Transcripts For BLOOMBERG Market Makers 20140829 : vimarsana

BLOOMBERG Market Makers August 29, 2014

Radical extremism, not just violent extremism. I set this out in my speech in 2011 and have given this forward through my Extremism Task force. Stopping funding of organizations that promote extremism and ensuring that every form of government and state are focused on beating the scourge of extremism. This task force will continue to meet prettily. Tain is an opera in tolerant, and free nation that backs people in every community and want to work hard, make onto vision, and old alike for themselves and their families. But we cannot stand by and allow our openness to be confused with the tolerance of extremism. Or one that encourages different cultures to live separate lives and allows people to behave in ways that run completely counter to our values. Adhering to british rallies is not an option or a choice. It is a duty for those who live in these islands. In the end, it is only by standing up for these five that we will defeat this extremism, protect our way of life, and keep all our people safe. Thank you. Very happy to take some questions. Reddish Prime Minister David Cameron making public british Prime Minister David Cameron making public remarks after they raise the threat to severe. Saying the fight against extremism may last for decades. It is a generational struggle. Military is only one element. The response to terror. He supports the bombing that the americans have in conducting in iraq against the organization that calls himself the Islamic State in syria. Specifically to the concerns that people have about britons were traveling to syria in Northern Iraq to fight with isil. It is believed the perpetrator of the beheading of james foley was a brit. We dont know if you was a naturalized british citizen or born in britain, but David Cameron talking about steps that britain is prepared to take, including seizing passports from those he believes have returned from fighting in the area or may intend to fight for isil in the area. Mentioning gaps in the armory. Saying overall the British Government will be taking a purpose to approach to dealing with these threats going forward. He is one of be making a speech in parliament on monday, detailing further steps the British Government plans to take in its response to the Terror Threat. In the meantime, a different kind of threat from were only finding out about it now. That cyber attack that targeted jpmorgan was underway for months before the bank caught it during a routine sweep. So far, theres no evidence the hackers of than anything nefarious with the information they kill for it. Jpmorgan says it has not seen the usual fraud levels, but infiltration of one of the most secure companies in america, one that spins hundreds of millions of dollars every year on cyber protection, has National Security on high alert. Mike riley is with us from washington. What have we learned since yesterday, since you broke the store yesterday . We have some gory details including the fact the hack took place over much longer period of time that think was first expected. It started in june. That meant the hackers are in one of the most heavily protected networks, layered the place with all sorts of malware and slowly extracted gigabytes of data over more than two months, almost three months, before jpmorgan got lucky with a routine scan and caught them. One of the things that struck me about your reporting is that it appears the hackers went to the front door, right through jpmorgans website. That is a very hard thing to do, in part because banks get a tax that way all the time so they spent a lot of money and make a lot of effort to try to lock those doors. Not only do you have a website even if you are able to get in the website, they have a protected zone which is very hard to get from there into confidential data. The hackers managed to get through the website and get into the data center, collecting a lot vast amounts of both Customer Data and it appears other kinds of data in jpmorgans network that could be sensitive in all sorts of ways. What stood out to me as well, it seemed like this specifically was designed for jpmorgan, not just that they decided to hack jpmorgan. I am wondering what the angle was. It had to be more than just getting this credit card numbers. Is very possible. One thing we do know, jpmorgan is telling people who have come into work on the attack for them, that they believe they were the victim not just of russian hackers, but the russian state may have had some hand in this. And that could be based on what they think is a threat of their u. S. In enforcing sanctions. But it is also based on some technical data theyve got. Sensees some amount of given the sophistication of this hack. Statesponsored hackers dont necessarily have to be the guys in uniform or people putin can call, they can the government can give certain kinds of assistance. Scanning you would need to develop. All of that could be given to these hackers by more sophisticated actors of the latter. Mike, people are no doubt asking, how could jamie dimon let this happen . I know for fact jpmorgan takes cyber secure do very seriously. Dimon carved out a section of his annual letter to shareholders to talk about the threat of cyber attacks, to talk about and explain even though the bank was spending 259 in 2014 and putting 1000 people on the case 250 million in 2014 a putting 1000 people on the case, they would lose some of the battles against hackers. Talking to the people you deal with in the Cyber Security in respecthow will to the amount of money they spent and the seriousness with which it takes the issue . Theres no question that jpmorgan, all of the banks, but jpmorgan especially, texas racer sleep