Sanctions case. Lcome to Market Makers the set, erikd on schatzker is joining me from colorado. I am very jealous. What do you have in store . First of all, thank you very much for holding down the fort in new york city. I do wish that you could be here with me. As you can see, aspen, colorado is a golden gorges place. They are holding their 10th anniversary attract for very big names today. Today we will be talking with walter isaacson. The president of the Aspen Institute, also the former editor of time, a biographer whose biography includes henry Albert Einstein for example, benjamin franklin, and most recently and what people know him best for, steve jobs. He is uniquely positioned to evaluate the state of leadership in america. What that are topic to raise with him given the luminaries attending the aspen ideas gore,al, including al Hillary Clinton, a number of ceos he like david rubenstein, with whom we will be speaking tomorrow. Following walter the president of Harvard University will be sitting down with me and talking about everything from the unstoppably rising cost of education would you believe att 10 years ago the budget harvard was 2. 5 billion and today it is 4. 2 billion . It increased 70 over the course of a decade. Withis a topic to raise him. Also, the state of the Harvard Management empathy, they run the 32 million and endowment. Leaving at the end of the year, it has been a revolving door. Mohammed elerian was there, for example. How can they bring some stability to the Harvard Management company . More importantly, make their returns more competitive with those of other Ivy League Universities ashen mark and the future of education. What is the point of a liberal arts degree . I will be putting that question to drew faust as well. That is also coming in the 11 00 hour. For the time being i will be sending it back to you in new york. Liberal arts degree, that was pretty much me at northwestern. For now, it is time for the news, we have the top business stories for you from around the world. President obama turning to a former ceo to fix one department. Mcdonald is a west point grad who spent five years in the army. The white house report says that Veterans Affairs has been hobbled by a corrosive culture. Ofentina is on the brink default for the second time in 13 years. The country is expected to miss a bond payment today. A u. S. Court locked the cash from being distributed until argentina settles with creditors from their 2001 default. Has a summer block was run its hands, transformers age of extinction has the biggest domestic gross of the year. Over 100 million over the weekend. Theels are already in works. No surprise, i love bad movies and am excited to see this one. The moment that victims have been waiting for this year, ken feinberg, tasked in april to administer compensation for the ignition switch defect is unveiling his plan right now in d. C. We are in washington with more. We are seeing some headlines trickling out here in terms of the compensation plan. What are the standouts so far . Big one. A lot of people were wondering how much money gm would set aside for this and the answer is as much as it takes. Ken feinberg is unveiling the plan right now in washington, d. C. Here are some of the key takeaways. Who wants to file a claim can file a claim. Feinberg will have lead a session with contributory negligence being irrelevant on this one. Meaning that even if the driver was found to have been texting, drunk, none of it matters as long as they can show proximate cause that the ignition switch defect was the cause of the accident. Paidble claims will be within 90 to 180 days and they will receive claims from august 1 to december 31, giving the claimants time to get their paperwork in order. This is just the latest piece of a very costly puzzle. Gm has already attributed the deathsto 57 crashes, 13 they had to pay over 16 million in repairs and rental costs. They had to pay a record 35 million fine to the transportation department. This, of course, is just the latest the puzzle. But we will have a better idea just how much this will cost them as soon as the announcement is over. Gm also said that they would pay claims even if they had been compensated before. Any word, though, if that means they give up the right to sue gm . That is exactly the case. If they do accept any funds from ken feinberg, they will give up their right to sue. As you know right now there are over 100 cases, 100 lawsuits already filed. Anyone who except funds from this will have to take it to will not be able to take it to court, which is what ken feinberg is receiving the big bucks for, to avoid long, drawnout lawsuits. Expectedyou so much. To plead guilty today to charges that they violated u. S. Sanctions on rogue nations, the french bank will have to pay a record fine of almost 9 billion. Richard farley is with us, an attorney from Paul Hastings and a Bloomberg News taking reporters with us as well, carry geithner. We dont have the official announcement yet. What details can we expect . Bought ike bmp para bnp paribassse is going to lose their abilities for up to one year as they could lose clients with that. They are getting ready to pay a huge fine that we have not seen before in this magnitude. Is this enough . I think it is. It is not just that, but they the essentially forced out coo and a dozen other employees. If you look at where this falls in the spectrum of other prosecutions for violation of sanctions, it is right in the middle. I think it is a tough result to much . It depends on how you look at it. If you look at it on a per dollar transaction basis, there were some at much lower levels that paid up to three dollars and finds for every violating transaction. This is about her descent. Some were lower, some were higher, but given the larger number of dollar valuations alleged here, it appears to be a fair settlement. I am really curious about the financial impact. We have been talking about