>> we are approaching 26 past the hour, so we are on the market. we have been focusing on the markets all day. we're seeing a selloff across the globe. now.&p 500 is down and not a huge selloff. the nasdaq is down 1%. this all started over in europe because of a default connected to portugal's second-biggest bank. the euro stock is falling as well. daq is down 1%. big losers over in europe. stay with us. more "market makers" after the break. ♪

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. you are watching "market

makers" on bloomberg television. i am erik schatzker. >> i'm matt miller, stephanie ruhle is all. breaking news out of europe, a diplomatic rift between u.s. and germany. the top u.s. intelligence officer in germany has been expelled days after the arrest of a german man accused of spying for the u.s.. hans nichols has more from berlin. >> the way the language is written, it feels like it was written in 1978. this head of the u.s. intelligence service needs to leave german soil. phrase.the it is difficult to underestimate how angry germans are about the variety of espionage allegations. yes, there was an word -- edward snowden. a potential double agent apprehended by german authorities a week ago. he is talking.

raid recently, another on another potential spy for the u.s.. you will know things have gotten really bad over here if they expelled the u.s. ambassador. you'll know things are almost irreparable if they give edward snowden asylum in germany. that is something that a large section of the social democrats, certainly on the left side of the spectrum in germany, something they call for. asylum for edward snowden outside of russia. when that happens, this relationship needs some serious tending to. >> what is the feeling on the street? for years.berlin americans were beloved until march 2003 when bush invaded iraq. in an instant, we were unwelcome. what is the feeling on the streets in berlin? polling data shows that germans trust americans and trust the u.s. government less and less.

it has been a steady progression that started with the iraq war, friendly, video non-war. it has been going downhill since -- frankly, it started with the vietnam war. it has been going down since. that goes for u.s. intentions and ukraine and for a potential free-trade agreement. have implications. it is going to be very difficult for angela merkel's government -euconsummate a u.s. free-trade agreement given the amount of poison in the atmosphere between the two countries. diplomats have their work cut out for them, this will take some time to heal. >> part of the problem is that the information flow is ongoing in one direction, in favor of the germans and against the americans. that it is notve really a two-way relationship here? conductmany does not espionage.

>> what are they up to? >> the german nsa is building new headquarters, they are trying to build up. that is the obama response, all countries do this, that is why you have a security agency and an intelligence operation. germans say you do not do it to allies. the earnestness with which they leadss their indignation me to believe they are shocked that germans are being spied upon by the u.s., they do not understand. >> hans nichols from berlin. germany addons with to a long list of issues for congress. peter cook just wrapped up an interview with one of the top republicans in the u.s. senate, ohio' is rob portman. >> he did not know a lot of

details about what is happening in germany, breaking from hans. he knew enough to weigh in. former u.s. trade representative, aware of the importance of the economic relationship between the u.s. and germany. i asked about the rising tensions with germany and a few other issues as well. importantedibly relationship, germany is a big player in the eu, they are allies in trying to push back putin's aggression in the ukraine. they are allies in terms of the middle east, helping resolve issues there. on the economic front, germany is important. we have got to strengthen these alliances. is frustrating to see us, not just not being able to deal effectively with our enemies, which is certainly the case with regard to iran, syria, north korea, and some of our best friends in the world, including the japanese and now the germans having a difficult time getting

on the right track. we need to have germany as a strong alley across the board. that the u.s. will immediately reach out and figure out what the ratio is -- what the issue is. all countries engaged in espionage with one another, there is a way to do it in a way where it is respectful of people's sovereignty. >> foreign policy and the vested question, what is happening at the u.s. southern border. the president is asking for $3.7 billion to help bolster enforcement there and deal with this flood of young immigrants coming into the country. are you prepared to support what the president is asking for? >> we need to do both of those things, have a humane response to what is happening on the border and ensure that the border security is enhanced. my concern about it is that i do not know that it comes with a plan. the president has yet to give a major national address that would be picked up

internationally that i have been calling for. saying this should not continue, to send a message loud and clear countriesents and like guatemala, el salvador, honduras, sending these kids unaccompanied to the u.s. make it clear that our policy is not to accept these kids as citizens. and in the misunderstanding is in addition that they could bring their families up. we do have an immigration system and we do have laws that will be enforced. toould be more inclined support it if it goes along with a strategy and a plan to keep it from happening. we need to stem the flow in order to deal with the aftermath. >> the president making the case, in texas making the argument for competence of -- for competence of -- for comprehensive immigration reform, you did not support it. >> there is nothing in the immigration policy he supported that came out of the senate that

