this story is available on bloomberg.com. we are back "on the markets" in 30 minutes. "market makers" is up next. live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> cracking the code on mobile -- mark zuckerberg delivers another record quarter for facebook and the stock hits a new high. russia'snaire blues -- oligarchs are nervous about how theident putin is handling crisis in ukraine. just don't expect them to say so publicly. we will tell you what they are revealing and private. >> under attack -- israel has one of the world's most thriving tech economies. here on"market makers" bloomberg television. good morning. i'm erik schatzker. >> and i am stephanie ruhle.

erik wants to get to breaking news and i am not going to let that happen because we need to take a moment to look at erik's outfit. you are taking it to another level. this is like special carnival gear. can you please put your foot here? -- up look at this shoe he is wearing today. only our erik. amazing. >> the tragedy is that these are you can't converse get anymore. nike owns converse. >> what inspired this? >> i'm going on vacation. >> can't let his hair down so he is getting his freak out. >> big numbers for home resales. scarlet fu has new home sales for june. >> disappointment here, erik.

new homes in june fell after a record may revision. for the month of june, the most recent month, people were expecting -- economists were expecting a drop to only 475,000. instead, we got a read of 400-6000 -- 400 success in. that is -- 400-6000. that is any .1% drop. in terms of the average price, the median sales price, that declined to $272,000 as well. this comes also as homebuilders report results. d.r. horton came out with numbers that showed weakness, especially because markets like chicago are having a little bit of trouble you. we will continue to keep an eye on these numbers. a bigger than expected drop of a .1% to 400-6000 for the month of 6,00 forstop -- to 40

the month of june. >> scarlet, thank you. scarlet fu in the newsroom. >> facebook shares are hitting a new record after its blockbuster quarterly report. second-quarter revenue surge -- are you ready for the number -- 61% from a year ago. let's bring in cory johnson live in san fran. made this quarter so strong? erik still has not joined facebook. >> i was unaware. i took the afternoon off to watch "the view" so i didn't have the opportunity to go through the numbers until late last night, early this morning. there is a lot of impressive .hanges going on in facebook we expected it would continue.

we see important changes in the way they do business. we looked at the nascent payments business and thought, gee, if they could grow that -- it ise zynga actually falling for this company is much more advertising -dependent and the shift to mobile has been fantastic to them, as opposed to the threat it appeared to be when they went public in two years ago. >> do you remember when they went public? one of the biggest albatrosses they had is how they get around mobile and now they are the ones dominating it. >> i don't think they quite very the ipo but they were forthright, maybe overly so, in terms of warning that they had nothing going on mobile. we learn -- in fact, they were working diligently on it. mark zuckerberg wrote his letter to shareholders on the ipo filing on a mobile device.

clearly that shows how important it focuses on mobile. 24%le revenue is up sequentially. majority ofw a their advertising revenue, which it wasn't even the right go. and the revenue per mobile at has been increasing a lot. >> i was looking at research showing that facebook's even top margins -- ebitda margins -- >> yeah. >> are some of the highest that any company this size have reported. google reported that in 2009 but it was a one-off will stop this research shows that when google ebitdaebook's size, it's margins were like cap. is that to suggest -- were like half. is that to suggest that facebook is getting higher or will it have to live in a little -- a

world of lower margins? >> my own model -- tda margins.ed ebi looking at operating margins, slightly different. >> the non-cash expense that that's particularly weird around the ipo, and starts to level out over time. you can see a clear trend there, and it is amazing. around theme things ipo where they took a big r&d charges, vast portions of research and development in particular. what might be happening -- it obscured what might be happening and make you wonder what they would do in the future. what those numbers show us is that the company is getting more and more profitable. it is still growing, they're still building a new campus in every thing else. there is sort of a cap on the amount of expenditures. they said going for the margins will look a little bit better

than they have been in the past did a really powerful profit story here just straight from the income statement. soccer competition charges, the appropriate thing to do -- not always the case, but in this case it is appropriate to show how strong this business is. continue about how to charge -- the fewer ads, it is a powerful story. cory,aking of powerful, your eyes look exceptionally blue today. did you get sun yesterday? >> there was some quality time, cannot live. beautiful day in sentences go. -- in san francisco. >> how good of a day is mark zuckerberg having? an awesome one. he has made $1.7 billion -- just this morning, on top of the $7

billion in may just this year. facebook shares of time 40% year to date and at the end of the day he could move past jeff bezos, sergey brin, to be one of the 20 wealthiest people on earth. >> meantime, u.s. automakers reported earnings this morning. talking about ford and general motors. ford beat profit estimates, raking in $1.2 billion and earnings this quarter. keith, the most important thing that stands out from these reports, what did they tell us about the state of the auto industry? >> that it is still pretty healthy. gm doing as well as it did, missing by a penny, shows you that they have not crippled by the recall crisis. ford on the other hand is

supposed to be in a down year. f1 50 pickup truck, that is supposed to cost them profits, but that is presently strong quarter and beat analyst estimates. teeth, why is for setting expectations so low for this f1 50? is it that big a deal? >> yeah, it's incredibly, credit, e -- it is incredibly complicated, erik, as you might imagine. this is the most profitable model, making about 8000 per model. it costs a lot of profits in the time it takes to change over. no vehicle of this volume has ever been made in aluminum before. this is blazing new trails. >> we know the recovery of the u.s. economy has powered the

performance of both of these companies. what do ford and general motors tell us about 2 other markets, europe and china? >> it is interesting. with europe we are starting to .ee some glimmers of hope that is the first they've made there since 2011. both of them are restructuring closing plants, very unheard of in europe. we seem to be on the cusp of a turnaround in europe. there is a market leader in china that continues to be a strong profit base for him. they've had a great first half of the year. that boosted their profits to a record in the second quarter. >> is that to say that ford is taking market share from gm or china or somebody else?

