, and to deal decisively with those who are our here. i will be making a state in the house of commons on monday. this will include further steps to stop people traveling with new legislation that will make it easier to take peoples passports away. intelligent, we also need to take a comprehensive approach. dealing with this threat is not just about new powers, it is about how we combat extremism in all its forms. we need to tackle that ideology of extremism head-on at rude before it takes the form of violence and terror. that means challenging the thinking of extremist ideologues, identify the groups in this country that push next to missed agenda, and countering them back and powering the overwhelming majority the produced values of democracy, the rule of law and respect for minorities. that is why's prime minister i have driven a new approach to attacking rival causation --

radical extremism, not just violent extremism. i set this out in my speech in 2011 and have given this forward through my extremism task force. stopping funding of organizations that promote extremism and ensuring that every form of government and state are focused on beating the scourge of extremism. this task force will continue to meet prettily. --tain is an opera in tolerant, and free nation that backs people in every community and want to work hard, make onto vision, and old alike for themselves and their families. but we cannot stand by and allow our openness to be confused with the tolerance of extremism. or one that encourages different cultures to live separate lives and allows people to behave in ways that run completely counter to our values. adhering to british rallies is not an option or a choice. it is a duty for those who live in these islands. in the end, it is only by

standing up for these five that we will defeat this extremism, protect our way of life, and keep all our people safe. thank you. very happy to take some questions. >> reddish prime minister david cameron making public -- british prime minister david cameron making public remarks after they raise the threat to severe. saying the fight against extremism may last for decades. it is a generational struggle. military is only one element. the response to terror. he supports the bombing that the americans have in conducting in iraq against the organization that calls himself the islamic state in syria. specifically to the concerns that people have about britons were traveling to syria in northern iraq to fight with isil.

it is believed the perpetrator of the beheading of james foley was a brit. we don't know if you was a naturalized british citizen or born in britain, but david cameron talking about steps that britain is prepared to take, including seizing passports from those he believes have returned from fighting in the area or may intend to fight for isil in the area. >> mentioning gaps in the armory. saying overall the british government will be taking a purpose to approach to dealing with these threats going forward. >> he is one of be making a speech in parliament on monday, detailing further steps the british government plans to take in its response to the terror threat. in the meantime, a different kind of threat from we're only finding out about it now. that cyber attack that targeted jpmorgan was underway for months before the bank caught it during a routine sweep. so far, there's no evidence the hackers of than anything

nefarious with the information they kill for it. jpmorgan says it has not seen the usual fraud levels, but infiltration of one of the most secure companies in america, one that spins hundreds of millions of dollars every year on cyber protection, has national security on high alert. mike riley is with us from washington. what have we learned since yesterday, since you broke the store yesterday? >> we have some gory details including the fact the hack took place over much longer period of time that think was first expected. it started in june. that meant the hackers are in one of the most heavily protected networks, layered the place with all sorts of malware and slowly extracted gigabytes of data over more than two months, almost three months, before jpmorgan got lucky with a routine scan and caught them. >> one of the things that struck me about your reporting is that it appears the hackers went to

the front door, right through jpmorgan's website. >> that is a very hard thing to do, in part because banks get a tax that way all the time so they spent a lot of money and make a lot of effort to try to lock those doors. not only do you have a website -- even if you are able to get in the website, they have a protected zone which is very hard to get from there into confidential data. the hackers managed to get through the website and get into the data center, collecting a lot -- vast amounts of both customer data and it appears other kinds of data in jpmorgan's network that could be sensitive in all sorts of ways. >> what stood out to me as well, it seemed like this specifically was designed for jpmorgan, not just that they decided to hack jpmorgan. i am wondering what the angle was. it had to be more than just getting this credit card numbers. is very possible.

one thing we do know, jpmorgan is telling people who have come into work on the attack for them, that they believe they were the victim not just of russian hackers, but the russian state may have had some hand in this. and that could be based on what they think is a threat of their u.s.in enforcing sanctions. but it is also based on some technical data they've got. sensees some amount of given the sophistication of this hack. state-sponsored hackers don't necessarily have to be the guys in uniform or people putin can call, they can -- the government can give certain kinds of assistance. scanning you would need to develop. all of that could be given to these hackers by more sophisticated actors of the latter. >> mike, people are no doubt asking, how could jamie dimon let this happen? i know for fact jpmorgan takes

cyber secure do very seriously. dimon carved out a section of his annual letter to shareholders to talk about the threat of cyber attacks, to talk about and explain even though the bank was spending $259 in 2014 and putting 1000 people on the case -- $250 million in 2014 a putting 1000 people on the case, they would lose some of the battles against hackers. talking to the people you deal with in the cyber security in respecthow will to the amount of money they spent and the seriousness with which it takes the issue? >> there's no question that jpmorgan, all of the banks, but jpmorgan especially, texas racer sleep and puts their dollars and expertise -- takes this seriously and puts the dollars and expertise into it. the hackers caught them at an interesting moment. they recently replaced the chief information officer, the guy in charge of this massive security team. it is a new guy.

right after this transition took place, a level of top-secret officials left. there's a process of hiring. could that have good treated to this? -- contributed to this? possibly. no question they put a lot of money into this. given all of the cronbach's they buy and the people they have on the case, how are these hackers able to avoid that massive dragnet of devices over on was three months? >> how worried is jpmorgan right now? >> i think they're worried, but the question is, anytime bad guys still very, very large amounts of your sensitive data, you have to be worried. you don't know exactly what they're going to do with it. the potential for a large amount of fraud. jpmorgan says they have not seen that yet. this is the kind of data that could be used in various schemes over a period of time. they will spend months of this on the cleanup and having to watch carefully what is done

with their data. mike, thank you. jpmorgan is getting the attention right now but have a funny feeling as we find out about other banks, the attention will shift beyond jpmorgan. mike riley, broke the story about the hack into jpmorgan. >> the white house is still what foreign-policy crises on multiple points, the threat of tougher sanctions on russia and the effort to find a strategy for dealing with the islamic state. on all thehas more presidents options here. first, what we heard in the u.k. from premise to david cameron about stepping up the level of security from severe to substantial. any reaction from the white house on that? >> no immediate reaction yet. there will be a white house briefing shortly. we expect the possibility of a statement, some response to what happened in the u.k.. it is on the u.s. radar. not a surprise. the coordination between the united states and u.k. over the security issue, typically what

is happening with isis both in syria and in iraq. spoke with the press secretary short time ago and he mentioned to me specifically about one of the big concerns on the part of this administration, the number of foreign fighters in syria and iraq including foreign fighters with american passports and the possibility they could bring the terror threat back to these shores, not to mention european shores as well. this is clearly on the u.s. radar. i expect we will get something from the white house this morning on what has happened in the u.k. >> what can you tell us about what the president is thinking about syria as well as additional sanctions on russia? what is first on his plate today? >> the press conference of president had yesterday he expressed reticence about really stepping in quickly and militarily both into ukraine and what is happening there and also in syria. he took off the table what a lot of people expected here, that the u.s. was about to launch airstrikes into syria against the islamic state.