would have kept this from happening. >> it would have provided more guards along the border, more border patrol. thehey would have accepted kids just as they have accepted the ones that came in this time. it is not like they snuck through the desert. these kids were accepted because of a lack of enforcement of policy. i think this system is broken, illegal and legal system. it should be fixed. it has got to include enforcement. my big concern was not just the border enforcement, which i believe needs to be enhanced, but also in here your -- also interior in terms of the workplace. unless you deal with that magnet of the workplace you are not going to have an effective immigration system. i am prepared to work with the president and others in congress to come up with a better answer on the border immediately. i am willing to work on immigration reform, i think the system is broken. it has to include enforcement. if you do not have enforcement and place, the rest of it's not going to work. gop convention

to cleveland in 2016, can you bring lebron back as well? >> cleveland is a great city. the new cleveland has an opportunity to be viewed by the entire world. it is going to be an opportunity to showcase some of the great things about cleveland, beautiful lake. great new neighborhoods that have been improved recently. restaurants and museums, the rock 'n roll hall of fame. we have got it all. look forward to having you there, peter. on lebron james, tyree irving could use a little help. i hope he agrees to come back. we will know in the next few days. >> well, peter. the senator weighing in on the possibility that lebron james will come back to cleveland. you do not hear that everyday. in ohio andstory across the country. you can be sure it is on rob portman's radar and a lot of ohio politicians. clearly, the host of things on

rob portman's plate and converses play, including tensions with germany, the gridlock that we see in congress right now. erik, the issue about immigration is a tough issue. not just for republicans but for the president and democrats. italy wants to vote on this $3.7 billion to bolster money along the border. this is an issue they did not want to deal with in a midterm election year, democrats see this as an opportunity to raise the issue of comprehensive immigration reform and put republicans like portman on the spot. >> did you talk about the controversy over the export import bank. the ceo of delta airlines has complained that the export import bank, i financing the sale of boeing jets to foreign airliners like etihad or emir ates, is hurting american interests like american airlines. >> i did press senator portman bank and-im

reauthorization. a lot of republicans are prepared not to reauthorize it by the september 30 deadline. there is an effort, a bipartisan effort in the senate to try to restore reauthorization. what we heard from senator portman is he is prepared to back that but he needs to see reforms. he's a key member of the senate to be supportive of it, hear more of his comments coming up at 2:00 as well as comments from rob portman on the possibility he might run for president in 2016. peter cook., rob portman, from ohio. coming up on "market makers," streaming shows like oranges the new black take on the old school tv networks. we will see who did better when it comes to emmy nominations. ♪

>> this year's emmy nominations are out. there are some clear winners, hbo's "game of thrones" walked away with 19 nods. scarlet fu has inside. the shows with the networks, the big winners. >> cable has been trumping all the broadcast networks. hbo won 99 nominations. you highlighted one for "game of thrones." netflix, which came onto the scene last year, walked away with 29 nominations, including five in categories that we care about, like best drama, comedy. isrange is the new black" considered a comedy. >> is a comedy? >> i got it. >> best actress in a comedy

series for taylor schilling, who olivia sterns -- >> piper's doppelgänger. >> she was also nominated. interesting stuff. it is interesting that the hbo shows are still produced in the old fashion way. they are so good that you cannot stop waiting for cindy to watch them. >> they have linear television and they spend a lot of money. they are winning the awards. netflix has looked at hbo as its main competition, trying to be more like hbo. it surpassed hbo in terms of number of subscribers domestically and is hoping to build on that. it is eyeing something like 60 million to 90 million subscribers in the u.s. above 35 is just million. compare that to where it started at the end of 2011, 22 million. >> the first netflix original production was a great show about the guitar player for the

bruce springsteen and e street band. he played a mafia guy who goes to norway. [speaking norwegian] >> what is interesting about ,etflix, and 2007, the emmys the organization that puts the awards show together, amended their rules to allow internet service providers to submit programming. a year after that, we got a nominations for internet service providers. last year, 35 nominations in total for internet service providers. this year, 35 once again. >> thank you, scarlet fu. coming up on "market makers," he broke cleveland heart before, is lebron going to do it again? the latest on the nba star's big decision. ♪

>> you can go home again if you

are lebron james. you can go wherever you want. four years after famously spurning the so-called steak by the lake for south beach and miami heat, lebron james might end up in cleveland again. re-sign withstill the heat. his choice has implications for the nba, not to mention miami and cleveland. andrew brandt runs the jeffrey murat center for sports law, he is also an analyst for espn. can it the understated what lebron's choice means right now? >> we're talking about the most important person, not player, person in the nba, if not all sports. you have to understand how rare this is. for a guy who is at the top of his profession to be a free agent at the height of his career.

