>> this is "bottom line," the intersection of business with a street purged -- perspective. ryan chilcote interviewed the ukrainian prime minister. me from ukraine. what do they have to say about recovery at the crash site? >> they have won access to the site. this is not like any normal

crash site. it is in the middle of a war zone. it is in a part that the separatists control. the separatists allowed them safe passage to part of the crash site. officials have been invited in as well. this is a massive crash site. rex ukraine has been clear that it believes are-russian separatists shot down that jetliner but do they have any proof? >> he says that they have an awful lot of proof. rebel controlnder weapon.as a russian russiane arrested citizens.

of proof and they intend to share that with the international community. what about the economic implications of all of this particularly as it relates to ?he international monetary fund >> the imf was in town and they approved the second tranche of $17 billion aid program. you willaid this means need more money. the prime minister told me that as well. he will need one billion more dollars to cover their war needs. he suggested that the imf is on the same page providing that money. froman chilcote joining us kiev. president obama said the evidence shows that malaysian airliner was likely shot down over ukraine via russian-made missile fired from separatists

held territory. he called on vladimir putin to and russian support for the separatists. peter cook has more from the white house. >> the president called it a global tragedy that has claimed nearly 300 lives. one of those lives is an american. the president went on to call for a cease-fire calling for a credible international investigation of the crash site. he went on after that to talk about exactly what the u.s. believes happened. specifically saying the u.s. is confident it was a surface-to-air missile fired from within rebel controlled area that took down the malaysian jetliner. he stopped short of assigning blame to the russians for what took place there but he did say there is some measure of responsibility for vladimir putin because they have escalated the tensions.

take a listen. again, russia has refused to take the concrete steps necessary to de-escalate the situation. i spoke to president putin yesterday in the wake of additional sanctions that we imposed. he said he was not happy with them and i told him that we have been very clear from the outset that we want russia to take a path that would result in peace and ukraine but so far russia has failed to take that path. was pressed ont hasher he believes putin responsibility. he said he does not want to get ahead of the facts. someone and has an ministration stating they cannot rule out the fact that they played more of a

part in the launching of the missile. separatists could not have operated this missionary without outside assistance. from the president's point of view he hopes that is a likelihood here particularly on the part of the europeans. he calls this a wake-up call for the europeans in global community. clear from the president's messaging that he hopes the europeans take the lead and agreed to ratchet up sanctions. if russia does not make moves on its own it can be sure there are opportunities for the u.s. to do the same. it is clear, he would like the europeans to take the lead here. cook joining us live from the white house. let this get some analysis of the situation.

joining me on the phone from washington. you have been breaking news this week on u.s. actions to ratchet up the present -- pressure on president prudent. explain what the white house has done. >> we have seen the most aggressive sanctions to date. in the u.s. and european side. the white house went quite a bit further. targeted somehave russian banks and energy companies. they have crippled their access to u.s. equity and debt markets for new financing that goes beyond 90 days. it is raising growing costs and cutting off medium and long-term financing. it is a big move and it is pretty dramatic. >> who was sanctioned and who was not this week? >> you saw the biggest oil rosneft andussia ro,

gazprombank. it is the state-owned development tank area dear had a defense contractors, the maker of the iconic caustic of rifle. just as interesting is who was .ot sanctioned, gazprom the supplier for 30% of the natural gas that europe depends on then this is a concession to prevent europeans from being left in the cold and dark this winter if there was any kind of retaliation. >> the strategy behind the regime, what is a question mark >> the plan is to squeeze the cronies, the oligarchs who makes the russian economy work and turn the economy into something assets and you see

already that the market has reacted. launching- ruvell is to a six-week low and the spillovers have been widespread. the yield increased 90 basis points. the yield even on the five year bond on spare bank which was not sanction increased 60 points. comingsanctions might be down the line. >> the plane disaster, the policy onu.s. or eu ukraine, do we have a sense of what that might be? >> the first step is outrage and sorrow. the second is concrete investigation. if it is proven that the ukrainian rebels were behind this and that russia's supplied the weapons that made this happen, you have the big question, was it intentionally it seemsever did it

accidental so it is unlikely they would go to the point of declaring russia a state sponsor of terrorism but you do see that vladimir putin is increasingly isolated. that means adding on pressure in sanctions as part of that. turningdoes feel like a point in the crisis. what should we expect next in the days and weeks ahead? >> it feels like an away as it -- if they could be the beginning of the end. it is such a shocking tragedy. vladimir putin is getting cornered. this was not his plan. -- inn the sanctions and 24 hours, this horrible disaster on which he is trying to palm off lame for it, the price might be too high for him. if he does not start backing down you will see a real cola sing, more sanctions, more pressure but this might be the beginning of unwinding his becaus smart.is --

