store closed --historic lows. >> especially if the fed will be raising rates soon. d thank you. ♪ ♪ >> labor market on a hot streak. the economy has not added jobs this fast in 17 years. >> a $5 billion question, where will elon musk build that giant factory? five states are in the running. you must china is winning the race. the grandson of nelson mandela how america can catch up. market makers here on bloomberg

television, happy friday. >> i am alix steel in for stephanie ruhle. he get that jobs number and the markets are -- we get that jobs number and the markets are inching their way higher. of time for the news feed, the top stories from around the world. we haven't seen a job market like this since 1997, employers adding 200-7000 jobs for the six straight month in july -- adding 200-7000 jobs for the sixth straight month in july -- 207, 000 jobs for the sixth straight month in july. ford beat estimates while nissan, gm, and chrysler came up short. and a big takeover in the slot machine business. it represents a 38 percent premium over the closing price

yesterday. >> investors are breathing a sigh of relief. for more thand 300 points for its first day -- for its worst day since february. we are asking where do we go from here. we turn to rick reader. ofsees over $700 billion fixed income at blackrock, the world's largest asset management. we did this last month, we hope we can do it every day going forward. your talk about perspective on markets as a whole. your specialty is fixed income, rates, credit, but equity is certainly a part of the puzzle. when we look at what we saw yesterday and how things have stabilized, what does that say to you?

>> i think the markets are adjusting to the fact -- we have a view that the fed is going to move faster than people think. said, six months with over 200-7000 jobs -- with ,000 jobs. i think when the fed moves it will be very well thought through in terms of what the long-term funds rate is and how to keep the back end of the curve down. i don't think they'll be tremendous devastation at all. people are starting to think about that. focusingms the fed is on wages. we have -- we are not seeing that such -- that accelerate. >> there is a tremendous bifurcation of wages. when you break away from the aggregate data, you see jobs with specialized skills, the

hard to fill jobs that are surging higher. you are seeing wage pressure. you clearly are seeing wages pickup. a bifurcated wage dynamic in this country today. him i think trying to keep rates at zero to try to enhance that is dubious. >> you have been super consistent for months now create you have explained is the fed will move sooner than some people have anticipated. perhaps we will see something in the first quarter. is that why people are taking money off the table in credit? >> credit has had an incredible run. you had 10 straight months of positive returns and tremendous inflows. you had yields that when you take a step back and think about where yields are in part of the high-yield market and look at it historically, we are pretty full. of people are saying we had a good run.

year where wee of pull back a little bit. you had some significant inflows. doesn't build bigger -- doesn't build bigger? 's -- does it gold bigger? >> it is not a question of if but when there will be a credit market correction. wise men some of the at wall street, the folks who made out very well in the big short back in 2008. we are on the cusp of correction. >> if you put things in perspective, when did credit have significant trade-offs? when you think about what drove it, there was a tremendous amount of fundamentals behind it. the cash flows, financing is

available in the marketplace. i would market the fundamentals are extremely good freedom there are not a lot of places to go for yield in the world today. what else am i going to do? i think there is no doubt we should correct and we are in the middle of correcting. him when you take a step act and look at what the true fundamentals are it is pretty good. >> he is the chief equity strategist at citigroup. rick says people are still searching for yield and the credit market isn't about to melt down so long as that is the case. is equity safe? >> i think the term safe is questionable. it is a question of where you are in the markets. we prefer large caps over small caps. it is not about a risk on or risk off asset. it has to do with where you are on the credit cycle, has to do with the lead indicators in

terms of performance metrics. you can find areas where there is aggressive valuation. you probably want to keep away from those. you can find areas where there is much more attractive valuation. the one thing i would probably suggest with regards to high-yield, i think rick would agree with that, when you are talking about the current yields they are far from high, which is better than you get elsewhere. talku also heard rick about the pifer occasion in the wage markets. -- the bifurcation and the wage markets. when does it disrupt corporate profit margins? >> there are two ways to look at this. with regards to higher wages, it is not necessarily mean you're going to see corporate profits slowdown in any major way. the answer is not in the initial phases. the unemployment check becomes a paycheck where the paycheck gets bigger. up.variable costs go the fixed over pet -- fixed

overhead cost structure gets better. the initial phase is positive for earnings growth. is wheredary aspect are we in profit margins relative to labor compensation echo there has been a bad chart describing it. it really does a poor job of addressing international components to the earnings aspect. s&p 500, yout the see where they were below 2007 highs. there is lots of room of profit margin. >> is it going to be the dog, the credit market, wagging? collect siu will have a jackson

hole meeting coming up and then the september affluence a. you have to watch flows in the credit markets. >> the title of it is all about labor. there is a robust conversation taking place. my sense is there is other dissent on the fed committee, thinking about a structural component. how much can you keep the funds rate at zero? we have a press conference after the next fed meeting. a seems like that would be natural transition point to talk about the evolution of monetary policy. i think we need to watch the flows in credit markets. we will see where that goes. absent some kind of exogenous shock, is that the next important date on the calendar? >> i think of it in little bit differently. from an equity point of view it is more of a him or then a light

switch. we can't look at that and say -- i agree with rick, i don't think we're going to see anything particularly hawkish. that is one man's opinion. i think it is more about the degree to which you have to worry about shifts over the next year or so. i suspect that discussion will be more earnest late this year than early next year. that end up speeding up any cap x investment? maybe companies don't want to get into too much debt. doesn't it have a positive trickle-down? >> let's start with the fact that the s&p 500 companies have record capital spending in 2011 and 2012 and record capital spending in 2013. they haven't been that restrained it 2014 we tracked over 700 companies. their plans are to be up over 7% this year over last year.