this does not happen. in the sport i cover most, the nfl, you rarely see this. a little bit with peyton manning but he was coming off a neck injury. he holds the nfl in his palm, there are literally dozens of queue waiting to see what happens. >> i have been reading local coverage, it seems like they want lebron back. dan gilbert would do this and wants to talk to him again back. understand why you would want such a trader, such a benedict arnold who publicly humiliated your city to come back. why would they take him? know if yourn't view is shared by all ohioans. seems like there's a lot of excitement, anticipation building that this could happen. >> how easily we forget. >> there were burning jerseys,

you remember all that. the motion tends to fade, maybe not with you. a motion tends -- you motion tends to fade. i do not have inside information but it appears that it is down to two teams, both of which he has played for. the miami heat, where he has played the past four years, and the cleveland cavaliers, where he played the first seven years. story, lebronas a james has to go back to cleveland. every media outlet seems to be saying the same thing. if you does not go back to cleveland and breaks the city's heart again, will he be the most hated man in american sports? how you view us. and society in america, people with talent have options. they have options to do what they wanted. he signed a contract with the heat four years ago, it was a six-year contract but it had a term in the fine print that he could get after four years and

survey his options. that, to me, is what america is, is what business is. people with options have leverage and can take advantage of that. very few athletes have this ability. he is one that does. nots going to make a choice based on money. how many times do we say that? there is a maximum contract in the nba, obviously he will get that. he will get it either from miami or cleveland or if there is a mystery team involved. this is not about money. this is about where his heart is and where he wants to play, who is on the team, all those things. so you have the aspect of him going back to miami, where they consecutive four championship series, or going home to cleveland, where he built a franchise years ago. >> the money might not matter to lebron, it does matter to cleveland and dan gilbert. this signing lebron for the maximum allowed by the league, is it a good deal for cleveland? >> i think so.

a 22 million-dollar excellent salary -- maximum salary. the value of the asset increases appreciably more than that. think about the cleveland day and tomorrow or the next day, potentially with lebron james. the asset value -- >> what about two years from now when lebron goes and does this dance with miami and cleveland or another city again. he could. i don't know where he is going to sign. i am sensing just threw the tea leaves that this could be a short the, maybe one or two-year year deal. everybody is pitching lebron. if you signed with us, this and that is going to happen. goinglebron says ok, i'm to sign with you, let's see if what you say happens really does happen.

this type of team is put together, whether it number one draft pick andrew wiggins turns out to be the player everyone expects him to be. he can survey that and not commit long term. he has leveraged to do this again but that is business. >> how does dan gilbert go back after saying this is a cowardly the trail and you are a horrible role model for children. both of those things true. and get lebron to work with him again? >> that is the big challenge. we know the money is, that. whatever the home poll is, whether his wife wants to raise the kids in cleveland, whatever. to me, the challenge is the owner. him oner just dissed the way out, he reacted emotionally, he put up that letter, which is now scrubbed off the website. if they can overcome the relationship issue, that is a big problem. pat riley of the heat met with

lebron in las vegas yesterday, that is a relationship issue as well. forward?going to go it is not about the money, it is about the people and relationships. if you believe the recruiting pitches, if you does not believe them fully, he will do a one year deal. >> what is your gut, cleveland or miami? no inside information, my gut tells me he's going to go back. cleveland, ohio. >> thanks for joining us. the director of the jeffrey murat center for sports law handling of the. "market makers" is back in two minutes. ♪

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. overheated, all those

multibillion-dollar valuations might have some investors saying it is time to stay on the sidelines. how about overregulated? president obama calls it his year of action, republicans charge it has led to $100 billion more in regulatory costs. the are over the web, internet devastated travel agencies, the asians who survived to not need large -- the agents who survived through not need large numbers of clients, just luxury travel. you're watching "market makers" on bloomberg television. i am erik schatzker. >> i am matt miller, and for stephanie ruhle. time for news. selloff on wall street, stocks are falling for the third day in the last four. 90 points now, the s&p 500 down about 10. both indexes extended last week at -- ended last week at all-time highs, we are not down

from a low point. yesterday we heard from the fed that policymakers are concerned and investors have run complacent with the economy and the vix proves that well. a bright spot for personal computer sales, down just 1.7 percent. harper demand in the u.s. and europe made up for declines in asia. rose 7n the u.s. percent, personal computers, the box on the screen used for years ago. nike shut out of the world cup final. when argentina and germany face off sunday, you will not see a swoosh on the shore. both teams are sponsored by adidas. nike's last two hopes were brazil and the netherlands, nike will not renew its contract with man u, another big soccer team that will not be wearing a swoosh. >> nasdaq 5000?

