 500 sought earnings retract. The earnings weakness is concentrated in energy. Thats 53 plunge coming you do not see it across different sectors. Materials, utilities, Consumer Staples were looking at singledigit earnings decline. Nothing in the vicinity of energy. Alcoa will be reporting earnings tonight. We look at it as the start of earning season. Things slow down this week. We get Bed Bath Beyond walgreens tomorrow. It gets into gear next week. On monday, we have the big banks. Matt look forward to your market coverage through the day. Rahm emanuel will run america thirdlargest city for another four years. Peter cook is in chicago with more on a manuals win. It looks like he got through but had bumps and scrapes along the way. Peter that is pretty much an understatement. Rahm emanuel will be chicago for the next will be merit chicago for the next four years. He won with 56 of the vote last night. Emmanuel was helped by strong support in the Africanamerican Community and the 22 million in his war chest that allowed him to blanket the airwaves. In his speech, he thinks supporters for their help in did say that this experience has changed him. He told the voters, i heard you. I am humbled at the opportunity to continue to serve you, the greatest city with the greatest people for the next four years. Peter in his own speech, chuy garcia was gracious in defeat. The Teachers Union that is done battle with mayor emanuel, there is more to come. Matt what does this race show us about the National Political theme . A lot of people are looking at chicago as a microcosm of a bigger picture. Peter a microcosm of the picture for democrats. What you saw here were progressive democrats largely backing julie garcia largely backing chuy garcia. It is a fight that Hillary Clinton and others could face as well. This organization is strong support from the business community. The money he raised helped him win here that may be a roadmap for Hillary Clinton and others. Hard to say that this does paint the national picture. Matt thank you very much. Our chief washington correspondent, peter cook. Thank you very much. Thomas pikettys ideas have been getting kind of wet. The french economist still has explained to do. Ed conard joins us to fill a gap in the intense debate on income inequality. What is the impact of an iran deal on the oil market . Could it mean prices will be 15 lower than expected next year . Stay with us. Matt we begin in moscow where Vladimir Putin is not ruling out loans or gas deals for greece. Alexis tsipras met with the russian president. Both men say they want to restore the relationship between their countries and revive trade. Greece must pay the imf more than 500 million by tomorrow. Officials feel sippers will promise great assets to bruton to put in. Investors are betting that beijing will increase stimulus to keep the economy growing. In japan, the central bank will keep its stimulus in place. Inflation sicking to zero. Mick donald is beefing up its menu mcdonalds will offer third pound sirloin burgers. It is a limited time offer but could become a staple if they catch on. Connecticut is the ncaa Womens Basketball champion. The huskies beat notre dame for their Third Straight title and their 10th overall. Really impressive string of victories. Coming up irans returned to the oil market risks delaying recovery in prices. How allman farmers are faring with the drought in california. Are they using all of that states water . Thomas pikettys book cap into a global debate about inequality that rages on. The issue was raised by janet yellen just last week when she questioned the disparities of wealth in income growth. A 26yearold m. I. T. Graduate student has stepped up to undercut the Thomas Pikettys thesis. Ed conard joins us with some answers. He is the author of unintended consequences. Thank you for joining us. I am one of the billions of people who is not read Thomas Pikettys capital p or c. What does this 26yearold economist actually refute . Ed he shows the Rising Capital relative to gdp is relative to Residential Real Estate. We know Residential Real Estate is not substitute for labor. Matt piketty wants to make the argument that the rich are getting richer off the backs of everyone else. Ed they take the capital and reinvested and drive down the cost of labor. A more technical issue about the substitutability of capital for labor. He often hear about robots which of the substitutable for labor. He shows a variety of different rates of substitution and shows you the right that piketty has is higher. I think it does include depreciation. It requires a lot of substitutability between capital and labor to get to the conclusion. This is a topic that is been debated for a long time. Piketty is out of the range. Larry summers called it reading of the literature. Matt harsh for an economist to say to another economist. Ed everyone has praised him for his research and data. They have been very leery about actually endorsing his core theory. Matt this kid put out a blog post and the brookings asked to write a paper on him. Ed other issues have been raised as well about the getty about piketty. The form of his equations would cause the savings rate to go to a hundred percent gdp. It is pretty much the opposite of what we have found. Another economist looked at the data he used for what comprises the income of the top. 1 . Piketty said it was 60 to 70 . When you really go back and look at his data sources, 60 of the income is really entrepreneurs. Matt his argument is that superrich are taking money away the could be used as wages for the lower and middle classes. You talk about a negative feedback loop that develops from the political prescriptions try to fix that problem. You would think all we need to do is tax the superrich and redistribute the wealth to the middle and lower classes but you are saying the rich really get rich because have access to all this great new i. T. And innovation and that if we tax them too much, that would retard growth. Ed i make the argument that what is making the 1 successful