bikes live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> russia turns up heat. moscow says the u.s. and europe are stoking the five-month long conflict in ukraine. president obama is on his way to eastern europe today. >> breaking his silence. the former countrywide ceo cannot figure out why people say all those terrible things about him. mozilla says neither he nor his mortgage firm did a single thing wrong. >> tricky more craft beer than

ever before. good morning. look who is back. summer vacation is over and here is stephanie ruhle. >> thrilled to be here. month.been gone for a a lot of news happened while i was gone. >> and some crazy stuff. some of you have been seeing these on twitter. thererazy super fan out made socks. i was hoping to wear these today in honor of your return. -- they are really designed maybe there are are hand warmers. they are stretchy. you can see the picture. >> i never wanted to have my face against eric busey's sweaty feet so much. thank you, that super fan who ordered these.

matt miller. >> down to business. economic indicators. manufacturing data from the institute of supply management. fors go to michael mckee more. >> you expect me to follow the sox? the news we have may not be as exciting but it is very good news for the u.s. economy. in 59. more than expected and the highest since march of 2011. her's rise to 60 67 from 60 34 yard production up to 60 45 from 60 12. this may be the peak. it is hard to see how we go much higher than this in terms of manufacturing. a bag -- a bad part of this as we do not see a rise in employment. the employment index drops down a tech. we saw a big rise in employment

in the last payrolls report. august may carry through because we're are still seeing a high number. for the economy overall. manufacturing picks up even if we see a slowdown in spending. companies are getting ready for us to buy more, it appears. maybe they are making more socks. these socksck -- are a very limited edition. you cannot just give these. sorry. >> thank you. >> time for the newsfeed feed, the top business stories from around the world. dollar general raised the stakes in the battle for family dollar stores. the company says it will pay a whopping nine point $1 billion. plus, dollar general says it will sell up to 1500 stores to meet antitrust concerns. namily dollar's board favored a offer from the dollar tree.

doingvictims accuse of cementing work on the oil rig that had exploded. bp, the owner of the rig. this is a story everyone is talking about today. i areand the f b investigating a report that hackers attacked the icloud and still new to photos of celebrities. among those pictures posted on the internet, actresses jennifer lawrence and kirsten dunst. there is a report apple fixed a bug in its software that hackers might have exploited. guess what? too little, too late. the fact that there deleted photos they thought were in the cloud are now being accessed by hackers? they do not feel so good about that. what are these people doing with all of these news photos in their photo library? >> if you're a giant celebrity like that with all of your

handlers, you do not have a pr person once a month remind you, by the way, no new photos. >> clean those skeletons out of your closet. more on the ipod hacking later in the show. tensions in the ukraine keep rising. estimated 2000 lives have been lost. for more, brian is with us from london. , at least the russians wanted militants in eastern ukraine and the ukrainian army are clashing. president vladimir putin made some comments over the weekend about the possibility of statehood for southeastern ukraine. it was repealed by his spokesperson but it seems to have ignited further tensions between the two side. upthings are really heating

caret heavy fighting yesterday. and the comment from the russian president on sunday with the broadcaster saying talks on resolving the crisis need to focus on statehood. the concern was that he was effectively looking to create a state led buffer zone state that would probably only be recognized by russia and some of its friends, to be a buffer between russia and the government in ukraine and nato further west. as he said, his spokesman came out and said, he did not actually mean he wanted independence for that part of the country. everything we have heard up to eastas been about how the of the ukraine should have more autonomy within the ukraine. that raised eyebrows. particularly considering two other quick comments he made. he said it dates back to imperial russia, when catherine

the great took that part of the world off. he used the word again for the second time in six months and everybody took note. barrosoedly told hosea in response to a question about what his intentions were with invading the ukraine, he said, effectively trying to mean he is not invading ukraine. he said, if i want, i could have time.nks in two weeks there is a lot of concern about the intentions of the russian president when it comes to the ukraine in general and a lot of concern. interpret the spokesman resending his remark? it seems president putin has said so many believable things -- unbelievable things that he finally said something totally believable. >> a good question. , the russianlly

president's words speak for themselves. his spokesman did not exactly argue with what the russian president had said. he sort of interpreted it. does not mean independence. what not like he refuted the russian president was saying. effectively, do not forget, russia is ruled by one man. what he says is very important, even if it is refuted by somebody else. he is landing in estonia tonight. he is delivering a harsh warning to putin? >> yes. the messages, and even nato countries on the western edge of russia will be defended if they are attacked. article five, that requires all , all countries will come to those countries aid. there is a concern in eastern feel like they are