i think the idea of things cost you more through financing cost slater, then there is an incentive to do that before it occurs. is also happening in areas like mergers and acquisitions. >> if janet yellen shares your point of view and dwells on that at jackson hole, our markets going to see that? >> i think i may have a slightly different perspective in that i do think there are a number of structural influences. that is changing the structure of the jobs market as well as what drove hiring in the last decade. fed has been adamant about it more cyclical instruction. >> a big if. $700reider oversees

billion at blackrock. thank you. and thanks to you to bias, chief equity strategist at citigroup. musk's ute contest. which state will end up with a battery factory for tesla's electric cars? >> we will talk about winning the hearts and minds of africa. america is playing catchup with china. of we will talk with the grandson of the late nelson mandela.

>> so far elon musk is not tipping his hand. we are in washington with more on this battle. no final location. still a lot of contenders. they announced they broke

ground in reno nevada, just outside of reno. states,r five california, new mexico, texas, and arizona are all very much still in the running. musk says he wants to break ground in potentially as many as three locations and by the end of the year he will decide which one to build completion based on the speed of regulatory approval. of it is still anyone's game. in everyone wants a piece of the $5 billion factory. him perhaps none more than nevada, with the highest unemployment rate of the group at 7.7%. they can post no corporate or personal income taxes, job grants. none of the states will offer up exactly what incentives they will offer.

each have an idea of what state may be playing. he is looking to the state legislature to provide an attractive sentence package -- attractive incentive package. at $5 billion he is looking at 400 to $500 million. >> it looks like they will put up about 2 billion. of we don't know what panasonic will put up. half a billion is a pretty steep price tag. the >> very steep. it has some people believing the smaller states might not be the front-runners. you are looking at texas, california. california is tesla's home state it is still anyone's gain.

>> thank you so much yang yang. we couldn't possibly talk about tesla without bringing in cory johnson to the conversation. you are listening to the call last night. step it up nevada or else. him the issue we need to bring into this conversation is a lithium. is there enough lithium out there to make all of these batteries? >> if you fast-forward to 2025 the answer could be no. demand could be 480,000 tons. your bipolar meds, not that anybody takes those. you can also look at a spaceship.

you can offset your lithium. the demand is so high. supply is very difficult to come by. thisy don't we hear about from tesla? >> there is going to be the next car, another car, an amazing sentence in the press release that said we broke ground in a factory of potential locations. they are literally tending -- literally spending money on a bulldozer with nowhere to build. the reason isn't building the factories. let us wonder what is the reason. is it because they want to get investors excited to?

long before the cars shipped out of the lot. dothey are going to have to to put into the giga factory. at the end of the day you will not see production start up until 2017. >> i'm not saying elon musk is a stock promoter. atthey are really good getting people excited about a future that is more uncertain than press releases might suggest. being able to source enough lithium. >> there are 13 million tons in the ground. >> dell reserves. >> this is not just probable, it is proven. there is enough in the ground. it it is getting it out. the majority is in bolivia, very hard to do business there. chile is where we get most of our lithium.

demand is really being out supplied by 2025. outemand is beating supplied by 2025. >> if there are no proven reserves it is about what people are prepared to face. >> what about technology? how much are we locked into a certain technology or is lithium going to be the battery source for the next 30 years? >> will there be something that comes up? we have seen a lot of start ups come in and try to find different ways of getting lithium to markets faster. it is not proven technology yet. >> there have been so many batteries.around

>> are they right to fool investors into thinking something will happen? comee to two projects online every five years. that is not a lot. of >> that is not fast. >> he operates on west coast time. >> cory johnson, thank you very much. we have more market makers coming your way. he will be back after this short break.

>> it is time for bloomberg on the markets. thate looking at stocks are relatively flat, if you can make that assumption after

yesterday's pretty disastrous selloff. you had payrolls come in slightly worse than estimates. buys upid see juniper for it. there was an uptick in unemployment rates at 6.2%. oan increase in labor force participation. we did get the best read on manufacturing here in the u.s.'s 2011. coming in at 57.1 for july. out linkedin.alk so much for the networking slowdown. we saw those results from twitter and facebook. now it is linkedin come in and -- coming in with a revenue forecast ahead of avenue -- ahead of analysts projections. analysts were looking at $541.5 million. million, that$1.5

is apparently good enough for 2.5 billion dollars in additional market values. up, how to price risk in a war zone. we will talk to an insurance company that does just that. ♪