china is the largest automotive market in the world and is growing at a rapid pace. everybody is growing in china. it is not like the united states where we are just taking it out of each other's hide. ford is trying to get more in the game. they were a latecomer to the party. >> how are you rating mark fields on this first call? >> he handled it well, delivered his script well in the q&a session. >> what? >you think he was on scrip? >> i think he handled it well. yes, there is definitely a script. >> never happens. >> thanks for taking a few minutes out for us on "market makers." ford's chief financial officer will be with us a little bit later. look for him at 11:30 eastern time. >> coming up, how are israeli

businesses coping with the constant barrage of rocket fire? elliott gotkine travel to the region to find out. >> russian billionaires are growing disenchanted with vladimir. a josh with vladimir-- vladimir putin. you are watching "market makers" on bloomberg television. we are digital, everybody. all of our coverage on bloomberg tv, bloomberg tv plus under tablet, streaming on apple and amazon fire.

>> welcome back to "market makers." i am stephanie ruhle with erik schatzker. hamas continues to rock -- launch rockets into southern israel and it is having an impact on the israeli economy. our middle east editor elliott gotkine visited a few of the companies operating near the gaza border and says they have been surprisingly resilient. take a look.

just another normal day. this is our daily -- >> routine. >> when they are not running for cover, workers about 8 kilometers north of gaza help sell 600 million vegetable plants a year. while we were huddled in the bombshell third, rocket hit his shelter, rocket hit this nursery. this crashed through the roof trayhere, knocking out a of putting pepper plants and all that is left here of the militant's rocket is this. the ceo says it is business as usual, but it doesn't mean they are not affected. siren,y time we have a people go to the shelter.

it is a lot of times to spend on running and coming back. we have to stop all the machines and run them agains. there was a lot of damage to the cover of the greenhouse. it has to be fixed or replaced after each missile or shrapnel hit it. >> further south, men and women are making water heaters. gaza is just 4.5 kilometers west. a quarter of the workers are or caringth the army, for kids to summer camps can't open because of the fighting. is not says the factory closed in 40 years and is not about to start now. to have to satisfy the customers, the customer in the u.s. is not interested in the war are not. >> the war shows no sign of

ending soon. this is the third time these sirens have gone through here. heading to our third shelter. israeli companies cannot ignore it but they carry on regardless. faa lifted thee ban on u.s. carriers flying into ,el aviv's ben-gurion airport and other airlines are beginning to follow suit, which highlights a problem for the industry. there is no unanimity or consistency in the no-fly zone. passengers are caught in the middle. this -- houteth did decisions get made about where to impose the no-fly zone and how to enforce it? >> as you say, they done beach individual nation. ,he united states, for example

can order it carriers not to fly to israel, as we saw happen this week. that is no direct impact on european carriers, or any other nation that is flying. they have to make individual decisions. you get this patchwork system or on the world. she united states bar overflights of libya, whereas other nations in europe allow the aircraft to fly over libya. you have that sort of situation across the world. what are those european airlines doing? >> as far as libya or israel? >> israel. >> we are seeing a trickling back of flights. the way these things work it takes a good 24 hours before anybody can get a fleet up and running. it will take a day or so to see how this is going. but we have heard at least a

couple of carriers are going to resume flights. down the bri band comes amidst the backdrop of ukraine and there is confusion about the circumstances under which that malaysian airlines flight went down. i want to make sure you help us understand this -- there wasn't a no-fly zone at the time in post over that part of ukraine. he was supposedly safer airliners above 32000 and it was supposedly safe for -- it was supposedly safe for airplanes above 32,000 feet. >> that is correct. there was a no-fly zone for the carriers south of where this --urred -- over crimea back in april. carriers were allowed to fly over eastern ukraine. the nation of ukraine imposed a -- thef saying where

flights could not fly below 32,000 feet. they had raised that recently after one of their military planes have been shot down -- >> alan, quickly, specifically about that incident, how much discretion to the airlines themselves have? we have taken a look at the flight paths of some airlines british airways bypassed not just cry but eastern ukraine altogether on its flights from whereas, the far east, as we know, malaysian airlines flew directly over ukraine and into the part of the country where flight 17 is shot out of the sky. >> the airlines have essentially total discretion to avoid areas they are comfortable with. but it depends on what kind of intelligence may get.

is a nation byt nation decision. it is possible some countries went to their airlines and said you might want to take care flying over this area, whereas a country like malaysia, they didn't go to their carrier and say that. a lot of it will come out as part of this investigation to the downing of the plane. >> alan, thank you so much. we will be back with more on "market makers" in just a couple minutes. ♪

