Good morning, everyone. This thursday in new york city. You are watching Bloomberg Television. I am Erik Schatzker. I am stepping in today for Stephanie Ruhle. See the resemblance . Time now for the new speed. Top business stories or around the world. Twitter. At cfoame to the company as and moved to coo in 2012. Retail sales rose. 3 of a percent in may, less than forecast. Still on the upside. Revised figures show april sales were much larger than first report. Is cocoo of bnp paribas stepping down in the midst of the investigation. He will leave at his own request. Askedp Bank Regulator that he be dismissed. Authorities want bnp paribas to pay as much as 10 billion to settle claims of illegal dealings with iraq and sudan. Big implication overseas. This could affect oil prices around the globe. Al qaeda has seized control of the second largest city in moving closer to baghdad i the day. Here is how this is playing out in the oil markets. You can see the response. In a moment you will hear from an investor who remains bullish. First, hans nichols brings us up to speed on what is happening. The latest is u. S. Warplanes made from northern iraq. That gives you an indication of how serious, how desperate the situation may be there. That comes from the Iraqi Oil Minister in vienna for an oil meeting. We do not have that independently confirmed from the pentagon or u. S. Government officials. Here are the cities that have fallen husseins hometown. The oil city has always been a ivided city, arabs, kurds, that appears to be in the hands of kurdish forces. The very fact that the militia is working the kurds handinhand and talking and having close court a nation with the Arab Government in baghdad is a significant sign. It gives you a sense of just how serious it is. Of course we do not need to know how serious but the oil with the oil market showing a great reaction. Up up 2. 5 . Brent up a little higher than wti, which is traded in new york. Here is a statement from the militants. This comes from a website that militants frequently use. We have not been able to confirm this ourselves. Here is what he says, march to baghdad, we have to set scores there. Do not let them catch their breath, be sure that victory comes from god. I suspect that when the pentagon briefs later today you will get a lot more information on what the u. S. Plans to do, and i know Phil Mattingly will be knocking on doors at the white house trying to get a sense as well. Phil will pick that up right now. I do want to point out, there is word that in recent weeks the Iraqi Government reached out to the United States for help to contain the militants, possibly with the use of airstrikes. Phil mattingly is our White House Correspondent and joins us from washington this morning. What are you hearing there . Are not getting any confirmation that any bombing is imminent. To your point, what we do know is a request was made from the prime ministers government. It has not been responded to yet. What i heard from u. S. Officials last night and this morning is they believed the situation is very grave and are watching it very closely, but in terms of actual actions taken, nothing has been laid out. What we have been told, increase training, definitely more equipment in the works. Airstrikes a possibility, as our increased intelligence capabilities and thrown use as well are things floating around between the pentagon and white house. The key thing is the administration is very wary of q in anyback into ira way, shape or form. The ability to remove troops and the u. S. From the situation is considered a strong point of his foreignpolicy. I think the problem, and you hear it a lot on capitol hill in talking to republican staffers engaged in the issue is when the president remove troops from there, there was no stability force left due to an inability to lock in an agreement with iraq, therefore it, the u. S. Is in a poor position even as the government request more support. The city seemsof to have taken much of the world by surprise. Given the Iraqi Government reached out to the u. S. In recent weeks, i have to imagine it was not a surprise to the president , not a surprise to the state department. Is the reason we did not hear anything because of that posture, the president so relax and to put iraq back on the agenda gekko . I think in part. When the administration has these conversations behind the scenes with anybody him and especially with what is going on iraq, it is not something they want to announce to the world. I think while the Administration May have been aware this is coming, the speed with which this group has moved through iraq, i think has caught everyone off guard. I think you should see capitol hill, because that is often where you get the clearest picture of what everyone is thinking, people are stunned. They are stunned at how fast this has moved, and the concern is the administration does not have a lot of contingency plans to move on iraq. People involved with the administration they clearly have things on the table they are working through that they want to move on quickly. How quickly is the big question. The iraqis think something is coming quick and in a big way. We have not heard that from the administration yet. What we do know is on the table if they move likely, that will make a major difference as the situation continues to more or less implode. We know the militants have their eyes squarely set on baghdad. Phil mattingly, White House Correspondent in washington. We also heard from hans nichols. Lets bring in a man with money at stake with what happens in iraq. Portfolio manager of the iraqi Investment Partners fund. Welcome to the show. You see what has happened this week. How concerned are you right now . No doubt these are very serious events. We will talk about markets in the second. In terms of politics, it is important to remember who these people are. They are still part