he said, we don't have a strategy yet for that. that raised a lot of eyebrows with the president of the white house saying that. the white house clarified what he was talking about was specifically the plan for airstrikes. that is front and center on the presence plate as is the situation in russia. he tried to tempt down expectations of reaction by the u.s. he heads to the nato summit next week. sanctions arethe on the table, given what has happened there and what the u.s. and nato believes are russian forces, russian troops in ukraine and helping the separatists. >> on the subject of the islamic state what is the response been does far too an odd word choice by the president yesterday that the government has no strategy when it comes to figuring out what to do in northern iraq and syria? >> they moved right away to try

to clarify what the president said because as i mentioned, not the words of confidence. we're used to hearing from the president of the united states -- i asked josh earnest directly about it. he said the president was responding specifically to a question about syria and the possibly of eminent airstrikes. again, what they're saying is this president isn't ruling out the possibility of airstrikes but he wants to develop a more conference of strategy that includes regional partners and players in that part of the world who don't always agree on a whole host of issues, sending john kerry to the region to try to develop those regional partners. turkey, qatar, perhaps iran as well. , ands a poor word choice something that white house is trying to rectify. >> as farsi allies are concerned, let's not forget about saudi arabia. ares far as the allies

concerned, let's not forget about saudi arabia. the president was supposed to spend the night in new york city he is changed his plans and will be returning to washington. >> self-made millionaire. jumpstart a by none other than the u.s. army. >> brave new world for the first time, there will be a a playoff to determine the national champion. ♪

weeks, the islamic state has been capturing more and more territory in northern iraq and syria in bringing with it unspeakable violence and terror. some still a boom time for local copies making money, thanks to american security officials and for at least one of these businesses, it was actually the u.s. military that provided the initial kickstart. capitalurdish regional of erbil hardly feels like a city under siege, but it is influence of the islamic state

that the growing externa growth here has begun to slow. and in this boomtown, business leaders are facing the new reality. talking about the isis situation, it was a big surprise for us. you never think you'll have this neighbor very close like what we have right now. >> in downtown, kurdish company the dr group may operate out of a small building but over the past decade, has become a big's news. in theriots started this 1970's before handing over to his sons. governor global -- the empire wha specializing in several sectors. shown to thes are brothers. the next week we sit down and mostly it is approved. >> brother number two has been

head of the company named for him since 1992. 10 years later, the mecca military arrived in iraq and kick started -- the american military arrived in iraq and kick started the business. contracted them to build, service, and in some cases, secure u.s. army bases in mosul. >> they have a big share of our success. we were able to make a huge business with general portray us. >> huge business with the us army meant tens of billions of dollars in contracts over six years. at one point, he says profits topped $1.5 million a month. today, the group employs thousands and is one of the handful of kurdish companies to dominate the country's are just ever structure projects. >> we take over most of the business in iraq because we have

enough cash in her hand, suddenly, kurds are running businesses oliver iraq. r's from is only one of two electro electricity firms. the local government sometimes struggles to pay its own bills. when they open its brand-new oil refinery earlier this month, there were no government inspectors insight. and no government approval on site. the islamic state in recent of iraq's largest oil refinery had just pumped up gas prices, and the group's potential profits. >> the timing is lucky, very lucky. the market is very good right now because there's a big request after the refinery was closed. million.spent $5 he now expects to make that money back in around six months.

dayite crude oil at producing the octane gasoline, diesel, heating kerosene and daily profits of around $30,000. the eldest of the brothers wanted to show us his proudest project, a construction site that he says will one day be the largest mall in iraq. >> 148,000 -- >> 1.5 million square feet. >> exactly. >> the headquarters will be in the country's largest building. where which her family be without the u.s. military? >> i can't imagine it. >> totally different? >> yes. everything you can see here is by supporting the u.s. >> a decade ago, the overthrow of saddam hussein from businesses include a standard takeoff. now it is airstrikes from that same military against islamic

state that ensure companies here conserve five and company owners can continue -- can survive and company owners can continue to thrive. corrects 10 million, 20 million >> tenley and dollars, $20 million. ex ultimately, it is only filled just a few kurdish pockets. >> we're the next on the region joining us. also invests in iraq. great reporting, really interesting to see how the effects of the us military are still lingering in iraq. is that still true? is it impossible to make money without the u.s.? >> the security blanket started until2 in northern iraq 2011. in the last three years, there hasn't been so much of the u.s. presence. other than the last few weeks

with the islamic state. that might be returning. player in the biggest kurdish business is the kurdish government. the two ruling kurdish families. >> are they providing cash to businesses themselves? what is the relationship? >> it is important for any big business in kurdistan data coast relationship with the kurdish government. neither the eu's tour west version >> one thing that seems so easy to lose, particularly with the threat of the islamic state, beheadings, executions, is that curtis dan is quite -- kurdistan is quite a resource-rich area of the world, isn't it? >> absolutely. gdp capital has grown. also the wealth disparity has grown.

a clutch of family-owned businesses that have been tremendously successful. >> isn't that the way it is across the middle east? >> certainly. one thing that is in and are analyzed consequence of the secret blanket in northern iraq has been the emergence of the group a very strong companies like this. the vetting and the diligence and so on these companies have to go through it to get those initial usc 30 contracts is often -- u.s. security contracts is usually very much stronger. maximum congressional oversight. a bunch of really strong companies have emerged in kurdistan. i think poised to become regional players. >> what does this do for curtis dan's -- kurdistan's resume gold become independent from iraq? >> i would say financially, they need to show they can stand on

their own two feet. one thing that will be for that to happen as they have much more control over their own oil and exports. we have seen that they have been exporting oil is out baghdad's approval. >> not necessarily selling it, but have been able to get that out. >> that will be a big battle over the next few months and years. i think it will continue to be something they have to work on to try to assert their independence. >> do you think this is the next evolution of curtis dan -- kurdistan separating themselves from northern iraq? formationernment process is going on right now in baghdad. two weeks more to run, by far the most consequential thing happening right now in iraq. you can imagine how these events have strengthened their hands in the negotiations. baghdad is going have to make some very series concessions to kurdistan to get its approval over the next government that we will see announced sometime in

