>> from bloomberg world headquarters in york, i'm mark crumpton. this is "bottom line." today, the pentagon increases surveillance over iraq as in shirt -- insurgencies capture more towns. good,ness that is doing time.oop at a viewers here in the united states and those of you joining us from around the world, welcome. a full coverage of the stocks and stories making headlines.

megan hughes tells us there are fewer airlines, but plenty of competition for your money. alix steel is examining business and investment in iraq. we begin with peter cook and the latest on the rapid advance by islamic militants in iraq. president obama spoke about the situation today. >> he did. he spoke at the white house before he headed out to north clear and he delivered a message. don't expect united states to arrive to your rescue in the short-term. he will consider options for helping the government take on islamic insurgents that have put the country on the brink of civil war. those options do not include the deployment of u.s. combat troops and the president conditioned u.s. action on iraqis resolving their political differences. >> we can do it for them. in the absence of this type of political effort, short-term military action, including any assistance we might provide more

succeed. this should be a wake-up call. -- won't succeed. they have to make hard decisions and compromises. >> the president said that any decision could take several days. among the options on the table, u.s. airstrikes by aircraft or by drones. the president will face congressional criticism no matter what he decides. you have lawmakers on capitol hill from both parties calling for air strikes me to lead. other thing the president should not consider any military action in iraq. the big memory here, the 4400 american troops who died in the iraq war. >> is a concern about possible oil disruption? >> he was asked about that. he said there is no sign right now that a major disruption in supplies -- one goal over the

course of the next few days is to talk to u.s. partners and other producers about the possibility of making up any shortfall in supply. clearly something on the mind of this president. the market reaction to what is happening as well. , thank you.k this week on political capital, the formal u.s. ambassador to recentlks about the attacks in northern iraq and the uncertainty in the nation. >> as far as the threat to baghdad, even without added assistance from the u.s. government, i think this force is going to meet pushback from the iraqi armed forces because they will come up against better troops and a less friendly environment to them. i don't think baghdad is under imminent threat. it is an alarming situation. some kind of help should be

provided. airstrikes were drone attacks would be entirely appropriate. >> and soon. >> as quickly as possible. everyday, every hour, time is lost. hopefully that this is an will be forthcoming. >> you can see the full interview with the former u.s. ambassador to iraq on political capital with al hunt tonight at 9:00 p.m. here on bloomberg television. as they inch closer to a civil war, what does this mean for companies that operate in iraq? alix steel has been looking into that issue. what kind of american companies do business in iraq? >> the oil companies. look at the oil price today. oil heading to the biggest weekly gain this year. you lose oil, that might tighten supply. 127 has oil reserves of trillion cubic feet of natural gas. surprise that it has

attracted big oil companies. they have been operating in the country since 2011. basically self ruled. it has 45 billion barrels in the ground and is considered easier .lace to do business they can transfer their profits. that represents 10% of oil production in the northern region. 17% of reserves. the bolt will be in the south of the country and there you have shell and bp. shell's ceo said that iraq contributed profitable production to the company. not a lot has happened to the business short-term. its asset was proceeding as planned. no oil wes leaving the north -- was leaving the north.

that is a different issue from what we are seeing with militants. if longer-term, there are going to be problems. deteriorates, foreign oil companies will probably leave. if security is moved from the south to the north, that might make operators in the south gilmore skittish. more the south feel skittish. >> what is so appealing about working in iraq? it would seem the opposite. >> it would. money is being pumped into the country. billion dollars in foreign direct investment in 2011. triple that of 2005. why? it is one of the world's fastest foreign growing economies. over 30 million people live

there. the economy grew 10% in 2011 and 2012. a jumpstarted $400 billion worth of investment over the next five years. it has done its part. foreign companies that are looking to develop residential real estate can now own land. real estate is the biggest sector. there are big needs like tech and defense to close those gaps. basic services, infrastructure like telecom, transportation, opportunities and so many different sectors for companies. on the downside, it is still the eighth most corrupt country in the world. obviously a long way to go. >> thank you so much. let us turn to the situation in ukraine. agriculture companies are

nearing a deal to boost exports to the european union. allen is in washington with that story. good afternoon. >> good afternoon. we just had an opportunity to have a chance to talk to the head of usaid. about some things to talk for potential agriculture trade with ukraine. >> part of my triple focus on bringing american agriculture companies to ukraine to understand how we can knock down some of the barriers to investment and business development. and really expand the reach of commercial agriculture in ukraine and build stronger trading ties, both east and west, for that country and its future. things is an interesting that he is talking about. you take a look at ukraine, the world's third-largest exporter of corn. it already has established ties with u.s. companies.