>> you are watching market makers on bloomberg television. happy friday everyone. it is hard to remember a time when there were so many crisis happening so many parts of the world. they had a big impact in the operations of multinationals and to help mitigate that risk they help take out insurance on their assets. the global insurance firms has policies protect capital assets and humans in high risk locations all across the globe.

chris, it is a pleasure to see you today. inky for joining us. there are so many crises happening from ukraine and in iraq. particularly i am interested in what happened to the airline industry insurance after malaysian flight 17 was shot down. >> it is a pleasure. the specific impact with regard to mh 17 is not going to be felt in particular within the global insurance market for aviation. it is the broader context of all of the disasters that have occurred. what we are reading and seeing is a significant tightening with regard to rates. the capacity is becoming extremely difficult to obtain. >> is there one particular region or industry that winds up getting hits the most? >> we spoke about airlines for a

moment. to consider the broader spectrum of context and directs -- and whether it is related to the conflict in gaza, the airline disasters we have seen, the rise of the islamic state, all of those have a large impact throughout the globe on the cost and availability of the capacity to ensure risk. those organizations that are deploying assets and individuals into regions of the world where conflict is present or close by rc be tightening. , how do you price risk like this? it is not as straightforward as taking a piece of news and adjusting the cause or the rate that is charged to regulate.

it is a combination of the existing exposures we are seeing on the television today. those we don't see that are going on at a lower level that are still out there, as well as the necessary analysis to try to willct where that risk ultimately take us, where future risks and exposures are going to occur. it is a complex process that a spend all dayrts long, all week long, trying to come up with the best answer. >> the given there are so many hotspot him a whether it is gaza -- or iraq, it would seem to me you have some pricing power. insurance is a cost of doing business.

>> it is true that insurance is a cost of doing business. understand they need to protect those assets. the insurance industry wants to capacity on a strategically deployed basis and want to do it at a cost level that is affordable for everybody engaged in the industry worldwide. it serves the industry best if we can meet those needs for as many firms is possible. the capital is finite and therefore there is only so much that can be deployed. year,get later into the as i capacity gets utilized and the ploy for existing clients, it becomes more expensive. that does obviously have an impact. companies --

what we do is provide the expert advice and counseling to manage that risk created insurance is only one component of the risk management process. we go through a process of evaluating what their mission is and where that mission is going to take them and determine how they can best manage, avoid, and sure, or otherwise take care of those risks that are presented immediately to them and in the , which can have an effect for anybody off rating near a concert zone. seen clients or companies make the decision to pull up stakes and with draw evena market because though they might see business opportunity they have a cost -- the cost of protecting people is

too high? >> we haven't seen companies pull up and moved out of markets or organizations the markets that are part of their core focus is on the increase costs around risk and insurance. we have all seen a number of entities that feel like they have to take a pause and pulled back from the cop -- from the hottest conflict zones. a temporary impact is what we are seeing more broadly. what kind of insurance is most in demand? damages, terrorist attacks, what is the biggest threat? focusse kind of events risk managers and company executive minds around political violence.

there is no one that is the most popular and most in need. the broad spectrum of political violence is in great demand today. >> thank you for your perspective. sending an investment deal in africa. we will ask nelson mandela's grandson how america catches up.

>> now america is playing catch-up. next president obama will host dozens of african and political business leaders for a three-day

summit. are upstaging the president with our own minisummit. he is an entrepreneur and cofounder of education. he is moving to self -- to south africa. of africafounder rising. he happens to be the grandson of the late nelson mandela. let's put things into perspective. how far behind china is the u.s. ? >> i think america is quite hesitant because of the political landscape, the risk, the turmoil, the instability. it is a lot closer when you look at the china africa relationship.

when you look at the it has beenls, quite robust. >> the risks are real. we have lookedng at extensively. their potential is extraordinary. the 10 fastest-growing economies are on the african continent. >> is there a difference between china coming in and taking over natural resources and bringing their own people versus starting up there and having a business that is actually based their? >> there is a huge difference. the greatestf resources is is extraordinary use in young people who are building organizations to bring that human capital and potential together. the use of the continent means it has one third of all young people on the planet.

have this extraordinary human resource that is largely untapped. people are needed to bring that together. >> i should add we have heard this before. the low we are trying to figure out is why it is different this time. of africa remains starved for infrastructure, riddled with political and corporate corruption. in some parts it remains affected terribly by infectious disease. of there is terrorism in sub-saharan africa. get its headtal around these issues? the to affect asduction it is not far-reaching as it seems. has made these

issues is far bigger than they are. from is a huge kickback countries to say that is -- yes we want to to come. to be have our own labor able to harness those opportunities that exist. africa is looking to be the key role player in leading development of the continent. continentot want the being led by european hands or american are especially the chinese. the they come in and give you the capital but everything is done on their terms. >> investors tend to behave that way. we arethat is why looking at people like germany to come in and actually invest. we keep talking about

africa as if it has one voice. at the end of the day there are multiple countries that do not agree with each other and have different self interests. how do you operate like that? >> we underestimate the size of those countries. of nigeria has 162 million people. of that is a $500 billion market how do you take advantage of an opportunity like that? somebodyto me that if is willing to make an investment in nigeria they must also be willing to accept the risk of potential losses. how do you come up with that calculation? how do you decide what the risk is versus the reward? to be atirely has function of having on the ground partners. not thinking of it of we want

to come in and did tate terms but we want to work with the local community and local governments. far we have had an extraordinarily warm reception for the new company that will be announced during the u n general assembly because of that partnership that has allowed us to integrate into the culture. >> are there other sectors? >> when you look at imaging and construction, infrastructure and development, it was i.t. and technology based. even when it comes to services -- products .