second-class members of europe in general. with a winreassure here, the countries in nato, unlike ukraine, would point out, that the united states is prepared to cap -- to step up. it is also to vladimir putin that he should not even think about perhaps invading the baltics like he has with ukraine. just to strengthen that message, obama will get on the plane and go to the u.k. where he will attend that meeting -- that nato meeting. front andine will be center. >> thank you very much, ryan. >> for more on the global tensions with russia, let's bring in the kernel who joins us now from washington. an intelligence officer in the u.s. air force for almost 30 years. founder and president. where does the u.s. go from here in dealing with russia? will be the biggest

question president obama has to answer. the real idea is that the united states has to be very careful here it is dealing with several russian strategic imperatives. the russians believe they have to go into the ukraine to protect their western flank. are securinghey their borders. to us, it looks very much like they are you invading -- they are invading the ukraine. it is an invasion. they are in essence taking over the russian controlled areas in terms of russian speakers. they will go in and use the ethnic russian population as an excuse to consolidate their power. that will bump them right up against nato countries such as poland and the baltic states. those countries will feel the brunt of the russian advance, whether or not the russians go in there is the next question. the real peace happening next

is, will the european and u.s. sanctions against russia have a bite? it really looks like they're having a effect at the present time. explainit make sense to russia's posture and actions in europe the fact that doesn't spend any meaningful amount of money on its military? perception is worth something and in the case of russia, they have a large and well staffed military and european temperance ending less and less over the past five or six years? >> that is true. the issue is mostthe issue is mo nations spend less than two percent of their gdp on military's. the goal is for countries to spend two percent or more on military forces. the united states spends 4.4% of

gdp on its own forces. there is a disparity. has won the board and of nato for a long time, ever since the founding of nato. russians see this as a vacuum and's -- they believe they could fill that vacuum and are taking it over because they receive europeans being week. they perceive the lack of spending on military and in support of nato is being a key indicator of their willingness to fight. that they have not really drawn a line in the sand in this other case, at least not yet, the russians see this in essence as a possibly yellow light to go ahead and they running through the yellow light right now. had two great russian sanctions, how effective have they been? >> if you give them a letter grade, probably around see minus at this point in time. it is early and it takes a while for sanctions to work. when you go to do the economics

you on german autobahn and look what is driving it, you see a lot of russian passenger cars. there whenrobably be it comes to what is actually seen in german and other european chops. it really does not matter as much to the russians and that is the key ink. you're trying to affect russian behavior. the sanctions are actually a form of forcing putin to increase russian nationalism, saying, they are all against us and are proving our suit -- our theories are right because they're going after us and they are going after us economically. because they are, we are going to be in a position where we can really strengthen our russian nationhood that ryan talked about from london. right nowt is at play with the russians. they're looking at this from a nationalistic standpoint more than anything else.

>> you have been in military intelligence long enough to remember what it was like during the cold war. most other people have not. the world has collectively forgotten what it is like to deal with the russians as an adversary. do we need to go back to the experts of the cold war to understand how vladimir putin thinks and understand how to respond to his actions? able like henry kissinger, who argues persuasively that ukraine needs to be a buffer state, needs to be the switzerland of eastern europe question mark -- europe? >> we have to look at cold war experts and see you what kind they can give us. i think the argument is very apt and henry kissinger's case. you could look at ukraine as a modern-day finland. in the cold war days, finland was basically the buffer state between western europe and eastern europe. there were other countries who played that role as well but finland, because it bordered russia and the soviet union at

the time, was the key player in that way. the ukrainian state could play a role like that. they feel themselves being more else.oland than anything they want independence and are looking at themselves as a poland from the polls -- post-world war i era. that is what they would like to do. they would like to go in and create a degree of independence from russia. russia will not allow it unless we develop some kind of accommodations between them and us. >> thank you so much. >> when we come back, the former countrywide ceo says, dude -- do not blame me for the financial crisis. he rejects the idea that he or the company he founded did anything wrong. >> what else will we do? drink it up. when we come back, we will talk at -- about the crass beers market.

-- craft beer market. ♪

click see is the poster boy for the mortgage crisis. angelo mozilla. could probably call it the worst acquisition of all time. interview, hee says he did nothing wrong. max is here. you spoke to him for 30 minutes. >> even if he does not feel he , i am some, how about sorry this all happened? >> if he were here, he would be like, that is offensive to me. he does not see himself as a villain. explaining to me why countrywide was really heroic. what happened was an external event that happened to

countrywide. he does not see it as something tooing america. >> when you called him, where was he, on his yard? believe helly come i was at home ready to see guest. >> what does that mean? who are his guests? i tried to keep it really simple in the interview and not press him. to be honest with you, there were a few moments where i could tell i was going too far. talked about villain is asian. i started describing the settlement with him, which was $67.5 million. that means something must've happened if he will settle for that amount. he did not want to talk about it. >> we know u.s. prosecutors want to go back after him. they do not have a criminal

case. andc definitely has a case that is why he settled in 2010. they accuse him of not sharing with investors information he and stocke sold stock sales make more than 6.5 million dollars. >> one of the things we talk about is if you put yourself in his shoes, that was four years ago. he paid his price. i also interviewed a few of his close friends and several said this thing. the united debt to states of america and you should allow the man to move on. he feels it is genuinely unfair that for years after the settlement come it seems that again the government is going after him in a whole new way. >> i want to know how rich he is now. what is his life look like now? actually, he said to me, i am a man without a job. i have to make investments.