this is really a moment when you have world attention focused on a region that is also having corruption problems and instability. the u.s. is willing to put more commitment into nationbuilding. more connection with those trade ties on the ground. all of this unrest we have seen is very close to the russian border. a lot of the rest of the country is fairly stable. next week, he will be going to kiev and he will start building this relationship. he talked about trade with east and west, but the west as part of the west. it is in th >> what is the latest on the commodity situation in ukraine? port activity in crimea has pretty much stopped because of the russian occupation. odessa remains open. ukraine is expecting pretty

solid crop this year. the usda just had its latest estimate for ukrainian production. they did not make any changes. may actually be a decent year for ukraine agriculturally. you are seeing them come off that a bit. >> a little fatigue in this country -- foreign aid is viewed skeptically. how is the situation in ukraine different? >> there is a chance where you have a clear national interest in ukrainian stability. nothing has focused attention on this region like what's been going on in ukraine. i was in poland last week. there is a real interest in the strength of nato and the stability of this region. the u.s. is paying more attention to this. could mean more u.s. agricultural investment. >> talk to us about how these saidrts fit into what u is playing a role.

>> when i traveled to ethiopia kenya, you will see these chinese construction crews building roads. what you see is a lot of attempt to build public-private partnerships. there is a lot of developing countries in this world and they are up for grabs as far as who they want to be friends with. the u.s. had an interest in being friends with these countries. the model that they are trying to do to make it work. >> i went, always good to talk to you. thanks. we look at how they are reading the global economy and how it's investing the more than $25 billion it has under management. stay with us. ♪

>> welcome back. this is "bottom line." i'm mark crumpton. french economist thomas pick b says his best-selling book builds on work by scholars that came before him. tonight on charlie rose, he says what his research does is extend historical data to a much larger number of countries made easier with the help of technology. >> these are issues people were fighting in the 19th century. you had a lot of technical innovation. of six werethe age working in mines. people were asking questions. in the 20th century, we started asking a different set of questions. it was a different period.

societyoups in soliciting growth. it in the early 21st-century first century, we are starting again to ask questions about the evolution -- very little evidence so far. his fulln see interview with charlie rose tonight at 8:00 new york time on bloomberg television. or on the economy -- my next guest expects economic growth of 2.5% in 2014. gary black is an executive vice president and global co-chief investment officer. they have $25.3 billion in assets under management. welcome to bottom line. good to see you. the labor department today -- we got wholesale price numbers. they unexpectedly fell in may. first time it has happened in three months. why hasn't pricing power materialized? >> the economy went through a

really bad time. it was the most severe recession we have had since the great depression. the fed has done everything it can possibly do to stimulate the economy. it is a not too hot, not too cold environment. created, but no inflation. it is the severity of the recession combined with what you are seeing in washington. not much fiscal stimulus. democrats and republicans are trying to beat each other up. you don't see much getting done in washington. growth is really slow. >> the fed would like to see inflation closer to that 2% threshold. today's ppi numbers, do they give the fed pause on hiking interest rates? >> i'm not sure. we are still thinking that you will see some point interest rates starting to rise. inirman yellen came out back march and said she would support

.nterest rates rising after qe governor after governor has come out and said it may be 2016 before we see rates rise. see slow growth. 2.5-3 percent. we will see another lead. >> you have not changed at all. you said that back in april. you see that growth -- growth is going to continue, but it will trudge along. >> it will be slow. it is what you are seeing in the markets. they're continuing to grow higher. any news they don't like, it's a good scenario where you get gdp inflation. no it gives the fed a lot of room if they want to push up the interest rate increases. evaluations are extremely compelling. among the cheapest they have been in 60 years. >> are you concerned that the u.s. could dip back into recession in the next 12 months? >> we don't see it.