of the french of the suni side. Fringe of the sunni side. They really do not have a chance of holding this and any longterm way. Still very significant they have been able to do this spectacular raid. Is 15 to remember iraq sunni and these people represent a tiny percent of that minority. The really bigger things on the mind of markets, we will get into it in a moment, but the markets in iraq have not responded as catastrophically as it looks. If these people are such players, why are people taking this so seriously . It is spectacular what they have achieved. So why cant come out from counting more . Why them out from achieving more . Remember and even recent history how resilient it has been. Al qaeda lost just five years ago. The main reason they lost is because they had no popularity among the broader iraqi public. Surely you are more concerned. If this is such a small party that they can take the second biggest city in the country with such ease, isnt there a bigger concern about the people who run the country in the institutions theyre meant to keep it stable . There is huge concern about that. A great question. It is a much more reflection of those things. The current government has been especiallyvisive, with the sunnis. It has managed the economy very badly. I think those are the bigger implications. Remember we had elections april 30, very recently. The government formation process is still going on. To me, the biggest implications of this this time will receive, the implications for the government formation process , will he stay or fall are much more important for the longterm. Lets talk about markets. We have seen a reaction two days after it happened in the oil market. The risk here is they will never get back toward 6 Million Barrels per day, because why on earth would you want to invest in infrastructure with this kind of instability right now you go with someone like you that has money exposed to what is happening, how concerned are you that this is it and there will be no growth in this country . Oil is a great place to start. As we saw free beasley, prev iously, oil is in the north and basra in the south. Both of these places are untouched by all of this and will remain untouched. Purely kurdish in the north and shiites in the south, this violence tends to happen in the mixed areas. Has moved 2. 5 up over the past week. The iraqi equity market was down 4. 5 yesterday, the big day. The euro bond, the biggest Global Barometer of faith in the countries found this sound yielding a little under seven percent. It was 10 only three years ago. Oil fields are safe him and the country has been through worse even than this and stuck together. Are the pipeline safe . The pipelines are at risk because they run through the regions you are talking about. The oil fields may not be there, but the pipelines are. If you cannot get the oil out of the country, what is point in producing . That is the concern. Gradepoint come and jonathan. Great point. You can see it right there. The pipeline going into turkey. That is the big risk, the pipeline. Northern pipeline, nerds and northern oil, 15 . Southern, 85 . That is the key point. The northern part will always be exposed. Iraq will always be violence unfortunately. Disruptedine has been a lot in the north already. It is already the second reducer in opec. And only growing. The big story is in the south. On youentioned earlier are responsible for 5 million and a rack. In iraq. How much money can you afford to spend on the situation right now . Describing it to the public or looking at it . Of my time. Ll it is critical. The heartre often of of emerging market investment, but at the same time, we are invested in a small number of companies, and proving they can make real money in terrible times. What do they do . Classic emerging market plays, consumer goods. One of theler, top three Cell Phone Companies listed on the local exchange. Our favorites are the banks, another classic leverage play on gdp growth in emerging markets and frontier market scenarios. Thank you very much. We will have to leave it there. From iraq investment herders. An investigation into bnp itsbas may have claimed first highlevel casualty, and we will find out if others are likely to follow. Plus, taking it to the limit. That is what you do in an ironman triathlon. We will speak to the ceo. This is Market Makers streaming on television, bloomberg. Com and you can find us on apple tv and amazon fire. Way. The Top Executive has tha stepped down. What does this mean for the fine . It is hard to see where this will fall. This could give them more leverage over the banks. I want to 10 billion. I want a couple more Senior Executives out of here, or they will reel it back a little bit. We will give you a little bit more digestible of a fine. These are moving negotiations. Things come up. Sick they are seeking an unprecedented big fine on this. That we do know. Not likely it will be too much smaller than the 10 billion. Were still waiting to see what is happening with this bank. Thank you for bringing us up to speed with the latest on bnp paribas. Coming up, stores are wondering where the shoppers went last month. They sure did not go to the mall. We are approaching do it. An 26 minutes past the hour, time for bloomberg on the markets. U. S. Airlines taking and on the chin today. Delta and southwest are the worst performers on the s p 500. Lets have a look at lululemo n. Stops wearing seethrough yoga pants and look what happens to the stock. Down 15 . You are aware of the scandal, the all too sheer yoga pants recalled as i said. The fallout is beginning to have an impact on the company. They have cut the fullyear earnings forecast to 1. 71 to 1. 76. Previously they had seen earnings of as much as 1. 