the next week. >> do you have the impression the copies like the divar group that have flourished with the help of your sponsorship, as it were, are more legit in kurdistan that some of the once we've seen profit in afghanistan, for example? >> i think we all know afghanistan is one of the most corrupt countries on earth. let's not pretend kurdistan is not. it is been one of the most corrupt parts of iraq. ,he two ruling families godfathers come operate their innocence that businesses have to be done or have to follow approval of these ruling families or things don't get done. that stifles transparency and makes it difficult, i think, to expand outside that region without the approval of these families. >> you mention they were going to build a mall. they will need the support of regular joe's. it can't just be about the rich if they want to grow their gdp,

right? >> certainly. things could be a lot more green -- murkier. the biggest oilfield in kurdistan commit telecom companies and others are getting heavyweight international institutional investments. that doesn't just mean what we know, but they think it is a good investment, but these copies have to survive this diligent processes. >> how much does the stability further south with the iraqi government's threaten the prosperity of businesses like these? >> some of them have operations elsewhere, like the divar group. oil to the south, pretty much in un interrupted.n insurer

>> we have to leave it there. the to talk to you. >> coming up, the fight against ebola. one company has a vaccine on the fast track. stay tuned for that. ♪

>> this is "market makers." >> you are watching "market makers." on bloomberg television. i am schatzker. >> and alex ruhle. i am alix steel in for stephanie ruhle. the ebola outbreak in africa looks like it is going to get worse before it gets better. the world health organization now saying more than 20,000 west africans may be infected until they get it under control. they say will take half a billion dollars to do it. several drug companies are working on vaccines and

treatments. among them is axis smith kline. -- glaxosmithkline. olivia sterns joining us. o seems to be one of really big companies really invested in finding a vaccine or cure. >> is great news they're going to be the first big pharmaceutical company to be testing their vaccine on humans. let me run you through what is out there so far. simple answer is there's nothing that has been approved or proven to work. there is no vaccine. on the drug side, the drug that is front and center is called zmapp, that is what was given to those two americans who were discharged from the hospital after being infected with ebola. we can't say they were cured from ebola. mapp is made by pharmaceuticals. of can see all of the list

companies on the screen. on the vaccine side, a comedy based in iowa also -- a company based in iowa also working on the vaccine. simply, the economics do not work. this is a very rare disease that treats a very poor patient population and remote parts of the world and there isn't a lot of money in it. >> is that to say the work that alexa smith kline is doing in its efforts to develop the vaccine is effectively charitable work? >> gsk has had a significant foot print and ball security market for many, many years. ebola has been under way and develop eye the u.s. government strictly not only to help the public health for it -- health outbreak but a biological attack. matchesa portfolio that nicely to buy a security with an anthrax product, work on antibacterials, antiviral, and also our vaccines in the event of a pandemic. this is another piece in our

arsenal for the bio security. >> how close are you to being able to determine this vaccine will work? i understand you're going to testing next week. >> the nih pointed out carefully yesterday, it is a difficult -- delicate process to produce vaccine. the first stage was promising a nonhuman clinical trials. we're expediting the process to begin human trials next week. there'll be several sets of human trials will happen throughout the end of the year. then we will look at that date at that point. for us tolear, as debbie ajo is concerned, the vaccine is not on the roadmap for this but maybe limiting the next outbreak of ebola? >> it is too early to say. we don't know what is going to happen with his current outbreak. to contain it.ry i think that is what the world health organization announced yesterday. first is containment.

simultaneously, we want to look at any kind of whether it is medicine or vaccine, to prevent, hopefully, this outbreak or any future outbreaks. >> explain how this works for gsk. it is not philanthropy, but i know you're getting funding for subsidies from the government. thehe opportunity for gsk threat of an outbreak in the u.s.? do you see a americans one day getting vaccinated or governments in africa buying or vaccine? >> i think with this particular outbreak, we're going have to wait to see if the vaccine even gets approved -- >> but down the road. >> another piece in the arsenal for by a secretive. there could be a commercial opportunity of countries want to stockpile this to prevent against a biological attack. there is a commercial opportunity in the prosecutor rena, which is what we're looking at. in this particular organization just case, the who asked this for the public health situation

in africa. >> how did you get funding. >> the research and development funding came from the u.s. government originally. this actually started in 2003. the government does find quite a bit of advanced research and development in the ball security . that was the impetus for the discovery originally. there's accommodation between the u.k. government, nih, to progress it further. one of the cup is listed developing a drug, they've got a significant amount of their funding from the department of defense who is also working on the drug side of this, separate from what gs k is doing to tackle ebola. >> if these trials are successful that you're undergoing, how quickly can you ramp up to mass scales? with the drug zmapp, they ran out. >> that is a huge issue, being able to produce two scale. part of the announcement yesterday was the fact we will be producing 10,000 doses in the event the vaccine is successful so we will have that available

for use determined by the world health organization. that speaks to opportunities that the government has with preparedness and response. that is what the ebola crisis has really shown. as an organization, as a country, as a globe, we need to be more prepared so when these outbreaks happen, we can ramp up quickly and address them. >> would it help glaxosmithkline and the other smaller cup is working on a vaccine if other members of the former community were to start working toward a similar goal? >> there are quite a few from cynical companies helping with e-cig -- pharmaceutical companies helping with it. pandemic flu is a perfect example. the benefit is, we do have the resource on the manufacturing side. to your point, that is the challenge, getting to scale. aire strain.r the

what about the other strains? >> nih's working on two strains. shrank early if i can west africa come also a vaccine that has two other strains. if glaxosmithkline is successful, it will go long way toward limiting future outbreaks of ebola. the who says it needs more than $400 million now to contain this particular outbreak. is there a role for your company financially there? >> where supporting all sorts of different efforts in africa. we have a large presence from patients and employees in africa. so are a lot of terrible organizations around the world. >> thank you so much. we wish you the best of luck. thank you for the reporting. >> coming up not quite march madness, the big boys of college

football finally have a 4-2 playoff to determine the national champion. -- four-team a playoff to determine the national champion.

teamhe bcs is out, the 4- playoff is in. the teams will be selected by committee. from condoleezza rice to peyton manning press that. we're trying to make sense of it on "market makers." with this is an analyst from espn. is this really that much better than choosing the two teams to play for the bcs? oneell, now instead of game, we will have three games. so i guess it allows for more people in the business computing for the national championship.

