The iraqi army itself, to put new generals in, to reconstitute it, and to help marshall outside forces in the coalition to come together to help them. The Islamic State assault against kobani has been going on for a month. And a lawsuit over the short term rental site, which is called unconstitutional, saying it benefits rival airbnb. It requires people to live in their homes at least nine months per year in order to legally rent them out. And a french advertising giant is pushing deeper into digital ads after a failed merger. Inez agreed to buy a firm for 3. 7 billion dollars in an all cash deal. It is called a ground jewel, allowing clients to receive digital transformation. And new clues as to when the digital watch will hit the market. In an internal memo, it was said the watch will be launched in the spring of next year. At a september product unveiling, apple said the watch would be coming early in 2015. Now, to our lead. Was it a mechanical problem, pilot error, Something Else . Analysts are trying to figure out what caused the Virgin Galactic ship to crash in the Mojave Desert, and preliminary results are pointing to human pilot error. Here is Richard Branson. The ntsb and the people who will speak about the causes, and they are doing a very thorough investigation, what they indicated was that a lever had been pressed a few seconds sooner than it should have been, and we will leave it up to the ntsb to decide whether that had any effect and whether that was the cause. The crash killed one pilot and injured another, but branson says he is confident there is no fundamental flaw with the spacecraft, and he is vowing to push ahead in the private space race. Joining us is our editor at large, cory johnson, and there is a commander of the International Space station. I will leave it to you. We spoke on friday. Albeit that it is little information, what questions are you asking . Actually, it seems that we have quite a bit more information, the ntsb having made official announcements, that they found a fuel tank and a motor largely intact, which indicates that those elements did not explode, and then they have Cockpit Video showing the copilot unlocking the device. Now, i emphasize he moved that lever apparently a few seconds early, but it was only to unlock the device, not to engage it, so a second command wouldve had to have been sensed or a malfunction of some kind to gaza to activate, which, barely, it did, so the ntsb is telling us that is what happened, and it cause the aerodynamic situation to break the vehicle apart. This is not unlike several Airline Accidents that have happened over the years, where a thrust reverser has accidentally deployed inflight. With the thrust diverters reversers, which cause planes to land on the runway, you will sometimes feel it when they engage, and it goes the other way to slow the plane down, and that has caused planes to break up in flight. That is not the same thing, but kind of the same thing. Now, i want to bring in a former ntsb chairperson using skype. Just how much trust these pilots \put into hands of humans, not just themselves, but also humans on the ground. Take a listen to this from Richard Branson on the ground. We have to feel comfortable and safe about taking people up, but that is why test pilots put their lives on the line, to see if there is any little thing that the 400 engineers done on earth have missed. Do we need less trust in man and more in technology . Why arent more of these features automatic, automated . In any new project, youre going to have to test the boundaries. Youre going to have to test the edges of the envelope, and that means taking the aircraft up, not just having models or predictions, where you can see how it actually does perform, and it will be testing it with conditions where perhaps it may unlikely face in service, but you want to test the engines. You want to make sure they know how that aircraft will perform in any scenario. Leroy, let me ask you, am i right to be suspicious when the investigation turns up to point blame on the one person that cannot defend himself . I think we see that a lot and find it more systemic with aviation crashes. I think the ntsb is being objective in this. They want to get to the bottom of this. I do not think they are trying to do anything like that. The ntsb announced they do have Cockpit Videos showing the copilot moving that lever a little bit early. As i said, there had to be a second failure, because just unlocking the device, to my understanding, would not cause it to deploy on its own, so, no, i think they are being objective with this. Devereaux, what do you think deborah, what do you think they are doing right now, and how does this differ from traditional aircraft and airplanes . The ntsb does have protocols. They have procedures. They are time sensitive. They have used them for decades. They have used them to investigate other issues that have led to fatalities, so they will be doing the exact same things they have done in the past. They will be working hard to interview with anybody involved with the programs. Procedures and protocol, and some of the pressures, and i think it is really important to say it is so early. There is so much that is not known. There are going to be more pieces of information that are going to come out, and i know it will be hard to hold judgment, but we have to give them time to develop them all. Leroy, and emily asked a great question earlier about man and machine and who should be in control of this thing, and it takes you back to chuck yeager and the ex 15 rocket planes and the great debate about whether these should be manmade lights or whether they should be controlled by computer. Is this going to be kind of what we are always talking about when there are accidents like this in the exploration of space . It is an interesting debate. We will continue. I think most pilots and ants astronauts would agree you want to have a blend. Operations which are