>> here we go, approaching 26 past the hour. time to take you "on the markets." our company i follow, under armour, numbers are out and under armour -- there you go, kevin -- crushed it. ae ceo and founder said in statement it is because they brought another product -- and broadened out their product offering and are also about international expansion. under armour might be a big american brand but overseas, they don't compare to adidas and nike. they have opened up in philippines and singapore and panama and are trying to make a footprint -- >> nike shares are flat this year. under armour zarb 50 presented -- under armour is up 50%. it trades 73 times next year's earnings for under armour -- >> people like those compression

shirts. it makes their bodies look good. >> when we come back, how do russian oligarchs feel about the policy in ukraine? they told us in private.

lex live from bloomberg headquarters in new york, this is market makers. is "market makers." i am erik schatzker. >> i am stephanie ruhle. >> and moscow the billionaires who owe small fortune to vladimir putin are saying they are horrified i how they have handled the -- by how he has handled the crisis in ukraine. good morning to you. i am not surprised they are not prepared to go on the record against a man who they owe their

wealth. and private, what are they saying to you? >> they are terrified to speak publicly on the issue. the way things are going, it was already bad enough when the u.s. introduced the latest round of sanctions, the sanctions that targeted to banks, including s date bank and the largest oil company and the gas company billionaire by a associated with putin. there was already panic. a day later the malaysian air crash happened. after that the calculations have completely changed about the likelihood of severe u.s. and european sanctions, and that is what is keeping them awake at night. >> someone say the sanctions are not quite severe yet or severe enough. at this point have we been able to calculate how much they have

lost? they are down about 15 billions -- >> they are down about 15 billion. of coarse they could lose an awful lot more. as we know, the european union now considering sanctions that state owned banks. the fear is it will not back down. >> that was the question i was going to ask. do they really have no info ends putin?uence over it has been well-documented they have built extraordinary

fortunes in the process. does that not give them any weight at all with the president? >> they do not have influence on him. certainly he is going to look at the potential impact of sanctions on the russian economy and will make the calculation how he should act. down, hewill not back will probably try to change his strategy somewhat. months, west few have seen him trying to avoid sector three sanctions. in terms of business interests, even the closest associate has come -- suffered. i just mentioned the cash -- gas company nova tech which you partly owns was recently targeted and he has personally been sanctioned.

>> what has this onto to his pop hilarity? his popularity is only increasing. the russian population sees that thisest is trying to see as a plot essentially. they do not believe the ukrainian rebels fired the missile but down the jet. probably theit was ukrainians that did it. that is pretty popular here. popularity rating of about 86%. >> thank you very much. and to see you this morning. mobius says he is still russia as well. he says now is the time to put more money to work in russia. to our ownis morning

tom keene. what did he say? >> interesting to talk to him. withes of experience templeton. he was adamant there will be opportunity in russia. he said the sanctions will work. after that there will be a terrific opportunity. >> how patient does an investor have to be? >> he does not really address that. there will be an opportunity to go to a major bank within russia . then you have to be patient to wait for the turnaround. it is totally different than what we have seen in america. a true bear market down 24%. what does mark mobius have to that he isfact

broadly speaking, supportive of the posture putin has taken toward ukraine? >> i can see the general council saying don't say that. he delicately walked around it. said it is in emerging markets and there will be a time beyond this where you will be able to acquire fresh and shares after the political storm and maybe after sanctions work and we see change behavior in russia. and you really wonder when that will come. one of the big stories here this week is the support he may or may not have from the oligarch. they interview i have done, support is not there for him. he is acting alone. vladimiry wonder when putin will have advisors that can steer him towards when the .arket will heal

he is there a loan. >> mobius will be one of the few people who was willing to speak up in whose favor. not endorsing the policy and the what he is saying -- >> i do not think he is supporting vladimir putin. >> a month ago he told olivia sterns he admires the control and restraint that vladimir putin has exercised. this morning when he was talking to you he said the approach is to take as much as you can get until it begins to hurt. so far, as long as the europeans someither reluctant, or in peoples eyes, too cowardly to impose harsher sanctions, he should -- >> you are both right. he did hedge away from what olivia sterns a month ago but he took a very mercantile aspect

and very decidedly said it is a political debate. i am a financial guy with franklin templeton and have a mandate to look at the financial side. he says there will be the opportunity. delicate.remely very difficult. rushe does not need you to to her defense. >> he is not rushing to my defense. he is giving it a lot of thought. i think he sees value in the investment. dexia supportive of his posture. in other words, not whether he approves of what is happening in ukraine. i do not think mobius for a moment would say he likes what he sees, but we rush to judgment.

you whether he should be held accountable, criticized for saying let's just take a step back and recognize what he is doing. i think what with all this morning from mr. mobius was all of the financial community was -- howep on how we react we will react. and within the sanctions, that's ramp.e the way he will as richard hoss said the other day, he suggested we have to vladimirff ramp for putin. we are in search of that this thursday morning. >> your entire interview on the bloomberg website. do not want to miss it. thank you for joining us. >> when we come back, not an er

or primary care clinic. inside the $15 billion urgent care business. ♪

>> welcome back to "market makers." i am stephanie ruhle. it is a good time to run an urgent care. at the teen billion dollar business. these walk-in clinics are one of the fastest parts of the american health care system. low margin and high-volume. m.d.,d park runs city which has more than 30 locations in the new york area. welcome. tell us how the business model works. >> the market is not complicated, very simple alternative to the emergency department.

