Television, happy friday. I am alix steel in for stephanie ruhle. He get that jobs number and the markets are we get that jobs number and the markets are inching their way higher. Of time for the news feed, the top stories from around the world. We havent seen a job market like this since 1997, employers adding 2007000 jobs for the six straight month in july adding 2007000 jobs for the sixth straight month in july 207, 000 jobs for the sixth straight month in july. Ford Beat Estimates while nissan, gm, and chrysler came up short. And a big takeover in the slot machine business. It represents a 38 percent premium over the Closing Price yesterday. Investors are breathing a sigh of relief. For more thand 300 points for its first day for its worst day since february. We are asking where do we go from here. We turn to rick reader. Ofsees over 700 billion fixed income at blackrock, the Worlds Largest asset management. We did this last month, we hope we can do it every day going forward. Your talk about perspective on markets as a whole. Your specialty is fixed income, rates, credit, but equity is certainly a part of the puzzle. When we look at what we saw yesterday and how things have stabilized, what does that say to you . I think the markets are adjusting to the fact we have a view that the fed is going to move faster than people think. Said, six months with over 2007000 jobs with ,000 jobs. I think when the fed moves it will be very well thought through in terms of what the longterm funds rate is and how to keep the back end of the curve down. I dont think theyll be tremendous devastation at all. People are starting to think about that. Focusingms the fed is on wages. We have we are not seeing that such that accelerate. There is a tremendous bifurcation of wages. When you break away from the aggregate data, you see jobs with specialized skills, the hard to fill jobs that are surging higher. You are seeing wage pressure. You clearly are seeing wages pickup. A bifurcated wage dynamic in this country today. Him i think trying to keep rates at zero to try to enhance that is dubious. You have been super consistent for months now create you have explained is the fed will move sooner than some people have anticipated. Perhaps we will see something in the first quarter. Is that why people are taking money off the table in credit . Credit has had an incredible run. You had 10 straight months of positive returns and tremendous inflows. You had yields that when you take a step back and think about where yields are in part of the highyield market and look at it historically, we are pretty full. Of people are saying we had a good run. Year where wee of pull back a little bit. You had some significant inflows. Doesnt build bigger doesnt build bigger . s does it gold bigger . It is not a question of if but when there will be a credit market correction. Wise men some of the at wall street, the folks who made out very well in the big short back in 2008. We are on the cusp of correction. If you put things in perspective, when did credit have significant tradeoffs . When you think about what drove it, there was a tremendous amount of fundamentals behind it. The cash flows, financing is available in the marketplace. I would market the fundamentals are extremely good freedom there are not a lot of places to go for yield in the world today. What else am i going to do . I think there is no doubt we should correct and we are in the middle of correcting. Him when you take a step act and look at what the true fundamentals are it is pretty good. He is the chief equity strategist at citigroup. Rick says people are still searching for yield and the credit market isnt about to melt down so long as that is the case. Is equity safe . I think the term safe is questionable. It is a question of where you are in the markets. We prefer large caps over small caps. It is not about a risk on or risk off asset. It has to do with where you are on the credit cycle, has to do with the lead indicators in terms of performance metrics. You can find areas where there is aggressive valuation. You probably want to keep away from those. You can find areas where there is much more attractive valuation. The one thing i would probably suggest with regards to highyield, i think rick would agree with that, when you are talking about the current yields they are far from high, which is better than you get elsewhere. Talku also heard rick about the pifer occasion in the wage markets. The bifurcation and the wage markets. When does it disrupt corporate Profit Margins . There are two ways to look at this. With regards to higher wages, it is not necessarily mean youre going to see corporate profits slowdown in any major way. The answer is not in the initial phases. The unemployment check becomes a paycheck where the paycheck gets bigger. Up. Variable costs go the fixed over pet fixed overhead cost structure gets better. The initial phase is positive for earnings growth. Is wheredary aspect are we in Profit Margins relative to Labor Compensation echo there has been a bad chart describing it. It really does a poor job of addressing International Components to the earnings aspect. S p 500, yout the see where they were below 2007 highs. There is lots of room of profit margin. Is it going to be the dog, the credit market, wagging . Collect siu will have a jackson hole meeting coming up and then the september affluence a. You have to watch flows in the credit markets. The title of it is all about labor. There is a robust conversation taking place. My sense is there is other dissent on the fed committee, thinking about a structural component. How much can you keep the funds rate at zero . We have a press conference after the next fed meeting. A seems like that would be natural transition point to talk about the evolution of monetary policy. I think we need to watch the flows in credit markets. We will see where that goes. Absent