>> from bloomberg world headquarters in new york, i'm mark crumpton. ."is is "bottom line forces increased attacks against the islamic state militants. home construction in the u.s. rises to its highest level in eight months. and the new owner of the l.a. ballmer, rallies the fan base and speaks to bloomberg. to our viewers in the united states and those of you joining us from around the world, welcome.

we have full coverage of the stocks and stories making headlines today. mike mckee looks at the shortage of construction workers. phil mattingly looks at u.s.' role in iraq. and in irbil, troops and into battle militants. first, a breach in the gaza siege fire. palestinian militants fired rockets earlier today in response, the israeli military carried out a series of airstrikes across the gaza strip. shortly after, benjamin atanyahu ordered negotiators cease-fire talks to return home from cairo. the israeli move, coupled with the outbreak of violence, through cease-fire efforts into jeopardy. an israeli spokesperson said that rockets landed in open areas and did not cause any injuries. meantime in iraq, government forces stepped up their attack

against islamic state militants. the rebels suffered a serious setback, losing control of the country's largest dam. we went to the dam in mosul today. irbil.ith me now in >> one of the most striking things was a mile from the dam, which is no longer in the hands of the isil group, a bit of violence between iraqi army soldiers and kurdish fighters. we were the last checkpoint going out to the dam. through,i humvees came cheering about liberating the erga repliedpeshm very angrily. we have been hearing that these two forces do not seem to get along well. we saw that firsthand today. >> what are the local saying about security? spent some time this afternoon at a nearby village a few miles away.

until a few days ago, it was almost entirely empty. the poll were telling us, frankly, they were going back after the u.s. airstrikes and they felt that although isil was just a few miles down the road, at least several families have moved back to the area feeling more secure. >> what about the u.s. airstrikes, what do the local say about the impact it has had on them? villagers we met this afternoon say that this was an absolutely huge issue for them. it encouraged them to think that they would get support from the outside world and was one of the reasons they moved that. withoutmerga also set the u.s. airstrikes, we would not have been able to do what we did. marx, thank you. to washington, where the white house is touting the advances by kurdish and iraqi defense forces as evidence that the short term

strategy in the countries working. phil mattingly is in the country -- with me right now. how do short-term gains factor into president obama longer-term goals? the presidentom yesterday and he said the big thing to grab onto with the advances they have seen is that iraq in defense forces and the kurdish peshmerga are able to work together in some fashion. out someinted potential problems on that front, but on the long-term side, the hope is to take those gains into what is happening politically in baghdad. the political process there is far and away the most important thing, which the president underlined yesterday. things.s sent the right i was impressed in my conversations with him about his vision for an inclusive government but they have to get this done. the ball is at the door and in order for them to be credible with the iraqi people, they will

have to put behind some of the old practices and actually create a credible united government. topresident obama referring alibati.t he has to form an inclusive government and put together a plan. that the success for that the u.s. says is an absolute requirement for any long-term strategy to succeed. >> yesterday the president was asked about so-called mission creep, a concern held by many in his party. how does the president ran on countering that. -- that? >> the more airstrikes that you see as part of the humanitarian process and strikes to alleviate the pressure on the dam in mosul, there is concern among the president party and among republicans that there is no control over how long and what the mission will look like. yesterday the president said

that he believes once an inclusive government is formed, other regional actors, sunni countries wary of taking on the islamic state so long as shiite powers were in control in iraq, will rise up and help the united states. it is with that coalition they will avoid any type of mission creep. one thing that resident continues to reiterate is that no u.s. boots on the ground in combat situations. that has not changed. >> thank you. coming up, u.s. housing starts surged in july. we will take a look at what drove construction and see if the industry is likely to maintain that momentum. joins us from charlotte in a moment. ♪