belgium is inn the same thing as investing in greece. why don't we talk about investing in south africa in the same breath we talk about the ivory coast? different countries with different cultural, political, religious backgrounds. until people get a chance to meet people from the continent from different countries and understand how similar we all are, the similar challenges and similar aspirations of young people, it feels as if it is a different world. goals have the exact same and are just human beings like us. of when you think about what that means from an investment standpoint, you can speak about the opportunities in south africa where you have incredibly fast-growing economies. until you have some understanding connecting to the

humanity of it is feel separate. >> very nice to have you here. terrific to have you both here. make sure to tune in next week. coverage's exclusive of the first ever u.s. africa business forum where world leaders will focus on business opportunities in africa. >> under armour launches its biggest marketing campaign ever. we will hear from kevin plank.

>> revenue has tripled since 2008. says that is slowly changing. he is hoping a new ad campaign

will supercharge sales to the other planet -- to the other half of the planet. the think women always love brand. it is a matter of us delivering on what they are asking for. performance always works but you -- that is chance what today is about. is not a launch by any way shape or form. we are telling the consumer that we are making products -- you have already got 30% of your sales. where do you want to take it to? represented footie percent. we have added over $2 billion in revenue. it is outpacing our growth. of what ourproud women mean to us and their

opportunity. to win in a women's game you're not just going to make a cute top. you have to win in -- ribution >> are you changing your tune now that you have had a meeting with samsung? have lots of partners from lots of different places. the connected platform has been overwhelming for us. the platform had about 20 million registered users. the first monday in july, we had over 64th house and people sign up to join the platform.

it is going to include a lot of partners. is job own,ng samsung, any device that will compute and work -- that is going to lead us to a much bigger idea. somethinggoing to see between you and samsung? >> there is lots out there. nothing to say. they are a great company. >> is under armour for the underdogs? corrects it is not about the athlete and it is about being seen. we have phenomenal athletes, some of the best in the world. if you look at the portfolio of have been together seven years now. we have been doing this together

for a very long time. and we lovehip that. we love building our city and building our stage. we love that you can never compete with the behemoth's. what they do or don't do has no impact with our business. we control our own destiny. it is our job to execute. >> you mentioned some of the great women that are tied to under armour women. tom brady. she is stylish, she is beautiful, she is athletic. we have had an amazing relationship with tom brady. i was really happy to see giselle at the world cup, being apart of her home country's ceremony at the beginning of the game.

greeted -- great respect and admiration. alex, i don't know if you have had a moment to see how well under armour has done. chances are he is going to be successful because pretty much everything else he has done with this company has been successful. since the market bottomed in march of 2009, under armour is up 1500 40%. s&p 500, total returns, including dividends, 171%. >> it is beating out its peers in that arena. armour iset under

such a raising -- it is why under armour is such a raging success. tune into today's options insight. . .

live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> will this be the a hundred-pound gorilla? it creates an online real estate giant. we will talk to one of the best-known brokers. >> the french company wants to buy t-mobile. it is probably going to have to raise the $15 billion offer. >> coke tries to put the fizz back in flat sales. it may start with admitting obesity is a problem. >> good morning.

you are watching "market makers." i am erik schatzker. >> i'm alix steel. happy friday. it is time for the top business stories from around the world. the labor market has not grown at this rate since 1997. for the six-month month on a roll, employers added jobs. sixth month in a row, employers added jobs. manufacturing rose at the fastest pace in three years. factories ramped up production after increased demand for cars and business equipment. procter & gamble is going on a diet. it plans to eliminate up to 100 brands over the next two years. the brands that remain account for 95% of profit. the company reported quarterly profits that beat estimates. >> in the market for a house or summer home? you used to have an easy choice in your online searches.

not anymore. trulia are merging in a $3.5 billion deal. what does this mean for the real estate industry and for buyers and sellers? we are asking barbara corcoran. she is now an investor. the abc hit from show "shark tank." changer.a game you have the two biggest guys in the business that used to compete with each other every day of the week, and they've join hands. now they control 60% of all the eyeballs have any interest in finding a new home. everybody goes online and will be looking at one website if this deal goes through. it is the big gorilla. no doubt about it. >> they have pricing power. they can charge as much as they want for ads.