some kind of exogenous shock, is that the next important date on the calendar . I think of it in little bit differently. From an equity point of view it is more of a him or then a light switch. We cant look at that and say i agree with rick, i dont think were going to see anything particularly hawkish. That is one mans opinion. I think it is more about the degree to which you have to worry about shifts over the next year or so. I suspect that discussion will be more earnest late this year than early next year. That end up speeding up any cap x investment . Maybe companies dont want to get into too much debt. Doesnt it have a positive trickledown . Lets start with the fact that the s p 500 companies have record Capital Spending in 2011 and 2012 and record Capital Spending in 2013. They havent been that restrained it 2014 we tracked over 700 companies. Their plans are to be up over 7 this year over last year. I think the idea of things cost you more through financing cost slater, then there is an incentive to do that before it occurs. Is also happening in areas like mergers and acquisitions. If janet yellen shares your point of view and dwells on that at jackson hole, our markets going to see that . I think i may have a slightly different perspective in that i do think there are a number of structural influences. That is changing the structure of the jobs market as well as what drove hiring in the last decade. Fed has been adamant about it more cyclical instruction. A big if. 700reider oversees billion at blackrock. Thank you. And thanks to you to bias, chief equity strategist at citigroup. Musks ute contest. Which state will end up with a battery factory for teslas electric cars . We will talk about winning the hearts and minds of africa. America is playing catchup with china. Of we will talk with the grandson of the late nelson mandela. So far elon musk is not tipping his hand. We are in washington with more on this battle. No final location. Still a lot of contenders. They announced they broke ground in reno nevada, just outside of reno. States,r five california, new mexico, texas, and arizona are all very much still in the running. Musk says he wants to break ground in potentially as many as three locations and by the end of the year he will decide which one to build completion based on the speed of regulatory approval. Of it is still anyones game. In Everyone Wants a piece of the 5 billion factory. Him perhaps none more than nevada, with the highest Unemployment Rate of the group at 7. 7 . They can post no corporate or personal income taxes, job grants. None of the states will offer up exactly what incentives they will offer. Each have an idea of what state may be playing. He is looking to the state legislature to provide an attractive sentence package attractive incentive package. At 5 billion he is looking at 400 to 500 million. It looks like they will put up about 2 billion. Of we dont know what panasonic will put up. Half a billion is a pretty steep price tag. The very steep. It has some people believing the smaller states might not be the frontrunners. You are looking at texas, california. California is teslas home state it is still anyones gain. Thank you so much yang yang. We couldnt possibly talk about tesla without bringing in cory johnson to the conversation. You are listening to the call last night. Step it up nevada or else. Him the issue we need to bring into this conversation is a lithium. Is there enough lithium out there to make all of these batteries . If you fastforward to 2025 the answer could be no. Demand could be 480,000 tons. Your bipolar meds, not that anybody takes those. You can also look at a spaceship. You can offset your lithium. The demand is so high. Supply is very difficult to come by. Thisy dont we hear about from tesla . There is going to be the next car, another car, an amazing sentence in the press release that said we broke ground in a factory of potential locations. They are literally tending literally spending money on a bulldozer with nowhere to build. The reason isnt building the factories. Let us wonder what is the reason. Is it because they want to get investors excited to . Long before the cars shipped out of the lot. Dothey are going to have to to put into the giga factory. At the end of the day you will not see production start up until 2017. Im not saying elon musk is a stock promoter. Atthey are really good getting people excited about a future that is more uncertain than press releases might suggest. Being able to source enough lithium. There are 13 million tons in the ground. Dell reserves. This is not just probable, it is proven. There is enough in the ground. It it is getting it out. The majority is in bolivia, very hard to do business there. Chile is where we get most of our lithium. Demand is really being out supplied by 2025. Outemand is beating supplied by 2025. If there are no proven reserves it is about what people are prepared to face. What about technology . How much are we locked into a certain technology or is lithium going to be the Battery Source for the next 30 years . Will there be something that comes up . We have seen a lot of start ups come in and try to find different ways of getting lithium to markets faster. It is not Proven Technology yet. There have been so many batteries. Around are they right to fool investors into thinking something will happen . Comee to two projects online every five years. That is not a lot. Of that is not fast. He operates on west coast time. Cory johnson, thank you very much. We have more Market Makers coming your way. He will be back after this short break. It is time for bloomberg on the markets. Thate looking at stocks are relatively flat, if you can make that assumption after yesterdays pretty disastrous selloff. You had payrolls come in slightly worse than estimates. Buys upid see juniper for it. There was an uptick in Unemployment Rates at 6. 