>> oh please. >> it is interesting. i got to say to him what are his investments here it he talked faredthe equities market more importantly, he is making real estate investments. he is a real estate kingpin. that houses ading taco bell. >> he they taco bell guy. >> he is not here it he does not .at chicken or beef >> they have vegetarian options on the talk about menu. -- tocco bell menu. -- the taco bell menu. >> there were so many other bad actors in the mortgage crisis. why have the united states chosen to pick on mozilla?

when a comes to the volume of loans originated and ultimately those that defaulted or went delinquent. indicatesthe math, it a first franklin, acquired by merrill lynch, and merrill lynch on its own, the percentage is higher than it was for countrywide. in countrywide's case, it was 25%. franklin, it is 22%. >> are you just saying there are other people to hate on more? >> all bad actors in that oh is, and yet, mozilla singled out. where is stan o'neal in this discussion? >> merrill lynch was on the chart you had. you look at countrywide and the scale is massive. >> the numbers are small but the percentages were as. >> during my interview with him,

he said to me, i want you to ask my enemies, ask my critics. he said, ask my critics, what done wrong? he spoke about himself in the third person. ok, what about size? what about the fact countrywide was the biggest player in a game that ended badly for people all across america, in california where he lives. he said, you cannot blame me for the size. we were the biggest and that is a good thing. would you blame amazon for being big? chris when you spend 30 minutes talking to him, were you drinking his kool-aid by the end? >> my job as a reporter is not to make someone look like an angel, just to show relatively clearly how they see the world with adding on what we know to be true, for example, the

government in many different cases, you mentioned california, fcc, he has gotten in a severe amount of trouble for things that happened a few years ago. he insists it is unfair but it is clear things did happen. >> what we have yet to find out is what the government, the federal government, states, chooses, what claims it chooses to make against mozilla oh this time around. we understand they're preparing to sue mozilla oh. >> the whole thing with the idea was sellingit shares and telling the world everything was fine. in the meantime, this new task force has new information on what he knew. statute on which they are pursuing mozilla israel. a financial institution.

>> obama set it up a few years ago. right. exactly maybe they have new information. he responded to your story? have you spoken to him today? >> interesting question. no. he said to me when we talked this is not something we could talk about for 30 minutes. he is the victim of something very vast and not fair. >> he may be someone who has become the punching bag really representing a much bigger issue. >> no question. i am just asking why we are not talking about other people as well. there were a lot of ceo's of private originality -- originators. at least as much. >> what you're saying is right. he is not just saying to hate on other people. it sounds like he is saying i am perfectly innocent.

bad players inee this, it is the government. >> i guess there are no government officials coming over to his house that afternoon. the congratulations, great story. >> we will be back in two minutes. ♪

>> live from new york, this is "market makers." the band is back together. >> i am thrilled to be back. now, let's turn to a fun subject, the world is developing a taste for craft beer. with over 3000 breweries operating in the u.s. alone, craft beer is up 10% last year. your productions slipped overall. one of the largest to rise to the top is dogfish head.

the founder and president joins us from skype from delaware. chance we are seeing a lot of bubbles. keep rising to the top. over 3000 breweries now. new commercial breweries are opening every day. captivatedave been by today's small breweries. >> when i grew up, people loved drinking budweiser. why the switch paired >> they made quality consistent beer. it is homogenous in the context of thousands of different beers. it is affordable luxury. the average american lives 10 miles from a local brewery.

>> things are clearly going well for dogfish. you expect to continue growing. it must trouble you america is collectively losing its taste for beer. is dropping.ion the trend is not your friend in this case. consumption is rising. >> you are right that overall, the trend is not great. breweries see the big regained the strength of their juggernaut. largestger is still the beer sold in america. andfastest selling is ip a it is coming from craft brewers. we are showing we have as much diversity in distinction online for a fraction of the price.