>> welcome back. we are receiving news that steve

ballmer is stepping down as a board member at microsoft. this move comes as he is now the proud owner of the los angeles clippers. mr. ballmer sat down with trish regan in los angeles. she will be joining me at the bottom of the hour to discuss the interview, what was talked about, no doubt, about the clippers going forward. steve ballmer stepping down as a board member at microsoft. stay with us. we will continue to follow the story and bring you more details as we get them. withrow, we will speak congressman paul ryan, republican from wisconsin, live a.m. on -- 10:15 "market makers." broke ground on average on 1,800,000 new homes in the u.s. in 2003. housing starts his morning came

in at about half of that. andael mckee is with me now tells us there is one big reason why there is no one around to build more. lost 2 million construction job during the great recession. the question is where did they all go? 800,000 higher than that, but that's not enough to support the housing rebound everyone is waiting for. you mentioned the prerecession numbers. housing starts have averaged 733,000 year. even july's game brings this average up to 980,000. one reason they are not building more, builders say they cannot find enough workers. the national association of homebuilders found they are having trouble finding people to hammer the nails and saw the wood. particular shortages of carpenters and framing crews. >> why can't they just hire back

the people they lost? homebuildersto they are not there anymore. more than half of them left the business, and why not? there was nothing to build during the recession and went back to school and trained to do something else. now when they are needed, they are not there anymore. here is a great graphic that shows the impact. the vertical lines are shortages. those disappear as housing booms gets underway. now, big shortages and lower levels of housing starts. as far as the builders are concerned, why not pay more and get the people you need? >> that is classic economics, but it is not happening so far, at least assuredly. wages are just keeping up with inflation for everybody. construction workers are losing ground. they earned about less than half of the inflation rate in the second quarter. that could change because homebuilders are having this

shortage and it is impacting their business, and they are starting to raise prices, which slows demand. but paying more is not unprofitable, so it's possible that the market will clear, it just takes time. >> thank you. home construction in july surged to the highest level in eight months. the commerce department said housing starts rebounded 50.7%, surpassing the decline of the previous two months. anika khan is a senior economist at wells fargo securities. she is with me from charlotte. good to see you again. >> thank you for having me. these julyut numbers, why were they so much better than expected? look at the, if we previous two months, we saw weakness, but especially if we zero in on last month, one of the things we noted was the significant drop was odd,

confined to the south. in this report, we saw a rebound in those numbers. of course, this is the second time housing starts have been above the one million mark. this regionalbout breakdown for home construction. what did it look like? pretty much broad-based increases. the midwest did see a decline. one of the things we have to keep in mind is that when we particular,south in that is where a lot of the home inventory resides. we are also showing that a lot of the activity in those regions where there is high tech, of course, energy, job prospects, as well as population driving a lot of the activity. so we continue to look in those areas to see where a lot of the housing will be needed. >> single-family home

construction rose last month 8.3%, but multifamily construction jumped nearly 29%. is this a renters market and not a buyers market? >> if you step back and look at the trends in multi family, specifically apartment, we continue to see solid demand in apartments. of coarse, that multifamily component is volatile, so we will probably see some pay back of that next month, however, the trend is obvious. we continue to see a pickup. in the single-family market, there has been a host of mixed messages that we have seen, specifically looking at sales activity for existing home sales. that has been positive but if we look at the new home sales number four june, that was negative, and pending was down. we can also point to other

indicators that shows weakness in the housing market. we are still looking for an improvement but it is not the big bang that we were expecting. ,> i am speaking to anika khan senior economist at wells fargo year potential first-time buyers, are they still at the mercy of flat wages and tight lending standards? >> they are. when we zero in on first-time homebuyers, we think that that is a big reason why we are housing slower paced recovery. 40% is where we would like to see the number. when we zero in on who are the first-time homebuyers, they are still largely the millennial generation who has a higher propensity to rent. going back to those multifamily and apartment demand numbers, we continue to see there is some momentum there, and it will take time for that younger cohort to move into a single-family. >> given that fed chair janet