we look at the key sectors, housing, it took a pause because of the bad weather we had in the winter. >> that is janet yellen's major concern. housing is still not back where it should be. >> that is starting to move up again. we think now that the weather is back to normal and you see interest rates fall this year, we think you'll start seeing housing pick up. you look at autos, they continue to move up. getting 17 million a year. consumer confidence remains pretty good. we had a week number today. retail sales was weaker than what we thought we would say. ,ll in all, you put it together things still look pretty good. >> we are seeing consistent job growth, but not in the higher wage and income positions. can that real income growth remain flat? ofk about the implications

that for economic activity and for an increase in good paying jobs. >> you are seeing a lot of not at the it's lower income level. would you really want to watch his capital spending. capital spending has been lagging. we have not seen the boom. normally five years and way recovery, you start saying capital spending regaining -- is mrs. all the severe recession -- businesses solve the severe recession. >> is this economy going to take off '? >> to get to that 300,000 a month, you need to see the fed start trying to ramp up interest rates. you have to see capital spending growth. have not seen it. the level of interest rates are so low today that you have corporations earning zero net cash and you could borrow money

at 14%. we have seen 1 trillion and deals this year. in thea deal last night internet space. a high multiple stock. you'll continue to see a lot corporate treasurer is saying, rather than zero on cash -- i would rather be buying the building. >> i have less than a minute. world bank lowered the global economic outlook. cited rebalancing in china. what does that mean about the soft landings that you were predicting for china? >> we still see that. bc china growth in the seven range. the small and medium businesses continue to expand. there is little inflation. china seems to be doing all the right things in terms of structural reform. we see 7% growth in china. we don't view that as a problem going forward. >> a much longer conversation. hope we can have you back soon.

gary black, good to see you again. thank you very much. still ahead, the scoop on doing good and turning it profit. i will speak with the ben & jerry's cofounder. bottom line continues in just a minute. ♪

we wanted you to know that bloomberg is the only business news service being offered on amazon fire tv. if you missed any of our interviews, you can now watch them on bloomberg on apple tv. it features live streaming and on-demand videos. we are coming up on 26 past the hour. that means bloomberg television is on the markets. no --hyman,

the 13th. friday it looks like we are seeing a bit of game today. even though there is still the situation in new york that has been pulling -- pushing oil prices higher. we did have intel coming out with a more positive forecast a on-demand for business pcs. that seems to be giving a sentiment list to some sectors. -- sentiment left to some sectors. according to fine a person familiar with the talk. prosecutors actually broke off of the bank earlier this week after city offered less than $4 billion. the justice department may file a suit as early as next week. banks thene of eight justice department is investigating for allegedly misleading investors over the quality of bonds backed by mortgages. we have seen this tactic in these other cases where banks have offered lower sums to settle with the government.

the government has held out for these higher sums. we will have more on the markets in 30 minutes. more bottom line is next. ♪

welcome back to the second half-hour of "bottom line." i'm mark crumpton. president obama unveiled details of a minimum wage raise for those working under federal contracts. congress is moving slowly on the administration's request to mandate a new level of $10, $.10 10 an hour across the country. the potential beneficiaries if the hourly wage does rise. wage? earns the minimum president obama recently suggested raising the federal

and mum wage from seven dollars 25 cents to $10.10. the congressional budget office estimates that this would raise 900,000 people above the federal poverty threshold. increase earnings for low rage -- low-wage workers. less than 1/5 of that money will go to families living below the poverty racial. most of the one .6 million americans don't actually belong to what the census bureau defines as low income families. benefitshose who made don't fit low-wage stereotypes at all. only one in 10 of those workers teenagers.fected are more than one third of them are 40 or older. more than one quarter have kids. the earn half the family's income and one in 10 have read when college. this proposed raise could mean

from-- subtract the income the increased earnings per low-wage workers and the net boost to gdp would've barely top 2 billion. the net affect on the federal budget deficit would probably be small. at least, in the short term. >> joining me now. that is a lot of math. the other about surprising aspects of this minimum-wage demographic. can we even call it that? >> i think so. of the minimum-wage earners are teenagers. 27%.number was today, 55% of those are women. one of the surprising things for me was that, of the people, one in eight live in a household where the household themselves

collectively take on more than $100,000 a year. one in five kids in america would see a parent benefiting from this increase. there is a huge number of people involved in this. thank you so much. up next, making sure the road to rio is safe to attend. we ride shotgun with brazil's army to see what the country is doing to key players and fans safe. ♪