>> is it a different drink altogether? >> it is. all the craft worries are relatively small. the 3000 breweries are less than 10% of market share for beer. we stand shoulder to shoulder, trying to convince people to try our beers. the enemy of craft beer is lack of education about how exciting and food friendly our beers are. beer, ijunkers try our am convinced we will continue to grow. your beeryou make stand out? when i go to the deli to buy a sixpack, i see before me so many different kinds, many of which i like. i do not find myself going back to the same one all the time. there is always something new from a brewery. as a result, i you not go back

to dogfish head every time. i have to imagine other people have done the same thing and that is a problem for you here >> lee s craft beer lovers are blissfully not committed to one brand. beautiful thing. i am a beer geek and not a beer snob. andow it just has quality our portfolio is not second to antibribery in the world. we believe we should be in the paris's beer levels -- beer lovers return to with consistency. >> what else do you like to drink? >> i drink beer from a nevada brewery, norwegian, and a local brewery here the coastal,

delaware area. volume, i did join our beer the most this weekend. is a.e in nevada they have natural -- national distribution. would you still call them a craft brewer? >> yes. for is that might seem ubiquitous, each only owns one percent of domestic market share. i consider them to be more similar to us in terms of being independent and american owned small for he is than the two international companies that control over 80% of american ear markets. >> let's talk gluten-free for a moment. in the craze across the country, what is that doing to your business? beer have a gluten-free made with strawberries which

grow here in delaware. we love the group -- the gluten-free category can embrace these beers. true barley cannot be one of the ingredients, but paris is get really creative with other ingredients. >> last week, we were talking about america's collective obsession with the smell and taste of pumpkin. it makes me wonder what you predict will be the next craze in beer. >> our pumpkin beer, we were among the first. 20 years ago, double-digit growth. come pumpkin short. that is a trend for sure. other trends in the beer think it will be the

fastest-growing style of near. tart beers, you mentioned you are a wine lover. beautifully in beers. card beers are so food friendly, i see it as another trend in the craft beer revolution. >> what are we going to see from the fridge in the months to come? >> one of the things we will have fun with is lemongrass and wheat. with a beer made lemongrass and aren't flats and -- orange flesh and not just orange peel. 600%.re beer is up a light we hear made with lemongrass and orange to be food

friendly. >> i kind of like bud light lime. i hate to admit it. sam was deeply offended by that remark and so was i there it >> you are a delaware guy and you were talking about delaware. how do you feel about grottos pizza? >> heck yeah. it is a tradition here. i do not just say that because they serve us that every one of their locations. .> thank you for joining us , we need you here in new york city. thepresident and founder of brewery. >> you know germany one the world cup but brazil was a big winner off the field. he will be talking to us about the long-term impact. >> soon i

♪

>> brazil may have lost the

world cup, but its economy won big. attracting almost double the number of foreign tourists. seven point $5 billion in economic stimulus. now that the world cup is over -- you know what, i just found out the brazilian tourist minister is still getting my. let's take the opportunity to bring scarlet fu here to talk about today's is off the charts. >> a special jobs and back to school edition of office charts. we talk about unemployment and people have the economist definition of underemployment, people who want to work full-time but can only get part time work. not fully utilize training, you might be underpaid. pay scales, how to report the most commonly held jobs,

consider themselves under employed. those who get paid an average of 2100 dollars, 80% of them say they're under employed. shift to a cashier, a third say they work hard time but want full-time. muchomplaint is not so with not being paid well. it just want the full-time job but cannot get it. do you really see a concentration here? >> this is studying, liberal arts is on there. there is no stem major. major, 62%justice say they're underemployed. criminal justice majors often lead to jobs as police officers. they make an average $34,500. 62% believe they're underemployed. there is also business. general studies, do you know what that means? it is a broad catch all of everything. it sounds like me -- it sounds

to me like another major called undecided. a broad, liberal arts-based education. you have to take a look at everything. you design your majoring. >> let schools have that as a major. >> i was looking this up and was trying to check it out. here at did not have it online schools tend to have it. i was still trying to look up schools that have a general studies major. what happens a lot of -- is people make it into their own major, design their own major. i might be wrong. .ight in if you have your own >> international business, 60% believing they're underemployed. business majors. >> it is a subset of business.

>> for all we know, international business students might find yourself -- find themselves underemployed. >> no english majors. 52% are underemployed. that is just his hobby, not his field of study. >> grammar is.'s hobby. kind of true. i continue to learn a lot about myself on this show. what is wrong with good grammar? >> there is nothing wrong with it. you.ett, thank i became an off the charts super fan last month. it was great to be here in person to experience it. press coming up, americans flock to brazil for the world cup. we will speak to the brazil minister. ♪

>> the company beat expectations attracting tourists and 7.5 billion dollars economic stimulus. out of the world cup is over, and a recession hangover brazil, how this country plans to remain a taurus destination. that is an important question because i know part of the design behind the world cup, holding it in 12 different cities was to introduce more to brazil than it otherwise might have seen? >> we surveyed over 16,000 international tourists during the game. 95% of them said they would come back. we did not launch a campaign in the next few weeks.