>> they can charge whatever they want for advertising, including brokers who have to advertise. they need the brokers to get the listings. the listings need them to be found. it is a simpatico relationship. >> for how long? they have the platform everybody wants to be on and needs to be on. >> if i could interrupt you. to have that platform, they must have a full grip on all the listings. for that, you need the real estate broker to get the agreement signed and put it on the listing. trulia.od news for >> couldn't you have made that argument for travel agents back in the day? where are they now? >> they are gone. they are simply -- were simply a provider of information to the

consumer. the real estate broker has a connection to the seller. they have to get the listing. that is the important difference. sold ayone who has ever as in many cases come to resent the 6% you have to give up on the purchase price. seehere anything you can that is going to change the pricing power real estate agents have over clients? >> i don't think so. the only thing that controls the pricing is competition. if one broke reduces their commission, the next was have to compete with that. that is still in the hands of the brokers provided they are similar in what they charge. i don't see that changing. >> what about for sale by owner? do brokers have to sweeten the deal to get customers? >> that has always been the argument. that is why the owners would threaten the commission.

it does not work out that way because not enough people have the time to market their properties themselves even though they have a huge platform like trulia or zillow. still that number is not increasing. >> why do we not see more real estate brokers offering lower commissions? >> would you? >> if i thought it would get me more business. once upon a time, before online avertisements, you needed broker because the broker was your key to market. zillow areia and the key to the market. >> there is less of a value proposition in hiring real estate brokers. prices have gone up. the broker is collected more than 15 years ago.

just looking for some free market dynamics. >> the broker today can offer more. i am not even a real estate broker anymore. i am friendly to the real estate community. >> you are in the industry. >> i pay commissions. i should be on the other side of the fence an opinion and still am not. the broker who gets an exclusive on a property can say i will market your property to the whole world. they pop it on any of the big websites. it used to be more limited. on top of that, you still need someone to manage the egos in the negotiations. leave in the hands of the homeowner and those negotiations do not work out as favorably for themselves. >> why do brokers need advertising? wind uprity of people finding their real estate agent through friends or family. why do they need zillow or trulia? >> they want to reach the

listings. the best way to do that is to have it on a giant website. that is where they come in. they are of like boardwalk and park place with a big hotel on each. what happens to the brokerage community when the guy that owns them gets wiped out? the rest of the spots are owned and controlled by brokers. it is meaningless. >> you don't want to be on atlantic avenue. >> or baltic, even worse. >> do you still have an endorsement deal with homes.com? >> i don't think i ever had one. i will have to check on that. i think the way back, i did. >> what does this mean for smaller outfits in the business withwere competitors trula and zillow? >> it is a game changer.

it is so hard to compete for the .ext closest rival is redfin it is like comparing a guppy to a shark. minnowsrs are like swimming by and watching the action. the market changed 10 years ago when the "new york times" classified section went from 14 pages 21. that is an indication of how this market has changed. >> do you think more sellers will come on the market? what prices will go through the roof. we are not even getting started yet. prices will go to the moon and back. just watch. what is the appreciation of what i just bought two years ago? >> where is your place? that is going down, too. >> you don't even know where it

is. >> why is there an area that will go down and others will not? >> park slope is golden. part to brooklyn what places to manhattan. >> where are you investing? >> outskirts of new york city. waite ando the gay where they are livingrs. >> seriously? >> that is brilliant. >> they go in early. they approve -- improve an area. when they go in, put your money in and you will make money. you will see the nightclub action, the first indication an area will pop. i like the columbia university area. that is where i am investing. parts of it are outskirts. it is still manhattan.

there's really nothing left in brooklyn and has not been discovered. brooklyn is over. they will still go up. stuyvesant, i bought two buildings there 14 years ago. it doubled in value the first few years. >> then we had the financial crisis. >> everybody lost in the financial crisis, just about everybody in real estate lost in the financial crisis. >> do you like anything outside of new york? >> you always lose your shirt when you go into somebody else's ballpark. >> what is the business -- biggest risk to the housing market? >> interest rates going up. at first, it will help prices. hurtey go up, that will the market when people give credit for. blackrockcutive at manages fixed income. he is worried about the impact

student debt will have on the real estate market. that the amount of student debt students are carrying will prevent them, a whole generation of first-time homebuyers, from coming into the market. >> he is right. it has been the case for the last five years. everybody is moving home. they cannot afford the debt and to buy. despite that, the housing market is increasing. it holds it back but it is not a big player. >> these are new households you are seeing formed? >> everything. upgrade buyers, new households, second-home market. the last to recover, now doing fine. the housing market had such a bad chapter that everybody is making up for lost time. >> it is so great to have you here. thanks for coming. >> i hope my husband was listening. [laughter] >> barbara corcoran, founder of

the corcoran group. >> coming up, the fight for t-mobile. sprint has been considering an offer. a french company has made a bid. >> it is friday. time to play the yearbook game. this is a media executive that graduated from the lawrenceville school in 1959 -- 1960. that is all the producers are telling us. send us your guess. ♪

suitor.ile has another the french telecom company made a surprising bid for the fourth largest u.s. cell phone carrier interrupting the meeting between t-mobile and sprint. next, let's turn to alex who has been following this

closely. cory johnson joining us as well. we are looking at it for $33 a share. what does that do to sprint? >> can we start with how preposterous this bid is? >> he has been saying that all day. >> and yesterday. >> the terms do not match up to what sprint has offered. >> they don't add up period. >> it does not look like it has the dough or borrowing capacity to do this kind of deal. >> why even make it? >> who put them up to this? >> no one really knows. they have not said. they have their own strategy going on in france. theoretically, they could be bought out. potentially, that maybe what they are doing.