>> it is the company known for its cherry garcia and pecan ice cream flavors. ben & jerry's is also known for its commitment to doing good. one of the cofounders, jerry greenfield, joins me now from burlington, vermont. thank you so much for your time today. >> it is great to be here. >> your company has won several awards for undertaking socially

responsible initiatives. how can a company be socially responsible and also turn a profit? >> it turns out that being a caring, giving company is also good for the financial bottom line. >> how good? >> well, the company is doing great. one of the interesting things that ben and i have learned over the years is that, the more generous and more giving the company is, the more financially successful it has become. it is counterintuitive, but that is the way it has turned out. >> how were you able to convince investors that it did not mean giving away the store? you can still make a contribution to society and meet your obligation to shareholders? when we firstbout went public in 1985. at that time, we established the foundation for ben & jerry's as the charitable arm of the

company. which would receive 7.5% of the profits,-- pretax which was the highest percentage of any publicly held company. the investors went for it and i think they have done really well. everybody is happy. >> did you have to convince them? >> the hardest people to convince where the underwriters. the actual investors themselves were happy. it is a funny thing -- given the choice, people will want to be involved in activities that benefit the community. there is a general feeling that you can't do that and still be financially successful. but our experience is completely the opposite. it is true for a lot of companies. >> the immigration debate is heating up again in washington. you just talked about the ben & jerry's foundation. it has given grants to migrant

justice among other groups. how many migrant workers are employed by you and what does it mean for the local economy? >> i don't know the number. the migrant workers in vermont are essential to the economy. ofry farms are a big part vermont's economy. obviously a big part of ben & jerry's products. vibrant justice does a tremendous job -- migrant justice has been able to get a biased free policing policy from local and state law enforcement agencies. with the help of another nonprofit, the vermont workers center, they have allowed undocumented workers to take part in the universal health care that vermont is about to bring about. >> ben & jerry's wasn't always the economy -- iconic brand. you and your partner had a vision, just like many other

small business owners. how did you grow the company into the giant it is today? did you ever allow yourself to dream this big? a lot of years. it started 35 years ago. dan and i began with a small homemade ice cream parlor in burlington. never imagining it would be anything like it is today. we started in this old abandoned gas station. ofwas a combination high-quality ice cream, great flavors with big chunks of cookies and candies and a real community orientation. customers really respond to that. >> one of the issues being looked at, the minimum-wage. know thatbsite, you ben & jerry's every year recalculates the livable wage to make sure that it is keeping up with the actual cost of living in vermont. last year, your livable wage for full-time workers was $16.

what about small business owners who think that increasing the minimum wage would put them out of business? for a i can tell you is, company like ben & jerry's, it works. all of the full-time people get paid this livable wage. it does not seem like it makes sense for a business to be profiting off the backs of its workers if they can't afford to pay their rent or buy their food. >> was this something that you were always acutely aware of? that.grew into , i don't evend think we were paying ourselves minimum-wage, if that is possible. about thearned a lot role business plays in community. that business really is the most

powerful force in our society today. business needs to take the lead on issues like paying people a fair wage. wasust so you know, while i doing interviews, somebody just came over to the set and i have my small cherry garcia right here in my hand. >> thank you. i appreciate the support. >> he is one of the cofounders of ben & jerry's. joining us from burlington, vermont. a pleasure to talk to you. thanks for your time today. is time for today's latin america report. we are only one day into the world cup and there has already been some heated clashes between protesters and police. result hoping to avoid violence and rice they faced last year during the confederations cup. we met with police in the amazon ofy of -- the host of one the biggest matches of the cup, england versus italy. takes us on an inside look at how brazil is

working to secure the world cup in the final installment of the road to rio. >> these soldiers are preparing for an unusual battle. on the soccer field. brazil is hosting the world cup for the first time in 54 years. the country is not taking any chances. he will be keeping the peace here in manaus, one of 10 cities where the matches will be played over the next month. his troops have been training for more than one year to confront any number of scenarios. rowdy foreigners bent on destroying property. angry protesters.

anarchists, hostage takers and even terrorists. portuguese] >> brazil wants to avoid a repeat of last year's confederations cup in a series of rallies turn into deadly riots. >>[speaking portuguese] >> rio is used to big events with risk. for manaus, the security challenges all know. -- challenge is all new. >>[speaking portuguese]

>> like any big city, manaus has a command center to monitor streets and high-risk areas. it is getting a major upgrade or the world cup. $45 million of special funding for everything from state-of-the-art video to mobile surveillance units. 4000 more officers. helpeven have an app to residents make immediate contact with the closest cops. if the threat is too grave, the army is ready to roll in. >>[speaking portuguese] >> the challenge has just begun and it won't end with the world cup final on july 13. the olympics in rio are just two years away. that is your latin america

report for this friday. boston come a los angeles, san francisco and washington, cities reportedly still in the running for a possible u.s. bid to host the 2024 summer olympics. us endless hosted the 1932 and 1984 games. the other cities will be first-time host. the u.s. olympic committee will decide whether it even wants to try to host bill ebix. the last two u.s. candidates both suffered humiliating fourth-place finishes. new york for the 2012 olympics and chicago for the 2016 games that went to rio. when bottom line continues, looking to get away? there may be fewer airlines to deal with, but a new report says you have plenty of choices to save money. ♪

