>> from bloomberg world headquarters in new york, i am mark crumpton. this is "bottom line," the intersection of business and economics with a main street perspective. burger king looks to buy canadian chain tim hortons. and we will preview tonight's primetime emmy awards. to our viewers here in the united states and to those of you from around the world, welcome. we have full coverage of the stocks on stories making headlines today. willem marx is back from iraq

with a first-hand account of the situation there. olivia sterns details a multimillion dollar purchase. we begin with julie hyman and burger king's interest in tim horton. if the deal is made, burger king headquarters would move to canada. >> to account outside toronto, and this is one of the so-called tax inversions we have heard so much about recently, which would reduce the tax rate for burger king. if you look at the tax rates overall of u.s. versus canada, in canada you are looking at 26.5% and in the united states you are looking at a corporate tax rate of 40%. this could potentially represent a significant savings for burger king, and this is the primary reason folks are talking about as the impetus for a deal potentially being made. burger king, by the way, 70% owned by three g capital -- 3g

capital, and they may be interested in doing some cost cutting, etc., as a result of this deal. icon.rtons is a canadian we were talking to erik schatzker, and native canadian, earlier, about the number of tim hortons in canada per capita is so much higher than that of, say, and mcdonald's to every u.s. citizen, if you look at the relative they six. it is a dominant player there in , and thed doughnuts union of burger king and tim hortons would create the world's third-largest fast food company. >> other reasons for the deal besides the tax inversion? >> there are other potential reasons. the tax inversion seems to be the largest, from a strategic viewpoint, the -- tim hortons is big in practice. burger king does not have as much of a presence in breakfast. it is a fast-growing area for many fast food chains. we also talked to an analyst

over at stephens and he said that we could see some tim hortons cost cutting of the same ilk we have seen with 3g and burger king. in addition to that, tim hortons is under leopard, doesn't have a lot of debt, so we could see 3g try to load up some more debt on the company to return capital to shareholders as well. there could be small reasons, but tax inversion is the biggest reason. >> why canada then? ireland and bermuda are popular tax havens but canada has not been as popular. >> is not as well known attacks even as other nations. but the country has been cutting taxes in recent years, trying to make itself more business friendly, and it seems that that strategy is working. if you look at recent deals we have seen, we have seen some of these tax inversions. tim hortons is actually on that list. it was owned by wendy's for a

time, then separated once again, was located in the u.s., and reverted its tax status to canada could it has done this flip-flopping before, as have several other companies. hyman, thank you. in another deal, a swiss pharma giant has agreed to by a u.s. biotech firm for more than $8 billion in cash. it is the latest big drug deal in what is shaping up to be a record year for m&a in the sector. olivia sterns joins me now with more. mark, you arel, probably thinking, is this about tax inversion? it is not. it is really a big bet on one drug, which treats a rare type of lung disease, the so-called orphan disease, and that means it has a lot of pricing power. it has the designation from the fda and is already a drug that has been approved by regulators in canada, the u.k., europe, and in japan. it is a big bet on this one drug

with a lot of pricing power. it is also a push into holman ary -- pulmonary. the company wants to push more into their respiratory business. they already have a few business start.th intermune to finally, this is the kind of acquisition we have come to expect from the pharma industry that roche has indicated they are looking to do, instead of companies spending billions of dollars to invest in their own research and development with no guarantees of striking gold. that is what they are getting here, this drug that is on track to be cleared by the fda later this fall. >> talk to us about that price, that $8.3 billion price tag. >> it is a lot of money, and if you divide it by the number of employees, as tom keene likes to do, it is $20 million per employee. has just 350 employees

as of last year. price,e skeptical of the a 38% premium compared to where onermune stock price closed friday. be mutual, to analysts say, for earnings through 2013. i have the share price -- a hefty share price. as barclays put it, this is not a no-brainer, simply a result of the fact that roche is accumulating so much cash. >> for more on the deal, shannon pettypiece joins me now here in studio. why is this deal so attractive to roche? >> you heard olivia talking about the price for one drug that is not even approved by the fda yet, but here is how these things work, and why these types of deals are becoming very attractive to pharma. pharma now has a lot of leverage in the price.