listen, i think will have arguments instead of who is number two or number one to play in the championship game, now the argument is going to be, who is number four or number five? gets left out? now we put the human element in. diversemittee which has opinions, diverse backgrounds, probably as diverse as you can get, compared to the former system, the bcs, which was computer-based. is it going to be better? yes. you four teams competing instead of one. we will still have controversy about who is in and who is not and we are still going to weston and debate this committee you mentioned as to whether they are picking the right teams. >> i'm going to ask the dumb question, why not just do what basketball does and let all the ands just go to a playoff then go to a national champion? what is the problem? >> it is not a dumb question and we hear it all the time. the national defense or answer is going to be from the conferences that, hey, these

kids are in school and that would take too much time. they would have to be out of school. these games are played on a weekly basis as compared to march madness which is every three or four days. it would extend into february -- all those things have been mentioned. i think the real reason is the ball system, which is to win to be a place besides these two or three games, is profitable. it is probable that profitable in schools and the business of college football. this is not messing with the bowl system. we will still have 15 to 20 bowls in addition to these championship games at the jerry jones palace in dallas. i think the real reason is the bowl system is preserved. >> this is not about fairness or doing the right thing, it is about the money, isn't it? >> well, i think it is. the other as active this is, as we are talked about before, you ncaa storm brewing in the

in terms of athlete rights. we've seen northwestern players unionize, the o'bannon case come down. a victory for the players in terms of name, images, and likenesses and we have more suits down the line, which get into the whole pay for play aspect of college football. when we talk about money, it is definitely there. the question becomes going forward, is any of those billions of dollars going to be shared with the players? that is still yet to come. >> doesn't boil down to what will this new criteria be to pick these four teams? >> you mentioned condoleezza .ice and archie manning there are athletic directors. their public people like rice who has background at stamford, who has background as a college football fan. listen, there is no question that hard-core football people are going to question their

selections and matter who they are. no matter who they are. is good for college football. the more you have people talking and questioning and debating, the more you have people talking about college football. in the end, that is not a bad thing. like they question the bcs, they will question this committee. no doubt about it. playoff or four-team the potential to expand it beyond four teams, play to the favor of any one or more conferences? >> i am going to say it may play to the disfavor, if that is the right word. you talk about a power conference in the sec, which has alabama and auburn and georgia and florida and tennessee, all these great schools. puthis committee going to two teams from one conference in the four? iscan all say, hey, the sec the strong this conference, does that mean they will get two of

the four the chevy chip games? -- championship games? there might be an unconscious bias, not to put them in, even if it is deserving. >> do they want to be a team by 50 to 10 rather than 30 to 10? does this affect how they might market or present themselves? >> i think there may be less of that because that is what happened in the past system. to win stylistically. you wanted points for winning by 50 points against lesser teams. that factor in. now, we're going to see, i don't know if that is going to be as important but one thing that is, the strength of schedule. just like we talked about in march madness how teams got into the tournament and did not, who did they play? we want to the creampuff schedule we have seen in the past. a&m and south carolina start the season. that was an important game for

both teams. we will see more of that. >> as this plays out, what you expect to be the most controversial aspect in the playoff system? >> the two teams, if we have undefeated teams from lesser conferences, are they going to get in? that is what i want to see, not the sec or scc or the big 10. those big conferences, teams like boise state, are these teams going to be able to play for the national championship even if undefeated? that is what i want to see. or is a one loss team from a power conference one to get in? that is what we will be looking at and maybe does unconscious bias against the power compasses allowing two teams from one conference. >> always great to have you here on "market makers." >> whatever happened the sports just been less complicated? watch sports and go home. >> big-money enter the arena.

>> coming up, a diamond in the rough. his only baseball experience was a fantasy league and now former consultant is trying to rescue a major league team.

>> you are watching "market makers." if you like "moneyball" you should be cheering for the houston astros. remember the story about the oakland a's? the lineng talent and of based on data alone? it was successful. the astros are taking a controversial yet much copied strategy to whole new level. a former can -- mckinsey consultant shaping of baseball ala billy bean, but anyways. >> when "moneyball" came out in

2003, it shook the world of baseball. a lot of teen owners said, and i'm missing the wave? they went out and hired consultants and techies and data and one of the guys hired by the cardinals wound up taking control of the team's draft. the cardinals have done really well. a few years ago, the astros hired him away to basically do tot mitt romney's to do still companies, chair the whole organization apart and rebuild it from the ground up with the idea toward building a super efficient, cutting edge data centric baseball team. >> he is the mitt romney of major league baseball? >> i don't know if you would like me calling him that. >> did he say, we are going have to lose for a few years in order to get better? how do you convince a team to do that? >> it is the wrong approach. you could spend millions of dollars telling a mediocre team every year to keep the fans happy or rip off the band-aid, trade away all of your major league prospects knowing in a

few years, when they got good, you would get really good and stay good. it is sort of a trade-off. their attendance has gone down, lost more than any team since mets, but we see them starting to turn around and positive signs. >> bill james pioneered big data in baseball, working the night shift at some dispensary. now he works for the boston red sox. the billy being on steroids or extreme "moneyball" kind of thinking, what data are available the did not exist previously? >> a lot more. in the last 10 years, we now have 10 times the amount of data in baseball. one reason is, every stadium contract from the spin on the ball to the speed with which it leaves the bat, and you need a different breed of talent to crunch those numbers and make

use of it. the astros front office's physicists, engineers. but somewhat better experience watching on tv. >> it has. >> does it work? can we say unequivocally, yeah, it totally works? >> good question. you can make a case it in a dozen. the whole infield moves around to one side of the diamond. it looks weird. 30% moreevidence that effective against batters. that all derives from complicated regression analyses these guys do on a computer. >> how about more anecdotal evidence? >> mccue had a great game last night. he was cut are the houston rockets, that sorry, the colorado rockies. of nine runs.

on his way out of baseball. spin on his curveball the most pitchers. that means it breaks more and batters more likely to miss it. they brought him in, rebuild him and he is been one of the standout pitchers in baseball this year. >> as of this aren't an issue seeing reputation -- hasn't this aren't an interesting reputation for the astros? >> nobody ever accused the a's of losing on purpose. what is at the heart of this is something about exposing the raw economics of baseball shatters that romance and history that is supposed to be the heart -- >> i think it makes it better. >> i do, too. >> you only when one of every three games for what two or three seasons heavy painful. you think the other teams

will try to follow suit? >> i think it depends on whether or not these guys succeed. they're doing much better. >> how long do they have? >> good question. i would say if they're not a 500 next year and winning for real in about two years -- sometimes these things don't work out and you get fired. if they start winning the way the oakland a's did, you'll see a lot more teams emulate what i call the mitt romney strategy. >> does he make any prediction for when the astros will start to win? >> he is even more prediction-averse than politicians. i think there will be a 502 next year. i think it will really compete. if you look at their farm system, best in baseball, a lot of young stars. they are an exciting team. they will be fun to watch. >> thank you very much, josh green. if you haven't seen it yet, check out his story about the on this misss

week.com. back in two minutes. businessweek.com. back in two minutes.

this is "market makers." raisesw threat, the u.k. its territory level, prime minister cameron wants the islamic state is a greater threat to security than anything the british have known before. >> a security teams worst nightmare, was some are calling the hack attack on jpmorgan. it went undetected for months. >> orange is the new everything. you cannot go to a restaurant or grocery store without running into something made from pumpkin. we will see what is behind this craze. >> you are watching "market makers." >> happy friday.