yellen has expressed concern about the housing market, do the july numbers give the fed and groomed to maintain the status quo and keep interest rates near zero for longer than anticipated, but most economists? >> that is a really good question. you cannot zero in on just one month. you have to step back and look at the trend. you are correct, the verbiage in the statement said the housing recovery has been slow. the pace is still slow. i do not think it is the only factor, of course, that the fomc is looking at. we know the committee is looking at a host of indicators, the labor market, and wages specifically. that will continue to be some of the discussion we continue to hear, especially as we look at jackson hole upcoming. , senior economist

from wells fargo, thank you for joining us. always good to see you. unrest in ferguson, missouri enters day 11. last night police fired tear gas and used stun grenades on protesters. there covering the story. how are things today in the streets of ferguson, following last night's protests? a right now things are calm, small group protesting here on the streets. that is what we have seen for the last few days. when night falls, we see a different tone, some violent activists, heavy police presence , and it looks like tonight could be similar, another clash between police and protesters. >> eric holder is scheduled to be in ferguson on wednesday. what can we expect from the federal investigation? >> there have been 40 different

federal investigators, agents who have been canvassing the area where michael brown was shot to death last weekend. they have been asking for witnesses, people to come forward with their stories. eric holder will be her tomorrow to hopefully talk about where the investigation stands. there is a lot of angst in the community, people want to know whether charges will be brought against the police officer who pulled the trigger. >> the curfew has been lifted but there are still other restrictions on public gatherings in place. what are they? >> people are being told by police that they cannot stand still, they cannot gather or form a crowd. they have been told they have to continue moving, so the marches a mobilests have taken platform. people have been walking in large groups. as long as they stay mobile, they have been allowed to continue. if they stay still, then please have been arresting people. >> you have been our man on the

ground there for a week. you have been talking to some of the people in ferguson. what have they told you what needs to be done to end the protests? >> everyone i have talked to say they are looking for justice for the young man who was killed. they say charges should be brought against the police officer. they are saying until that happens they will continue to come out and protest and will ofonstrate in the streets ferguson. until that happens, we are likely to see more clashes. , those imagessk last night that folks were seeing on tv, they were very upsetting and disturbing. what was it like to be on the ground there last night? like a war zone here in the united states of america. tear gas, smoke bombs, it was very serious and dangerous for the people there. the latest from ferguson,

missouri on the violence and the attempt to reach calm and a peaceful solution to the process. thank you for your time. coming up, and on the markets update. and later, trish regan sat down with the newest leader in the nba. steve ballmer on taking over the l.a. clippers, and more on his move today to step down from the board of microsoft. ♪

>> more now on that breaking news we told you about earlier, steve oliver stepping down as a board member at microsoft. hold microsoft shares for the foreseeable future. his departure ending a more than 30-year association with the worlds largest software company, which he led from 2000 to 2014. under his watch, microsoft continued to power ahead as the chief provider of computer software but failed to push

aggressively into the mobile and web markets. trish regan traveled to los angeles to speak with mr. ballmer. that will be coming up at the bottom of the hour. of course, you can see that interview on "street smart" coming up at 3:00. the markets. go on olivia sterns has the details. >> stocks are higher in the u.s., the snp within one percent of its all-time record high. good economic data this morning showing housing starts jumped to the highest level in eight months and a subdued picture on inflation readings, coming in at the lowest level in five months. both of that helping sentiment overall. one thing we are watching is print, doubling the amount of data available for shared plans in his latest offering of its sprint family share pack come in putting an end to the so-called ily plans.

verizon communication has cut the fees of its single-line as well.plan by 20% also keeping an eye on el pollo loco. analysts initiated cautious ratings on the stock. more after the break. ♪

>> welcome back to the second half-hour of "bottom line." "bottom lini'm mark crumpton. word ballmer, receiving that he is stepping down from the board of microsoft. trish regan, the anger of "street smart" is with me. you spoke to mr. ballmer yesterday. >> i actually just got off the phone with him three minutes ago . we will talk about this in a moment, but he did sound as though he had a lot on his plate yesterday.