if you can find a drug where there is nothing else on the market, where it can provide an actual benefit to patients, and with this drug it did improve life expectancy for people who had a very rare, terrible lung disorder that kills people typically within five years of diagnosis -- if you have those things, the sky is the limit on the price. there is even some drugs out there over $200,000 a year for patients, because there is nothing else, and the insurer of have their hands tied and pharma can charge whatever they want. >> this is a strategic play for roche, especially when it comes to the market for lung disorder drugs. >> we have an aging population and a population that has been more affected by tobacco, smoking, and pollution. for a disorder that is caused by genetic mutation, but what roche wants to do is increase its business in lung disorders because we have a population that is going to have

more on cancer and asthma because of populations globally that are exposed to more pollution and tobacco smoke. long -- can add another theydrug to its arsenal, could sell these other products and this helps them stake their flag in this area. >> what is behind the surge in a pharma deals we have seen recently? >> the companies have an enormous amount of cash, they are swimming in it. 14 billion dollars, pfizer has over $30 billion in cash. they have the money and they have to do something with it. they don't have the pipeline internally to get growth that way so they are going out and trying to buy growth. >> all right, shannon pettypiece, joining the onset. coming up, islamic state militants seize a syrian air base. we will look at this latest advance and talk to an expert about why u.s. airstrikes in

syria could be a significant move. "bottom line" continues in just a moment.

>> conflict continues in iraq and in syria. islamic state militants have seized an air base in syria as the hunt continues for james foley's killer. joining me is director of special projects and a former cia case officer with extensive experience in counterterrorism issues. welcome back to "bottom line." iraq beginspeace in with leadership they're taking charge. what should the new government do to bring different factions together to deal with islamic state militants? how does the new leadership show warring factions that the militants are a threat to everyone? >> that is the keystone to everything that will happen after that. the new prime minister has until september 10 two put together a

new national unity government and he has to make very transparent and generous moves. they have got to undo eight years of maliki's divisive sectarian rule and he has less than 30 days to do it now. it is off to a bad start because the sunnis have walked away temporarily after his sectarian massacres this weekend. >> the u.s. joint chiefs chairman, general martin dempsey, says that once he has determined militants in iraq have become a threat to the u.s. homeland, he will recommend the military move directly against a group in syria where it has been given sanctuary. what would that military action involved and would america's allies in the region join the effort? >> i would think he would have to be some kind of regional effort. they said today that they would look negatively on unilateral u.s. military intervention in iraq -- in syria, and we are talking airstrikes, and airstrikes will hurt isis but they are not going to change the

force on the ground. it is the first part of the brick -- of a bigger solution. >> what are the economics of terrorism? where are these militants getting the funding to carry out this sustained violence? >> in the beginning they were relying on donations and smalltime extortion. but these extortions are called taxes now, and they have held territory in syria and they are making -- low estimates are $1 million to $2 million a day, high estimates up to $10 million. if you add up everything they are doing in iraq or syria from oil, weapons, extortion, and ransom, they are the richest terrorist route, or insurgent group, in the world. marx colleague will him spent last week in iraq and his report looks at how the violence has ravaged the economy. putting down the insurgency means propping up an economy

that is already received billions in international aid. is the international community willing to allocate more money to a country whose history of cyclical violence is no guarantee of success? >> that is a great question traded there is tremendous donor fatigue, and in the case of iraq, donor resentment, spending so much time and money especially rebuilding an army that collapsed so quickly. it is difficult to undo what in syria haveers wrought. >> we are learning that spy agencies are close to identifying the killer of american journalist james foley. whatever technology is being used to find the identity of a masked man with an english accent? remarkableetty technology. they will look at the metadata will dohe video, they voice analysis, which is not definitive, but it helps you. iris scans are not going to help because it is too far away.