not yet. tech stocks might not be back to highs, but vc is. sinceg the most to work 2001, an all-star vc panel will take a look and ask what's next. inh stein, a partner at vfj silicon valley is with us from san francisco. ed zimmerman is chairman of the tech group at lowenstein sandler, what are the five most active law firms and venture capital in the u.s. and then a general partner at spark capital. good to see you. where should we begin the conversation? $14 is a lot of money, what does that say about vc? market to be end. investors across the board are chasing yields. what we are seeing is a lot of traditional public market

investors dipping into the private markets and others that have raised large funds looking to get capital to work in the biggest and most successful companies. is one of thech significant drivers of economic growth in this country. you see people with capital trying to chase that growth. frome seeing money flow in the earliest stages, the angels and super angels to epic proportions. the term is overused, but the unicorn club. everybody from hedge funds to money managers. >> to find a unicorn club, there are people who have never heard that or not in the way you mean it. >> it is a term of art. the companies that have crossed that billion dollar threshold in

violation and are still private companies and attracting private capital. >> a company i have been talking about lately is uber. in their last funding round, $17 billion valuation. they have really no assets. right now, they are paying drivers commissions to be able to compete with lyft and the super low prices. >> you have that inverted, lyft is trying to compete with uber. uber has lots of revenue, they have opened up markets. >> i mean they do not own their fleet. >> that is example, that is part of being -- that is great, part of being thin. one is an example of what analyst said would happened back in the spring of 2012. he said one of the consequences was that private

investors would read more valuation on these conference because companies were saying let's go public later, not as soon as we can. another illustration of that phenomenon, josh happens to be an early investor in uber. >> before we take it to the other josh and san francisco, ed zimmerman has been so busy signing vc documents, look what happened to his arm. youan i jump in on uber, raise a point about barriers to entry. the lightness of their business model presents some complexities. drivers are effectively mercenaries. >> a lot of drivers are working for uber and lyft and whoever else. question that raises is pricing power. does uber have pricing power over time or is a race to the all theseterms of

various competitors flooding the market. without proprietary barriers to entry -- >> we should remind viewers they have just dropped prices in new was to match what lyft going to offer, but they are only in brooklyn and queens. >> i am a big uber fan and customer, i think the company is going to be worth a lot. but people overestimate how big the barriers are to that business. we are seeing it by virtue of the fact that at that stage, the company is dropping prices rather than pushing them. >> josh stein, time to get a word in. >> uber is a great company. as you pointed out, the funding is about 10% of the total in the last quarter. what you are seeing is those large rounds are really displacing ipos. tech entrepreneurs have increasingly thought of ipos is being less attractive, at least until their bitter. -- they are bigger. -- they are

smart private investors are feeling that role. >> it deprives investors of the opportunity for a company at an early stage of growth and to enjoy the upside that comes with the lights of google and netscape and others. marketing at ae, later stage makes it in theory a safer investment with less potential downside. >> one of the things that is going on, it is not so much about uber, which is like a moonshot company. it is about all of the companies lots uber that are raising of money. one of the exciting things to come out of to the insights report that we are talking about, it showed how buoyant the venture market is. it is really robust and right here in new york, for instance, it is incredibly robust. we just had $1 billion deployed in venture for the first time in new york. this is the 10th straight

quarter the york has bested boston as a mecca for ventures. upsw startup scene, start have become primary culture rather than a subculture as they were a decade ago or five years ago. that is part of what is exciting, the culture of innovation. >> great news for the country. the startup phenomenon, the entrepreneurship that is taking up this fantastic for the economy. >> 100%. we are all the believers in this sector and we are putting our money where our mouth is. there is one downside here, one issue that i feel compelled to point out. which we do not talk about when we look at aggregate funding levels, which is prices. is, with thaty much money flooding into the venture capital market, it inherently pushes prices up. there is always a push-pooled between an object investor, the more money at once to come in, the object or once -- the under

par -- the entrepreneur wants. prices rise. in our portfolio we benefited from it but it also hurts in terms of new investment. we have seen prices rise in terms of what these companies trade at. they need to grow into these valuations. whatsapp gets $19 million and everyone else who has a center with a lot of money to. >> mo is talking about a lack of discipline. do you see a lack of discipline? >> i see an increase in long-term thinking, whatsapp had one billion users. you can count the businesses who have anything close to that. >> until they try to make money, they have a billion users since it is free. when they try to make money, the kids are going to switch to something else. >> i'm not sure that is true,

whatsapp does charge after the first year. now that they are part of facebook sega system, i would bet they are going to be able to monetize. the broader point is that the holding startups takes long-term orientation. we turn to work with companies for five years or 10 years. you have seen the ipo market become less and less market focus and more trading focus. you are seeing structural innovation. entrepreneurs like mark zuckerberg are preferring to raise private capital from investors that have a longer-term orientation than what they see in the public market. >> you were involved in boxx. >> we led the first round of investment there and i've been on the board since 2006. >> you and your other venture partners put in hundred $50 million a very late stage a companyto boxx, that has already filed for an ipo.

