>> from bloomberg world headquarters in new york, imr crompton. this is bloomberg "bottom line." we look at the islamic state militants funding network. rahm emanuel discusses job creation. draftarmour wants to kevin durant. to our viewers here in the u.s. and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines.

shelby holidays saying that its airline still giving a first-class experience. either cook reports on the battle between the tea party and the business community. then we will discuss the funding of the islamic state in iraq and syria. are defense officials telling the press that the obama ministration is considering launching a humanitarian relief operation for shiite turkmen in northern iraq. byy have been under siege islamic state militants. the imperiled town is about 105 miles north of baghdad and just a few miles from kurdish territory. an estimated 12,000-15,000 people are said to lack access to food or water. julie hyman broke the story that the self financed islamic state might be raising more than $2 million a day in revenue. matthew 11, the director of the

signed program. -- matthew levin, the director -- he how did this story come about? >> we have been hearing for a couple of months now that this group, which is now going itself the islamic state and operating in iraq and syria has become the richest harris group we chatte -- the richest terrorist group we have ever known. where were their finances coming from? was it what we have seen in the past like a sum of who was wealthy himself. is it like kidnap for ransom? what i found was that this group has been largely self financed through a combination of territory theyl control, some criminal activities.

also, the big punchline, oil. they control seven oil fields in northern iraq and 60% in syria. they have access to fields that have the capacity of 80,000 barrels. there isl component, nothing we have not seen before. >> citizen. the good news is that it is one of the few areas of isis financing that might be susceptible to our traditional counterterrorist finance tools designations, actions with other governments. do in oured to studios. the rest of their funding, the vast majority of the funding, those aren't as susceptible to those traditional. they need a law enforcement component. there is no coalition force on the ground and the iraqi government isn't capable or willing. public radion

international website as saying that las vegas rules do not apply any rock and syria, what happens there will not stay there. how could the terror funding network allow cells to break out undetected around the world? so much that it is undetected it is that the flow is so significant. we have a foreign fighter phenomenon here with. andy rock that is much larger than any we have had in the past. iraq, chechnya. these are very significant. thousands of people from europe alone, about 300 from the u.s. we got news on american who grew up in minneapolis, living in san diego who died fighting with isis in iraq and syria. >> the u.s. is reportedly reaching out to middle east allies, jordan, turkey, and saudi arabia to get their interest in joining a religion against islamic state militants. what is the likelihood that such a collision would be formed and what is at stake at this

countries if they side with the west? we are seen in effort to reach out even more broadly than described to our allies, the united kingdom, australia, were very likely to join in in any operation against the islamic state. those other countries you mentioned, each one of them has something to offer. turkey is a nato ally. it would be useful if they wanted to conduct airstrikes in syria. and a lotlots of cash of connections for funding the anti-assad opposition in syria. jordan has a lot of access to intelligence. each of these can play a role. they have realized that if they did not already know. this could come to their country's next. whether it is unitarian,

communications or actual .ilitary involvement >> i noted that you were with the signed program on counterterrorism. factjust touched on the that the u.s. surveillance flights over syria. they have begun to track islam escaped militant targets. of counterintelligence goes into that and you think it could be a prelude to something bigger him and maybe american airstrikes and syria? >> i certainly hope it is. this is what we need. a strong component to push isis back. both any rockette in syria. it has to be on both sides of that border. we are talking about aerial surveillance. the problem is that syria has some pretty significant antiaircraft abilities and unlike special forces, helicopters which go in fast and

low, predators and other drums go very high and very slow and can be shot down. you would think that this is the type of intelligence he would have been collecting earlier. clear targets we can hit both in terms of isis or assad regime. we are absolutely not together. >> a lot of questions i have heard from folks both in and out of the building in the world headquarters and out, how do you narrow this down for people that might not feel that they are directly involved in something like this? what are the global implications , specifically economically for something like this, for terror groups. huge.y are in terms of the immediate effect, they want to take oil, first off the bat because they were talking about their control over oilfields.