just now, as the news came out, he and i spoke, and he said, i want to be a great shareholder and i want to pay appropriate attention to my shares, but between teaching and my new responsibilities at the clippers , and my civic duties, it is a lot. however, he went on to say, i love microsoft. he still cares about the company, want to be a great shareholder, but the time commitment involved in being a member of the board is a bit too much given everything else he has going on. we talked a lot about his leadership at microsoft. i got his thoughts on current leadership at microsoft. the possibility that he might step down from the board yesterday, so this was not a huge surprise when i saw this cross today. >> let's take a look at what they spoke about yesterday. when you think about what you

will be doing over the next 12, 24 months, you are still on the board of microsoft. you have this project in front of you. how would you divide your time between everything? >> i retired so i can have a next phase of life. i am feeling a little stressed right now, actually. i will have to wrestle that through a little bit. i have some other things i'm also interested in. having moreyself as time for myself, including more time to study, teach, a class this fall at a business school, or time for sports, golf, all that kind of thing, and on top of that, i want to be a great microsoft shareholder, i want to be a great clippers owner. i am trying to figure out how to

evolve my civic contribution -- my wife and i have been active in particularly child welfare issues, stem issues in the state of washington. we are asking ourselves what else? nothing to say that, but it takes some energy to figure that out. >> do you think you'll stay on the board of microsoft for the foreseeable future? >> i'm on the board today and i'm excited to be a board member. that was 24 hours ago. so again, steve ballmer leaving his position on the board of microsoft. >> you asked him about mr. nadella and the layouts any kind of hedged a bit. he said this is his decision. i think we have a clip of that as well that we can share. i want the clippers to be the best that they can be, the best

team, best players, character, coaching staff, business. i want all of that for the clippers. that just means that we are going to have to be, as i say, hard-core, about being better, tenacious. clippers fans are very excited and fired up. >> and loyal. >> no question. seem conscious, we chose the clippers. and is a fun and exciting thing. >> do they feel like you chose them? , butdon't know about that happy that they can focus back on basketball. has been a big force, holding this team together in this difficult time. will he stay on? >> my job is to figure out how we can continue that. is your leadership style

and how does that apply to this team? >> i am enthusiastic and passionate. i will also ask a lot of questions. i will not say i micromanage, but i ask a lot of questions. that is how you push to be better. all of those things work in a business. microsoft, 30 people, a couple million in revenue. left, 100,000, $90 billion in revenue. third most profitable company in the world. i think that worked pretty well. the other question is, do the same characteristics apply? desire to be better, optimism, hindus he is in, fashion. i think those qualities probably work pretty well but the right thing -- first thing is to get the right people in place. i am not expert and we need experts in place that can run the various parts of the

clippers. isone of the challenges recruiting players. nobody knew what the future of this team was. now that you are at the helm, now that there is clarity, who would be your top choice to bring in? >> there is no question with stability comes opportunity. doc has been clear, having stability in the ownership makes it easier for him to do a lot of things, including recruiting. >> you heard him talk a lot about the clippers and his intention on how he will manage the clippers. he did talk at length about microsoft, the layouts, pinning that on saturday the dollar -- satya nadella. he is taking the company in a direction that he thinks will make it successful. about the what spinning off of parts of this large company, xbox, for example?

he said, really not in favor of that, my work speaks for that in terms of keeping it together. interesting parts of the interview that we will be sharing with you coming up on "street smart." >> he is sitting in the front row at these games. courtside.said i am looking forward to hearing him tear. >> see you at the top of the hour, thanks. follow-up from argentina is still being felt. details in the latin american report when "bottom line" continues. ♪