is a set of forces that are independent of what is holding down the wages of the middle class. I argue that was holding down wages of the middle class is the near infinite supply of cost labor in the world. A very large amount of immigration in the united states. Close to 20 million adult born children. Matt i want to come back and talk about this after the commercial. Matt you are watching in the loop. I am matt miller, in for betty liu. Back with ed conard. I wanted to let you finish your thought on income inequality. If the rich are not making all of their extra money we actually have a graphic that shows how much wealthier the top quintile is getting as the lesser quintiles are losing income. How come they are losing this much income . Ed if you look at the two theories of income inequality. One is that the halves are negotiating with the havenots. A classic managers against labor. A second way is that the 1 are earning their success by coming up with innovations and things like apple and google that are valuable. That is putting upward pressure on wages. There is independent set of forces that are pushing downward on wages. If you conflate the two and blame the success of the 1 for what is happening to the stagnant wages of the middle class, you want to tax them and redistribute the money but you are slowing down the thing that is putting upward pressure on wages. If you dont solve the other problem, youre left with the thing that is putting downward pressure. You could get negative wages under that circumstance. Conflating the two but making very little argument why the two would be conflated other than the piketty argument. Matt i believe that debate to viewers at home. I recommend that they read your book unintended consequences. Chicago mayor rahm emanuel fought very hard to win a second term and now he is fired up to take a new approach to steer in the third most populous u. S. City away from collapse. Being mayor of the city of chicago is the greatest job in the world. Matt this election was about more than chicago. It has also been about the fight for the soul of the Democratic Party. Here to explain is Frances Berry. Ed is going to stay with us. He was also mitt romneys former bain partner. How does this represent what is happening at large for democrats in america . Francis it was really a battle between two wings of the Democratic Party. You had a moderate mayor and a liberal challenger. To the extent that this represents the debate that will play out in 2016 in the party, this was important. 56 of the vote. That denies the liberal wing of the party momentum going into the primary season. Matt what was he running on . Francis he was running on his record. It is been a tough four years in chicago. Matt they still have all kinds of fixable problems fiscal problems. Francis he cut spending reduced pensions took on a lot of unpopular fights in his first term. That created a lot of resentment and created an opening for someone to challenge him from the left. Matt what do you think about the state of chicago . Normally we do not pay his close attention to mayoral races unless they are in new york. Ed i think we all know pension benefits are going to eat us alive. This is the shape of things to come. Matt chicago has 20 billion in unfunded pensions. Ed what we need are democrats who have credibility with the people who will be affected most of these cuts to step up and take the lead for managing this. They are going to be thought by people further on the left that are looking for the free lunch that think there could be an infinite amount of spending and we are not going to have any problems. As people step up, youre just seeing what is coming. It will be a fight in the Democratic Party over this. The baby boomers are going to eat us alive if we do not make adjustments. Matt in some sense as it is more than a microcosm of what is going on in the u. S. It reminds me of what is going on in europe. The idea that you can vote yourself rich as the voters for tsipras apparently thought they could do in greece, that doesnt pan out. Francis 70 of voters who were concerned about the citys finances but that was the most important issue and voted for rahm. The election proved you can make these tough decisions and get reelected. If rahm had lost, it wouldve made it more difficult for politicians in general to make these kinds of decisions around pensions as well as around education reform. 84 of voters in exit polls show that they supported rahms decision to close schools in chicago. Ed we have grown 50 since 1980. Germany and france grew less than half as much. When you turn to what is happened to risktaking and business success, you get less of it and end up with less growth. Youre talented people go to the beach and take vacation rather than trying to earn that incremental dollar. It happens very slowly over decades of gradual change and compounding. This is where the fight is going to head. Matt thank you very much for joining us, Frances BerryFrancis Barry and ed conard. Im going to give you your top stories for the morning. A new deal creates an oil and gas giant. The cash and stock deal is worth 70 billion. That will form the secondbiggest oil and gas company in the world. The sale price represents a 50 premium above bgs Closing Price yesterday. Shells ceo says it is a bargain. If you look at the combination of the two companies, what we could do with the assets that bg has with our capability supplied to them we saw a lot more value in the combination than the market. Matt the industrys biggest deal in at least a decade. U. S. Officials concede that a white house Computer System was hacked by russians. They say no Sensitive Information was taken. The incident or the shutdown of the system for several days. The system is used for scheduling and other apparently nonclassified matters. A white Police Officer in South Carolina is facing a murder charge accused of shooting a black man in the back after a routine traffic stop in north charleston. Video captured shows Michael Slager shooting walter scott in t