,he most important thing to do brazil is pretty much in line. an --ou come during such such a major event, any major it is going to be more. 4004,ned out the prices, were not higher than any major event in the world. >> how can a country claim events like the world cup or the olympics are of a net economic benefit to brazil in the country just slipped back, two quarters of negative gdp growth they're all the money tourists spent coming to brazil was not enough

to counter the output with so many brazilians off work. atyou do not look short-term. turnover inlargest coming tooreign money brazil. a major event such as the world cup is the opportunity to rebrand. still attracting investments. we are now facing an economic slowdown, as all the countries in the world are. we are sure the rebranding of the company will help us to increase the number of foreign countries.

them to the games and to many destinations we have to offer your request you created all these new hotels, restaurants, establishments. what happens when you do not have a world event. >> in the past 10 years, we have improved conditions in brazil. seven percent of extreme poverty, formalized 20 million jobs. it means you have paid vacation for the first time. that is why we went from 30 million in 2003 to 110 domestic arrivals last year. more and more are traveling now within the country. think it was not

only meant for international tourist, but also the internal market. visitedrazilians have the store hundred cities. they were visiting for the first time. money?it have the >> they do. .ore and more have access it is a huge change. it is traveling by plane and staying in hotels. we want to thank the 111,000 americans that came to brazil. it is easy to travel, a safe

country, and we believe we can come from 600,000 americans every year to 1 million and a half in the next few years. world,il promised the all 12 stadiums would be ready for the world cup. and they were. it was a mad dash to the finish. lost theirn workers lives in the process. what lessons have you learned from the world cup to make sure that does not happen? really speed up the construction phase of many construction. airport, you see the sees the, the organizers, the tourists, our surveys show that.

we have all done by the start of the competition. >> what is your challenge? what is standing in your way from saying this is a tremendous success, a homerun, a goal? >> it is to sustain momentum. we're are also fighting for international tourism. in such a goodse way as we did, we have to oftain that with a campaign death campaign. we're organizing a workshop to attract investments to become more closely to american operators. brazil is not -- is one of the largest centers to the u.s.

togetherto also work with food service chains. as i mentioned, germany, we had such a great relationship with the german team that we want to continue that by working with european countries. >> you feel good about the german company that came. minister the state said it was not happy because it came and did not spend any money? >> what do you mean? >> not all argentine agents were low cost. i am a buyer.

>> thank you very much. >> thank you so much. ♪

a smart wallet in your smart phone. apple plans to turn its next iphone into a digital wallet, and it is teaming up with a big credit card company. >> a fortune hidden underneath the runway. the airport that is paying off its debt by fracking. >> jessica alba's latest starring role. her baby product company valued at almost $1 billion. welcome back to "market makers." time is 11:00 a.m., it is

for market makers once again. welcome back. we need to talk about some business, the top business stories from around the world. manufacturing in the united states banded last month at the fastest pace in three years. orders grew by the most in a decade. the surge was led by an increase in demand from airplanes. orders for cars and auto parts also rose. of theer and ceo washington post is stepping down. hasa region cruise line buy the stage cruise prestige cruise

line. >> apple has a plan to create a mobile wallet. in our principle and and our bloomberg news intervening editor. -- contributing editor. what do you make of this? >> i have been optimistic. i feel it is time to be pessimistic. nfc is this idea that you can use your cell phone as a wallet and jump back-and-forth between one of the payment device is in the terminal. it has been around for a while, but it has not gotten picked up, and then we had square come along that held it up. sixths the fifth or

coming up and fcp i should be more optimistic about it. i think it is horrible news foursquare, but i do not think it will see rapid adoption for apple or anyone else. >> how big a deal is it that apple is getting into this game? a lot of other companies have tried to create a digital wallet business. google for example. paypal. good apple change things? >> i think they could. if you look at the consumer base largerey have, it is than any other vendor in terms of vendor shipments were smartphones. they lead the market and they have some of the most profitable consumers. he beat of you look at things that are successful today, you -- starbucks has a mobile payment platform that

they see upwards of 5 million transactions happening per month on that. i think we are on the cusp of something that i think the smart phone market being more matured and apple being the dominant player in this category, owning the right customers is in the place to take the leadership position. >> why do you think apple did not just do this on its own? arge agreements to become mobile payments network without having to go through the zone, a hroughcard -- t mastercard, american express get-go >> somebody people have a relationship with their credit card. so to integrate with them and make a payment, you just pick

which credit card. apple might fit in there so you can use their payment system. but so many people are used to cards that that is what the for china's -- the friction is. what do you think about the fact that it is apple getting in the game? seeing as they are the company that never gets anything wrong, do you think we will see other companies follow suit? >> never gets anything wrong? i will hold off talking about that. sees the same opportunities, and square is out there trying to push mobile payments and their own way. lots of people have been trying. is outsing pieces that is the friction.