we are accessible and provide access to patient. not on the fifth floor building you cannot ever get to but next to your subway station. we are street-level. >> do you take insurance? yes, we do. >> you paused. one of the issues is i feel it could cost you 10 grand to get your kid seven stitches. >> i paused for a second. we take most commercial insurances. currently we do not take medicaid. there are plans to take them in other offices but we take all commercial insurances. rex is that is a insurance companies -- what would an insurance company rather do, presumably not have someone go to the er? >> basically co-pay. the co-pay may change depending

plan. patient's insurance basically just the co-pay. >> how serious of it condition could you treat? >> 80% of the doctors are er positions -- physcians. >> what sort of a come -- equipment do you have? >> broken bones, x-ray on-site. have sutures, broken bones, cuts and burns. anything not life-threatening we can take care of. lex you have written a book about emergency medicine. you were educated and trained in the american health care establishment, right? so are you trying to disrupt that industry? that has been leveled against

us. i love the fact that i am an er doctor. we take care of everyone and everything. i love the er. we are not running away from the er. a lot of people point to how it expensive and inefficient it is. we want to do this, to create an incredible experience. that is what drew us out of the er. >> if delivered effectively, it will be an incredible experience. , street-levelism health care walk-ins is health care factories. a low margin business, high-volume. drinking people out at $150 per pop. you and your investors will not make enough money until you get that throughput going and raises questions about quality of care.

how do you find that? >> that is a great question because i would argue that steve and efficiency is being polite and kind. unkind to wait five hours to be seen. schedule an appointment and wait an hour. so all of the practices him efficiency is really out of kindness. >> there is a balance to be struck. be unkind ifly to you come in for a stuffy nose and get your prescription for as z-pack and send you out the door. >> you have to provide value. it deserve to be around? the answer is up to literally yes. you touched upon the criticism of urgent care area number one, stock in the box and the quality is poor. that has been leveled against

us. number two, you do not play well in the sandbox. you are the redheaded stepchild of not playing with the other kids. patients like us but in general other parts of the health care industry have despised us. lex it is changing and has to change. play witho learn to other players. that is called collaboration. that is called playing together. yesterday i heard an african saying. it says if you want to go fast for me you go alone. if you want to go far, you have to go together with a group. .o it is being collaborative working together with primary care doctors, entire landscape. so when urgent care separate and the redheaded stepchild to not play in the sandbox. onyou are just logging redheads right and left.

do not understand what house you are in? you love being an er doctor. how many years have you been at dr.? lex i graduated 1999. >> tell me the most extraordinary case that walked into the er. someone accidentally ingesting a chainsaw, what is it? >> some of it is not appropriate for tv although some of your constituents like what curdling stories. i can say what is most memorable. why doctors going to the profession of medicine. lex most memorable. have two handicapped children and two autistic children. as a parent of an autistic child , i cannot go to a restaurant like you can. they will run around naked, so we are always a little bit

uncomfortable. when i walked into an exam room and see a handicapped child and the mother is giving me the the preface it, i say mom, i have two of these, don't worry. their guard lets down, they are comfortable and they trust me. , thatrust, that feeling is why we do it. we want to do this for every visit. that is what urgent care is about one it is done correctly. >> i wish you the best of luck, you are a great guy. >> can you see a future in which an emergency room sense of patient away to an urgent care clinic because the condition is not severe enough to warrant care in the yard? >> i see that happening now. care in the er? >> we are out of time. good luck.

there you go. dr. richard park. congratulations. >> we are gearing up on the set. we want to continue the conversation. richard park. next up, what would you pay for a domain name like bitcoin.com? we will find out. ♪

>> paging matt miller. we now know bitcoin is worth $600 today but what about the related domain names? the u.s. set to auction off the website for 700 at the thousand dollar but a court lock the sale. that is a lot of money. i think that is something like goes for.ker.com

>> almost. >> i talked to an economist this morning that said he would not pay that much for it but when it does so, it will probably go for a million dollars. >> these are not people who are going to use the domain but people hoping it will take off. i do think the interest in domain name since we have moved on from the possibility it is just investment like gold. you will sit on it and watch it grow as an asset. at now ise looking slow, boring growth into a platform that will shave margins off money transfers. that is it. seems they have put money in bitcoin almost as a free

option. >> 240 million dollar in bitcoin related services. what we are building now -- there is a platform. what is happening is the infrastructure to get money in and out. i think what we have realized, except for matt miller, no one else is willing to hold onto a stash of bitcoins for transaction. people want to hedge that. you are paying a little bit cash ando you can take make a transaction without ever having to hold onto it. >> so bitcoin becomes almost like a transaction platform as .pposed to accuracy >> you always hear the transaction cost can go down to zero. that is never going to happen. >> thank you for giving us the

latest on bitcoin. we will be back with more. you are watching "market makers." ♪