this for a while, but the dollar clearing aspect to be up in the air. Do you have a sense of how much business they will lose ashen mark weck it does not seem like a huge impact in revenue, but the fine is going to Impact Capital ratios and moved them to a place they are uncomfortable with. Analysts are expecting them to move back to a place of comfort after about one year of the bank making money and generating revenues. The dollar clearing is really a victory for banking regulators. We have not in this and previous sanctions cases. It is a way for them to move the needle a bit and look like they are cracking down even harder on this bank. There are workarounds for this. They can do for business and payout . But no one wants to do that. Short, if the clients are going to stay with them and then come back to them, that is an issue where they could potentially lose clients aside from revenue. Some people start to lose their job anyone else . Our regulars regulators going after specific individuals . There are about one dozen people on the chopping block to be resigned or fired, but to go after individuals . That would have to be a separate set of cases that would require more evidence than we have now. At theontext if you look amount of the fine it wipes out brings capitalnd down to 9. 5 from 10. 6, it will essentially take the rest of the year to bring it back up to the magic 10 level. Consequences again, you can say that you have six months , but you never want to let a competitor out of the tent and give them access. Is the guiltyhere plea, the other one that we saw was with credit tweeze and tax aversion for clients. Did not meanhere anything. Does this guilty plea means something . We are going to see the same thing with credit suisse. Same thing as usual, when all is said and done. Now you are looking at several prosecutors in how they are packaging the deal. Is it enough . Is the giant fine enough . How do they package these penalties in a way that makes both congress happy, does not stop the bank from doing business and actually deters bad behavior in the future . Absent this this is a large thing right now, but they have been a very well run bank, managing to avoid most of the disasters during the 2008 crisis , they were model citizens who can hopefully put this behind them. Woundht, but this still up happening under everyones watch. You how a fewow employees operating in geneva can do things that cause draconian consequences. Doesnt that Say Something about the management at the top . Were they asleep at the wheel . The ceo isis why stepping down and one dozen employees are losing their jobs. Potentially. This is the same criticism we have seen of jpmorgan over the last few years, who have paid fines on various issues, charges, sanctions, Different Things like that. Is that an issue of management or just how banks are set up . Businesses within banks, do they tend to do things that management does not know about . Issues of oversight and compliance digging into the question of how banks are being managed. The biggest question, is this a viable deterrent . You seem to think that this is fair recommence for what they ad, but is this enough of deterrent for other companies to change their Business Model . Absolutely. Really . Who will be next on the chopping block . We will have to see. Hopefully no one. If you lose an entire years earnings if you did something wrong in one day you lose your years salary . Why that would be a big bummer, but then again i am not dealing and 9 billion figures, so it would be different. Thanks to carrie and richard. Aereo tries to figure out what their next step will be. They have temporarily shut down after the Supreme Court ruling. Reid hoffman, why has he been so many of Silicon Valleys most successful startups . Stories and interviews are at bloomberg. Com tv and streaming on apple tv and amazon fire. The online streaming service, aereo, temporarily shutting down after it received unfavorable ruling from the Supreme Court. The ceo posted a letter to customers on the website, stating that they had decided to pause their operations temporarily as they consulted with the court to map out the next step. So, what is next for aereo . Temporarily is showed for shutting it down just not today . Checking on kenosha several said he interviews, he did not see a Supreme Court a future for them if they were shut down. You think did something change . Not necessarily. I think they are just crossing the ts and dotting the eyes to see if there is some other way out they had not thought of. It is potentially possible they are speaking with different parties after the ruling to see if there is another way to go. Instead of live tv could they a time recorded tv with delay . Potentially, but they would probably have to do something different. It starts to get technical here between private and public performance. There are services out there that will record your broadcast tv and allow you to watch it over the internet, but they are devices in your home that you purchase and subscribed to. The reason the Supreme Court shut down aereo is because they said they were acting like a distributing programming to everyone like a Cable Service would do. That route . To go they would have to change their Business Model. Most likely, unless they came up with some other loophole around the decision. Ex at the end of the day these customers are going to find other ways to watch tv, so what does that do to internet tv . Who wins with that . I imagine that what will happen is not much. Wrinkly there were not that many subscribers to aereo to begin with. More was more of a concept than a popular product. Stopdea that you could paying retransmission fees, meaning billions of dollars less to the broadcast programmers out there, theoretically a way pay tv operators to stop paying if they partnered or use that technology, that was a big deal for the media industry. The actual products or limited scope and only