totally appropriate, the nominal mode is auto until the landing. It came down to the actual seconds and landing. We actually felt more comfortable having a human hand on the stick to go through the landing, because humans are so adaptable. We are tradable, and we can react quickly and appropriately. An automatic system does not have judgment. You want to be able to have an override to take over manually. Coming in to dock with the International Space station, we were on autopilot with a russian sore use soyuz rocket. We had to take over. If we had relied on auto, we probably would have crashed. Some said that Richard Bransons enthusiasm for getting us into space is far beyond the capabilities of the technology really as it exists today. Debra, how big of a setback is this for the private space race . How much of a delay until we really do see Richard Bransons dream come true . I think that is only a question that Richard Branson and his team can answer. They are dealing with a lot of difficult situations right now, and particularly with the loss of the crew. These were their friends. These were people that everybody worked with, were respected, and they looked up to, so they are going to have to get rid this period, and then they will have to make decisions about how they move on with the program and at what pace, but i think that many of the failures that we have seen in the past when we charge chart New Territory are really kind of part of the process. Unfortunately, when you are doing something risky, when you are doing something on the edge, when you are doing something that is new, there are always going to be areas that are risky, and i think there is really no other way to talk about it when you do something new. Unfortunately, when you do have new products and technology, the products fail, or you do not experience reliability. When you have a human endeavor, and there are people involved, and you have a failure, it is much more catastrophic, like in this situation. Ok, the former ntsb chairman leon wright, two experts, thanks so much for weighing in today. And up next, Virgin Galactic and the prize for innovation. How will this impact the future of space travel . We would discuss that with the president of x prize, next. I am emily chang, and this is bloomberg west. Based on the award concept of spaceship one, where a rocket is lifted on another aircraft before lifting independently. They got an x prize award years ago to the tune of 10 million. Editoratlarge cory johnson has more. The public competitions to encourage different kinds of technological development, and it has drawn some big names, including larry page, elon musk, among others, and we are with the president in los angeles. Bob, it is a fairly amazing thing what the xprize has wrought. Was the notion to bring tourists to space, or was it more than that . Is more than that. Certainly, that is at the core of Virgin Galactics business, that one has to keep in mind that we are trying to open a new frontier, and the costs and risks of going into space is part of that. At the xprize foundation, we believe that a lot of the issues can be solved by proper use of space. We are in a closed system. When those consumables are gone, then we are in trouble. If we have a way to get more energy and more of the things that we need, then that does not have to be the case, and the space offers that potential, so Virgin Galactics efforts to send individuals to space is part of that larger opening of a new frontier. Yes. I was out there in the Mojave Desert 10 years ago when the xprize was won by burt and the company that launched this thing and put all of the money behind it, but the notion that it was going to launch a new private space race seemed ridiculous, and yet here we are, with elon musk and spacex and with blue origin with jeff bezos and Richard Branson. Did you guys realize that xprize would lead to that . Yes, when our founder and i and a group of others formed the xprize, it was with this was in mind. There were certain Market Forces in place. It was not what nasa was doing, so we very specifically wanted to launch a new industry, and the xprize was a very visible demonstration that it was possible, and, in fact, with the winning of the xprize, we did open up a new era of space flight. We were not sure what would happen. Originally, we thought it would be within a few years of the winning of the xprize. We did not anticipate its starting within the competition itself. With the competition, launching a new industry, can one crash like this bring that new industry to its knees . That is a good question, and we think not. There is inherent risk in doing these things. With every great venture, where you are looking to open up new frontiers, there are going to be some hazards, and so the risk is inherent. You take activated risks, and you do it so the ultimate saying you are trying to do or ultimate operation, in this case a spacecraft, is much, much less risky. These test pilots knew that was involved, and you do it in a calculated way. You do it in a way that a business that is operable and safe can be run. This one tragedy is not going to change that. We are going to learn from it. We are going to make the proper course corrections that will benefit not just Virgin Galactic but the industry at large. It has to change it on some level. There was a perception that this would be a tourist spaceflight. On some level, it has got to be a change in the reception of the consumer and the market here. Well, i think it is not a complete analog to compare it to passenger flights. It is more like adventure tourism, and there are other forms of it, where there are risks. People climb mountains, take rides in submarines, two other things that have more inherent risks to it, so it is not like just going to work. So those risks, when you take them, need to be done in an acceptable action, and in a way, it is completely understood by the people who are not taking