90 per share. Also trying to expand into international markets, and that plan is not paying out as well as investors had hoped. Lemon Getting Press today, down almost 15 . I refuse to get excited. Fourday record high close. Going in a straight line, right here . There you have it, consumers holding on to mark wallets. Why retail sales this missed estimates last month. Weree place and brazil watching the world cup is not a priority. This is Market Makers streaming on Bloomberg Television, bloomberg. Com, apple tv and amazon. Live from blue Merck Bloomberg headquarters in new york, this is Market Makers with Erik Schatzker in Stephanie Ruhle. I am Erik Schatzker, and as you will see, Stephanie Ruhle not here today. Better looking, a little quieter maybe. You need to step up your game. Turn the volume up a little bit. I think you probably turned it down a little bit. You might have to tune it up for me. Turn it up for me. Have seen jonathan before. Bloomberg tv london. If you get up very early you will see me. Hours, or if living in a lake, maybe as you go to bed. Anything better than watching the eveningro in after a few cocktails . On a day when retail sales name and disappointingly low, taking a close look at online shopping. Will it be a shot in the arm for the industry or not perhaps . What is clear, the ecommerce experience still has a long way to go. Julie hyman is here with more. Click through rates are part of the problem, right . Fourth fiscal retailer physical retailer on the Conversion Rate. Getting someone to actually buy something. The online Cash Register or physical Cash Register. The Conversion Rate is lower than the store. 70 do not end up fighting it. Several reasons why. Or a stir has done research and says about a third of them did all the way to the checkout and then see the shipping cost. This. Ay we will not do 30 say they are just not ready to purchase or whatever reason. Talkedto a consultant the phone rings or it the baby cries, just do not feel like you can do it at that time. Compare prices. He also said there are simple things that it has taken a long time for ecommerce sites to figure out. For example, when you check out, do not ask me a million questions. Do not ask me to sign up if i wanted do not ask me to sign up for the newsletter. Do not ask me if i wanted you the product on multiple pages. It is missing it used to be about price. Only cared about making sure they have a lower price than the retail store come and now they have relied they need to get the click rate down. I have seen this with airliners to get the click rate from around 20 to around 10. The fewer steps the better. The different layers you have to thoseough, the more of him the less likely you are to make the purchase. Less about price and more about having a uniform experience between the physical and online retailer, for example. In other words, a lot of times the selection in stores is not the same as the selection online. Neiman marcus making on working on making the selection more uniform. Other retailers like j. Crew that have stuff available exclusively online. You will get that. Yes. Do you have any sense who does this right . J. Crew is one. Walmart comes up frequently as having a very strong ecommerce platform. If you look at the site, it is nothing special, but i think it is more a matter of is walmarts store anything special . Hows more have they they integrated it. In other words, you may browse on your phone and buy it in the store. You may buy it at home and pick it up in the store. Walmart has done well with the instore pickup option. That has been an area of growth. The retailers that seem to be the most successful are those that get it, that even if youre not going to buy in online and you can do the research successfully online and then go to the store to buy it. Something completely unavailable to the Amazon Customer for example. Exactly. That is an area when you look at Something Like apparel where a physical retailer may have an edge over an online retailer. Are we moving to an area where it is just the experience and nothing else and does not have to make money . Remember her you are speaking to hear. Julie knows what a high street is. Matter. Nk it does you see a lot of the stores, particularly apple, just trying to develop an experience. Does not matter if you buy it there or in stores. Buy it,ares where you that is the bottom line. Yes, the idea that the retailer has to have a good experience. Look at urban outfitters. There is a hair salon and it. Amazing i have not been there yet. Restaurants in stores becoming more and more common because it is the whole idea of the lifestyle brand them that you want to build the experience you are referring to. You want to build a relationship. That is something that is not new, you want the customer to have a relationship with your brand, and it does not end up where you end up giving your money to the company, just that you do and you have the loyalty. Jonathan, clearly a regular customer at the hair salon. I do not know the number on the clippers. I have been it for about a week and have seen so many commercials to get your hair back into this sort of thing. Message to the men of america, you do not need hair. Men do not need hair. Here is the saying, men care about losing their hair touch more about women caring about men losing hair. That is my philosophy about such things. Thank you very much. We really went off on a tangent. I would not say reservations at definitely went on a tangent. Julie hyman with retail conversion. The brazil you will not see all watching the world cup. I saw it. People living here saying building the soccer stadium force them into this refugee camp. Forced them into this refugee camp. Brazil spends more than 10 billion to host the world cup, which kicks off that 4 00 eastern today, but the real cost of the tournament is much harder to see, especially from here. I traveled to brazil insult a refugee camp insights help all well to get a look inside sao paulo to get a look. Brazils men 365 Million Dollars to build this new s