if you guys don't coalesce around us, we will look elsewhere. there are a lot of things that are on. 3g company in france. we are not going backwards in this country. size.is a fraction of its >> somewhere between 1/4 and 1/2. >> technology is the key to understanding this. the future of t-mobile is going to be a type of 4g that is different. >> some have been complaining sprint has not been investing fast enough to make that acquisition. >> the spectrum is interesting and could lead to differentiated, better service.

these guys are talking about synergies. >> $10 billion in synergy? where does that come from if the two companies have only $15 billion in combined operating expenses? >> good question. if you have the synergy argument, there is no way an iliad bid could out-synergize a sprint bid. >> couldn't help that they are not in the same country? >> this sprint-t-mobile deal has still not been announced. it keeps getting pushed back. june, nowold september. i'm starting to hear from people they are not sold on this. it is not a done deal yet. there is a lot of concern on the regulatory front. one of the interesting things about this is they spent months talking to regulators trying to

get their pulse. not much time was spent on the deal structure, so that was pushed back. >> now there is a window of opportunity for iliad. they want to see them put a real offer on the table. >> do either of these companies have the capital to help t-mobile at the end of the day? >> no, the telecom is all about debt. the question is the borrowing capacity. thanks are giving away money for free now -- the banks are giving away money for free now. deutsche telekom has shown a desire to unload their stake. maybe iliad could take some of that off their hands while they sit through the regulatory process of a sprint-t-mobile acquisition. they could lighten their load. that could still happen. >> you wonder if maybe dish comes back into the picture. dish tried to buy sprint. the offer was seen as

preposterous and did not go through. potentially dish's strategy has been to wait and hold back, wait for regulators to block a sprint-t-mobile merger and come over the top and try to buy t-mobile. thatere is a rival bidder says we don't have a regular toy problem, maybe dish -- regulatory problem, maybe dish is forced to put their cards on the table earlier. whfor the guppies, it is seasonale. that is a function of the low interest-rate environment. the ceo of iliad sounds kind of crazy. did they hook this up together? adultrred in the pornography industry? rights to the

song "my way." >> co-owner. >> that would be a colorful combination. crazy. >> let's not forget the t-mobile asset that was a dog a couple of years ago. john leger marched in with his old team from t-mobile. i met with him about this a few weeks ago. we were out for drinks with macklemore. the discussion was about how this plan to turnaround team of your -- t-mobile and change the telecom industry in the u.s. was something they worked on before they marched in the door. he came in with his team reviving this company forcing the other carriers to respond. >> if you follow john leger on , i suggest you do if you like swearwords. he has pushed this narrative he does not need to merge with sprint. he is going to be the boss of

the new sprint employees. >> he behaves like a guy who does not feel like he has to. in may said wen cannot compete with softbank on t-mobile. we don't have the money for it. dishes a $32 billion company. compete, but maybe he can and does not want to reveal strategy. >> we have to leave it there. out sherman and cory johnson -- alex sherman and cory johnson. >> when we come back, republican versus republican on capitol hill, fighting about what to do about immigration. ♪

>> we are approaching 26 minutes past the hour. time for "on the markets." you had better have your eye on the broad market. we are down .25% on the s&p. the dow has given up an additional .3%. there is the nasdaq as well. i want to look at go pro. fascinating story. sales are on fire, up 30% year over year, exceeding analyst estimates. here is the problem. it is losing a lot of money. about $20 million in the last quarter. shares are priced high. as a result, they have dropped 12%. to be a mediaying

company versus just a sales company. >> a one-day drop. but since the ipo, up 76%. still a rich reward for those who got in at the right time. ames used to go better with coke. what now? ♪

withis is "market makers" erik schatzker and stephanie will. -- stephanie ruhle. >> it is "market makers." i am erik schatzker. >> i am alix steel in for stephanie ruhle. fewer people are sharing a coke. that is causing problems for the giant. the company is becoming more transparent about challenges and solutions. this story is great. you should read it. we have a managing partner at consumer revises on

financials. in college, i drink seven a day. graduated, stepped on a scale, and never touched it again. how did they make me drink it? thehey started upsizing in 1980's. >> not in this city. >> i started doing that. as obesity started skyrocketing, they got the brunt of the pushback. people started moving away from soda. it is easier to cut out of your diet. coke has an image where people think of it as being unhealthy where they had not thought of that before. >> what do you do about that? you like the stock. that is a big issue. >> it is a core position in our portfolio. we are happy to add to it at the current price. we think it is a great stable product. the fact that

consumers point of the companies for these problems. consumers need to be more conscious of their own decisions and held accountable. coke is a great product and has a fabulous portfolio. you have toquestion ask yourself today is, can coca cola innovate and create their way out of this mess? i think they have the cash. their profit margins are still good. they will find a way to continue to grow. >> let's listen to the ceo in his own words speaking at the clinton global initiative speaking about coke and obesity. >> we want to be part of the solution. we want to create awareness for energy balance. we would like people to understand if they are consuming products with calories, whether drinks or food, they have to

create a balance and move away from sedentary lifestyles. create ae you can only solution for this societal problem if you work together and have this harmonized partnership between government, business, and civil society. cynics say what a load of b.s. i will not be a cynic. i wonder why coke does not embrace soft drinks the way oil companies are embracing oil. oil is not going away. we don't need to be in the wind or solar business. it is ok to sell gasoline. ok ton't coax a it is sell high fructose corn syrup soft drinks? >> i think you heard him say it.