>> even he did not point in exact finger of blame because we were only 24 hours into this. there has to be an investigation. some of that information might not be forthcoming. that area is in eastern ukraine controlled by the rebels. what do we not know at this point? >> all great questions. if the rebels have the black box and trying to take it to russia, that is concerned. they was concerned about the deleted tweet by the ukrainian rebels. wereow -- maybe they taking credit unknowingly for this passenger disaster. we will see what happens with the investigation.

we are going to have to see how this plays out in terms of what can be proven, the weaponry and who is behind it. >> thank you. , defense secretary chuck hagel and an exclusive extended pentagon from the discussing ukraine, the middle east, china, and the future of the u.s. department of defense. you can see the full interview at 9the defense secretary p.m. washington time right here on bloomberg television. coming up him up the crisis in gaza. we will explore what is next as israel prepares to widen its ground operation against palestinian militants. are watching "bottom line" on bloomberg television. ♪

>> is really soldiers backed by

tanks and warships have moved into gaza. more than 260 palestinians including dozens of children and two israelis have been killed since fighting intensified last week. charlie rose spoke with hillary clinton about the crisis. >> israel's assessment is that with these stockpiles, weapons that are now in gaza that it would be difficult to get a reliable cease-fire. egypt did announce a cease-fire, it israel said yes and thomas said no. the space is not being filled. >> do you support israelis in invading gaza? it is not an easy question. i would prefer not. why flew from cambodia to try to prevent an invasion. there has been a lot of phone calls and outreach and working

with arabs and others to influence hamas and get them to stand down. how must may feel like they are totally cornered. i on have egypt under sis one side and they have israel them so hamasame might feel like they have nothing to lose. >> you can watch charlie rose's interview tonight at 8 p.m. and 10 p.m. new york time. let's go to houston for more. our guest. by career spanned eight administrations. minister benjamin

netanyahu has reportedly told his military to prepare for what is called a significant expansion of the ground offensive in gaza. is the goal to stop rocket attacks into israel or is the hamas? crush, that even with the ground invasion they cannot crush and eliminate, spit the goal is to degrade hamas's military infrastructure to the highest extent possible, especially its ability to launch rockets against israel. that is why you're seeing a very keen military focus on these tunnels that hamas has gazaructed underneath the n-israeli order. it is too seriously degrade its

military capabilities. >> there was a three week israeli ground operation into gaza in 2009 and it seems the of to active was to degrade their military capacity but, street covered. are you concerned that this offensive will last longer, resulting in more military and civilian casualties? to see a replay of the film you just indicated. 2009, 2012, 2008, and 2014. areisraelis obviously compelled because of the rocket attacks on the country to go in, do whatever they can to buy an theyded period of calm, hope at least two years and if no political settlement

between the israelis and the palestinians in terms of the peace agreement and ending the occupation we're going to see this film recur. there is no military solution to this conflict. there is no military solution to the hamas issue and challenge. there is only a political solution. >> what are the economics of this latest conflict? andeconomy is infrastructures being reduced to rubble. what does this mean for gaza going forward if they hope to rebuild? population the 1.7 million people who live in gaza, this is -- i am not talking about the hamas militants but this is a humanitarian disaster. they're kept alive by foreign subsidies from the wealthy arab states from the u.n.

organizations, assistance, the thatrefugee organization, -- but gaza is a disaster area. and the living conditions are abysmal. the sanitation conditions are abysmal. the medical conditions are abysmal. it is a prison. with anomic consequences military incursion are worse. we should mention as the ambassador is speaking we're looking at a live picture from gaza. you see some fires in the distance as that ground offensive continues. would heart of an economy have to involve israel easing restrictions to allow goods into gaza? >> that is basically the trade-off. to -- hamas is

cannoto work for, they seem to be defeated. it is a [indiscernible] of the borders and easing of the israeli blockade of goods and acrosss coming into gaza the borders. that is key. they have another high political demand which is the release of butstinian prisoners, certainly it is the easing of the blockade so that left him minimalo some very normalcy in gaza. former u.s. ambassador to israel and syria joining us from houston.

it is always a privilege to get your perspective. thank you for your time. >> my pleasure. >> a check on the friday equity movers as we go on the markets and later, been to the movies lately? summer boxhe dismal office and see if there are any hits on the horizon. line" continues in a moment.