>> live from bloomberg headquarters in new york, this is "market makers." >> welcome to "market makers." i am stephanie ruhle. >> i am erik schatzker. my ears are bleeding because stephanie just cracked her knuckles. need to talk about president obama and corporate america. the president going on the attack, slamming u.s. company for shipping headquarters overseas to avoid domestic taxes. he will give a big speech on the issue today and may name names.

explain the calculus behind president clinton's decision -- to president's decision join in this. >> when you talk about tax loopholes and the inversion issue, the assumption is this issue on its face with whole 10 or 20 points better than that. the issue hasis been bubbling inside the administration. you thought jack lew's letter about this last week. i think the administration is trying to continually find something that resonates with the electorate and they think this is something that will work and today will be the first test of it. >> the letter you just referenced was strongly worded that polite.

can we expect the president to be a little less polite and perhaps even a more populous on the subject today? >> no question about it. i think it will be a campaign like speech. the readout from senior administration officials last night and this morning is he will question the patriotism and citizenship of the companies that do the cross-border transactions. ready strong words coming from the president of the united states. policy push at a all but there are policy aspects. this is a political issue they think is a definite winner. is this really going to jazz ? >> tax inversions, companies't but moving their address overseas to dodge millions or billions in taxes, that is a winner. it is why they go after oil and

gas executives. why they have gone after major companies in taxes in general. they are terming it like a cayman island type moves. i would be shocked if you see -- hear the word inversion ever come out. broadly put, that is where they will go with best. >> i am eager to see how the president words this this afternoon. bringing in owl hunts. more on the politics of this issue. is it a political winner? >> it is a small winner. it is low hanging fruit, and that is why president obama thinks it fits in with the other arguments. i think if you want an indicator, look at joe manchin in west virginia whose daughter is ceo of a drug company located overseas. joe finally said we have to stop

a law from stopping them to do that. >> how is it the president is so certain it is going to work? president has been criticized for attacking companies before. those companies is the time for wall street banks. these, on the other hand, are .ot such cat they will continue to employ tens of thousands of americans in the united states. >> first, i will give you some of the old fdr speeches. obama's think barack speech is attacked. i think your point is an interesting one. i do not know what that will work. this is a political point they're trying to score this morning. i do think most americans will say companies get all the benefits of american protection

and security and then go overseas for tax purposes and it rubs them the wrong way. , noter you can change it going to happen to begin with. >> will he be successful in making it a campaign issue in as much as not every public and wants to come out in support of tax inversions and many do not like tax inversions at all. they recognize it as depriving the u.s. treasury of the corporate tax revenue. they just do not think we should pass a discrete law banning inversions but part of broader tax reform. you are right. that is why i think it will be a second or third level issue. of any republican wants to defend it, i think it will be a problem in most places. i think you're right, very few will.

basically a lot of it can be solved by doing corporate tax hasrm as dave camp proposed. obama said let's lower it. sit tight because i need to bring peter cook into the conversation. telling us about republicans trying to score political points of their own by taking on a traditionally democratic issue, that being poverty. talking about the issue of >> the bigs week. game out there today is paul ryan. one of several potential contenders. high-profile republicans taking on the issue. he wants to shake up the safety net. issaid the $800 billion basically inefficient. states and localities in his view can do it better.

importantly not talking about cutting the federal budget number. states would apply for it voluntarily. they can spend money and alternative ways if they get approved. they would have to spend the money on people in need, work requirements. and this would all have to be tested by a third party. his idea in a speech here in washington. >> we are reconceiving the role of the federal government. no longer would they try to supplant but try to support them. in my view, the federal government protects the supply lines. it is the people on the ground that are the vanguard. >> there you go. bringingio seems to be himself out there as well,

doesn't he? >> a speech at a catholic university wednesday. he has been talking about the issues. a softer, gentler approach. some of the same ideas. he would make it a pilot program and would mandate it. he wants to talk about education reform. a range of other ideas for trying to deal with the issue from a republican standpoint. paul, he has a speech tomorrow to the national urban league. talking about economic empowerment zones. giving a lot of money to low income communities. as low as five percent on some families. the question is, does this move the ball at all with the theyorate? democrats say

do not fit the republican mold and do not work with the country. for one second. us.unt is still with when was the last time republicans were successfully able to make haverty a campaign issue? >> the late jack camp was passionate about it, far more so than paul ryan or marco rubio. i do not know how much he succeeded, but at least he managed the bridge of the insensitivity cap. i don't know. i think some of the rhetoric is really interesting but i think we need to remember the idea of turning back to the states is really interesting. a lot program began because states either did not or could not meet the negotiations.