the fact that he is left-handed is somewhat helpful, but each little clue helps. because the person seems to have such a high profile, it is good that he has been around social media before. that will prove to be his undoing. >> is it up to the united states to lead a coordinated global strategy, counterterrorism strategy, at this point? >> i think so. even though we don't want to get involved in everything, the affairs are internal by definition, but iraq-syria have morphed into this regional fire, and it is unacceptable, even in the louvre -- loose definition of "unacceptable," this region is collapsing and it will have dramatic impacts in the near and long-term. the u.s. should lead a new war on violent extremism. something has to change. , always a skinner

pleasure to get your thoughts and perspective. thank you for your time. for more on the crisis in iraq, i am joined by my colleague willem marx, who spent a week in erbil in the area north of muscle. it is -- north of mosul. it is not your first time in iraq. what has changed? >> my last time in erbil it was a much calmer city. it feels like ancient history now. thousands of these islamic state fighters, much much fiercer, and a more regional war. the city of erbil itself is now filled with half finished towers and cranes. it was fascinating to see how much has been happening in the last four years. >> when you talk about the roots of terrorism, you mentioned that

it is different than the way it was 4 years ago. --seems that some of the some of it is born out of poverty and disenfranchisement, and these could be young people who could be seduced, for lack of a better term, by someone who is preaching violent action against someone if they believe has oppressed them. is that what is happening in iraq? >> i think employment is going to be a big issue. i'm a british citizen and to see british jew hottes -- jihadi sts fighting is absolutely shocking. it is extraordinary. >> what does all this violence mean in the long term? >> from a business perspective it will be difficult for people to attract investment overseas. the kurdistan region over the last 10 years has been a de facto autonomous region, and they have seen a huge amount of investment poured in, billions

and billions of dollars, particularly in real estate and oil. it will be difficult to attract norwegian, british, american companies to do business there when there is the threat to their employees we have seen the last few weeks. >> what about the businesses that aren' -- that are there right now? >> they are thinking about what their long-term strategic objectives are. is it worth the danger they are putting their staff through? i think a lot of projects that we were looking at while we were there, including kurdish department stores in american restaurants, they are thinking, wait, is erbil the safe place it once was? >> there has got to be some people who, regardless of the situation there, are considering or looking seriously towards investing their -- there. how difficult is it to navigate the business environment? >> it has always been a difficult place to do business. you have got to figure out who is in charge from who was in

power, which regulation you have got to jump through. kurdistan has traditionally been a lot easier to navigate because they have had a much more business family environment, but that is changing as the distinction between chris and and iraq starts to ask the distinction between kurdistan -- the distinction between kurdistan and iraq starts to fall apart. .e left early sunday morning saturday night there was a car bomb in erbil, at a hotel we had been staying at previously. we had been at kirkuk earlier in the week, traveling around filming. there were 4 blasts on saturday so i was glad to be out of their. >> are the politicians and control? >> at the kurdistan region, yeah. there are peshmerga forces everywhere and i would say they are pretty much in control. >> willem marx, good to see you. thanks so much. still ahead, a milestone for the s&p 500.

later, are you ready for some football? sure you are, which means you are also ready for the latest version of madden nfl.

>> we have breaking news now on amazon.com. cory johnson is in san francisco and he has the details. >> amazon making acquisition of a company that is $1.1 billion acquisition, reported earlier to be going to google. twitch has been a hot commodity. you may be asking yourself, what is twitch? it is a fascinating series of cable or video channels that broadcast the live play of video

games. when matt miller and i are playing each other on our xbox, we can broadcast the game on twitch and people can watch us play to see matt's fantastic prowess. there are 2 anecdotes about twitch. i was at the e3 conference when they were announcing the new xbox and it was literally thousands of people in the u.s. auditorium come the same place where a basketball team will sell out, we saw the announcement of the xbox and the guy running the business for microsoft announced there would up to thetwitch hook xbox and the whole place went up in cheers. there is a whole new media platform i was unaware of, a dramatically growing business. the other thing about twitch users as they watch a lot of hours of broadcasts, they watch these games as phonetically as they played these games. it is something that amazon will

pay over $1 billion for. videoin, amazon buying service twitch interactive for more than $1 billion, according to people with knowledge of the plans. we will bring you more details as soon as we get them. it is 26 minutes past the hour and a bloomberg television is "on the markets." julie hyman is standing by. >> let's look at where stocks are trading. we have a rally that took the s&p 500 above 2000 briefly for the first time ever in the but now it is down back around 1997, 1998. gains on the back of deals in the u.s. let's look at a couple of stocks for you as well. shares are down sharply today for a company that filed to sell 10 million of its shares in a secondary offering. the stock come by the way, hit an all-time high of 45.1 less

than two weeks ago. and the owner of ann taylor is the latest target of activist investors. of them are urging the company to sell itself, as much as $2.5 billion. we will have more in 30 minutes.