>> another recall for general motors or gm is recalling half a million camaros over ignition

switch problems. automaker says a driver's knees can bump the key and knock the switch out of the run position. that knocks out the power steering and brakes and could cause drivers to lose control. the recall affects nearly 512,000 chevrolet camaro's from the 2010-2014 model years. of airlineve years mergers impacted competition for air routes in the united states? not by much, according to a government study out this week. bloomberg's washington correspondent megan hughes joins us now to explain. how can this be? >> apparently, the rise of the discount carrier has filled in the gaps. .his is a report from the gao a report requested by congress. it covers 2007-2000 12 am looking at the 37 most traveled routes in the united states. the number of airlines providing nonstop or connecting service in

those markets with 5% market share or more went from 4.4 in 2007 24.3 in 2012. not a lot of change when it comes to the number of competitors in major markets. here is the reason why. the gao said a low-cost airline expanded quite a bit. the average number of discounters increased from 1.7 2.3 in 2012. low-cost carriers have provided more competition. >> any negatives they looked at? >> there were lots of negatives for consumers. not necessarily attributed to the mergers. have seen fares up by about four repor 4%. airlines are getting more revenue from fees. up tremendously in terms of revenue from 2000 and.

neither of those things can be attributed directly to the mergers. one thing we are seeing that mergers may have played a role in his comedian when the number of competitors is constant, we are still seeing a decline in the number of flights and seats. that is true as you get to smaller and smaller markets. that can be attributed to the mergers and other factors. getting ready of redundancy, dealing with fuel costs and airlines trying to restrain capacity to keep those prices higher and keep the demand up. >> isn't surprising that the mergers have not made a bigger change when it comes to competition? left out ofr was this report. the report covers the mergers that took place between 2007-2000 well. -- 2012. it did not include the american -u.s. airways merger. that was not included. it may be too early to see the

impact of some of these other mergers. ♪

>> get the latest headlines at the top of the hour on bloomberg radio and on your tablet and bloomberg.com. that does it for this edition of "bottom line." i'm mark crumpton from new york. thank you so much for joining us. on the markets is next. have a great weekend and a happy father's day. are coming up on 56 past the hour.

bloomberg television is on the markets. i'm julie hyman. total -- untiln the closing session. not a very large one. we have been talking about intel coming out with a higher forecast that has helped sentiment to some degree. we are watching oil prices because of what is going on in iraq. nymex crude is up slightly today. it has had more of a winning week. not really indicative of the bigger move we have seen. as oil trade higher, the etf is also going up. seeing increased volume as well. with a look at how you can play those rises in oil prices in both short and long-term is our etf guru. eric, it is a tricky thing to do when you're looking at a conflict like this entering two game oil.

-- to game oil. is themost liquid one uso. it is very liquid. people like it. it is slightly more tied to the u.s. market. you think about global come on one of the etf's that is not as popular that may be more --ropriate is united states it is more tied to the global markets. at this. conflict last year and -- dealing with that bm o the issues of that, that might be the best one. >> you are wanting to get less volatility, you would go with uso? >> exactly.

they are equally as volatile, but uso -- both of them will go up. raditionally speaking, bmo is more tied to global. the energy sector is having a great year. taking in $6 billion. most people reach for xle. i have an alternative one, the fidelity energy sector. this one is the cheapest and deepest of the lot. charges .12% per year when it attracts 166 companies. >> this is global. xle is just u.s.. xle.'s a competitor to xle is a fine product. the fidelity one is growing. fidelity is not going anywhere, so they are ramping up. it almost has $1 billion in

assets. the other one longer-term is the ishares global energy sector etf. this one is 50% u.s. and 50% of companies outside which included bp. if you want to cover all of your bases. >> a lot of different choices there. thank you so much. quite an up week for oil. street smart is next. ♪

>> ok, we have a key measure of inflation, unexpectedly falling in the month of may. the fed may keep rates lower longer. i am trish regan. it's friday afternoon. "street smart" starts now. here we are heading into the close. welcome, everyone, to the most important hour of the session, 60 minutes until the closing bell. priceline steps