>> our guest host, former hedge fund manager now adjunct professor at liberty university, a specialist -- columbia university. >> first, ominous news from the u.k., the british government has raised the terra threat level because of new intelligence from syria and iraq. it is now severe him it the second highest in means an attack is highly likely. prime minister david cameron says britain cannot look at the fighting as a foreign war. >> we've all been shocked and sickened with the barbaric murder of american journalist james foley. and by the voice of what increasingly seems to have been a british terrorist recorded on that video. it was clear evidence not that anymore was stated that this is not some foreign conflict thousands of miles from home

that we can hope to ignore. the ambition to create an extremist caliphate is a threat to our own security here in the u.k. from david words cameron. we go to the phone in london. what has been the reaction not just from lawmakers but also on the street? what you're going to be seeing on the street is actually not a huge change in lots of ways. the terror threat level in u.k. moves up and down. when we asked the prime minister what this would mean, he said, you will see more policeman on the street, more armed. regular police officers in the u.k. don't carry weapons. most of the increasing of the threat level is about an internal message as well as a

general message to the public about watch out. we have the nato summit coming to the u.k. next week. there isn't a specific threat to that, but obviously, that is a major international event tied to the u.s. as well, happening in the cave. that inevitably is something the terrorists might want to target. >> what was different about the david cameron you heard today? >> this is david cameron in his best, serious prime minister mode. we just had the summer vacation season here, and he is been photographed surfing, had a slightly difficult week -- one of his lawmakers defected yesterday. one of the things david cameron is very good at is looking like a national leader at the time of

national crisis. and that is what we saw today. >> robert, cameron in his remarks talked about seizing passports from britons who have traveled to northern iraq or syria and blue to a participated in the fighting there -- believed to have participated in fighting or believed to go from britain to that part of the world and fight for the islamic state. what more might he say when he ? dresses parliament on monday >> they would say they have done a lot. the opposition would say they have not done enough to try to stop young men. it is principally young muslim and from traveling to the region the fight against the syrian government. this year, they have taken 23 passports to stop people they suspect of traveling. 23, on one level is a lot, but they think there are 400 to 500

britons fighting at the moment. part of the problem is you have people who have no kernel record recently suspect -- no criminal record you just of the suspect i'd be going. on monday, he will announce new legislation which will make it easier. we will see the details then. at how they're going to do with this sort of civil liberties problem of stopping people traveling. >> we will be paying close attention to that as well. we are also getting some reaction from the new york police department, nypd says -- >> last hour, we brought you up-to-date on the hack attack against j.p. morgan and other exploited.were

jpmorgan, no surprise, is beefing up its are ready formidable defenses. they're trying to figure out how serious the damage was. mary galligan has deep express with cyber security and recently ran the fbi division here in new york city. she is here with me and alix. first, what was your reaction when he found out jpmorgan have been hacked by criminals who appear to have been working for the russian government? twofold.action was one, i think we need to look at the fact the bank found this particular breach faster than a half in the past. that is a very good sign. although, it does not appear that way, it is a good sign they are finding it faster. they're acting on the intelligence information faster. as you said, cyber criminals that may or may not be working for the government, something we've seen for the past two years in determining if they're working for the government or

themselves will be part of the fbi -- >> state-sponsored cyber terrorism. isn't that the fbi's worst nightmare? >> yes, it is. it is the intelligence communities worst nightmare. if a rope terrorist were to get their hands on these types of techniques and perpetrate a hack would be the worst nightmare. >> there's absolutely no doubt they could get into the federal reserve, that would be the way to do it. if you could shut down -- every time someone buys a bond or sells a bond, if you -- every dollar is working its way through the fed at the money transfer level. that would be the ultimate goal because that is a system that would used -- my question to marry is more about are my thoughts are more about the philosophy of defenses. these guys are spinning $200 million. we will increase it to $229. you keep building these moats

higher and higher. as a global firm out of dallas in a position is, take it to them. listen to the chatter. honest reviewing it not as a military crime scene investigation. how did they get in? but rather listening to the chatter and taking it to them before hand. >> offense versus defense. >> almost a more military view rather than a police investigational aspect. don't plug at more holes in the dams, find out where the bad guys are and stop them before it happens. >> what i make of that, he is correct that we have been securing our networks for the last 10 years. we can secure a build firewalls and plug the holes. that is not enough anymore. you need to be secure and vigilant. you need to get that cyber informationligence you're referring to. you also need to be resilient. real playing the field is going to be.

the attacks are going to happen and breaches are going to happen. you get the information by following what is going on on the underground, in the chat rooms, from the government, from information sharing industry to industry. >> does that mean firms like jpmorgan need to employ black hack hacker types? >> let's make a distinction andeen black hat hacking sever threat intelligence gathering. most of the financial institutions have large groups of people that are doing the cyber threat intelligence. it may be one of the reasons why they found the sooner rather than later. >> what is the relationship between companies and the fbi? people have their stuff stolen from target stores. they got the password from a ventilation contractor. are you seriously going to tell me that it is possible to

control the ventilation? these passwords are everywhere. it's over. >> the fbi did warn companies way before the target hack happen. the relationship, the conversation did not happen. howe's a false sense of that conversation happens. the government shares allrmation almost 40% of breaches are identified by law enforcement. the situation is that the government can see some threat intelligence information and copies cannot, vice versa. how do you share that quicker? inre is no infrastructure the united states to do that. more importantly, and i think of financial institutions would agree with this, we're in a very stick-generated atmosphere. there is no carrot. there is no incentive to share. there is going to be a breach and regulators will come in. >> what everybody is trying to figure out, what was the motive?

