It is Market Makers on Bloomberg Television. I am Olivia Sterns in for stephanie. I am thrilled to be here. The emmys are on tonight. There is a great big canada story in the news. Data could be a huge story. If tim horton gets taken over once again by an American Burger chain. It is about the Housing Market. New july homes are in. We have an on extent did unexpected drop. In july they actually fell 2. 4 . Decline inecond as many months. Analysts and economists we surveyed were expecting an increase to 430,000. It this 412,000 is the fewest since march. This is the lower than the lowest estimate. The Housing Market is recovering in fits and starts. I am just looking. U. S. Stocks continue to rally higher. We are at the best levels of the day. The s p 500 is one point away from reaching 2000. Dampenedto not have anything. This is a disappointing read on housing. Scarlet fu with the latest on the Housing Market. These the top business stories around the world. It will be tougher to make partner at goldman sachs. They will name a 70 partners this year. That is the same two years ago. That was the smallest class since they went public in 1999. Named 115. Y biggest making its acquisition in years. The price is 8. 2 billion in cash. Intermune has a drug that is awaiting approval in the u. S. Of shake up in france. The Prime Minister will be forming a new government after two ministers criticized the economic policies. Should focus less on deficit cutting and give tax cuts for households. Versioncould be the in deal that throws congress into action. Burger king is in talks to buy tim horton. They would relocate their headquarters from miami to oakville. Our us to discuss this are analysts from little rock, arkansas. These are one of the crack tax reporters. Julie hyman is with us as well. I am not even sure where to begin. , itld it surprise us surprised me honestly, that an inversion deal would wreak locate an american corporate icon to canada, of all places. We think of tax havens like bermuda or more lease more recently ireland. Attractive pretty place for u. S. Companies looking to relocate their domicile to save taxes. , being familiar canadian, i know a few things about canadian taxes. Canadian government has been reducing Corporate Taxes since coming to power. They are now quite a bit lower i gather than they are here in america. The rate is lower than the u. S. The u. S. Rate of 35 as one of the highest in the developed world. It is easier if youre a canadian country to reprint repatriate profits. This is why they dont like being based in america. Is is all about Financial Engineering . I think there are a few reasons behind it. One is the taxes. That is first and foremost there. Have a gna them to at tim horton. They have stripped burger king of a lot of fancy call structures. Tim horton is under levered. Everybody is anticipating a real every in and dividend event at burger king. Tim horton is less levered than burger king. The canadians dont like being in debt. I it has served us well. You have something to learn. When you look at it as a consumer part of the business, it does not make as much sense. Burger king, like the burger and tim horton would help with the breakfast growth of the business. It is not as though they have incredible rate naked recognition here in the u. S. Could you leverage that name to improve the breakfast business . Is, is that a realistic proposition . Would that add a lot of value to the business . Tim hortons is head problems itself. Are they competing against one another . Would even help . Is the competition really to bully . Canary yes, but not in the breakfast space. Maybe divides some leverage. They have been trying to expand in america for a number of years already. It does not make much money here. Does the billionaire genius behind burger king no how to turn tim horton into something more profitable . Maybe. We have not seen much success here recently. There is a small strategic opportunity to put some coffee and breakfast items into burger king. I doubt it can go the other way. This is very small. Put this in perspective. You are canadian. How important is tim horton to canada. What would this be like if an American Fast Food Company took over this . Wendys owned tim hortons. I spent most of those years in the United States. This did not change that much. The question is whether beyond Financial Engineering they want to mess with the formula. I cant imagine why they would want to. There are some amazing statistics to be cited about tim horton. There are more tim horton restaurants per capita in canada then there are mcdonalds in america. There are three times as many as there are Dunkin Donuts in america. 15 of canadians over the age of 15 go there at least once a day. Sharelaim to have a 42 of the Quick Service business in canada. It is unbelievable. Who is tim horton . He was a hockey player. He played for the toronto maple leafs. He is a legend. He started it back in 1964. How they lost the i am not sure. That raises another question about the ownership. This is the question that olivia raised. To what degree would three g want to tinker with this form of the has brought them so much success. There perhaps a hidden real estate play because from what i , they enfranchise the operations but they often own the real estate underneath the stores. They do. I dont think there would be any reason to tinker with what is working in canada. Has been a good owner of brands. I doubt they would do anything to mess that up in canada. The real estate is another opportunity. Three g is a very savvy allocator of capital. It is untapped value. Do they go ahead and sell that . Do they spend enough . If this is politically tolerable in canada, would they want this . To them i heard they have been wanting to curb their International Expansion plans. Probably so. Would they want this as a country . Who knows. I would assume things get a lot leaner pretty soon. This have to look at potential transaction. Something may happen as early as this week. This may be the first of more. You mentioned ireland and bermuda where places do in version deals. Is canada the next hot spot . . There have been five and version so far. We are in a point where countries are inverting the fastest paced ever. Pace ever. You will see more canadian firms acquired. They are under pressure from boards or activists or they are a furry aid afraid of congressional action . Why should i remain a u. S. Company . Zach, thank you. He is one of our tax experts here at loberg. Some breaking news just moments ago. The stock market continues on fire. Its take you back out to scarlet fu. Above 2000500 posted four about one a seconds. Now they are back below at 1999. That would mark five years for the s p 500 to double in value. It closed at 994 in the 2009. I was just looking at the sectors that are helping arrive the s p. The best groups are cyclical. Those are groups that are sensitive to changes in the economy. Consumer discretionary is up. Health care is up 105 are sent. Industrials are gaining 120 . Technology is up 111 . Individual names that have led way, under armour and netflix round out the top three. The dow industrial is still below its record high. The record high there is 17,138. It did break above that 2000 level. Thank you so much. Coming up, a tale of two central banks. Why it wont the ecb follow the lead of the fed . The emmy awards are tonight. We want to know if the emmys still matter. Things are not looking up for europe. They are following to a oneyear low after week Economic Data comes out of germany. The u. S. Economy continues to improve and europe continues to stagnate. Warns. Raghi weve been hearing about the threat of quantitative easing for two years. Ever since mario draghi said he would do whatever it takes to save the euro. We are at this moment where growth has ground to a halt and inflation is at its lowest point in five years. Inflation is in double digits. No return point of where quantitative easing is inevitable . No. I would not go that far. There are a few things to understand. That we know the fed has a dual mandate. They focus on inflation and unemployment. The ecb does not have that. They were just created to focus on inflation. That is one big thing. The other thing to remember is a lot of people do forget that the ecb mine european government bonds is not the same as the fed buying u. S. Treasuries. There is no common bond market in europe. Or ecb buying spanish italian bonds is you of the fed buying municipal california state property. Several are countries and have a problem with that. The bar is very high. We are stepping closer to qe. Were not there yet. Quantitative easing would not be the same in europe that it does here, would have much of an impact . I think it would. In the United States we have Treasury Bonds for the whole country. The fed uses treasuries to conduct its money market operations. Conducthow they monetary policy. The same is not true in europe. It is a different thing. At bar is higher. If they did resort to that, i would say they have a very vague impact. Announceds already that there would be rate cutting. This will take us to the end of the year. It is unlikely you will see conventional qe before the end of the year. They cut the overnight rates in june. They drove it to negative era tory. Banks have to pay to keep deposits at the ecb. They announced that they would be doing short term liquidity measures in september. This is a form of qe by the end of the year. The problem is and is not a very big abs market. One of the things to worry about banks taken up liquidity in europe, there is another assessment of banks by european regulatory officials. That is not due until the end of october. We think it is unlikely you will see banks expanding their Balance Sheets six significantly before that. The goal here alternately for draghi is to get lending into the small and mediumsized companies. You mentioned the dilemma area steps. Overnight rates are in negative territory. Just a followup on erics question, with the 10year note on german debt is already below 1 , what impact is qe going to have . Will that actually spur lending . They say they will announce the results of this study of bank Balance Sheets by the end of october. It is very unlikely you will see significant expansion of bank Balance Sheets before that. The short answer to your question is it is not going to do very much, at least over the next few months. Stagnated in books the second quarter. There is little investment spending growth going on. Theyree going going to be stagnated for a while. They are worried about deflation. We are going to get a reading pretty soon for august. The expectation is that inflation is going to fall down to 3 10 of 1 year on year. We think september will fall even further. That is the real worry. Want have seen in japan, to get into a deflationary situation, tickets very hard to get out of that. , if deflation is the threat is the French Economy minister right . Austerity is not the answer . They face high unemployment and a sluggish manufacturing sector. Should they be going into more debt and violating those eu promises on the fiscal deficits . That is a very good question. The euroe big reasons is in this mess is austerity. Early in the recovery, they were getsting budget deficits big and recessions. We had a doozy of a recession in the financial crisis. That is not the time to tighten fiscal policy. You get into a negative feedback loop by cutting spending and tax receipts go down and the economy goes down. The time to do that is when things are expanding. That is when you that the deficit. The short answer is yes. Austerity is not the thing. Mario draghi called for stimulation