>> welcome back. thanks for staying with us. it is coming up on twice six minutes past the hour. bloomberg television is on the .arkets. nilan s&p above its eight and

10 day average. the winner on this rally so far as you can see is the nasdaq. up 1.5%. a large part of that can be attributed by earnings from google. they were selling more ads. this is upsetting a decline in he meant for the ads per click. you can be -- investors are shaking off weak economic data we saw earlier. in earlysentiment fell july as well as in june. not really stopping the rally today. adat we're watching is [indiscernible] hire.ncing a deal to buy s will lower its tax base from 22%.

get paidders will its firsty made takeover proposal. line" on thettom other side of the break area and -- break. ♪

>> welcome back to the second half-hour of bottom line on bloomberg television. i'm mark crumpton. thanks for staying with us. tonight is the deadline to weigh in on net neutrality. so much issue generated internet traffic, fcc servers crashed, pushing back the original deadline tuesday night. megan hughes has been looking at the numbers. what kind of numbers are we

looking at? >> record-setting. they topped one million as of yesterday. today as of noon, another 50,000. this issue hasay gotten the most digital comments in the history of these proceedings, almost more than they have received on any issue in history. that record was set janet jackson's 2000 four super bowl performance. millions of complaints about that. as you mentioned, the flood of comments crashed the server several times. to put this in perspective, the period for dodd frank got just 60 5000 comments. we are talking about a flood. >> how has this turned into such a mainstream issue? >> a lot of credit can go to

comedian john oliver. on his show in early june, he issued a call to arms for internet commenters everywhere. >> this may be the moment you have spent your whole life training for. you have been out there for roche is lee commenting on dog ferociously commenting on dog videos and baby videos, saying things like every child could dance like this lulu's or after one week of practice. loser after one week of practice. to tell you, we went through hundreds of these comments, and in the samples we looked at, all of them were against the proposal. we do know at&t and comcast did file comments in support, but the vast, vast majority were opposing the plan to allow some internet lanes to be faster.

>> there were some good ones, weren't there? >> they were very wide ranging. some people talked about how it would hurt small businesses and startups. some people gave shout outs to john oliver. this woman predicted a very dire future if this proposal goes forward. she said "you are obliged to uphold free access. failure to do so can lead us to a future depicted in science fiction, where mega courts hold all the power, government by the people is an outdated model and all restaurants are talk about." others like this one got personal, saying -- some threatening words. said this was a

civil rights issue. one company threatened to move to canada. this has people fired up. what happens next? >> public comment ends at the fcc, but then allows reply comments. people can replied to the comments posted, and i goes until september 10. -- that goes until september 10. so this will go on for more time and there will be lots more interesting comments, i am sure. >> and you will bring them to us. there is further escalation of the conflict in the ukraine in the middle east. what does this say about investors moods? the bond markets. how have they been reacting to the report yesterday of the malaysian passenger jet eating downed over ukraine? >> yesterday there were massive

-- getting downed over ukraine qu? there were massive flights to safety. investors piled more than $2 billion into investment-grade bonds, the 30th consecutive week of flows in. just to put this into context, when people pile into safer bonds, it usually means they are less optimistic about the world. they are looking for safety. they are not looking for higher income. for higher income securities, high-yield securities, they yanked the greatest volume of cash from the debt since last june. does this tell us about investor sentiment? >> everyone talks about complacency in the bond market. they say yields are low. people are buying whatever they can and they are not considering risk. what this really shows is this is the most angst he, nervous