they seem to be producing half of that. it is a drop in the market gosh a drop in the bucket for the world markets. as these groups are able to take over more and more territory, they have all sorts of resources. you name it, not to mention as i said local taxation and local government services. the economic implications are huge. that is why i think that we will see a coalescing of some sort of an alliance to do something. were potential complications, and means the u.s. doesn't want to do anything against terrorist groups that will somehow bolster assad regime and probably will not look at it from the point of view of making an alliance with him. they will have to tread carefully and it will be interesting to see how this plays out. >> the u.s. says an american citizen was fighting alongside

islamic extremists. what kind of global threat is posed by global combatants involved in the conflict? >> secretary defends hegel says that isis is posing the most significant hit to the u.s.. -- threat to the u.s. you have several thousand american including european citizens. we have seen one attack at the jewish museum in brussels. we are concerned about the potential hollow one attacks. this really is the most significant terrorist threat we have faced in several years. isis is now the sexiest teen hottie group out there surpassing al qaeda. areterterrorism officials concerned about a real threat to the homeland and elsewhere, to our allies. >> they try to distance himself from isis.

of the washington institute and signed program and counterterrorism and intelligence. my colleague on the foreign policy joining us from washington. thank you both so much. when we come back. sam grove art of bloomberg businessweek -- sam grovbart sits down with chicago mayor rahm emanuel.

>> welcome back, this is "bottom line" on bloomberg television and streaming on your tablet, your phone, and on bloomberg.com. he is the former chief of staff and the obama administration. the employment rate is eight and a half percent. so, what does ram emanuel make of the public sector for's role in creating jobs? sam grove ar --sam grobart sat down with mayor a manuel and discussed technology, research in transportation. sat down with mayor rahm emanuel and discussed technology, research in. plus what kind of levers --

>> what kind of levers can you pull to bring those types of jobs to the city? what i don't create jobs, the private sector does. >> there it is the emerging private industry. i call this grading a platform. particular,space, that is what we're are talking about, in any industry, chicago which isiggest face its talent. 100 50,000 there are fresh college degree said, landing here. not only do we have 14 four-year institutions, we have more big universities in any other city in america. the kind of way to illustrate it is that 10 years ago, paypal was developed here. they moved. ebay.rs later,

they pay to keep it here, they have 300 jobs because they have the talent and the capacity. something that was developed here. something that they can grow domestically. that shows where chicago is 10 years ago versus where it is today. softwarepanies seeing development, the capacity here, and the ability to grow it because of the talent that lives here, and the quality of life. chicago versus san francisco. boston, seattle committed a third of the cost. the same talent, the same capacity. -- boston, seattle, a third of the cost. major institutional support. the lead at oregon university of chicago and the city university of chicago. advanced digital manufacturing. , theniversity of illinois'

supercomputer based there. we have 11 innovation centers throughout the city. tern is putting in a new biotech life sciences center. i negotiated a deal between the university of chicago on water technology. here, majorch talent. obviously, capacity under transportation. both with the best connected airport. a public transportation system which is setting records for its investment. it will be the first system to go for ge. -- 4g. this gives you a sense of the capacity in chicago. more people take public transportation including the mayor in a single month than all year. making major investments, cutting downtime, improving the quality of the experience with new quiet cars. all of that, talent, research,

transportation, and then a great quality of life that is the third of the cost of any other major city. that creates a platform for a lot of what i would call the ecosystem to really take hold in the emerging economy. last year, there was a new start up every day in chicago, just in the digital space. we have 10 now that innovation centers, we have announced 11 in the life sciences and my oh sciences to take advantage what northwestern university is doing. incubators, versus what goes on in the digital economy. that is a key thing that the city can do. we don't do venture capital. i am holding the first venture capital summit in chicago bringing in vcs from the west coast, europe, to see what we have. if you put those resources to

play, chicago will continue to accelerate. was he will have more of sam grobart's interview with chicago mayor rahm emanuel on "street smart." the focus will be on startups, innovation, and the inequality debate. republicans are confident they will hold onto the house. prospects are less certain for speaker john painter. some of his biggest critics in the gop are headed back to washington and it looks like they are bringing reinforcements. -- prospects are less certain for speaker john banoehner. >> that is how it has laid out. that is where the tea party faction could actually grow in the house and still, the entire house further to the right. john boehner's job