>> it is time for today's latin american report. argentina second depaul been 13 years and is threatening to up that local governments planning to sell bonds abroad. have surgedsts

since a legal dispute prevented the nation from making a bond payment act on july 30. since then, yields on the provinces debt due in 2015 have jumped seven percentage points while those on the cities similar maturity note line six. the sales are being jeopardized by argentina's inability to reach a settlement with creditors led by elliott management corp. over unpaid debts. a mexican company is closing in on an agreement to sell the bulk of its rusted fence -- restaurants. the retailer could reach a deal as early as this week to sell a toority of its restaurants food operator gigante.

that is your latin american report. still to come, republicans move away from battling obamacare. where candidates are putting their money in the midterm elections. ♪

>> after more than 50 attempts to repeal obamacare, republicans have at least given up in their midterm election ads. we have more from washington. this is the first election in which obamacare is the law of the land. how are republicans adjusting their campaign message, and is it as powerful a weapon against democrats as it used to be? >> for the first time we have hard evidence that republicans are starting to eat soft on their obamacare offensive. this has been the issue in the past couple of election cycles but we looked at some of the ads running in key battleground arkansas,battle --

louisiana, and north carolina. as dealingion of with obama has dropped significantly, so it is not what it has been in the past for republicans to use against democrats. kay hagan in north carolina, over $4 million on obamacare pads and is maintaining an even standing against her republican challenger. why is the advertising fullback significant? is significant because obamacare has helped republicans defy the president. this has been a proxy for a war on the president in every election. in 2010, it was quite effective. that was a landslide for the republicans and what was one of the top issues? obamacare. republicans will not drop this issue entirely. what is their plan of attack now that obamacare is the law of the land? >> we obtained a memo from a

problem that -- prominent republican pollster that shows republicans view this time as a brief pause as they reframe the issue. the top issues are the economy and jobs, so republicans are attempting to reframe the obamacare issue around the economy and jobs. they say small businesses are not hiring as many full-time employees because of the insurance mandate, premium hikes will take old in september, and we could see another ad then. so we are not drawing a final conclusion about how obama care be used in the election, but to be sure, it may may not be as effective for some of those independent voters, now that the law has taken effect. spoke about kay hagan in north carolina. any sense on what is happening on the ground and how obamacare figures into the republican strategy? of thethat it is the law

land, some of the numbers are coming in about how it's being did. in north carolina, it's quite popular. if you percent of the population has signed up. at the same time, we went in and talk to some of the republican voters who voted for mitt romney and were very open to -- anti-obamacare in the last election but now some of them are benefiting from it. while they still say they have problems with the law, it is not as toxic an issue this time. >> thank you. this is the time of year when fantasy football fans start to obsess about their first round draft picks. the head of bloomberg sports joins me. why is this so popular? it is time consuming. >> so time consuming, the fantasy sports trade association estimates the people that play fantasy sports, particularly

football, spend as much as eight hours a week on it. it allows them to get engaged in the game and to play general manager, compete with friends, do a little smack talking, and in the case of the newest craze, daily fantasy, actually win some money. it is a growing industry and people are having a good time. > >> there is a fantasy sports trade association? >> there is. it is big and growing. it is now an industry where people are spending $4 billion and growing. not even including the advertisers who advertise. it is a significant industry and it is getting bigger. >> talk about some strategic tips for people who are planning to prepare for the draft? has beenerg sports building mathematical models and projections in order to do the sorts of things, to give people

some guidance. last year, that fantasy sports trade association gave us the top award for the best projections. our draft kit will give people a lot of tips. our top three rated quarterbacks, peyton manning, drew brees, aaron rodgers, are significantly above the next 4 to 15. if you do not get one of those top three, you can wait and pick somebody else and get a quarterback who will be roughly equivalent. those three guys really stand out. if you look at the projections and use it we have done, you will do better in your draft. system does bloomberg sports used to develop the fantasy football model that allowed it to win the award? build the models using a combination of mathematicians, engineers, and football experts. we do that for every sport. we bring in experts and have them work with bloomberg engineers, mathematicians, to