>> thank you very much. al hunt in washington. chief washington correspondent peter cook with the latest on republican strategizing ahead of the congressional midterms and news breatheaking ukrainian prime minister has resigned. his coalition has collapsed. he said his government did what it could. there is the potential it could trigger new elections. ryan chilcote with us on the phone from london. this throwree does politics and ukraine into chaos? >> it does. not entirely unexpected. what is unexpected about it is a way it has transpired. and ukrainefeeling that parliamentary elections are

necessary. when he was thrown out people wanted new presidential elections, which they got. they wanted new parliamentary elections because the ruling power spelled it would be too much. the way it has happened with the coalition collapsing, now saying have to resign. there is an epic bottle with russian forces. it has come as quite a surprise. >> what is the thinking behind it? it seems if anything what all ukrainians need right now is solidarity. >> there is a couple of things. for one, a lot of the parliamentarian that were the

former, the ousted president are still in the parliament. these are guys that either under duress or of their own free will effectively switched sides and back to the government that was formed on the back of this revolution that was what we saw transpire back in february in the ukraine. streetf the all in the demonstrations, the hundreds of thousands of people that turned wanted thet the time people out of the office altogether. they wanted to be punished for some porting unicode rich and the police action. not thinkght, i do anyone was calling for this the country has a

colossal fight on its hands just to stay together. the internal domestic battle and election, it is just a bit crazy to imagine. onlyther issue here is the saw himself as a caretaker prime minister. i met him shortly after he became prime minister. i remember him telling me he was quite certain he would be the most hated prime minister in the ukraine history. this is a guy who did the deal of the rescue deal. and this has changed all of the laws. tariffs, and benefits and really made life very difficult for people. the only caveat, they have no difficult it -- idea how it will be. >> inc. you for giving us the latest. ryan chilcote of bloomberg news.

>> riding the railroads with the ceo of union pacific. ♪

>> welcome back to "market role.." i am stephanie breaking news on morgan stanley. paying 270 5 million to resolve claims that it misled investors. this is the subprime era. is when theis government feels those getting into the deals with morgan stanley and investment banking community did not understand what was under the hood of the car. it, anotherve settlement out of the bank. as just a gift that keeps on giving. only 275 million dollars, not

the 20 million. lynch likely to pay. >> does not mean it is the last time they will pay. 200 75 million today. who knows what it will be tomorrow. >> meantime i'm a warren buffett -- pain is burlington northern gain. struggling in part because of propositionnter and of transportation of crude oil by rail. you can see it in earnings today. net income of 17%. the ceo of union pacific joins us from head -- company headquarters in omaha. .ut it into perspective for us to what degree is union pacific benefiting from the struggles? >> there is a little bit of business that has shifted back and forth between us as they

have work through issues. they are a strong operating company and are investing heavily in infrastructure and will come back strong. excited about the fundamental growth taking place in the economy. seeing what is happening not and thingsrude oil like that. >> stock trading at a 52-week high. what is next? >> we hope more of the same. we are pretty optimistic as we look to the second half of the year. >> you talk about the strength how there isy and demand for oil amid the tapping if you will of the deep oil reserves and requirements that the new crude supply be shipped by rail because they are not enough hype lines in the country. does that account for the eight percent volume growth you saw in the second quarter or was some

of that volume that was trapped because of the weather and other transportation delays we saw in the first quarter? >> i think fundamentally it was a strong quarter because the aricultural products had strong harvest and are carrying over this year and into the next crop year. agricultural products up 16%. that was very positive for us. second largest group was industrial products. the shaleere we have development. lumber was up 17%. other construction products up 15%. those are really good strong, economic indicators. the intermodal business on the international side and domestic side both up. automobile sales, june at 16.9. our automobile business was up six percent.

really been a strong trajectory for us. the only business down year over oil was chemicals in crude was down 24%. >> how long do you believe coal volumes will remain strong given the recent slide in natural gas? >> natural gas is still in the price point where coal would be preferred and more economically viable. so we are not concerned about that. if you look out to future pricing, they are looking for the seasonal downtime for natural gas pricing anyway. if you look at the overall coal supply, the number of stockpile days that customers have, today will 16.5 days below what would be the five-year average for this time of year. ofwe -- though still plenty

demand. feeling good about coal business. >> how are the department of transportation's new safety regulations or the proposal if it passes or adopted as currently envisioned, how would it affect your company? >> when you look at the proposal that is out there, what the department of transportation has done is propose a number of options. quite frankly, none of them were a surprise. we have worked hand-in-hand with the department of transportation and customers to shape what is to make safe transportation even safer. so the proposal itself is not definitive in terms of one way. use of the options to cause concern. for instance, if we had to reduce the speed of the train entirely across the network like 40 miles per hour. that will have implications. it will take up capacity and it will slow other trains on the

network. those are the same ones we run passenger trains. there would be consequences. one thing proposed is the phaseout of d.o.t. cars in two years. i do not think there is enough capacity today to retrofit old cars and build new cars to keep up with that. i think it might be more like three years. i am pretty confident we will continue to work with the department of transportation, secretary fox and his team. >> thank you very much. .he ceo of union pacific >> stay with us. we have a lot more to cover. you are watching "market makers." ♪

>> stay with us.

following the bread crumbs to penny stocks. you will be surprised where we wind up. >> fortis back in the fast lane. the cfo will be here. dashboard is back in the fast lane. -- ford