while people might want to follow it is going to be more compensated because the does not have the advantage of being preloaded with the data. is the opportunity for apple to make money on the payments themselves, or is it by harvesting the data that is generated by all these transactions and doing something else with that the way that google does with search? i think it is 1% trying to off the transactions. there's not a lot of money to be made there directly. aboutere you collect data consumer behavior and do a better job of optimizing everything from ads to location-based offers and try to find ways to straddle that privacy divide and still give people value in addition to

making transactions easier. nuisance asey are a you drop plastic and sign all over the store. >> there is something for apple, when you look at their strategy, and is about retention, adding value, and boosting their ecosystem. they do want to do things on their platform that gives existing consumers happy, but adds value to those considering their platform. , the of our data convenience of that, and brings loyalty back to the platform. the ecosystem value is there whether they make money on it or not. is the convenience enough to overcome people security fears? thisat what happened weekend, the icloud was hacked. i have to feel that jennifer

lawrence is leery of views occur phone as a payment device. there is an interesting way to solve that. if you look at what apple is doing with touch id, which is securing your fingerprint into the hardware at an encrypted level, there are ways that that could play out. they could put more into the secure enclave and make that much more encrypted. we are in the early stages of that, that is certainly an issue . we have had this conversation for the past 10 years that i have been doing this about security. even credit cards themselves are an and harriet lee insecure an inherently insecure transaction. can i as you, when we talk about the importance of security, and maybe people do

not realize the significance of how you can get hacked, how do joint celebrities who have security and publicist and agents, and managers, and handlers not realize that they need to be stored in early careful -- extraordinarily careful? this is about people's willingness to put out information that they probably should not be putting out in the cloud. let's put that aside for a second, and say there was a problem with find my phone inside the icloud service where you can repeatedly ask for the password. there are new new

photos in our phones, so we are ok. thank you to our guests. >> coming up next, more on cyber security. the experts are trying to stay ahead of the hackers. now there's something new to worry about. >> you are watching bloomberg television, live on bbg television and streaming on your phone, tablet, and at bloomberg.com. now on apple tv and amazon fire tv. ♪

>> welcome back to "market makers." it is time for our bloomberg

west top tech and media headlines. alibaba is officially pushing back the start of its ipo roadshow by a week. they want to answer some questions from the fcc first. their ipo is expected to be the history.in u.s. another bid for t-mobile. ed theonth they reject iliad bid. the worst summer for ticket sales for hollywood is over. guardians of the galaxy is still on top.

grosses have not been this low since 2000 six. >> computer hacking is so old school. there are billions of devices in the internet of things already. here to explain how vulnerable they are a timothy ryan -- is timothy ryan. how old vulnerable is the internet of things? >> raising it with the icloud today. we are taking thermostats, coffee parts, cars, and we're plugging it into the same forrnet that is responsible reaching securities around the world. do we need to slow down on this enthusiasm around the internet of things? we are not ready for it? >> i think that is a good point. i think we need to think from the very beginning, before we have the entire house wired into the internet which is inherently

insecure, that we should take a break and build in security. >> who should we trust? the nest theout same way we do about the refrigerator? >> i do not think there is an easy way of knowing who to trust. you have to test it. >> is the way you test it who got hacked? >> companies that are producing devices to go on the internet need to have some sort of third party that tests those devices and the environment they're going to be used in. >> what does this say about this icloud hack? if there is an expert out there, it is going to be in the apple universe, no? isi do not think that apple's insecure, i think it is how it is implemented.

there were security features that were not put in that led to the breach. it is not as simple as everything apple does is insecure or secure, and is how it is implemented. if somebody can randomly guess passwords constantly without being logged out, they will eventually get into your account. >> this third party that is theg to certify security, who is that? dowe have third parties who it for things like airlines, for very trusted systems, for the department of defense. in the consumer sector i do not believe there is one. >> that is not possible to have some third party that the security or vulnerability of every device that connects to the internet, is it? it would be a backlog of phenomenal proportions. >> a device could say we could

comply with these standards. we comply with these top 10 rules, so you get some level of trust. we do not have that right now. nesten you look at where is able to sell itself for, we we want security, but when you look at what we buy, does not seem that way. i think with the internet and with computers it is a far more complex. athink people care, but it is complex subject. >> do people care enough to do