they are aware of the problem and want to resolve that. it is huge. >> i think they're trying to refocus the way people think about it. >> we used to drink soda as much as water, even more. now they're trying to remarket themselves as a treat, something you enjoy in moderation. >> do they fear high fructose corn syrup is going to be regulated the way tobacco is? >> i think you would have to ask them. i think they recognize that people are looking at them differently. customers will navigate that. >> what is the risk when coke diversifies into so many different products? they bought a vitamin water company and coconut water company. they had so many products trying to be healthy that they strayed from their core. >> they have diversified. i think they started in 2007. they started a new branch were they would buy up smaller regional brands.

their core brand is still coca-cola. they are the coca-cola company. they need to make sure people still feel good about that drink. >> at the end of the day, coca-cola will be here. it is a staple product, consumer product. it is summertime. there is nothing better than an ice cold coca-cola. >> shameless plug. [laughter] >> can we do a random survey? , stu you drink -- how much do you drink? >> i drink diet coke, probably a sixpack a week. i go diet. i like diet. i am conscious and aware but i still love the product. >> i drew a ton of diet coke. i was probably a huge portion of their sales when i was a teenager. i still drink it and drink regular coke and sprite zero.

>> i don't. idon't think i have had -- might have had a ginger ale a couple of times in the last 10 years. i don't drink the diet stuff at all. where does the aspartame go in your body? [laughter] >> i am not quite sure. once again, consumer but where -- beware. be conscious of your choices. >> by that theory, tobacco should not be related -- regulated either. >> i think we cannot continue to regulate everything we do. consumers need to be accountable for what they do. >> what about people who are poorly educated and don't know better? they don't need any protection and should be at the mercy of a marketing industrial giant? >> you can see too much of anything is not going to be good for you. i have a big pop on with the

consumer deal where they go after the maker. cigarettes? they like to consumers in the early days. they were found to have lied about the damage of cigarettes. that is what allowed that platform to develop in terms of lawsuits. at the end of the day, coca-cola pays a nice 3% dividend. if you look at the history, it will build over time. we are happy to add it to our portfolios and not concerned at all. >> it is a great article. you should check it out online. we appreciate it. >> while we were talking about coke, big breaking news. scarlet fu is in the newsroom. >> some legal problems is one way to put it. gan has filed ar

lawsuit in central -- district an billainst valeant ackman alleging insider trading, fraudulent practices and failure information. in february through april, pershing square or just stock while aware of takeover intentions. valeant is down. allergan is off in line with the broader market movements. allergan deciding to make a legal problem for valeant and bill ackman's pershing square. it said it filed the suit to make sure all stockholders have the opportunity to make decisions based on full and fair disclosures. alleging insider trading and

fraudulent practices. we will continue to monitor. >> i think it is fair to say we have been waiting for something like this. ergan is under pressure , withw it can go it alone all the money of pershing square . just last week, they were cutting jobs and now this. anything to try to postpone a shareholder vote is far out into the future as possible. going to court would do that. >> a defensive move pushing the stock lower this morning. it is something we were expecting. allergan doing what it can to fend off valeant an pershing square. that is the latest on allergan filing in federal court. >> thank you, scarlet fu. house speaker john

boehner cannot blame this on the democrats. he hit an unexpected roadblock before a planned vote on an immigration bill. >> it is time to play the yearbook game, which i am terrible at. and a media executive graduated in 1960. i need help. tweet me. ♪

>> you are watching "market makers." i am erik schatzker with alix steel. it was an embarrassing night for house republicans. speaker john boehner had to cancel a vote on immigration after a group of republican lawmakers surprised the gop leadership saying they would vote against the bill. there are signs this morning the law could be coming back from the dead. from cook is with us capitol hill and al hunt is

getting ready for tonight's "political capital." what happened last night? and what might happen today? >> surprise, surprise. john boehner faced another republican revolt over the border bill with conservatives saying it was not tough enough dealing with the issue of the flood of central american immigrants, children by and large. they went back to work this morning. they met behind closed doors. it looks like they have made enough tweaks that they will get the support they need. that is what we are hearing from members leaving the meeting. 694 million dollars, they have added $35 million to give more money to texas governor rick. to support national guard troops along the border. rulesoughened deportation to make it easier to send them

back to their central american countries. they have also agreed to have a second vote that would toughen language, additionally which couldg with asylum rules they toughened this bill to the dismay of democrats urging democrats -- republicans to consider the bipartisan bill that cleared the senate. that will not happen. it looks like republicans and democrats will be able to head home by the end of today. >> as they look back on their legislative record, what can they say they did this session? >> it depends on who you talk to. bottom line is not was accomplished in congress between the chambers. republicans sent 200 bills to the senate. you have the senate complaining about the house not doing anything. the bottom line is this place is in gridlock. there is no prospect until the midterm election for any change.