if inven't the russians, fact they were responsible for this, done anything with the data? you are involved with the fbi's investigation the hack against nasdaq. entities, thuse far, they haven't gone so far as to disrupt the american financial system or taken money out of j.p. morgan accounts or set down trading on the new york stock exchange, the nasdaq. i'm kind of left wondering, why? clearly, they have the power to mess with the system much more than a half. are a lot of discussions about that. one of them is, are they trying to send the message that we can do this? when you're talking about the governments, is that a message and is there something they know the united states would have the propensity to attack back cap code -- attack back? >> these governments are still somewhat invested in the power

structure? are still a global economy there. we don't know yet whether the most recent one was backed by the government or a wink and a nod by the government or tools were shared. >> are we doing the same thing to other countries? >> if you listen to former general alexander, former head of the nsa, he talks about the united states does take offense of actions to protect .mil and .gov. we don't do it in the area of espionage or the economy. >> there were viruses they put into mess of the centrifuges that were working in iran. that sort of was almost opening the field to everybody in that regard. consumers, i don't know if anyone cares anymore. no one is changing their passwords every time you get an e-mail. >> thank you for being here.

mary galligan, works at the fbi on cyber security and a very senior role. coming up, hedge funds coming up short. maybe the problem is, too much money to invest. >> time to play my favorite game, the yearbook game -- which i can never get. he graduated in windsor, connecticut back in 1963. that is all our producers are telling us. tweet us. help me out. i suck at this every time. ♪

>> this is "market makers." hedge funds, so many aren't putting up great numbers at the industry is raising the most new money for investments since 2007.

why are they pulling in all this dough? let's ask fabio savoldelli. how does it work? what are the hedge funds of popular? i have some ideas. >> i think a large part of it is the looming turn in the cycle. they have done better. i do think people -- if you're sitting in a pension fund and taking everything off touched has turned to gold but in reality, i'm really nervous, i'm really nervous about how my world is going to a ball. turn it over to a multi-strategy firm. you turn it over to sit it out. no never got fired for hiring ibm -- >> or goldman sachs. exactly. you turn it over and these funds bring in billions of dollars in 90 days. guy, is itmer funds true what i've heard the best time to put money in a hedge fund -- first, identify and

manage who has a pretty good track record over time and then find him when he is doing his worst, anticipating the reversion to the mean will take place and he will eventually do better and you will catch him on the upswing? >> that is the right way to do it as an investor, absolutely. the reality is in the fund to fund its space, it is different sometimes from the actual investor space, which is bad -- sad. marketinge become vehicles. to look at someone and say, i think you should be -- >> toll-gating. in 2008.a was down 55% you will go to your buster and say, i'm going to give the money to a guy who just lost half the money we had and by the way, he is locked up all his investors. other than that, he is great and now is the time. if you are private investor, you might have the guts to do that.

if you're talking to a pension fund, they're going to think you're lost your mind. once you get in it it's like, i don't want headline risk. >> is it a we're contrary indicator we're seeing pension funds get in now and these guys are raising so much money? >> i'm not sure that is the case. understand that many investors don't understand, a rising rate environment, if you sell rising rates and widening credit spreads, everything gets hurt. there's really only one or two ways to make money in that environment. come in time. you need to be able to short. >> is it a fed clay? >> where do i put my money in such a way i can protect my money in the next leg of the cycle. these guys are thinking long-term. over time i need someone who can go short and protect me in a rising rate environment.

the only thing they the is certain types of hedge funds. >> we talk about hedge funds or the industry is some kind of model of construction but the truth is, hedge funds, there are so many kinds of strategies in so many different ways to run the strategies. the reason i make the point is that $57 billion of net new money is flown into the hedge funds the first half of this year. most went to a very small number of firms. why? >> two reasons. mostly, you don't get fired for hiring ibm and the role of consultants. it is very hard to get onto a consultants buy platform. >> they're very powerful. thet is something where board doesn't know the underlying thing and doesn't want the responsibility. you don't want to be the guy who says, i just bought citadel on my own and it fell. it's not worth it. govern thethat

pension boards, you want to pay these consultants 10 basis points to tell you to buy citadel. >> and it gives you plausible deniability when things go wrong. >> exactly. >> the flows we're seeing, exhibiting some guy on the corner out of business? is justof the money coming out of straight old-school profits. the rest of the markets are up in you can see this kind of a shift. you have t remember for the average lifespan of these funds, even once they reach 12, 12 months, the average lifespan beyond that is only five yrs. 250 sale. you're seeing a huge amount of money going the top 20 funds. there will probably have over half the money in the industry. nobody gets fired for hiring them. you take the shot on a smaller manager and many have the risk, the reputation. the smaller managers can be more

noble and react more. unlike a citadel, their positions are small enough to potentially sell them and get out of the way, which is something you don't have any huge funds. >> we're going to take a short break. theo savoldelli with us for full hour. >> coming up, piling on the pumpkin. name of food and chances are someone has tried making with some kind of pumpkin spice. we will tell you why. ♪

>> cute is time for the markets. > i'm looking at the company 's software helps businesses analyze internet data. it is soaring. have a look at this. it is now worth $6.5 billion,

forecasting revenue in fiscal 2015 as much as $420 million. -- excuse me, initially forecast 410 leaderless, as signing up for $410 million. signing up though, nordstrom and a bank in portugal. this kind of noteworthy. the company doesn't make any money right now. analysts expect it will make a penny a share next to which means it is trading at 4200 times expected earnings. >> one company not doing so well, specific sunwear. third-quarter losses, wider than estimated, now looking for a loss. is ugly. gross margins are lower. same-store sales looking flat. i should say, this year alone, stock is down 37%.

i mean, ugly. ugly, ugly. more retail pain. marketers able to read your mind? that may be the reason for the pumpkin spice craze. ♪

it is no longer little friday, it is real friday head of the long weekend here on "market makers." >> it is only august, but starting next week, duncan will be everywhere you look from coffee to beer. pumpkin flavored everything. why is everyone going so crazy for pumpkin? we have a restaurant consultant that represents over 10,000 restaurants across six continents.