anything about it? more people are giving away their credit card information and personal information into the cloud and the universe. >> i think they're going to be caring when they are part of againsttion suits businesses. >> who is taking it. seriously right now? institutions, those who are worried about extortion attempts or data leakage. but outside of the financial sector is, there is nobody really in the weeds. >> should there be? >> absolutely. there are companies doing remote connected door locks. do you trust one of those? >> may be a camera, not a door

lock. if it is a security camera outside my house, not a big deal. if it is the locks, it is a big deal. >> medical devices? >> i would definitely not be putting that on the internet. >> but if you listen to the evangelist, that is the future. >> exactly. but back to your point, we should take a break from all of this. how long do you think it will take until we get to a point where we should feel secure about those kind of things? in theory, if you have a number of interconnect did medical devices they can generate data that doctors and health professionals can use to improve your life. >> it is like the fda, they do data thatyou to take you will not be using.

thank you. the directoran is of cyber investigations. >> when we come back, jessica alba does not stick to the script. she has a startup that is valued at $1 billion. ♪

>> we are approaching 26 minutes past the hour. in this time for on the markets. here is what is going on in the broad market. not a lot. the strongesthat the day in five years is not strong enough to send the s&p to a new level. what investors may want to think about is a bold call at morgan

stanley. there will be bumps along the economy the u.s. continues to deleverage, payments are very low, we continue to live in a world of uncertainty. >> i need to talk about a specific name. you guy loves at all when -- laws and all you can need an all-inclusive cruise. have agreed to buy .restige cruise lines

up, it makes more money than selling cinnamon rolls. ♪

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. welcome back. we need to talk about airports. then me feel packed every time you travel, every time you try to rush to your gate, but the truth is they are bleeding cash. almost 12.5 million less. we look at how airports are trying to bring your money and. in. >> imagine this, you take off

in vacation, new get settled , and see a 70 foot rig? get used to it. airports are strapped for cash. toports are turning unconventional and controversial ways to make money. one of the biggest losers, pittsburgh international airport. in 2003, over 14 million people traveled through its doors. was devastating. the were probably 15,000 employees that lived in this region that lost their jobs. we went down to 8 million flights a year. the hundred $50 million

lifeline it got from the state of pennsylvania gave it some breathing room, but it did not fracking.ior until gas resources buried underneath the airport. at is ayou're looking portable rig which is getting started on vertical drilling. you do not normally see 9000 acres together where you can ly this route the surface but get that much -- disrupt the face but tap into that much resource. approval passed by only one vote, making it one of the more controversial projects to break ground on airport land, but not

the last. other airports have had crazy ideas. now, pittsburgh international airport gets 23% of his revenue from non-aviation sources. >> that puts a lot of people to work. it is a significant help to what we need at the airport. thank you so much for taking the seat for the less two weeks. >> you bet. >> how crazy is this? , and theyeed money have to find a way to get it. fracking is not so unusual for airports anymore. ft. worth has been

working with chesapeake energy for a decade. they had to drill at night in order to do that. you also have denver international airport leasing out some of their land for fracking. what happens when natural gas prices fall? or what happens if there is an accident? >> that is why they only want drilling at night, and that is the downside for working with an airport. work with a lot of regulation and a lot of different type of regulation and security. it is a big issue, you cannot disrupt in the airport workings. on the upside, you only have one owner. go through have to

60 different pieces of land ownership, but this time it is only one. fracking, coming to a college campus near you? >> perhaps. but the question is why now, why this? said this is one of the best resources out there. production has been soaring. project could produce as much as 800 billion cubic feet of natural gas. into those 45 wells could be producing for up to 20 years. provides a great opportunity investment for both parties. >> coming up, a setback for uber. lost a big battle in court.

♪

id no tony's say uber. paul is with us to talk with us about some of the implications. has faced opposition in individual cities. london, lots of opposition. germany, an entire country saying that you cannot operate your service? what does it mean >? ityou kind of have to split into a bunch of pieces. it is not as straightforward as it might initially seem. germany and some of the largest cities have some of the highest cap rates in europe and in the world.

cab rates in europe and in the world. even more than new york. and then you have this wrapped in the guise of let's protect the consumer. you will hear about how, what will happen in the event of an accident, how is the passenger insured? take theot have to same training courses as other drivers, so what if they cannot find the destination? there are quite like consumer -- uasi-consumer politics wrapped around this. >> are they protecting the consumer or the taxi and limousine commission? these ridesharing businesses have been a great

benefit to us, the consumer. >> absolutely. the claim that they are istecting the consumers made by taxi drivers and politicians, not by the consumers themselves. saying ints say who is am protected? i am not protected at all, , this is also serving -- all those who charge on a per mile basis. >> what is that it does this set -- precedent does this set? i am not sure, but you have the international community scolding germany and saying we

are trying to promote startups. potshotscrazy between the eu, google, and germany. ismany people say it unstoppable. how much could this situation in germany affect the company? in the not think it will long run. i think what will happen is what has happened in other jurisdictions. you will see concessions with more training programs, making ity with other par organizations. the idea that you can put your stopr in the flow and

these ridesharing organizations, is nonsensical. >> thank you. >> are contributing editor, paul kedrosky. >> after jessica alba starts her second career, and is going strong. ♪