even harder. those that do not support him are cruising to reelection. the other two decided to run for the senate. includes at least three lawmakers specifically targeted by business groups for defeat including the chamber of commerce. they spent a lot of money here. they all face primary challenges, they all one and they look safe in the general election. the bad news for john boehner is that the anti-boehner chorus could be bigger. there are dozen republicans on their way to victory who have said on the campaign trail that they will not support or at least at this point will not commit to back boehner as speaker. that includes mark walker am a gary palmer of alabama, joey heist, all of them running for the house and looking like they are likely to win. boehner could still win with the

support of the rest of the conference. there is no guarantee that he could hold onto his job but his job is already difficult enough. it could be difficult even if republicans hold on to the house. >> talk about support for the speaker, when will it be put to the test? >> it will be put to the test when the new congress convenes. we expect them, but the real test policy wise might come in march. that is what we have, another debt ceiling vote. again, up to the speaker to try to convince his members on how to handle that policy issue and whether he can heard these cats once again. us from cook joining d.c. in search of luxury in the skies, is first class still a first-class experience?

>> we wanted you to know that bloomberg is the only business new service being offered on amazon fire. if you missed any of our interviews, you can now watch

them on bloomberg on apple tv will sto -- on apple tv. apple television it -- where stocks at are trading right now. we have had a very sort of ho-hum session in terms of movement. completely unchanged. it doesn't happen very often. it is trading right now at 2000 after posing at a record level yesterday. in terms of individual movers, let's look at apple. shares are hitting a new all-time high. they are moving up the debut of iwatch after -- they are expected to unveil it with the iphone six. tiffany shares are hitting an all-time high. reportedny second-quarter profits that

topped analyst estimates. they also raised their earnings for cast for the full year. smith & wesson shares falling by the most in two years after it cut its full-year sales and profit forecast.

>> welcome back to the second onf-hour of "bottom line" bloomberg. thanks for staying with us. while many airlines are cutting cabins andst-class focusing on premium business seats, some are going above and beyond for luxury passengers. diggingolliday has been into the story and joins me now. how are they catering to the ultrarich? >> we know that the business classes living -- some are going to great length

to upgrade their first-class cabin. we are not just talking about little luxuries. had a business concept. we are seeing the air grants. this takes the cake. it rolls out basically a first-class cabin. chef.er, a personal >> did you say a butler? >> a butler. they're going to bunt and beyond. >> what is the strategy? ofwe are seeing a lot airlines extend business class. there are still first class passengers that are these ultrarich clients that want to fly and feel special and feel pampered. stillivate jet industry has a way to go. i just got off of the phone with an airline expert and he said that some are facing a lot of

litigation, regulation. until these private jets can become more excessive book, affordable, convenient, we will see first class passengers in some markets and a lot of demand for the outrageous tickets. >> what does that mean for the first-class traveler? like that is a great question. what we have heard now is that in the short term it is not going anywhere especially in markets like the middle east like wealthy cities, london to york to tokyo. it will be around. private jet companies can work with regulations and the faa, i do think that we will see first plastic around for a while. >> if you are on a private jet, it is first-class. >> thank you so much. it is time now for the commodities report. su keenan is on the newsroom. >> the latest supply pressure

oil prices.e on the so-called breakfast commodities take the cake, orange juice and coffee. fruitspoint orange juice -- orange juice futures doubled. this threatens growth in florida. the rally for the last two days, florida after brazil. there are renewed supplies concerns. the focus has been on the drought and the aftermath in brazil. set for thet is worst slump since 1965. conditions now in

central america, that is just adding fuel to the fire. there are predictions that we could see a valid move to the upside for coffee which is one of the winningest commodities. >> a little bit more about oil, what is going on in oklahoma? >> well, that is a key delivery point. that is where we are seeing continuing rises for the fourth straight week. lower prices right now. they would not be surprised to to be in the mid-80 tossed by the end of the year. inventories, almost a million barrels which was less than forecast. surging, four percent gas prices. $.80 a gallon. as onentinue to shape up of waning domestic demand. one trader describes the market as chopping. we are seeing in commodities what we see in stocks during the

last week in august. a lot of low volume. >> ok, sue keenan with the commodities report. china is considering a $16 billion investment in infrastructure for electric cars. cities growsmajor out of control. will this chicken and a good approach payoff? matt miller has been looking at the demand in china for electric vehicles. >> i thought it was a fairly interesting story. it makes me think that china is putting the cart before the horse. to 2007les going back when the company was started all the way through the end of this year him if you take the most optimistic forecast for gospel will total less than half of what china is going to invest in infrastructure. it is a heck of a lot of money. tesla is not even the biggest electric carmaker in china.