>> welcome back to the second half-hour of "bottom line" on bloomberg television. i am mark crumpton in new york. thanks for staying with us. sales of new homes in the united states fell unexpectedly in july for the second month, declining 2.4%, the fewest since march, and weaker than the lowest estimate of economists surveyed by bloomberg trade housing has advanced in fits and starts this year due to tight credit and slow wage growth. atdreds of mourners gathered a st. louis church today for the funeral of michael brown, the

18-year-old was shot and killed by a police officer in ferguson, missouri, earlier this month. father asked protesters to take a break and observe a day of silence. president obama sent three white house officials who attended the funeral. pacific gas & electric says it expects to continue searching for possible gas leaks following the earthquake that hit the san francisco bay area early sunday morning. the magnitude euro six earthquake was the strongest to hit northern california seven -- in 25 years. it cut power and ruptured water mains in the area. this a look at the top story -- that is a look at top stories. mark.d afternoon, oil is trading lower as traders look ahead to the streets inventory report. it is expected to show more than ample supply, change from last week when geopolitical concerns and fundamentals dominated as the driver of trading.

with the unusually low volume we are seeing, we are also seeing a lot of on vacation on wall street. is leading toe, the fact that you are not seeing a big move. oil is basically unchanged. brent crude holding steady above 102. at the volume, the volume of all futures contracts is more than half, or 54%, below the 100 day moving average and you have a lot of traders who don't want to get in there. refinery maintenance is weakening demand and managers dropped a bullish positions by about 14% last week, all of this combining to give motorists a break at the pump. the nationwide average price for regular dropped four cents in three weeks, according to a survey. natural gas is the surprise story, with its biggest one-day

gain in 2 months, and forecast for a late summer heat wave rolls income in the midwest, it oppressive,hort of sending us into winter with some of the tightest supplies for natural gas in a long time. >> futures trading was suspended last night. >> a technical glitch at the cme group was the explanation, causing a 4-our trading halt in chicago. this was on the globex electronic trading. withs one of the longest buying and selling of oil and gold and stock and bond futures and a lot of speculators cutting bullish bets on a recent string of positive economic reports. are closingmetals strong with a stronger dollar as well.

>> up next, football season is fast approaching, meaning the arrival of one of the most popular games for your console, madden nfl '15, out on tuesday. that preview in just a moment.

>> it is time for today's latin america report.

argentine bondholders are keeping the faith that the 15-year legal dispute preventing the government from paying its obligations can still be resolved. an attorney representing the group says creditors with at least $9 billion of restructured argentine debt are planning to ask fellow holders this week or next to waive a clause in their bond contract that the nation says is prolonging the debt. agreement by 85% of creditors is needed to waive the rights on future offers that expires at the end of the year. that is your latin america report for this monday. tomorrow, madden nfl 15, the latest version of the ea sports franchise, will come to a console near you. with montages and even new pregame and halftime shows, much will be made of the game's advancements in animation. but as matt miller found out, the most important part of the game is a simple data.

for the last two decades, madden nfl has consistently ranked among the top video games america, bringing in $4 billion for electronic arts. one man has helped to fuel that success, and it is not john madden. >> this is the database where we literally make a change. madden's ratings czar, whose rankings take players from the fields of the game. team, plusyers per 54 free agents and players and legends, that is 2668 players to whom donnie assigns a rating of up to 100 and 64 different categories like strength, speed, and catching, scores he creates using data from game performance, team stats, and his own notes. >> you want the game to look like an nfl game.