pretty unusual to see venture capital funded companies raising money after making ipo filing. wasfact that -- and that just mentioning that maybe all the venture capital investing suggests that the startup environment is healthy in america. is it, necessarily? you are putting $150 million into boxx that you could direct to other companies. >> capital seeks return, a company like boxx that is growing at a significant rate market, you a large are seeing investors step into the role of a public market. you are seeing counting teams of the company's preferring to raise from the private capital versus public markets, which has been very volatile of late. in the second quarter, you have tremendous volatility and a high-growth sector. that had nothing to do with underlying fundamentals. company earnings were on interrupted, really just trading dynamics of the risk on, risk of trade. if you are a tech ceo trying to

build a long-term company is very attractive to not have to deal with that kind of volatility. >> we represented josh in one part of his boxx investment, it is a great company. it is not uncommon to see people once a company is almost at the ipo point. that happened with greater frequency. >> we have seen late stage stuff but the investment after the ipo filing. >> these funds have raised money that is getting ready for a pocket of growth as well as startup money. >> this is capital that is raised for a different purpose. tpg is ad that, private equity firm and a public market investor. i think, you know, you have to look at tpg as trying to, they

box'sking a bet on ability to go out and have a successful offering. was trying to raise some capital to give them flexibility in terms of when they went out on what terms. tpg was making a bet they would earn a solid return. >> is it a healthy thing to see, look, private equity has invested in mostly mature companies. is a good to see private equity moving -- i don't want to say down. >> an investor is an investor is an investor. some focus early, late, public, private. the reality is, as these companies get bigger and bigger and have more fundamentals that you can evaluate as a public market investor would or a late stage private equity investor would, as they get the numbers

from the company and do analysis -- they are in a position to make a calculated investment. >> what about a start up, the entrepreneurs out there. the preferred route, to go public? do they want mark zuckerberg to pay $19 million? >> they want to build an enormous company, their goals are audacious and they are guiding companies like facebook, uber, and twitter. whether they go public or stay private and do really well, it hardly matters. the ipo used to be a holy grail. i don't know that it is now. we have seen that you can be a successful, enormous company that is profitable and not yet go public. >> the best entrepreneurs are concerned about the business and creating something rather than -- focused on building a business that is long-standing. longer a necessity,

entrepreneurs have other options. if you look at uber or box, those companies have 1000 plus employees and hundreds of millions in revenue. ces, --portfolio, spa a massive company, they're going to stay private because they have the option to do so. >> josh, thank you for joining us. all-star vc round table. josh stein is a partner at dfj in san francisco. government is at listing taylor will be here for the full hour. withsocial media company no revenue and no assets. worth more than $4 billion. which one it is. >> the white house calls it a year of action, republicans call it a year of way too much regulation. a look at what the gop says is the cost of the president's

executive action. ♪

cynk technology calls it a social media company. unknown until 24 hours ago, some itsites highlighted over-the-counter traded stock. it has one employee analysts its phone number -- it has one employee and is listed phone number is not working. shares were up more than 25,000% over the last two months. julie hyman has been on the phones all morning to try to get to the bottom of this. with no working phone number and one employee, over-the-counter shares, seems like it is a difficult task. >> i just reached a man named who previously was the ceo of the company. >> cfo -- >> and the treasurer, and the

secretary. the time of its f1 filing in january 2012, he was listed on the documents as all those things. he says even at that point he was not associated with the company by the time the shares started trading. he professed surprise that his name was even on the document. the man who apparently succeeded him, marlon sanchez, whose number is also not working. personal number by somebody formerly associated with the company. carter says he has never met the guy. i said, have you met the man who apparently founded the company, again, according to the f1, a guy named john. no, i've never met him. it is completely baffling. what is cynk, anyway? when it was begun, it was called obuzz, a social media network where you pay for act.

you seeite introbiz, this, a social marketplace. you can pay to be connected with areas hollywood celebrities. that would not seem to work. other professionals who are just people who are associated with a firm called world talent. have signed up to this thing. there are a lot of smoke and mirrors going on. if you look at how the stock has traded, the flow of it is about shares.ion it did not trade anything this year, april, 180 shares, march, 2000. and on one day. 400,000 shares at one point. >> the shares kept going up and up. volume,hite line is about 100,000 shares.