their shares were down yesterday. these are the big chinese electric carmakers and they own the market. >> china will be important to tesla's future. >> he has said that it will be important to the future. china sold about 20,000 green cards in the first half this year. that is not even all electric cars. that includes plug-in hybrids. we had 66,000 plug in electric vehicles through july and obviously tesla is a huge part of that. tesla doesn't nominate the market here. if you look at the amount of plug-in vehicles as they have been invested, they have sold only 28,000 through july and the chevy fold has sold the most. >> the one thing people say about electric cars is where are you going to plug them in.

expansion.eeing some we have over 8000 charging stations in the u.s., a lot more than china has. goal thatobama had a we would have a million electric cars on the road by 2015. about going to come in 300,000, 400,000. he has helped to invest about $5,000 in infrastructure and this is the kind of chicken or add to that we need depending on how you see it. >> matt miller, thank you so much. we will have the latest on world cocoa production. the country at the top of the list might surprise you.

>> the former environment presidencyll win the against the incumbent court into

a new poll out for you as you like. so for 45% of voters support in the second round. silver is running second in the first round 29 is versus 34%. 19% in the survey which has a margin of error, lesser minus two percent. ecuador is posed to extend its lead over brazil at the top cocoa producer in the americas as exporters forecast a record harvest. the national exporters association says cocoa output probably will rise about nine percent to 230,000 metric tons this year. some of the reasons include government assistance programs and easing concerns that of the el niño weather phenomenon would curb yields. that is your latin america report for this wednesday. "streetsmarts" at the top of the hour. --

smart" at the top of the hour. trish regan is here. how much ision is, fed policy contributing to this? if it has a big role in these valuations that we are looking at, can we now say nearly six years after the crisis that said policy has jumped the shark? enough is enough. are we running the risk or is the fed running the risk of creating another kind of problem? and by that, income inequality where you increasingly have a society with the haves and have-nots. fed policyit, the has done a lot to help the wealthy, but it is not yet really trickles down, so to speak to the rest of the economy. >> that is something that rahm emanuel will be talking about

interviewedgrobart him and we will be having more " ashat on "streetsmart well. >> if you look at the real unemployment rate which is effectively everyone out there that would like to have a job but maybe has given up because they can't find one or part-time workers that would like to be full-time, we are still in double-digit territory. yet, you have all of this and and a activity. $2 trillion, up 70%. you have to ask the question, why is everybody feeling so foolish? why is valuations being driven so much higher? we will be lucky to see three percent growth. something is out of whack. we will dive into that deeper and talk about what exactly the implications of this really extreme fed policy might be. smart" with trish

regan coming up at the top of the hour. details of a multimillion dollar more over sneakers. war over sneakers.

>> under armour wants kevin durant badly. the deal would double the rent's durant's deal with nike. he has given 90 until today to under armour's offer. good to see you again. >> i think we have gone from an arms race to a foot race. >> very nicely done.

armour deal with kevin durand is finalized, how will this change the dynamic endorserhe athletic and businesses? what the sneaker market is posed to $5 billion. salaries are an afterthought. after a global footprint. with the street credit that under armour has, nobody ever went after nike. there were a lot of pretenders and they failed miserably. an iconicave clearly type player like kevin durand, you're talking about the world. sports has become a global language and a financial windfall. >> would be a loss for nike given its stable of athletes? >> no, because nike is the ultimate company. they have done such a spectacular job, they have understood that the world is shrinking in the size of the ball and they have captured a

lot of those great players. i think it is almost an opportunity for nike. if kd goes to under armour, you have a battle. he is the ultimate competitor. calexico live years ago, 90 lost -- nike lost the services of stephon curry. are they literally and figure briefly on their heels at this point? their toes and they always will be just because companyanagement of the . if you think of the detroit pistons bad boys which have gotten a lot of ink, when you have steph curry and kevin durand and whoever, that great seventh grader to come, this could be the good boys and under armour. >> a big component of the story that has been getting a lot of talk about dollars is the jay-z