>> welcome back. thesea alba's success days is happening off camera. productsfriendly baby company is worth nearly $1 billion after its latest funding round. one of the investors joins us

now. what is it about this company? it cannot just be about the celebrity. >> it really comes down to the product in the mission. is aoint out that jessica celebrity that has founded a company, but the product speaks for its help and she started the company with a mission to develop safer products for families that were better for the impairment. -- the environment. that struck a chord with consumers and that is why we have seen the growth rate that the company has experienced so far. >> do you run the risk if jessica alba is in a movie or personalthing in her life that does not go with the brand that it good hurt your business? the first thing she thought about it.

we are having an emphasis on real longs in our commercials to talk about how it impacted their lives. is it more challenging to invest in a company that makes things like these honest products than in some of the other technologies you have been involved in? snapchat, zillow, these are things where we can under the and -- understand the tech appeal. it does not seem that these advantages apply to honest. you're producing a physical product it can be more complicated. you are also starting with a different margin structure. results.ad pretty well -- good results. with any other aspect of investing, and comes down to picking the right team, and

opportunity. >> what makes the company more appealing? is it the opportunity for growth, or that it is a premium product that can command much higher margins? the premiumof aspect, we try to price competitively. that is one of the core tenants that jessica wanted to instill in the company, to make it healthy and accessible to everyone not just the wealthiest people. in terms of market opportunity, the statistics are 3 million babies on for year in the united states. this does not include the fact that we are just scratching the surface in terms of international expansion.

we are really driven by the consumer demand for our product. >> it is hard to find a new lawn who does not want organic, healthy products, but one they're looking at the shelf going organic seems to be very expensive. we offer a months supply of diapers and wipes to go with it, and if you wanted to run the math as to what that would cost you on the shelf it is pretty competitive. >> word to you go from here? expanded the product portfolio pretty considerably, but what other opportunities do you see? products for your children is not an american out phenomenon. >> is it just for kids, war will -- or will there be an

opportunity for them to make things for adults too? >> we will have to see over the next couple of years. the company has been incredibly particularly in relation to other companies out there. would raise a little money and then be properly capitalized. we can control our own destiny as far as financial resources and see the wealth of opportunities for us to expand into. >> i am an honest company customer. congratulations. >> thank you. >> we will be back in a couple of minutes. ♪

>> welcome back. leave for the day we have to bring in our own aj,

adam johnson. coming up, two conversations, we are going to have some fun. we have the former founder and , twilight zone conversation. >> what else do you have? your new dog? >> we are not talking about that, we beat that to death. howe going to talk about nfl owners are going to try to get you to come into the stadium . at home, watching it on the big screen and tweeting. from the perspective

owner of the miami dolphins, and although the president -- also the president of the jaguars. >> i know i will be watching. >> that will do it for "market makers." beingow, what is it like the new kid on the block with cable television? >> it is 56 past the hour which means that bloomberg tv is on the markets. >> thank you. weeks are starting the mostly unchanged. joining me for two days options is that the derivatives strategist from mk holdings. day, late in the summer after labor day. hopefully things will pick up a

little bit. cyclicals,rd financials. of what we would expect. volatility is very clear sailing into october where you get the seasonal peak. for-six weeks of sustained low volatility good for stocks and indices and dispersion. >> is this a good time to get long exposure? >> yes. we feel like adding it on the cheap with leverage into october and november. >> staples, shares are having a after the ceo came out said they should buy office depot. this is indicative of the

environment we're in. outcomes.e potential very clearly, a play on staples buy office depot. your dollar tree and dollar general bidding on family dollar. the options increased has happened sharply. option participants have expected yahoo! to move higher. >> we know that alibaba was public, butgoing with a merger it is had to get -- hard to get ahead of that.

>> you look for the inverted sku. there is no guarantee that that will signal the future, but in up,os case if it is bidding the expectation is higher. >> thank you. we are the markets again in 30 minutes. ♪

>> welcome to "money clip," where we tie together the best stories and news from today's business news. about going to talk angelo mozilla oh, who is connections to the financial crisis. and bob o'shea tells betty liu what he meant when he said he had bigger roles in the u.s. government. we talk