of spark capital, what do you make of this? >> are there any major holders, 5% holders. thearlon sanchez, listed as current ceo, and jack of all trades, is the largest holder. there is an 800 number in belize. >> what is trading on a daily basis, less than 100,000 shares. >> it had been 400,000 at one point. >> anywhere between .5 million and $1 million moving around, it could be one or two people manipulating the stock and holding on. >> that raises some big questions. >> how do they get out? >> is a shell company, it has never had any assets. the'm looking at a 10-q for

quarter ending september 30, 2013. this company, a sensibly, has been in business for five years, it hasich period generated zero revenue and racked up operating expenses of stock-basedpaid composition, presumably, to marlon sanchez of $1.43 million. ownership? >> i talked to the auditor of the company, a gentleman in florida. he last heard from them back in october 2013. the latest filing that you mentioned, one of the recent filing said they were not going to report anymore. the auditor said what is unusual about that is usually companies that do that go away or they list on the pink sheet. 25000%. go up is volatile.on, it bigger than domino's, aol, zy

nga. >> zynga still exists? >> yes, and it is worth billion.3 sec hasn't been paying attention, they will start. >> a fascinating story that should be on gawker still. too crazy. >> when i talk to the auditor and he saw my 212 number, he said i kept thinking the sec is -- >> as far as i audited the company. sec!am waiting for the bed for zero and zero to not correct. >> if you add zero and zero -- >> you get zero billion r $4.5

cynk, tweet us if you are trading the stock. >> time for "on the markets," let's take you to berlin and hans nichols. hans? berlin, things are fine. the selloff is in the periphery countries. a massive amount of fear out there on just what is happening. it is all started because of portugal's biggest bank, a company associated with it missed one of their payments. it was down 17% on the day. shares were suspended pending announcement from the bank. look at the yields on spanish debt, the 10-year note up some 21 points. a remarkable story, also important to remember that the central bank, mario draghi, is

still very much on war footing. his pledges to do whatever it takes to save the euro countries and save the strength of the euro. the question really is is this a one-off pickup or is there serious fear in the market, is this the beginning of something more serious? >> the question is about whether mario draghi can do anything, in provided the fed has support but it was the treasury that organized the bailout for the bank, not the central bank. we will see how that plays out. sorry, make your point. >> at the end of next year, the ecb will have the authority. >> that was fast enough, back in two minutes. ♪

. .

>> live from bloomberg headquarters in new york, this is "market makers" with erik

schatzker and stephanie ruhle. >> you are watching "market television.loomberg >> stephanie ruhle is off today. guys here on the desk talking about right now president obama. he has made going at it alone the theme to this year, signing more than executive actions to get around a gridlocked congress, but there is a cost to executive branch action. a republican-aligned group has seized on it. phil mattingly has an exclusive on their finding. >> that's right. much,illion -- that's how according to american action for him, has been spent so are this year of executive branch agencies. first, this is not a stunned the 40-plus executive actions the president has taken -- this is the 40-plus executive actions the president has taken.

a lot of actions are big things the democrats have pushed and are firmly behind, but the results of those -- the energy department -- more than $50 billion in rules so far. epa, $38 billion. the treasury department, more than $4 billion. the obama administration is going to continue to push forward, but it's going to have a cost. republicans around d.c. and around the country are going to seize on that. >> of course, other things, by the way, have a cost we are not factoring in. for example, pollution, has a cost on our climate. i will leave that out for now. >> let me ask you a question about the numbers. the american action form has put them together. tough toa little bit know how accurate those calculations are? >> into resting thing -- each agency, when they do rule makings, have to estimate on their own what the cost of those will be. they also have to estimate the

number of hours that will be spent trying to put those rules in the place. these are coming from the executive branch agencies. >> so all they are doing is effectively the math and tallying it up? >> exactly. these are all in the public register, so they have gone through and compile these numbers and taken a look at it. i think the key thing here is there's a lot different ways to calculate this. of the big issues right now is these are the type of numbers that get taken and used in campaign ads. this is a policy group for republicans that is basically eating them solid material, accurate material that they can take and use against democrats in terms of red tape or government overreach right now, and i think that is the use of this, and that's where it becomes problematic for democrats. >> the supreme court has sort of bit governmentle overreach. what effect will this have on the white house? will be president continue this kind of executive action? the white house is

thrilled to have this debate over a president acting against a congress that is not acting. i don't think they are going to pay much attention to these types of numbers. all you have to do is listen to of president in every one his public stocks over the last few days. he is hammering at home he is willing to act. take a listen. >> i'm not going to wait. not going to wait. [applause] why i have taken a bunch of actions this year, just to help working americans. while still reaching out to congress. what i said to them is, "if you are not acting, i'm going to go ahead and do what i can." >> white house officials i have talked to love this contrast. they love that house speaker john boehner is threatening to sue the white house over these actions. they are not going to back down. if anything you will see them

ramp up over the next few weeks. >> so much for checks and balances. >> my question is where are the checks and balances? how far can the president go? how far can he take this? >> he can do some things. as we know, the speaker of the house, john banner -- john boehner has been outspoken against the administration against the use of executive action. >> the real decision to come out of this is how far you can push executive action. the suit, when it actually happens -- they have not actually outlined which actions they are going to sue over yet. >> still all talked. >> i think it is a brushback. they are saying they have problems with the way the white house is acting.