and puts their dollars and expertise takes this seriously and puts the dollars and expertise into it. The hackers caught them at an interesting moment. They recently replaced the chief information officer, the guy in charge of this massive security team. It is a new guy. Right after this transition took place, a level of topsecret officials left. Theres a process of hiring. Could that have good treated to this . Contributed to this . Possibly. No question they put a lot of money into this. Given all of the cronbachs they buy and the people they have on the case, how are these hackers able to avoid that massive dragnet of devices over on was three months . How worried is jpmorgan right now . I think theyre worried, but the question is, anytime bad guys still very, very large amounts of your sensitive data, you have to be worried. You dont know exactly what theyre going to do with it. The potential for a large amount of fraud. Jpmorgan says they have not seen that yet. This is the kind of data that could be used in various schemes over a period of time. They will spend months of this on the cleanup and having to watch carefully what is done with their data. Mike, thank you. Jpmorgan is getting the attention right now but have a funny feeling as we find out about other banks, the attention will shift beyond jpmorgan. Mike riley, broke the story about the hack into jpmorgan. The white house is still what foreignpolicy crises on multiple points, the threat of tougher sanctions on russia and the effort to find a strategy for dealing with the Islamic State. On all thehas more president s options here. First, what we heard in the u. K. From premise to David Cameron about stepping up the level of security from severe to substantial. Any reaction from the white house on that . No Immediate Reaction yet. There will be a White House Briefing shortly. We expect the possibility of a statement, some response to what happened in the u. K. It is on the u. S. Radar. Not a surprise. The coordination between the United States and u. K. Over the security issue, typically what is happening with isis both in syria and in iraq. Spoke with the press secretary short time ago and he mentioned to me specifically about one of the big concerns on the part of this administration, the number of foreign fighters in syria and iraq including foreign fighters with american passports and the possibility they could bring the Terror Threat back to these shores, not to mention european shores as well. This is clearly on the u. S. Radar. I expect we will get something from the white house this morning on what has happened in the u. K. What can you tell us about what the president is thinking about syria as well as additional sanctions on russia . What is first on his plate today . The press conference of president had yesterday he expressed reticence about really stepping in quickly and militarily both into ukraine and what is happening there and also in syria. He took off the table what a lot of people expected here, that the u. S. Was about to launch airstrikes into syria against the Islamic State. He said, we dont have a strategy yet for that. That raised a lot of eyebrows with the president of the white house saying that. The white house clarified what he was talking about was specifically the plan for airstrikes. That is front and center on the presence plate as is the situation in russia. He tried to tempt down expectations of reaction by the u. S. He heads to the nato summit next week. Sanctions arethe on the table, given what has happened there and what the u. S. And nato believes are russian forces, Russian Troops in ukraine and helping the separatists. On the subject of the Islamic State what is the response been does far too an odd word choice by the president yesterday that the government has no strategy when it comes to figuring out what to do in Northern Iraq and syria . They moved right away to try to clarify what the president said because as i mentioned, not the words of confidence. Were used to hearing from the president of the United States i asked josh earnest directly about it. He said the president was responding specifically to a question about syria and the possibly of eminent airstrikes. Again, what theyre saying is this president isnt ruling out the possibility of airstrikes but he wants to develop a more conference of strategy that includes regional partners and players in that part of the world who dont always agree on a whole host of issues, sending john kerry to the region to try to develop those regional partners. Turkey, qatar, perhaps iran as well. , ands a poor word choice something that white house is trying to rectify. As farsi allies are concerned, lets not forget about saudi arabia. Ares far as the allies concerned, lets not forget about saudi arabia. The president was supposed to spend the night in new york city he is changed his plans and will be returning to washington. Selfmade millionaire. Jumpstart a by none other than the u. S. Army. Brave new world for the first time, there will be a a playoff to determine the National Champion. Weeks, the Islamic State has been capturing more and more territory in Northern Iraq and syria in bringing with it unspeakable violence and terror. Some still a boom time for local copies making money, thanks to American Security officials and for at least one of these businesses, it was actually the u. S. Military that provided the initial kickstart. Capitalurdish regional of erbil hardly feels like a city under siege, but it is influence of the Islamic State that the growing externa growth here has begun to slow. And in this boomtown, Business Leaders are facing the new reality. Talking about the isis situation, it was a big surprise for us. You never think youll have this neighbor very close like what we have right now. In downtown, Kurdish Company the dr group may operate out of a small building but over the past decade, has become a bigs news. In theriots started this 1970s before handing over to his sons. Governor global the empire wha specializing in several sectors. Shown to thes are brothers. The next week we sit down and mostly it is approved. Brother number two has been head of the Company Named for him since 1992. 