complacency you can imagine. people are looking for a reason to get out and to seek out safety. even aek safe bonds, relatively low yields. their concern is there is potential for x -- for escalation that could interrupt oil transportation and really cause some kind of further slowdown in growth. tot can the central banks do fix that at this point? >> i just saw a 10 year yield a 2.48 right now. what does this mean for risk assets going forward? >> there are two different prongs here. on one hand, there is a question about whether the conflict in conflict,he ukrainian whether they could potentially trickle down and affect growth globally and could actually slow whatever recovery we have had, which hasn't been very quick anyway. any potential slowdown or

uncertainty will cause banks to freeze even more money and there are dueling factors that will lead some people today to say any time we have bought during the selloff, it has always paid off. >> going back to last month, a record volume of corporate bond sales in the united states for the month of june. how much debt did companies sell? >> 160 billion dollars, almost three times the amount of june last year. and companies are saying what if something does happen like what we are seeing right now where borrowing costs will increase riskier companies? why don't we lock in our cost right now? >> but wall street's biggest investment banks did not do too badly. >> this has helped prop up earnings for both the banking side and the trading side. typically when companies do

they a bond, not only do underwrite the fee, they also typically get business trading the debt much more frequently in the days after the sale. >> do they expect that issuance to continue? >> it has kind of fallen off in the past couple of weeks. if the uncertainty continues as it has -- >> is it all geopolitical at this point? >> it feels political, but it's also economic. there were weaker than expected housing starts. it sort of unclear exactly what story the market is telling. up next, box office watchers are saying it has been a dismal summer for the movie studios. was it the popularity of the world cup the cap people at home? we will look at the why's and wherefore's and see if there is another blockbuster out there. ♪

>> israeli troops are pushing deeper into gaza, firing volleys of tank shells and engaging palestinian fighters in a ground offensive meant to weaken the enclaves hamas rules. you are looking at a live shot right now from gaza. andassault opens a new potentially extended, bloodier stage in the conflict. strikes against gaza have failed to halt militant rocket fire on israeli cities. benjamin netanyahu said he told to prepare for what he called a possible significant expansion of the operation. time now for today's latin america report. rose for theonds

first time this week. they are demanding u.s. compensation in court for support of a ruling blocking restructured notes. the payment was blocked by u.s. courts and is being held at a bank of new york mellon account at the argentine central bank. citingne news service unidentified court officials reported argentina and holdout creditors led by elliott management may ask for a 24-hour stay on the ruling to allow the payment to go through an provide more time for negotiations. and new poll shows the brazilian president's lead has narrowed with less than three months before elections. to the survey indicates for the first time that she does not have a lock on the runoffs. according to the poll, she would win 44% of the vote in a second against the opposing candidate, who would get 40%. that is your latin america report for this friday.

we are talking summer movies in the search for a big hit when bottom line returns in just a moment. ♪

>> is the age of summer blockbusters dead? box office sales fell to their lowest in 15 years for july 4 weekend this year. our senior media analyst joins me from los angeles. paul, welcome back to bottom line. it's good to see you again. >> good to see you. thanks for having me here today. >> is this the natural rhythm of hollywood or does the fact that people have more entertainment options and platforms have something to do with it? the natural rhythm of hollywood and we see that this is a very cyclical business.

last summer was the highest grossing summer of all time. trying to live up to that this year is very difficult. there are a huge number of entertainment options for the audience out there, but if you look at how well transformers did a couple of weeks ago in planet of the apes this past weekend and i think the purge will do this weekend, if you have compelling entertainment and movie theaters, people will come out. summer is down 20%, five percent on the year, but we also see that ahead are a lot of big , and next year could be the biggest box office of all time in the biggest summer of all time. help is on the way, but it is very cyclical, it is evident flow for the movies that are released. >> so this is not a question of people wanting to part with their hard-earned dollars to go to the movies or perhaps stay at home and watch the world cup which lasted for months? >> the world cup certainly can have an impact although i would

say if a movie is as big and compelling and marketed well as let's say transformers, that was the world cupg and it netted a $300 million opening weekend worldwide. see weekend we are going to some big movies in the mix. transformers is a great example of a film that has done incredibly well worldwide. it sort of like if you build it they will come. build the perfect box office beast, people will come to the movie theater. it's very product driven. we have guardians of the galaxy on the way, the next marvel movie. that's going to be a big film. help is on the way and there are a lot of blockbusters on the horizon. >> i have to ask you about the male-female demographic. that playing out? are studios understanding the