there are a lot of big-ticket items that need to be dealt with. a lot of them kicked past election day. immigration is surfacing as an obvious flashpoint. if republicans go home saying something, they can point to democrats who were unsuccessful getting their own bill passed yesterday. both sides leaving him to hand it -- into handed pointing the finger at the other. >> five week vacation. gridlock int the congress, what was ted cruz his role in all of this? -- ted cruz's role in all of this? >> he is a member of the senate. he had private meetings with the right wing caucus of the house and urged them to stand up to the speaker not to go along on the vote. inplayed a critical role

having to sandbag and pull back that legislation yesterday. democrats are delighting in this saying the houses on cruise control. john boehner and other republican leaders are furious. the long-term damage is republicans are in decent shape to add to the house majority and maybe take control of the senate, but the campaign will be put these guysou in charge, look at what happens. they do look like the gang but cannot shoot straight. it says ted cruz is smart and does not care what the establishment thanks of him -- thinks of him. it is a right wing base. he has immensely improved his standing with that crowd. this is a freshman senator having influence on the other body. that is almost unheard of. >> why does he wield so much influence?

what would have happened if these rank and file republicans had not listened to ted cruz and gone along with the republican leadership? >> he is singing to the choir. these are not people who wanted to go along. >> they just needed to be persuaded to move further in the direction they are already going? >> right, to be encouraged, to be emboldened. i don't think he forced them into that position. i think he gave them a lot of encouragement. they like that. they love the fact a big name like ted cruz is with them. john boehner hates it. >> thank you for your perspective. "market makers" will be right back. ♪

>> it is friday. we are going to play the yearbook game. he is a media executive, graduated from lawrenceville school in 1960. that is all the producers are telling us.

tweet me so i don't look stupid. >> he is the former ceo of a very, very, very large media company. >> that helps a little bit, but i need more time. you could have told me that before. >> castles in the air. >> that helps. ♪

>> it is friday on "market makers." time for the yearbook game.

media executive graduated from the lawrenceville school in new jersey many years ago, class of 1960. >> you gave me all the hints, which i appreciated. it is michael eisner. >> it is. that is what he looks like today and that is what he looked like as probably an 18-year-old in 1960. aged reasonably gracefully. lard theit when people answer with extra. >> we like to bring the funny. a lot of people got it. i was an outlier. from have to take a break the yearbook came to bring you important news. we have been talking about argentina all week. elliott management has been in a battle with argentina. a u.s. court has told argentina it must pay it and the other

holdouts to honor of additions -- obligations it undertook when it sold the debt in 2001. the international swaps and derivatives association has just ruled argentina's refusal to pay is a credit event. this is important because it triggers settlement on derivatives tied to securities. we heard from standard & poor's a couple of days ago this was a technical default. now isda is calling it a credit event. buckle your seatbelts. this could get interesting. >> there was a question about whether this was a default. >> it is the default if someone does not pay. the question is if it is a default under the terms of the bond agreement. be a veryg to action-packed and interesting

weekend for players in the derivatives market, the government of argentina, the folks at elliott management and the other holdouts who refused to participate in the restructuring of the 2001 debt. as we have also been discussing, the banks that have been trying to mobilize a bailout for the government by buying debt from the holdouts. it is all unclear. one person involved in negotiations described it as herding cats. it does not sound like a quick route to a solution. let us do this before we go to scarlet fu. have a great weekend. >> it is 56 past the hour. bloomberg television is "on the markets." scarlet fu has more. >> let's get straight to our guest. is the chief risk strategist at

chat would -- chatwood funds. you just heard the ruling on argentina. it is a credit event. we had a big selloff yesterday that extended into today. volatility is rising. what indications do you have volatility will continue to rise into next week? to comewill continue off as people way out the progression of the argentinian crisis. the reality is it is not a major market. there are dominoes that could come down the pike. that is why some traders are taking off risk. options traders are still looking to the upside. upside out of the money calls, people are not selling those calls thinking the s&p is going to crash. i think they are expecting more rocking this and selling -- ro

ainess and selling but resolution. crisis looks to be in the options market short-lived. >> you're looking for recovery in the next three or four days. if not, that could portend more volatility? >> we also have a breakdown technically in the charts. the s&p has broken below its 50-day moving average. and has not done that since april. if we don't recover in the next five days, that could be a problem as well. >> thanks so much. ♪

>> welcome to "money clip" where we tie together the best news and video clips. in nation, a million and a half jobs in the past six months. sounds good, but enough to take away the sugar? africa trying to contain the worst ebola outbreak in history. --motors, tesla gets changed charged up over the new power factory. in brand, coca-cola acknowledges it has a problem. not trying to do something about it. 30 years