how do these trends get started? yet pumpkin, kale. >> they can start by design or default. they can be an accident or manufactured. in this case, starbucks stumbled upon it. originally, the test work, it might work. >> starbucks originated the pumpkin craze? >> they did. 11 nears, imagine a home run runs for 1111 run home years back to back. likely to top one but he knows this season or next. >> doesn't that tell everyone everything they need to know about the pumpkin spice craze, came out of a liquid lab? this isn't someone at home with the pumpkin in the coffee maker, this is chemical factories across the river in new jersey, international flavors and fragrance, that kind of thing,

japan, cooking of flavors and smells the company's like starbucks put in coffee? >> it is not real pumpkin. >> that is part of the controversy. chemicals. there is no pumpkin in a punk and spice latte. they're catching some heat with that now. starbucks and chipotle in a number of new service companies are reshaping the restaurant landscape. in this case, it is a testament to our earned india. what they've been able to do it digital marketing, social media efforts. helping to create and perpetuate this. >> we are food guys. from where i sit, september 3, 2003 will live in infamy because that is the day they invented or at least first sold this vile pumpkin coffee creation. believe it or not, there's an academic book a woman named

cindy ott was written a book on the cultural history of pumpkins. the word coffee and pumpkin don't figure, really in it. if you go back to 2003, it has spread. the expansion of christmas. it is about making people feel warm and fuzzy and comfortable somehow. it is very evocative. the flip side if i could go back to 2003, hard choice between do i stop the existence of this pumpkin coffee or in fact in that same year paris hilton issued her tape. >> people don't agree with you. is up. flavoring but no accounting for taste. .alks the sensory branding some hotel chains have started to tap into this. there's a signature scent or an

old factory logo. 75% of our motions triggered by the sense of smell. if we can tap into that, the question becomes, what does your brand smell like? >> and what does it drive you to do? >> it reminds you of the buying season, holiday season. >> on one of your bits of research that i thought was fascinating, mid-yuan to talk about the decline in sales at starbucks because of the smell of their breakfast sandwiches. >> with positive reinforcement and negative reinforcement, they have learned about the sense of smell. sales dropped. that was negative reinforcement. we need to make sure our signature scent -- >> they reformulated the sandwiches so the coffee would continue to permeate. >> these kinds of items, what is the end goal? we want them to buy these and other things or is it margins? with the restaurant business,

you look for your cash cow. what is the item you reflect as your brand. you find that, you want to extend on the peak of that out to the shoulder season. pumpkin spice latte came from the success of their eggnog-type programs which were more around the holiday season. how do we get them to buy sooner and create that crazy sooner? >> you have any more horse stories, campaigns like starbucks might have built around a fragrance or taste the totally backfires? >> most are by accident, not design they would backfire. >> of course. >> they started to realize how powerful this is. you're a marketing, this idea that marketers can now read your mind. literally look up to her brain. like the kgb movies were they

would hook you up to the lie detector. they can literally see what part of your brain lights up if you're telling the truth or not. with this kind of research, we can tap into motivations of human behavior. >> every time i smell a cookie, i want a cookie. it works. >> what about pumpkin beer? can we just stop this? >> thank you for coming in. >> when we come back, we will be considering the conversation about moneyball 2.0 with a man who was the inspiration for iteyball 1.0, the man behind when we come back.

>> the houston astros are shaking up major league baseball with data like you've never seen before, the subject of a new story by josh green. we are it "moneyball 2.0." whoanted to know the man inspired statistical analysis things about it, bill james. what billy bean did with your ideas with the oakland a's, caught fire, replicated by the boston red sox and run a blue jays and other clubs. now the houston astros have put it onyball and steroids. what you think of their approach? >> we don't know if it will work or not. but a certain he can work. there will never be any shortage of ignorance. there will always be people who insist on doing things in ways

that a proven not to be effective. for that reason, the will always be plenty of room for smart do and in run around the field and come out ahead. >> to the new techniques and technologies available to , doppler radar, for years has been used for the weather but now in the ballpark, have they made it easier for you to pick the right players and put a winning team on the field? >> in a word, no. those innovations may have great value great down the road -- weight on the road, but so far, for now, just large house of data that no one understands

which really isn't doing any use yet. that's my opinion. i know people will disagree with me. i don't think with the astros are doing is really direct from that kind of stuff. i don't know how to find any real value in that kind of information. >> you bring up a good point. just because you have this data doesn't mean anything. you kind of have to have the infrastructure to understand it. back to what it means to build that up to then make decisions. >> to reference the astros, my understanding and what they're doing is that it is not really based on that kind of large pilot data but based on insights and looking at what other people are doing and saying, you know, despite the fact we're been doing this -- people have been doing it this way for a long ceased to be logical 40, 50, or hundred years ago and we don't need it continue do it. question, when

you have a surge of data like that, suddenly you just have billions of bits of data that you did not have about a subject 10 years ago, you're not going to understand it in the first 10 years. you would have to ask that data the key questions like, [indiscernible] and then move from the key underlying questions to systematic small questions in which there might be an advantage for you. the key questions is, how to i recognize a curveball in the data or recognize a hard slider change? side then once you have thoroughly solved those, you can progress to, try to figure which of those is effective in which situation. >> the a lot of work is been done about this that may be coming into and moving baseball further and further away from something that is done by people who are passionate about it to

the world of big data. i think what you're saying is exactly that transition. we've seen that amongst statistical arbitrage. you had the equivalent of p/e ratios and that can of thing. even if it is the pythagoreans winning range, went to get this truly huge data, sometimes you find relationships between things that exist in our persistent but are not exploitable by single sort of factor. it really stops being about passion and about things that make sense like on-base percentage at the most obvious level to much more youth aerial things like temperature versus hangs speed of a ball and all those other factors that really i think will take this further and further away from people who are passionate about baseball and deep into the world of calculations somewhere occurring in india dealing with 10,000 or 10 million data points per game.

it will change it and take it away from baseball people. you may find it does not plug into 10 years of evolution on its own. it may actually occur quite quickly because it is plugging into the big data that already exists. >> that is 100% right. i've never heard it stated that will be for, but that is exactly what i've been trying to say for the last 10 years. >> bill, one of the things that has made the astros so much more controversial than the a's were at the outset of "moneyball," they decided it did not make sense just to have a small payroll team where you used statistical analysis to try to build a winner the future, they decided they wanted to lose so they could get better draft picks and that has caused some heartache inside the organization and outside the organization. did it cause any heartache for you? i would not ever do that. i don't know whether they have or not. there are two games involved here. the win loss game and the money

game. created a situation in which you can get a hit in the money game by losing in the one loss game and that was a very poor idea to create that situation. the astros are not responsible for creating it am a they're merely one of the teams that perhaps has exploited it. if you ask me what i ever do that, no, i would never do that. >> do fans care whether or not the team is run by passion, which is what bobby was referring to, or big data? have -- i don't have committed his confidence that big data is ever going to yield insight sufficient enough to overpower the advantages of being really passionate about what you're doing. i don't have a lot of confidence. i will tell you, the red sox, we may not in the future draft as well as the astros, we've

addressed really well on the other hand. you look at how much does a ballplayer loved the game. the reason is him of the game is loverd that if you don't it a lot, he will quit and go home in two years. you have to find those people who are going to stick with it when things don't go well. >> it hasn't been a great season in beantown. bill, can you explain the red errorsord this year by in statistical analysis or is it just the two not coming together well enough or other teams playing so much better and are you optimistic the next several seasons are going to be a better? of analysisbut part and heirs? are you asking if this is my fault? i will take as much responsible the as anybody else.