allowed you to watch broadcast tv and for the fact of the matter you can still do that if you really want to. You can watch it streaming, you can use an antenna in your house , but most people want cable channels. They want to watch hbo, they want to watch espn. This would be a limited product in nature. Thank you so much, have to leave it there. Breaking news on Supreme Court decisions coming out this morning. Megan, whats the latest . Lobby, awin for hobby big win for the prolife advocates that you see behind me here. Was announced, 54 decision before the Supreme Court, ruling that hobby lobby, a privately held company with religious owners could be exempt from this provision of the Affordable Care act that requires or required until today that employees receive coverage, including all forms of contraception. Noty lobby said they did agree with two forms of contraception, saying that they amounted to abortion. It now appears that the Supreme Court today again is allowing hobby lobby to opt out of that part of the law. Again, a victory today for hobby lobby. Justice alito read his decision from the bench. It seems like a victory for hobby lobby today. Some other cases came out today, one in particular relating to unions. This was a decision out of illinois. A bloated union found that are not allowed to be required to have part of their paycheck taken out to go to the union. This was a small group of union in illinois, Home Health Care or hers. It was a blow to public unions in general, but they phrased it as a certain type of worker, not fullfledged public employees. It could have been a much bigger hit to unions across the board. Is thaturse, the worry if they have less money, the less leverage they wind up having. Thank you so much, megan. We will be following these cases are out the hour, particularly talking about the impact on businesses that these decisions have. Coming up, the socalled paypal mafia. Why do they have a hand in so any successful Silicon Valley startups . Time for on the markets. Rally underway here. If we were able to hold stocks would climb for the longest stretch of quarterly gains since 1996. Not seeing a huge jump, still building on the gains we have seen, five percent overall in the second quarter, you can basically attributed this to the jump in pending home sales that we saw, rising in may and april, providing slightly higher half of one percent on pentup demand from the horrible winter season that we had. Facebook basically apologizing after conduct in an experiment that influenced what 700,000 readers saw in their newsfeed, with concerns about privacy issues i should say, not really affecting the stock that much, worried about what facebook is doing and how they are infiltrating what you wind up seeing. Are shares are active, we checking on that because arielle temporarily shut down the service this weekend. The chairman, barry diller, said last week that it did not have a Material Impact on the business overall. Coming up, lots more for you. Talking about linkedin, we will be right back. Welcome back to Market Makers. I am alix steel, all alone in new york. In for stephanie ruhle, alex Erik Schatzker is in aspen. Serial entrepreneur and tech investor, he has been called the start of whisper of Silicon Valley. He has had his hand in so many technologies and successful companies. Emily chang sat down with him to hear the story behind the Silicon Valley legend in her new series, studio 1. 0. What was the biggest take away . Of glad i am here to keep you company today, since you are all alone in new york. Reid hoffman is one of the most decorated people in technology, which says a lot. , heearly on a pal founder went on to found linkedin, one of the earliest personal investors in facebook, now working at greylock, investing in dozens of companies she is now an offer and author of two books. The goal of the studio is to find out who these people you who these people are unaware they are going. We dont get their back stories on number bwest. One of the interesting parts of the conversation had to do with paypal. Take a listen to what he had to say about what made the paypal mafia so special. Like they collected a bunch of people they collected a bunch of people who are young and intense themselves. Suddenly these folks alike what do i do next . Youtube. Go into elon musk goes and does spacex. Jeremy and ross do yelp. Yet because we have had the six this intense experience together, we still have this really tight network. Call for what . For example, macroeconomic , i willl bold models call peter. The intersection of interesting Business Models for business technology, like big eta max. For a willingness to just think super big with a risk not being a variable, elon. It sounds very much like the paypal mafia, which started in the late 1990s, is alive and well. He does nottip, like the words mafia. He thinks it sounds of it dark, but it is a term that gets catchy and is repeated, implying it is a very tight network. A nice rolodex to have. Did you hear any indication on what he was going to do next . Steve case talked about going to pittsburgh and detroit to help you a tech boom there. Did he say when he was going to do . First i asked him if he ever imagined leaving linkedin. He said it would be a strange universe. I did not get any indication that he wants to leave as long as he feels he can make a contribution. He still has an office there right next to the ceo. He is also an investor in so many companies. He has a hand in just about everything. He is one of the first people that these up and comers call when they need help. He feels that he really is helping and involved in the and that they can find things useful in terms of the advice he has to give. It seems like he is doing what he wants, working seven days a week it does not seem like he will slow down, seems to be making his life meaningful. Amazing. Emily chang, thank you so much. We really appreciate that. You definitely want