growing influence and economic clout of the female audience? they are not, they need to. if you look at the young adult female movie default in our stars, it did incredibly well. maleficent, the main character in that obviously is female. females drive the box office in a big way. unless people think females only they arentic comedies, wrong. women like to see all kinds of movies. they like disposable income, just like guys. if you look at the hunger games or the twilight movies, those hugely by females. hollywood ignores the female audience at their peril. i think they're finally getting that. that is particularly important, especially in summer. >> which films have failed to live up to the hype this summer? >> i think there have been a

few. i think every studio has something out there that maybe didn't live up to expectations, but if you look at some of the movies that maybe didn't do as well as north america, they were huge -- we track all the worldwide box office, and a movie like edge of tomorrow is a huge hit internationally and globally, while in north america there is an expectation the tom cruise should be making x amount of dollars. but this is a global business. movies have a chance in north america. they have a huge second chance internationally, and oftentimes the movies are released first internationally and then in north america. this is a global business, and if you look at it that way, a as notmovies perceived doing well, if you look at the global box office, they are hits. >> august 1 is two weeks from today. talk to us about some of the big-name films that have yet to be released.

are they going to be enough to offset the 20% drop in revenue? >> is going to be hard to offset 20% by labor day. but guardians of the galaxy opens in august. the purge opens this weekend. they call it the dog days because sometimes you have big movies in august. i don't think there will be enough to offset the 20% down but i think we will not get fairly significantly -- not it fairly significantly in the coming weeks. and then we have oscar contenders in the fall. next year i am predicting will be the biggest year in box office of all time. >> we will have to leave it there. thanks so much. stay with us.

another check of market movers is on the other side of the break. ♪

>> that does it for this edition of bottom line on bloomberg television. i am mark crumpton reporting from new york. thank you for joining us. on the markets is next. have a great weekend. is 56 past the hour.

that means bloomberg television is on the markets. i'm alix steel. we are still seeing a rally underway. stocks being able to hold the rally, helped by google earnings. the s&p up by about one percent, above its 10 and a day moving averages. however, it was a very rough day in the market yesterday. the s&p fell by over one percent. of hotspots bounced back today, similar to what we saw with the s&p. we have a look at some of the etf's that are most effective. not only did russia have to deal with renewed u.s. sanctions but accusations having to do with the jet going down in the ukraine. the etf, thesh market vector rusher, was down seven percent thursday. it has since bounced back two percent today. when you look at that etf, it

traded about five times average volume on thursday. when you look back in march when russia first invaded ukraine, that was a similar kind of day. everybody got out of russia. how to 15% russia run because it is pretty cheaply priced. it has a pe of nine, priced around one. i think investors were not as quick to run away thanks to the good valuations. ae russian etf definitely was price discovery vehicle yesterday as well. whattf kind of shows you investors are feeling toward the market in these emerging markets. >> and of course, we take that event and broaden it. we have malaysian air and the airlines here in the u.s. airline etfno somehow. there are etf's for everything. there was one, and it was probably the dumbest closure everywhere. the best you can do is the

spider transportation etf. this was down one percent on thursday but it also bounced back. and of course, in the middle of all of this, we have israel invading gaza. what happened to the etf's associated with that? >> the ishares etf was the most popular. it was the most popular. it is down about two percent. it's not a huge deal like russia, but this etf is gone on a 50% tear in the last two years. it has some vibrant companies in it. make it a policy to run away from these places. >> israel is a great tech hub. you can buy a small israeli startup. it's hard to discount that. >> the vanguard international has oink five percent israel. if you are looking to get anything -- .5% israel.

if you're looking to get anything any impact, you have to go to the ones that are 250 million dollars. >> what about yesterday's janet yellen testimony? reg she said biotech and social media are overstretched, so there is a huge selloff in both. ironically, fed policy is what made them stretched. it is staggering how investors are able to take in stride the geopolitical risk. we are back in 30 minutes. street smart is up next.

>> welcome, everyone, to the most important hour of the session. we have 60 minutes to go. the markets rebounding from the crisis in the middle east and the ukraine. investors are moving out of safe havens. street smart starts now. today on street smart, president obama looking directly at the em