build and refine the models -- >> it sounds like a serious enterprise. >> we taken very seriously. for the world cup, our projections were phenomenally on target. all oft models across the sports and are working with in the daily draft space where people can open up an account. there are all sorts of fun things to do. >> we are looking at some running backs. why isn't adrian peterson number one? >> you have to take everything into account. >> the numbers do not lie. >>there are all kinds of factors. many of the experts do not take certain things into account. around a whole thing strength of schedule. for the dolphins, their quarterback has the weakest schedule, whereas the broncos have some of the strongest cudgels. that does not mean that you take

tannehill before peyton manning. >> any sleepers that you can tell us about? >> we think ryan fitzpatrick, now that houston, throwing to andre johnson, is underrated by the market. mark ingram will have a great year in new orleans. lacy was we said eddie the guy to look for. he was 34th on our list. ended up 19th overall. >> should i be heard that you have not mentioned my steelers and then roethlisberger? >> i am sure they will have a great year, and you can have a great fantasy season by using our projections. >> [laughter] bill, thank you so much. stay with us, another check on the markets is after the break. ♪

>> get the latest headlines at the top of the hour on bloomberg radio and streaming on your tablet and on bloomberg.com. that does it for this edition of "bottom line." on the market is next. see you tomorrow. it is 56 past the hour which

means bloomberg television is on the markets. i'm olivia sterns. equity markets are higher, the s&p edging towards its all-time record high this morning. inflation numbers this morning showing inflation is pretty much some dude, lowest level in five months. good news in the housing market, housing starts jumping to an eight-month high. one stock we are watching is bhp billiton, the billion-dollar mining company has announced a spinoff of its aluminum, coal, and silver assets. the new company could be worth $15 billion, which would make it the mining sector's biggest spinoff in a decade. for more, i am joined by our market correspondent alex neil. so why now? -- alix steel. >> sanford bernstein came out

and send that this could mark the end of the super commodity cycle. it is different when it comes to an actual company making a choice. 35%.n on invested capital, in 2013, 13%. we havethat is because seen lackluster demand, oversupply coming on the market from years of investing so much capital into these resources, creating a glut in the market. there is no demand, assets are worth less, you have to put in a lot of money for capital expenditures, and then you need to do something. we have seen companies like rio tinto start to dump assets here and there, but this is the first real spinoff we have seen. some analysts say that we could see other companies follow suit. >> for so long the story was these giants getting bigger and bigger and now we have this spinoff. what would that leave bhp with? ore,l, coal, copper, iron which get 70% of its sales from.

96% of its earnings from those commodities as well. lower operating cost, higher returns. southre focused more in america, australia, and north america. they are definitely left with some really good stuff. >> they are keeping what works for themselves. you mention this is the end of the super cycle. help us to understand what went so wrong here. >> mining companies in general went on a $16 billion investment spree. it has been enormous the past couple of years. a large part of that was china. bhp gets $20 billion from china. when china slowed, you had these companies that are very sensitive to the economy and they threw up their hands and said, who do i sell to now, and how in order to make enough money? the issue down the road is projects are shut in, assets are

being spun off. does that create a supply crunch at the end of the day? these cutbacks will take a few years to achieve through, but by 2015, 2017, we could see these commodities, under some support because we do not have enough supply. thosebhp is keeping assets that are selling well, why are shares down? >> investors wanted a buyback. that was a problem. for on the doesn't markets. in the meantime, "street smart" with trish regan is up next. ♪

tuesday, breaking news, steve ballmer is stepping down from the microsoft board. apple topping $100 a share for the first time since the stock split. i'm trish regan. streaming on your tablet, phone, bloomberg.com, apple tv, and amazon fire tv. "street smart" starts right now. welcome to the most important hour of the session. this is the show you do not want to miss because we have a lineup of exclusive interviews you will only see right here on bloomberg television. fir,