combo with kevin durant. is that as disruptive and influence? see it as creative. sports and entertainment. every athlete wants to be an entertainer and every entertainer wants to be an athlete. it is not just what your vertical leap is, it is what your global impact is. as someone who is a player and someone who is ultimately cool. what therstand ultimate end game is. >> you can draw an arc from oscar robertson to lebron james. his kevin to rent there or does he have to win a championship? >> always like to get a ring. there orin durrant does he have to win a championship? >> always like to get a ring. he was born in

d.c. might he go back to the wizards? these athletes really control their destiny to a level we have never seen before. >> the price tag being talked about, the $280 million range, does that surprise you? >> of course it surprises you when you think of $280 million to go to a shoe company based on what he's being paid a year, it is significant. when you look at the up side of the market, lifestyle, economic growth in asia, and south america, and europe. basketball clearly is a global game. it has made great inroads and those dollars are really insignificant as insane as it sounds, when you are locking up somebody who was such a high-quality individual like kevin durrant. >> you believe that the upside is not for the faint of heart, why not? >> you have to have a big

checkbook. this is a tug-of-war. you are going all in. you are not playing halfway like .ther companies have done kevin plank has built this in an intelligent manner in the game is on. did steve ballmer paid too much for the clippers? >> absolutely not. jumpsnterested to see who higher, steve ballmer or mark cuban. >> the former president of the golden state warriors 20 knots from san francisco. it is always a pleasure to have you on and get your expertise. -- the former president of the golden state warriors joining us from san francisco. "bottom line" continues in just a moment.

>> get the latest headlines at the top of the hour on bloomberg radio, streaming on your tablets, and at bloomberg.com. that is it for this edition of ," i will "bottom line see you tomorrow. >> i am julie hyman. let's take a look at where stocks are trading. it is very unclear whether we will have a record close. stocks have very little changed. aboveve the record close two thirds in. it hasn't moved very much in the wake of that. more movement we have this week raised on a big merger.

this answer going list of companies facing both public and political pressure for moving their headquarters overseas or just across the border in so-called inversions. that was the bloomberg rankings is joining us now to put all of this activity that we've seen in context. it feels like we have seen this big ramp in this activity this year. it is just feel like it. your numbers show that is what is happening. >> you can look at the raw number of deals that have taken place or are pending. what is really interesting is looking at the actual market cap of these companies that are moving their headquarters overseas. in 2014, the number of proposed deals in the amount of proposed deals was 215 alien dollars. that is the gdp of portugal. this number has skyrocketed ever since 2009 when companies eager to a loophole in the inversion

to actuallyows them invert their companies and take advantage of lower tax breaks overseas will not since then, you have seen the number skyrocket and that has drawn a lot of public and political scrutiny. >> it is interesting because one of our guest point out yesterday that even though the market cap of these companies going overseas is relatively large, as a percentage of tax receipts, is still a relatively low number but it has gained all this attention. canada seems like an unlikely place or not as frequent a place and you question the numbers on what are the most popular places that these companies are moving? >> over the past decade, 41 companies have reincorporated into lower tax havens including 12 alone since 2012. by far, the most popular destination is ireland. 10 companies have moved over there followed by canada and the u.k.. matt levine made a good point about these moves saying that it

is not as simple as let's move over to these countries because it is a much lower tax rate, it is not like we're moving to canada because they are taxing discreetly less. there is also more involved, more to it than that. if you are a non-us company, you will still pay 35% income tax. this is with sales. >> if you were in canada, you might be paying less for the income you are making in subsidiary, sales and other countries. that is where these potentials are for these big pharmaceutical companies that have a lot of intellectual property and have the ability to sidestep some of these laws and restrictions. >> give us the highest and lowest tax rates for these. unfortunately has the highest income tax rate in the developed world. central and sub central. the state and also the u.s. government.

on the flipside, the lowest income tax rate not surprisingly is ireland. >> getting all of those companies to move there. interesting numbers to help us explain the big trend we have seen. thank you so much, we appreciate it. >> we have equities struggling to maintain the historic rally. i am trish regan. starts now.t" ♪ a new threat in ukraine. kiev says russians holger's have joined rebel fighters and are mounting counterattacks despite a pledge to work for peace. in europe the ecb