the white house does not take any of these actions without a reading from their legislative council, so they feel on solid legal ground, and if you look at the action, they are fairly limited. they are limited in scope. that said, as you point out, the supreme court, big ruling on nominees a couple of weeks ago. they are willing to test it. how far that lawsuit goes is the big question now how much if its just optics or if it will really move. >> phil, thank you very much. coming up, transforming the travel industry. one of the new crazes is the river cruise. so german. ♪

>> it's time for hot money here on "market makers," looking at businesses that thrive in the summertime. we are talking about virtuoso, a luxury travel agency that boasts exclusive services and products. the travel industry plummeting dramatically since the mid-1990's, how is a company like virtuoso projecting an 15% increase in revenues this year? the ceo joins us to explain. industry -- incy saw a travel agent the other day at a gas station. knows that- even she

she uses the web. what do you do that is different? >> that's funny, given that we are doing 12 point $5 million in transactions. >> first of all, we are not a travel agency. we are a travel network of independent agencies. probably best way to explain this is if you follow what happened to us, it is similar to what happened to stop rocher's, where there is this massive move online, but at the same time this happened, there is something people do not think about a lot because it is fragmented. airing that same time, we saw the largest growth in private because of thent rise of wealth around the world. it is obviously a win luxury world travel network, but we always say it is not the value of the trip but whether you value the advisor. we are a big reduce or across

all the luxury stuff, but we are also doing a lot of middle-class and good business like that. >> i think it is quite interesting. we had big travel interests, and spend a lot of time looking at this category. operatingther friend more in the high-end and doing terrific business. what we have seen in the market is this move toward experiences the mass affluent is generally looking for experiential luxuries rather than just physical luxuries. this plays right into it. the analogy to the stop rogue was quite interesting. -- the analogy to the stockbroker is quite interesting. really good job questioning the validity of the private wealth manager and what they are actually providing to you and the fees they take for it. for the foreseeable future, you have a good is this ahead of

you. the question will be how you innovate in the future as the web continues to get more and and sophisticated packaging. >> during the financial crisis, we looked at ourselves and said that we are travel agents selling luxury travel. not a good place to be in 2008. we trademark something called return on life. i don't come to you and say, "i just want to book your travel as your travel agent." we talk about a return on life advisor. why would you have a wealth have a in your life to conscious strategy over managing your financial assets but not have somebody that you collaborate with to help you have a conscious strategy on managing your most valuable nonrenewable asset? >> the interesting thing is it's a much less frequent purchase. managing your money is an ongoing activity, but kind of more akin to an interior

designer or architect. you do not buy or do a house every day or week or month or even here. travel, you do a couple big trips a year. you're not an expert, and you really could use some help landing it. >> what do you charge for it? advisers, both professional fees and commissions. it is very transparent with the clients. we are dealing with a lot of the most sophisticated best travel -- >> that is important. transparency was never an hallmark of the travel industry in the olden days. >> it's still not. >> you never knew what the markup was on the products you are getting and never knew what the built-in fee or commission was. >> for example, when you are doing what is called for an incentive travel, it's all broken down. in some cases, there's time to go fees, and we are very open about the fact that this is how

we get paid, right? we do get paid commissions. >> suddenly, i don't care how much it costs. if i say i have a week to burn and i want to do something this summer before the summer is over, what should i do? >> one of the hottest trends right now is river cruising. we were talking about it. i heard you say it's very german. >> my parents are on a river cruise right now. >> there are so many different varieties of it. small amazon ships. all these amazing things. the other thing that is very hot in the summer is just the evolution of multigenerational travel. basically, today, we are finding both the boomer parents and grandparents are taking their kids on vacations, not only for the bonding and relaxation, but really to give their kids a leg up, wanting them to be global citizens. i had a financial advisor that's a good friend of mine who said, "you know what i want to do?