♪ >> live from bloomberg headquarters in new york, this is "market makers." >> welcome back. >> good morning. do you remember saying technology? this mysterious company operates , oneistent numbers employee, a market value of six billion dollars. a penny stock was jumped more than 20,000%. in the space of just teed of science. we have been on the trail of the

sink mystery. >> across the board, erik schatzker -- >> a hot story and click lack a hot look. open a check it for a moment. look at that here that is sweet right there. give it to us. >> nobody expected you to find a whole lot, but it gets more interesting. monthscompany for a few listed a ceo who lives on an island off the coasts. to see a newthere for ari outside his house or whatever the case may be. it was a little tough to find and i had to ask around but i eventually got to his grandfather's house. >> what happened come you should about the town and said, does anybody know how the year? yes. people told me i do know where he lives, but i do

not want to tell you because his rather will be mad. you better look out for melvin. >> see, there you go. >> on facebook, melvin million dollar per america. i found melvin at the bar where he works. .e did not want to talk to me >> a bartender? >> he is. he is the x ceo's e's brother. driver who said he is from town, he got on the phone and started calling everyone he knows. eventually, we find the x ceo's e's cousin. we go to the house. the house is made of plywood. it is like if you and i went to home depot and made a house right now. there is an outhouse and it overturned golf cart in the art. if he had any involvement, he did not make any money.

this is where he lived until recently. his grandfather gets a phone call while i'm talking to him and says come i do not want to talk you anymore and he goes inside. driver tells me he gets a call from one of the people he had called and he said melvin house.our over at his >> million-dollar melvin and then what happened? >> melvin says, melvin his trunk and he is coming to get you and he is in a red golf cart. i told the cab driver i will promise my boss i would not get in any trouble while i am here. i do not want to see melvin. there is only one road in town but i said less just take the back way. we did not see him. >> a golf cart cannot beat you.

you're in an actual car. >> did you find any evidence? >> more distinct than we thought or just nothing? >> owing to the place where it just listed the headquarters. it turns out they had addressed it and it turns out, this is the building they went to. >> by far the nicest building in town. on the fourth floor, a guy who incorporates offshore companies, and also in offshore brokerage. i was able to get documents that showed the offshore brokerage had in fact held sink shares for clients.

i do not know who the clients were. takeaway with all of this? >> do not buy penny stocks. >> there you go. but then here is the question. who should be involved? help me, eric. >> there are a lot of people who are talking on the fcc for not for not think -- policing them, but i'm with stephanie. anybody who wanted to buy the stock would've done exactly what we did. that shows you know revenue and no assets and one employee and -- it lookedenses like a scheme or a scam or something like that. >> should the government protect you from not doing your own

homework? >> i do not think the government could have stopped this much sooner than it did. now that it has, i am sure they will look at the trading records .nd see who looks at the stock >> it starts trading again >> it does. >> a two-week suspension. >> yes. just -- bewill not displayed anywhere, but a lot of shorts will be scrambling to cover now. to beestors do not want known now that all eyes are on them. >> if you read the story, which bloomberg.com, you would be hard-pressed to see any value in this thing. >> sure. >> stray dogs, overturned golf carts. melvinod million-dollar

has the bartending job or else what would he do? >> great reporting. thank you for coming on. our own seat fox giving us the latest on sink there is >> when cfo bob shankthe is with us next. ♪

>> breaking news on russia, new sanctions the you may impose on vladimir putin. peter cook has the details. peter. >> this is a list the eu has been settling of entities potentially targeted by the eu, in an effort to step up their list. let me walk you through some of the names on the list because it may not be the list some in the obama administration had been theng for. the head of

federal security service in russia, the foreign intelligence searches chief, on the eu draft left -- list, yes i have the head of the national security council. individuals targeted, 15 in all are being considered by europeans. what is missing from the draft list, no major companies. the europeans at this point not considering any major russian companies being targeted. that could change. as things move next week, europeans will start to consider tougher sanctions, specifically blocking capital markets, a band on on and shares by europeans. technology, a ban on

selling deep-sea drilling equipment to the russians, the technology the energy sector would like to maintain. these are some initial steps. trying to plan initial pressure trying to get the europeans tougher going forward. meanwhile, the>> ford motor company in the midst of a remarkable recovery. 400int venture of almost million dollars. bob is with us now near detroit. peter just told us new sanctions may become me against russia. there is the threat of new sanctions given what has transpired in the ukraine in the past few days. if the sanctions are opposed, what that -- what might that mean? >> i do not know. . have not seen

what we will do is our normal process. we will understand what happened in the external environment and make adjustments as appropriate. >> of course. the overall economy in russia is not exactly healthy. russia to fords >> it is important in the sense it has the potential to be the goingt market in europe forward. when we look at future growth in the industry, it is one of those markets in terms of the top of the list and we like to participate in terms of other emerging lists in the world. >> another big surprise was the money you made in europe.

it was not a lot but it was the first time in three years. i understand your continuing to losses for the remainder of the year and a 2000 15.d ideally in what are you told right now about the state and paste of the ?conomic recovery there >> we are benefiting not only from our own actions but a well-thought-out execution plan that has been in place for and it isee years clearly bearing fruit. we are also benefiting from the fact the overall economy is turning around however modestly. we are seeing strong growth in the ukraine -- to u.k.. that is one of the benefits we are seeing in our own business

performances year. so excited about quarter results. we are expecting a loss in the full year but a profit next year. >> you know youth unemployment is a staggering level. onpanies like ford count young people to be the next generation of car buyers. how does that 25% unemployment and more in some places -- affect your company's prospects now and in the immediate term? son up -- some of those people would have been car buyers if they had jobs. >> good question. one of the things we had done as a result of that is we have a modest expectation in terms of continued growth in the industry sales in the next several years. you go back 2007 the industry was at 17 million. this year, we are looking at the 14.5 range.