policies. Either way, he is very happy to be back. Larry kantor, thank you so much for joining us from our clays. Another look at the s p 500 hitting a big round number. We will return in a moment. Welcome back. We are approaching 26 past the hour, it is time to go on the markets. The market took five years to get from 1000 to 2000, where we had earlier this morning. Consumer discretionary and health care are the strongest performing. To be honest with you, i find it difficult to get excited about round numbers. I like to look at things in relative terms. Think what has happened since the market bottomed. We have seen valuations go way up into the stock market. Corporate profits are accelerating and now valuations are carrying the flag. It is taken us over the 2000 mark. We we back in two minutes on Market Makers. Live from bloomberg headquarters in new york, this is Market Makers, with Erik Schatzker and stephanie ruhle. Youre watching Market Makers. It is monday in new york city. I am Olivia Sterns. Hollywood is tuning into television tonight. The emmy awards are tonight. The nonbroadcasters could be the big winners. Does a win mean big money . Andill ask Brian Steinberg a scarlet fu. She is our inhouse tv watcher. Thank you for being here. Lets start with you. The the emmys matter . They do more than it used to. They could give a boost to shows that you could watch on netflix it around. You should watch this now. It adds some prestige. Is that to say that the emmys are much more important now than they used to be because we live in an era of timeshifting . Thelet has given us schedule as a time shifter. Oneverybody watches things dod or dvr. The Netflix Emmys are for shows that you can watch all at one time. Netflix is playing changing the game. These days, you can watch it again and again. Madmen is a perfect example. The ratings are not very good. The aftermarket, it is a big deal. That is incredible to me that netflix has more candidates to win an emmy then the Big Broadcast networks. The only major broadcast drama in consideration is downton abbey. And that is pbs. Cable is making things more of a touchstone. They are rolling out great dramas that go beyond things like from the minds here minds. Riminal thate advertisers want target demographic. Does that what he ateyearold the 28yearold female care about the emmys . The show itself . Does it matter how may awards house of cards wins . People started watching orange is the new black because house of cards was great. When the Tipping Point is the show start winning a few emmys. The actors become recognized and it becomes part of a cultural buzz. When it gets cultural prestige, when big hollywood actors go to television rather than looking for the next movie after the oscars, people talk about the power of winning an academy award. Are people Walking Around buzzing about how many emmys . This. How many emmys you win. It says that the viewer might want to watch it. That is a push. We are in this golden age of tv. The quality is incredible. If Matthew Mcconaughey wins, it is not what it was to win an emmy for friends. There was a cinematic quality role. You dont seeedom on broadcast television. A good example of a broadcast show that has done very well and does well and if eyes the convention that broadcast shows get water down. Letso losing out to next netflix . This is what Reed Hastings will talk about. He will always make a comparison to hbo. On a relative basis, netflix has so much more content than hbo does. They are getting 30 nominations, but for fewer shows. Hbo has the amazon deal now. This could be a hold new game changer for time warner. Do you think it means that appealing toent is transfer tv . It says a lot about where people are going. Shows get great guest stars. , is stillthat drama working on it. Drama really is drawing m a lot of great talent. I keep waiting for brad pitt and Angelina Jolie to show up on a tv series. I am trying to figure out how orange is the new black is a comedy. It is more of a miniseries and it is a fullblown drama. The point you make about comedy is a good one. . What is an emmy worth . True detective is amazing. A sitcom that is up for an emmy is not amazing. It is worth an emmy. This is what we of done. She has been mistaken for her. Gotten to cut the line at airport security. There you go. It is a very popular show with tsa guys. They all love orange is the new black hair coat black. At my passport and it clearly says Olivia Sterns. They told me that they love my new show pillow. Clearly, an emmy has the ability to help make something hot. It makes something that is new even hotter. What about a show that has been around and has low ratings like 30 rock. I dont think it adds immediate audience. Player, ita new helps you out a lot. I dont think it does that much for you. Does it do anything for the show for overseas audiences . These are very popular overseas. They watch it both legally and illegally. Doesnt that give some sort of cachet . Not everybody has access to it. Watch this. They need to watch. Forhe emmys or on monday the first time in 40 years. Seth meyers is hosting. What do the emmys do for seth meyers . He hosted the sps. This is the first massmarket awards he has done. Deal forbecome a big him. It could be great for his latenight show and his brand. I will be watching live. Berg, thank you. Up, alibabas dealmaker behind the scenes. Youre watching Market Makers on Bloomberg Television. You probably never heard of him before. He is the man behind the scenes of alibabas ipo. He is making the decisions in brokering the deals. His masterminding a corporate roach structure that allows them to bypass chinas government. Jack motte is the name most people associate with alibaba. Who is this guy . He is the yen to jacks yang. Perfect the purpose complements. He is the guy behind the scenes iraqi executes the deals. Is