you don't have to sell me on family vacations, but i want to have a conscious strategy that when i have invested in these vacations that when my kids graduate from high school, that i know they are global citizens ." >> everyone is looking for a return on their investment. >> exactly. >> that's fascinating. >> what was the last vacation you took? >> my last vacation, i was in buenos aires. lovely city. >> i was in paris with my wife. >> big trend. >> you've got to take care of the wife. >> thanks very much for joining us. very fascinating story. >> will be back in a moment or a few final thoughts. this is "market makers." stick around. ♪

of final a couple minutes to share with our guest host for the hour, and i want to take our conversation back to where we started it. the idea that there is perhaps a in thetoo much froth markets in general, but also in venture capital, which may surprise some people. you have to exercise this if you're going to make money year in, year out, and even then, sometimes, it can be a little lumpy. >> the markets are all linked, right? the public markets move, the target markets move with it. they do not always move in lockstep, but they track each other. >> they inform each other. >> of course, because these businesses ultimately -- they are staying private longer, but at some point, they go public, and they also are valued based on comparables coming from the public markets. in terms of discipline, you have to suspend disbelief a little

bit. you have to be a believer. you have to be naïve a bit, but you also have to have some discipline and what you're doing. we tend to try to not time the market. we tend to invest kind of on a consistent pace at all times. sometimes it gets a little hot and we slow it down. sometimes it's a little slow and we pick it up. are not market timers. we are creators of value. frothiness of this -- i am impressed we have not used the word "bubble" the whole hour -- how much of it has chased the yield? >> i think that is a big part of it. i'm a big believer the secular trend of technology not being just a great place to make money, but a key driver of our economy in the world, the global economy in general. what we are talking about here

is just relative valuations at a given point in time. we all know you look at the charts, you see markets go up and come down a little bit. i don't think we aren't anything like we were in 2000 when it was completely irrational exuberance -- i don't think we are in in i don't think we are anything like we were in 2000 when it was completely irrational exuberance. >> thank you so much for joining us. we will be back -- matt and me -- and a couple of minutes here on "market makers. ♪

>> that is going to do it for "market makers" today. matt miller, thank you for joining me and stephanie's absence. fuorrow, it will be scarlet joining me. we'll talk about the economic summit taking place in jackson hole, wyoming. will be with michael mckee for a bloomberg exclusive. you be able to see it right here at 10:00 a.m. eastern time. >> or i'm sure afterwards on bloomberg.com.

tweet a link to it. apparently apple tv and fire tv. your mobile device. >> it's a digital world. >> stocks around the world are selling off in the united date. the vix rising on renewed concerns about europe's financial industry. joining me now for today's options inside is a strategist with keenonthemarkets.com. when you look at equities, how much of a panic is there or is there not in the options market? >> the market is off of the highs, but only about 25 points. we are selling off today, but the bulls are making a bit of a stand. we have grabbed back almost half of the losses we have had on the open this morning. nothing i'm seeing in equity options is pointing to any kind of panic here.

i think that markets are kind of in a holding pattern right now. i think investors and traders are waiting to see what earnings are going to tell us about the economy. we know that domestic labor markets have been getting better, but does that mean consumers are spending more money? will that translate into growth in corporate profits? until we get into the full swing of earnings season, we are not going to know where we stand in the economy and in the market, which is why we kind of see gyrations in the market between the all-time highs and around of s&p futures. >> let's get to companies we are keeping an eye on. when you're looking at is apple. we have seen a lot of call buying in the shares lately. what is going on here? what is the psychology? >> since the split, calls have been out trading puts in apple at a ratio of almost teed up to one, and on some days better -- twotio of almost teed up --

21, and on some days better. it seems like the rumors of the watch coming out and a larger display phone are driving investors into this stock. we know a lot of people have been waiting for them to come out for a new phone with a larger display. emerging markets have a very large appetite for this types of devices. 40% of all new android sales in markets like china are driven by larger display devices. if they disappoint on the event or investors do not like the watch, then the stock might have a good way to fall, but it seems there's a lot of optimism. >> you see a lot of movement tied to product launches. what about earnings results on july 22? >> we are looking at more bullish activity going into earnings. i think that with all of this upside call buying, the expectation is definitely for

apple to report better-than-expected earnings, but that being said, it might be a little too risky to get long the stock ahead of that report, especially with it trading just off of its 52-week highs. looking at an options play, i think is better on a risk versus reword basis. >> let's talk about wells fargo. the company reports earnings tomorrow. you have been keeping an eye on strategy here. >> right. thes my favorite stock in right mental space. i definitely think they are best in breed. they've had 17 straight quarters of rising profits while other competitors have not been as impressive. if we look at how the stock response on earnings, it has rallied three of the past four quarters, but the stock did not move that much on a magnitude basis, so it can be difficult for an options trader to make money within our right call purchase. i'm going to sell the bull put spread's for $.35 for next weeks .xpiration

>> all right, thank you so much. ♪ clip,"ome to "money

where we tie together the best stories and video in financial news. oftake you behind the scenes apparel's american ouster as well as the fight to try gain control of the struggling retailer. and the emmys -- the nominee goes to netflix. the rise of the new broadcast. in the spiral of violence the middle east. israel and hamas engage in deadly one-upsmanship.