you don't want to give a guy one speed and he is they're inching along. >> exploding the bad player ratings on old football games is how he got his job at madden. thatu could just -- at point, i thought i could fine tune the process a little better so the mistakes that make players wait more good than they should be. >> today the franchise has sold over 100 million units. but sometimes layers disagree. -- sometimes players disagree. >> i know i have gotten better and they give me the same rating? isactive on twitter, donny willing to take feedback from fans, coaches, and especially players about his ratings. >> there is a reason these guys are nfl players and stars.

it is a reason that the 99th overall on the team -- hwe are trying to capture that. >> not even to the highest rated player in the game. >> i go to denver, and peyton manning will come in and i will be super honored, i've never met the man, he is a great guy, but, ton, you are down 86, you are 38 years old. >> while anybody else would be focused on hanging out with pro bowl quarterbacks and wide receivers, donny only cares about making madden 15 a great videogame. now.tt miller joins me it is a shame you are not here during the commercial break. what do you think? >> it looks awesome. there are new features this year that looked pretty amazing that

take the game into different level as far as realism. tattoos will look exactly the same, all of his touches, because ea sports went to his tattoo artist and asked for the rights to use those tattoos in the game. sherman will do this when he blocks the catch. it is so realistic, but the main thing is that these layers have the ability in the game that they have on the field. for instance, if you put peyton manning with the center he does well with, he will do better with that center than if you put him with an offensive lineman he doesn't do well with. said, "thate guys is so disrespectful, i've gotten better. they really take this hard. you will be on with trish regan. >> indeed. i will talk with grover norquist about this idea of tax inversion, with the companies

realizing that the united states of america may not be the best place to run a business, and why not operate your business out of a place that has the same kind of legal integrity but a much friendlier tax regime? i will also talk with these active vice president -- i don't auren -- is itl have a uren or -- they of clothing that will tell you your heart rate, maybe your blood pressure -- they have a new line of clothing that will tell you your heart rate, maybe your blood pressure, and it could be used a number of other ways. >> we will see you at the top of the hour. coming up, the emmy awards. we will find out why tv award shows are popular again and get a preview of tonight's likely winners and losers.

>> welcome back. this is "bottom line" on

bloomberg television, streaming on your tablet, phone, and bloomberg.com. the 66th annual primetime emmy awards show will air tonight on nbc to accommodate the networks nfl coverage last night. this is the first time in years that the star-studded event will be held on monday. the director of research at horizon media is back on "bottom line." i have to ask, before you even start, they moved the night for preseason football game, not even a regular-season game. what does that tell us about the strength of football in america >> it was a contractual obligation that the nfl put on nbc. the new contract begins this year and lasts until 2022, and they have a game on sunday night. it is kind of a mixed blessing. night is less competitive than sunday night

monday night is a heavy night for tv viewing but the competition is a little less. >> you contend award shows are popular again. do the ratings paint that picture? >> last year's emmys was close to 18 million views, the most in years. the golden globes were the most watched in 10 years. the grammys were the second most-watched in 29 years. those of the big 4, and all of them had a great year last year. >> is this because of social media? is social media to having these giving these shows the tailwind to having these numbers? >> there is a term, eventize. are events, and it triggers conversations on social media, with twitter, millions of people commenting on what they said, what they wore, who won, who didn't. it is like the last 30 seconds of a marketing plan, getting people to engage viewers and make comments.

>> the fact that it is on a monday will not hurt? >> it is august and this is one of the lowest weeks for viewing. it is labor day next week and a lot of people are on vacation and a lot of people dropping their kids off at college. typically about 6,000,000 less viewers this week then say a few weeks from now when september rolls in. >> talk to us about host familiarity. has been hosting the grammys for several years straight. is that enticing viewers? >> particularly if they are good. the last 3 grammys have been amazing. >> we remember the oscars when billy crystal hosted. >> johnny carson did it. and also the golden globes with amy poehler an d tina fey. they have gotten it down to where it is more entertainment than these long dead spells of airtime.