10 years later, the mecca military arrived in iraq and kick started the American Military arrived in iraq and kick started the business. Contracted them to build, service, and in some cases, secure u. S. Army bases in mosul. They have a big share of our success. We were able to make a huge business with general portray us. Huge business with the us army meant tens of billions of dollars in contracts over six years. At one point, he says profits topped 1. 5 million a month. Today, the group employs thousands and is one of the handful of kurdish companies to dominate the countrys are just ever structure projects. We take over most of the business in iraq because we have enough cash in her hand, suddenly, kurds are running businesses oliver iraq. Rs from is only one of two electro electricity firms. The local government sometimes struggles to pay its own bills. When they open its brandnew oil refinery earlier this month, there were no government inspectors insight. And no government approval on site. The Islamic State in recent of iraqs Largest Oil Refinery had just pumped up gas prices, and the groups potential profits. The timing is lucky, very lucky. The market is very good right now because theres a big request after the refinery was closed. Million. Spent 5 he now expects to make that money back in around six months. Dayite crude oil at producing the octane gasoline, diesel, heating kerosene and daily profits of around 30,000. The eldest of the brothers wanted to show us his proudest project, a construction site that he says will one day be the largest mall in iraq. 148,000 1. 5 million square feet. Exactly. The headquarters will be in the countrys largest building. Where which her family be without the u. S. Military . I cant imagine it. Totally different . Yes. Everything you can see here is by supporting the u. S. A decade ago, the overthrow of Saddam Hussein from businesses include a standard takeoff. Now it is airstrikes from that same military against Islamic State that ensure companies here conserve five and Company Owners can continue can survive and Company Owners can continue to thrive. Corrects 10 million, 20 million tenley and dollars, 20 million. Ex ultimately, it is only filled just a few kurdish pockets. Were the next on the region joining us. Also invests in iraq. Great reporting, really interesting to see how the effects of the us military are still lingering in iraq. Is that still true . Is it impossible to make money without the u. S. . The security blanket started until2 in Northern Iraq 2011. In the last three years, there hasnt been so much of the u. S. Presence. Other than the last few weeks with the Islamic State. That might be returning. Player in the biggest kurdish business is the kurdish government. The two ruling kurdish families. Are they providing cash to businesses themselves . What is the relationship . It is important for any big business in kurdistan data coast relationship with the kurdish government. Neither the eus tour west version one thing that seems so easy to lose, particularly with the threat of the Islamic State, beheadings, executions, is that curtis dan is quite kurdistan is quite a resourcerich area of the world, isnt it . Absolutely. Gdp capital has grown. Also the wealth disparity has grown. A clutch of familyowned businesses that have been tremendously successful. Isnt that the way it is across the middle east . Certainly. One thing that is in and are analyzed consequence of the secret blanket in Northern Iraq has been the emergence of the group a very Strong Companies like this. The vetting and the diligence and so on these companies have to go through it to get those initial usc 30 contracts is often u. S. Security contracts is usually very much stronger. Maximum congressional oversight. A bunch of really Strong Companies have emerged in kurdistan. I think poised to become regional players. What does this do for curtis dans kurdistans resume gold become independent from iraq . I would say financially, they need to show they can stand on their own two feet. One thing that will be for that to happen as they have much more control over their own oil and exports. We have seen that they have been exporting oil is out baghdads approval. Not necessarily selling it, but have been able to get that out. That will be a big battle over the next few months and years. I think it will continue to be something they have to work on to try to assert their independence. Do you think this is the next evolution of curtis dan kurdistan separating themselves from Northern Iraq . Formationernment process is going on right now in baghdad. Two weeks more to run, by far the most consequential thing happening right now in iraq. You can imagine how these events have strengthened their hands in the negotiations. Baghdad is going have to make some very series concessions to kurdistan to get its approval over the next government that we will see announced sometime in the next week. Do you have the impression the copies like the divar group that have flourished with the help of your sponsorship, as it were, are more legit in kurdistan that some of the once weve seen profit in afghanistan, for example . I think we all know afghanistan is one of the most corrupt countries on earth. Lets not pretend kurdistan is not. It is

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