2 . Oan increase in labor force participation. We did get the best read on manufacturing here in the u. S. s 2011. Coming in at 57. 1 for july. Out linkedin. Alk so much for the networking slowdown. We saw those results from twitter and facebook. Now it is linkedin come in and coming in with a revenue forecast ahead of avenue ahead of analysts projections. Analysts were looking at 541. 5 million. Million, that 1. 5 is apparently good enough for 2. 5 billion dollars in Additional Market values. Up, how to price risk in a war zone. We will talk to an Insurance Company that does just that. You are watching Market Makers on bloomberg television. Happy friday everyone. It is hard to remember a time when there were so many crisis happening so many parts of the world. They had a big impact in the operations of multinationals and to help mitigate that risk they help take out insurance on their assets. The Global Insurance firms has policies protect Capital Assets and humans in high risk locations all across the globe. Chris, it is a pleasure to see you today. Inky for joining us. There are so many crises happening from ukraine and in iraq. Particularly i am interested in what happened to the Airline Industry insurance after malaysian flight 17 was shot down. It is a pleasure. The specific impact with regard to mh 17 is not going to be felt in particular within the Global Insurance market for aviation. It is the broader context of all of the disasters that have occurred. What we are reading and seeing is a significant tightening with regard to rates. The capacity is becoming extremely difficult to obtain. Is there one particular region or industry that winds up getting hits the most . We spoke about airlines for a moment. To consider the broader spectrum of context and directs and whether it is related to the conflict in gaza, the Airline Disasters we have seen, the rise of the islamic state, all of those have a large impact throughout the globe on the cost and availability of the capacity to ensure risk. Those organizations that are deploying assets and individuals into regions of the world where conflict is present or close by rc be tightening. , how do you price risk like this . It is not as straightforward as taking a piece of news and adjusting the cause or the rate that is charged to regulate. It is a combination of the existing exposures we are seeing on the television today. Those we dont see that are going on at a lower level that are still out there, as well as the necessary analysis to try to willct where that risk ultimately take us, where future risks and exposures are going to occur. It is a complex process that a spend all dayrts long, all week long, trying to come up with the best answer. The given there are so many hotspot him a whether it is gaza or iraq, it would seem to me you have some Pricing Power. Insurance is a cost of doing business. It is true that insurance is a cost of doing business. Understand they need to protect those assets. The Insurance Industry wants to capacity on a strategically deployed basis and want to do it at a cost level that is affordable for everybody engaged in the industry worldwide. It serves the industry best if we can meet those needs for as many firms is possible. The capital is finite and therefore there is only so much that can be deployed. Year,get later into the as i capacity gets utilized and the ploy for existing clients, it becomes more expensive. That does obviously have an impact. Companies what we do is provide the expert advice and counseling to manage that risk created insurance is only one component of the Risk Management process. We go through a process of evaluating what their mission is and where that mission is going to take them and determine how they can best manage, avoid, and sure, or otherwise take care of those risks that are presented immediately to them and in the , which can have an effect for anybody off rating near a concert zone. Seen clients or Companies Make the decision to pull up stakes and with draw evena market because though they might see Business Opportunity they have a cost the cost of protecting people is too high . We havent seen Companies Pull up and moved out of markets or organizations the markets that are part of their core focus is on the increase costs around risk and insurance. We have all seen a number of entities that feel like they have to take a pause and pulled back from the cop from the hottest conflict zones. A temporary impact is what we are seeing more broadly. What kind of insurance is most in demand . Damages, terrorist attacks, what is the biggest threat . Focusse kind of events risk managers and Company Executive minds around Political Violence. There is no one that is the most popular and most in need. The Broad Spectrum of Political Violence is in great demand today. Thank you for your perspective. Sending an investment deal in africa. We will ask Nelson Mandelas grandson how america catches up. Now america is playing catchup. Next president obama will host dozens of african and political Business Leaders for a threeday summit. Are upstaging the president with our own minisummit. He is an entrepreneur and cofounder of education. He is moving to self to south africa. Of africafounder rising. He happens to be the grandson of the late nelson mandela. Lets put things into perspective. How far behind china is the u. S. . I think america is quite hesitant because of the political landscape, the risk, the turmoil, the instability. It is a lot closer when you look at the china africa relationship. When you look at the it has beenls, quite robust. The risks are real. We have lookedng at extensively. Their potential is extraordinary. The 10 fastestgrowing economies are on the african continent. Is there a difference between china coming in and taking over Natural Resources and bringing their own people versus starting up there and having a business that is actually based their .