and -- onme mistakes , this year as opposed to our miserable season two years ago, miserable season two years ago was just a cluster. one of those things, please, let me out of this. this year, it hasn't been like that at all. been moving past the team that was a successful last year, we made tremendous strides. we have a lot of young players who are in the majors now and have gotten their feet wet who weren't part of the team in the past. there is an inherent optimism even though we've had an enormously physical year. we of have made mistakes. excited guy who is so

in spring training, and he should not of been there. >> who is that? -- i don'tdon't want want to say. he came out of nowhere and looked so great in spring training that we put them on the major league roster, though he is not played the majors in years. we should have been disciplined enough to know there might be an issue with that. >> like you say, if you have a passion for the game, you're going to make some mistakes. nobody can be perfect. bill, you found ways to make competitiveredibly teams. talking to us about big data in baseball. thank you very much. fabio savoldelli has been participating in our conversation with ill james and been here for the full hour --

bill james and been here for the full hour. now professor at columbia's new school. you drew an analogy between the pitfalls of statistical analysis in baseball and the pitfalls of statistical analysis in hedge funds. bill james agreed with you. is the parallel that strong? >> i would continue little bit on the bill thing and say in general, history is shown that fashion is somewhat doomed by big data. we just had a guest on who analyzed this. the chef working nationally in the background isn't going to million dataor 10 points. i think what matters is the execution. what we have seen when we look at the global bond markets and the performance of the global macro funds has been disastrously poor execution.

they have created teams that are not the right teams for the playing conditions they've got. continuing the baseball analogy. >> what does that mean? where did they go so wrong? why isn't working for them? >> the performance has been dismal. all of these brightest and smartest people in the world are losing money. you say, why? the answer is, well, we don't have volatility. we haven't had any opportunities. vix equivalent of the bonds. it has to climbed to some of the lowest levels -- declined to some of the lowest levels in years. the reality is, their costly training the things and grown so large that it is all they can trade. >> i'm not want to apologize for any of the micromanagers, but i do wonder to myself whether some

of the responsibility for their underperformance lies with an inability to predict behavior of central bankers? i'm not saying every hedge fund manager. unable to predict because it has somelong and strong with and rode it to the extreme performance appaloosa has had for the past two years. is hamstrung, is it not, in the environment of unconventional monetary policy were the rules of the games are thrown out the door? >> i think it becomes more of a challenge, but to dismiss the federal reserve is not being a phenomenal factor of perhaps the most fun a metal factor since whoever invented don't fight the fed came up. yellen could not have done more than just rigid a billboard -- yellen could have not done more than just rented a billboard.

is there any part of the european economy that has not been dragging down and transparently telling you that, you know, you might think it should be going up but don't fight draghi either? not be more clear. andnvesting in aluminum coffee and done well, but that is way limiting. you would be exposing yourself to so much risk at the same time, right? >> and why you go because you are grown so large. because you accepted $20 billion. at one point have recently said, i want to be bit more than i want to perform? >> that is a key question. what is the size of my opportunity? >> and how to second pair to my assets under management? -- and how does that compare to my assets under management? when you look at these guys moving up to $3 billion, $4

billion, $5 billion, you can do that and take meaningful and euro but you really haven't seen that -- them execute in that space. it is he huge disappointment to $700 billion that is in the macro space in a relatively small number of players. it is somewhat selfish on behalf of the big players to not be a to do it. internally -- >> to be fair, some have been giving back some money. >> that is true. and some have fired 10% of its people. be able to also organize your team. these teams are not single homogenous organizations. their bunch of independent disks were if i don't have capital, i don't make money. even if i have no opportunity, i'm going to yell for the opportunity and the capital. >> great conversation about hedge funds and how they relate to baseball. we are just about done for the day. your with fabio savoldelli.

before was a goodbye, let's go back to the europe again. we did not get much of a chance to show everybody this picture. graduated in 1963. i had a guess. i think it was right, but we will show you who our winner is from twitter. it is henry kravitz. >> someone send me a message on bloomberg telling me that, but someone still knew before me. henry kravis. >> wheels give extra points to somebody likes got here who can elaborate. just the barbarian, not henry kravis. i want to say thank you very much to you, alix steel, for being here with me for the month on "market makers."

it has been wonderful to have you. stephanie will be back tuesday after the long weekend. i would also like to thank you, fabio savoldelli from our great friend here on "market makers." ajit professor at columbia business school and specialist in hedge funds. >> thank you for having me. >> i hope you have a fantastic labor day weekend. on tuesday, what to look for to, cooler than expected summer, how it affected the bear -- beer business. >> hope for some samples. >> no pumpkin ale. bloomberg television is on the markets. scarlet fu is here with more. >> the s&p 500 flirting with 2000 once again come on track for its biggest monthly gain since february. a blockbuster month or u.s. equities. max brier is joining me.

>> the market is forecasting calm waters ahead. environment even with the meeting coming up which would create some uncertainty in the market, it really isn't. >> coming up on the 17. >> correct. two-day meeting. earnings season is behind us. the macro catalysts are few and far between. we have a jobs report but it has been a string of good ones. it is hard to imagine a bad report creating too much nervousness in the markets. somewhat smooth sailing right now. >> let's mention twitter in the news this morning. solid earnings reports of late. what are you seeing in terms of options activities?

>> we're seeing some put selling . we're seeing some call buying up to the october time frame. investors betting on this current momentum extending through october. it has really been a one-way flow for the last week or so. we saw people betting on the stock. those bets have paid off. >> let's move from individual sought -- stock to a sector. sales were fairly strong. you have a trade on any tf. >> itb, but 65% homebuilder related, directly related. i like going out to september. itb trading at 12 for dollars, where you make your money back.

were you make your money back. >> the upside is so much higher than the downside. >> when does it expire in september? >> september 20. you get the fomc meeting in there. it is been telegraphed. ask thank you so much. we will be back on the markets in 30 minutes. ♪ . . .

wherecome to "money clip" we tie together the best stories, videos, and interviews in business news. here is the rundown. youtube hits heading to hollywood. how shows could soon eclipse "muppets." it is our cover story. the release of the gear s. what will apple offer? smart money is betting on a smart watch. iraq may be in crisis but there are some were managing to make money thanks to the u.s. military.