clearly, we are seeing the impact of the overall modest expectations of growth. part of that is exactly what you just talked about. >> lie is it, and i want to shift and talk about the largely aluminum version of your best-selling product, why is ford being so cautious and setting expectations so low? >> we are excited about the introduction of the product. it is tremendous innovation coming from for it an incredibly important to us. has done and aluminum intensive vehicle in this volume before and we are extremely excited about this and pretty much in track in terms of the launch. facilityake down our in eight weeks and start building and start getting that

into showrooms by the end of the year. >> ie extremely excited. mischaracterize the company's optimism. everybody involved on the outside and inside just wants to make sure. i guess being a product like this out involves so many challenges that a number of things go wrong. than perhapsetter some people outside the country might feel? >> we feel good about the want. i cannot talk about how people feel outside. it is extremely innovative, as i mentioned. i can understand people being interested in terms of what we're doing but we feel very .repared in this launch we have great people and great talent on it and feel confident

we will have the product out there in the fourth quarter. >> a fascinating thing to watch. 20 one quarters of consecutive profit. thank you very much. more breaking news is coming fast and furious here. so to stream. you know it and it allows you to make soda at home. let's get out to scarlet in the newsroom who has more. --this is according to them two people familiar with the matter. they say there is a transaction that could take place where it would go private at about $40 per share. that would give it a total value of 828 million dollars. several fonts have been looking for a potential leveraged buyout. resumed trading. was aboutt it got to

3650 three. the price tag under discussion is $40 per share to take soda stream private. it has $500 million in revenue and slowed down quite a bit. revenue this year from 29%, 51% in 2012. we will keep an eye on it for you. investment burdens to be taken private. >> i do and i never use it here and i do not understand why it is so special. .> it reminds me of crops you put them on once a many say, i do not like these things. >> i never wear crocs. soda stream, i get that everybody else likes it but it is lost on me. >> when we come back, no boats and no problem. the latest wave in the sharing economy. ♪

than 86 million every year in the u.s.. found to the weekend now, making boats more accessible, more than 95% of the time unused, we are giving

people more access. as the market matures and expands, you will see more options for anyone who wants to get out of the water, whether it is corporate events or family or you want to have an investment meeting on the boat. >> if there is not a captain on a boatingdo you need license? >> very states do require a boat or captain to operate the boat on the license. listings rain from bare-bones reynolds all the way to megayacht's with captains and crews on them. you do not have to be an experienced operator. >> give us a sense of what it costs. can rent a kayak for $25 a day all the way up to a megayacht for $18,000 a day. the average price is about $450. that is typically a 28 foot power boat. >> a cool idea. what is your competition? >> we do not have much. a couple charter companies are out there and a couple people started to do what we are doing.

we have had the benefit of being the first mover in the market. we have key partnerships with players like brunswick and boat help us expand quickly. we build a product that is defensible. we are going probably 10 times the rate, probably the same amount of both their adding. are ahead of the competition. >> nothing works if you're stuck out at sea or your engine cops out. >> we put in place a conference of insurance and on the water program so every renter includes up to $1 million in liability and $2 million in coverage to protect the boat. we prescreen and qualify every renter and we look at our driving and criminal history prior to turning that over to the boat owner to really figure out if you know your way on the boat and operate the vessel. eatotes today, what other

-- what other underutilized assets can you bring? today, what is next? we areecosystem evolves, seeing providers pop up to complement our services. as we continue to bring new ters, marinas and dealers, all sorts of partners are working with us to bring tech. we are seeing massive growth. leave ite got to there. thank you for joining us, the founder and ceo of boat found. the for us to take you on markets. scarlet fu has more. >> thank you. we will head straight into the options insight today. joining us right now is scott bauer. you have got a trade for us on twitter. a bullish or bearish strategy? neutral strategy.

not a lot of earnings history. the options market is pricing in at about a 25% move. it sounds complicated but it is really not. for those options traders out there, this is a golden nugget trade. i am selling a call spread. august 30 eighth, about where death august -- august 30 eight. -- aguest 38.est all day long ride again that risk reward to this type of trade, especially when it is only four dollars per stock earnings. >> you are not expecting the stock to move a whole lot and if it does move a whole lot to the downside or upside, you would be losing money. a dollar.risk is

i am to potentially make three dollars on the trade. in twitter bearish overall, but this is a neutral trade on earnings. >> twitter will be reporting results next week. facebook reporting results yesterday and the stock is trading at a record high. a lot of options activity leading up to that as well. thank you so much. we will be back on the markets once again in 30 minutes. "money clip" is up next with adam johnson. have a great rest of the day. ♪

>> "money clip. welcome to" ." welcome to "money clip i'm adam johnson. it's an earnings bonanza from caterpillar to facebook. barras says he is not the sheriff of wall street that you are. we have a double feature for auto burg today. mark mobius stand by the russia play. believe it or not, his admiration of vladimir putin. and basketball star ray allen calls the shots. we kick it off with what everyone is talking about.