those risks. I do not know if you have done this, bob, but the zero g flights which are made to simulate weightlessness, i took that flight about one year ago. There have never been any crashes, and i was terrified before i went up, but it turned out to be a blast. It is that kind of thing. It brings up a great deal of fear with out the crash, and i imagine this will be different. Is there a way people will be going after refunds, or will the ultimate size of this business change after last week . As i understand it and from the statement that sir richard has made, not only have people not asked for their money back, but since the incident, they have had an additional two people signed up to take a flight as a vote of confidence. Certainly things are going to be delayed. Time is needed to understand what happened and make the appropriate course corrections, but Virgin Galactic will persevere, and ultimately, be safe or passenger flight, and one hopes that the sacrifice that was made by the test pilot, who died during this tragic accident, will not be in vain, and that we will stand on his shoulders, as it were, as the company goes forward. Well put, bob weiss, president of the xprize. Emily . Apple trying to raise money with another large bond sale. But it has some asking why. That is when bloomberg west returns. Welcome back to bloomberg west. I am emily chang. Goldman sachs and Deutsche Bank have been hired to organize a call involving apple. So why . Why is apple doing this when they already have so much cash . Interest rates are low, and by borrowing this money, they are using it to pay for the buyback program, returning money to shareholders, people like carl icahn and other investors have been hiding over the years, so this is the way they are funding that. Any idea about how much they plan to raise . No, they did Something Like this last year which was the biggest offering in history over 10 billion, and that is something they returned back to shareholders, so it is a way for them to take advantage of really low Interest Rates, keep their shareholders happy, and still not cutting into their own capital reserves too much. So is that what theyre going to be using this money for, as well . Returning it . They said earlier this year they would be doing this. A will do some in the u. S. , and they will talk about doing some of it in europe, and that would be a first, if they raise this money in euros or in pounds, Something Like that. Are we going to see more and more of this over the next couple of years . I think while the debt markets, it is this cheap to borrow money, i think you will see this while rates are really, really low, so it makes sense for companies to do that. Ok, covering apple for bloomberg news, thank you very much area. Not shying away. Next. It is 26 minutes after the hour, which means bloomberg is on the markets. I am mia saini. Lets catch up with where markets are. Gains across the board. The s p is up by about one quarter of 1 , and this is higher than the october 15 low, manufacturing data adding to evidence that the u. S. Cant sustain the withdrawal of stimulus. For on the markets, we are again back in 30 minutes. Stay with bloomberg west. you are watching bloomberg west, where we focus on technology and the future of business. I am emily chang. Looking at Services Like mobile pay, and our Market Makers editor Erik Schatzker joins us. He is at the 2020 conference in vegas. Technology and the future of business. Here at the money 2020. You call yourself the chief ninja . Is that right . I started out at princeton. I did not want to negotiate. Tell us a little bit about your company. With the platform, we hope to engage our customers, with rewards. Sell apple pay, as i understand, i am not a customer, but i understand a bit of how your product works. Applepay in many respects validates what you are trying to do. Overall for us and our merchant partners, it is a good day. What we are pushing to consumers is you should pay with your phone at your favorite merchants, and you should automatically accrue rewards when you do that. And apple pay is basically the Biggest Company in the world to do this. You can put your card, your starbucks experience, right into that wallet. Now the gates are open, as long as you play in our, apples, wallet. And for your company, as long as you choose to use the company as opposed to a credit card, correct . Yes, and i think that is the most exciting thing apple did. They have given this to the merchants, not be credit card companies. Yes, your credit cards are in the apple pay. We can beacon you, we can say leave the credit card in your wallet and pay for this loyalty program, and it would be better for you and better for the merchant. What kind of change . What does it mean for payments now that apple is in the game . Apple is undoubtedly the most Influential Technology Company in the world, and everyone is waiting for apple to say, lets make it happen, and over the next two or three years, we are seeing people rushing to make payments in a way that is good for them. Merchants want low Interest Rates and data; apple wants them to use their wallet. And with apple pay, we integrate into both of them. One of our investors, one of their investors is on our board. We followed along. I actually think you will see Google Wallet get a lot of lifted now that apple pay has done this, and google users have been able to do this for a while, but now they will start to. What might google do to one of apples game . I think one of the biggest things that apple left out and which is an opportunity for google is the loyalty rewards. Apple is a hardware company. Google is an advertising company. It will tie in rewards much more tightly. What about other companies that are trying to solve the merchant side of the electronic payment problem . Possibly doing it from a position of advantage, like they manufacture the terminals, the point of sale, or they develop a software th