he offers a t-1 telecast that is probably still looking for a ghost -- i don't know if -- the oscars is a telecast that is probably still looking for a host. >> talk to us about the economics of putting on an award show, particularly when viewers attention is on facebook and tweeting what is going on and they are not paying as close attention to what is going on and they are certainly doing this during the commercials. >> it is a double-edged sword. nielsen put out a study that 86% of those who are on a smartphone or tablet or on it when watching television. if they are tweeting about a commercial or tv show that is one thing but if they are distracted and are texting somebody on a different topic, first of all, that is hard to gauge, and really, that is been going on for years. the nielsen meter just tells you who is watching and what channel it is on. >> is social media driving ad rates down? >> i don't think so.

if people are watching the show, that predicates how much things are going to cost. the emmys got 500,000 last year and generated close to $34 million, and the oscars, super bowl, these types of live events can generate a lot of dollars. >> who are the big names expected to go home with an award tonight? >> it will be between "breaking bad" and "true detective." the most bad" is impactful cable show since "the sopranos." comedy might be surprising because that is one area where broadcasters have dominated. won the lasty" has number four years. "orange is the new black" could set all sorts of records. >> what about using seth meyers as host? is that a not up to the millenial -- is that a nod to the millenials?

>> i think so. even his show was old. the median age for his show is about 50. the median age for the emmys last year was 54. the younger viewers, if they are watching it, they are not watching it on, say, linear television. >> we have about 30 seconds left. what do you think the size of the audience is going to be tonight? >> i would say this year will be -- i would say 17 million, only because it is august, but as said, thes highest-rated emmy was on a monday since 1976. >> all right, always good to see you. stay with us. another check on market movers is on the other side of the break.

>> get the latest headlines at the top of the hour on bloomberg radio and streaming on your tablet at bloomberg.com. i am mark crumpton reporting from new york. "on the markets" is next. see you tomorrow. >> is 56 past the hour and that means bloomberg television is "on the markets." i am julie hyman. lookesn't at this point like we're going to close over 2000, but of course, an hour is a longtime, especially in the trading session. we went above 2000 earlier today for the first time ever. we're seeing the dow and the s&p

about half a percent. we have comments out of mario draghi of the ecb. different things are contributing to gains today. let's look at what is happening in the bond market today, because we're seeing the biggest gap in treasury 10-year, between that and german bonds, that we've seen in 15 years. we are seeing and move down to 2.39%. let's look at oil prices. we're seeing oil prices down to some extent today, just down about 1/3 of 1%. there was speculation that the supply report we will get this wednesday will show an expansion in supplies for the fourth straight week. rounding out our asset classes, let's look at the dollar as well. an 11-month high against the euro. joining us with what is behind that move is rachel evans, who covers currencies for us. i mentioned mario draghi. he is only part of the picture today.

talk to us about what is pushing the dollar higher. >> i think it is accommodation of factors that have taken place over the past week or so. last wednesday we had the minutes out from the fed, which basically was saying that the fed could look to move rates sooner than currently anticipated if the data continues to improve. now, that provided a little bit of a boost to the dollar last week. yellen was speaking at jackson hole and she reasserted that, but she moderated her thoughts little bit, talking of slack in the labor market, but again saying that she sees signs of improvement and because the market was primed to hear more neutral-to-hawkish sentiment, they reacted to that in the dollar gained as a result. >> she seems to be expressing more division is. -- dovishness. >> she has been consistently dovish the past few months and

the markets have been waiting for some kind of change in tone, and are prepared to seize on very small nuances suggesting that change. >> maybe even imagined nuances. >> perhaps. >> talk to me about mario draghi as well. >> what has been going on there is that the ecb seems to be on a divergent policy path compared to the fed. the fed is perhaps starting to contemplate the timing of the interest-rate hike. the ecb is looking at a further easing. on friday indicated that the inflation expectations are slowing. that suggests that they could ease further when they meet september for the next meeting, withbly come out quantitative easing, which is something we have talked about for a long time but have not seen come through. >> the dollar is rising against broad currencies.

we are also seeing it against the yen to some extent. very quickly, what are we seeing? >> dollar-yen is relatively flat today but we are looking at it from a broad perspective. highest level since january at the moment against the yen. people arepeople are expecting e dollar-yen upside. >> thank you. marketshave more on the a little bit later. welcome to the most important hour of the session. a record rally driving u.s. stock market it. the s&p jumping above 2004 first time in the history of the universe. "street smart" starts now.