>> from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line," the intersection of business and economics with a mainstreet perspective. we begin with the release of the beige book, the anecdotal survey based on reports from the 12 banks of the u.s. federal reserve system. peter cook joins me with the details. >> good afternoon. the latest economic snapshot for the fed's 12 districts paints a pretty steady picture of the economy, continuing to grow but not necessarily busting loose at the seams. the key take away, economic

activity in all 12 districts expanded since the last report, but there was no distinct shift in growth in any of the districts. six districts report moderate -- th, six report that others said individual sectors reported more optimism. , generalspending consumer spending grew in most districts at rates ranging from slight to moderate with few changes in the pace of growth compared with the last beige book. the beige book says chicago was up, but philly was slower and atlanta had some slight weakening. there were some discussions about auto sales at record highs in some parts of the philly district and dallas district. reports on manufacturing were mixed. almost equally into three characterizations, expanding, contracting, or unchanged. in terms of labor market and --

measured by hiring trends, reported to be relatively unchanged. generally modest rates in most districts. contacts in nearly all districts reported difficulties findings -- finding skilled labor. bottom line, this report doesn't seem like it is going to move the fed all that much. consistently do what they have been seeing in the economy. steady growth, moderate to modest growth, but no gang buster growth, to be sure. >> thank you. more on the release of the beige book coming up. economisthase chief -- joining me. the nato summit kicks off tomorrow. on the eve of the meeting, russian president vladimir putin is offering ukraine a peace plan. bloomberg's ryan chilcote is in

wales with the details. president putin will not be at the meeting. he is in mongolia. what are the details? >> he is stealing the show, stealing nato's thunder just as they gather to meet. the russian president basically saying that he has this draft peace plan for eastern ukraine. it is a seven-point plan and it will be a very difficult -- it will be very difficult to negotiate. happen on friday. representatives of the osce, ukraine, russia, and the rebels will all gather in the country of belarus to discuss it. it is not a done deal. we will have to wait until friday to see how it goes. we did hear from the ukrainian president earlier in the day, saying that he and the russian president had at least agreed on the stats needed to reach a cease-fire, maybe even a political solution to the crisis in ukraine.

>> talk to us about the timing of this proposal. what do you think the strategy is behind it? >> look, you know, obviously, it is coming right before nato leaders gather. they are talking about deploying a force of about 4000 troops that would be prepared to go to eastern europe should there be any more russian aggression, as they put it. should it look like russia wants to invade, for example, the baltic countries. don't forget that the ee you is also talking about sanctions -- the eu is also talking about sanctions. there is going to be an awful lot of people here over the next couple of days in south wales that say, you know what, this is probably the russian president throwing stardust in our eyes again, trying to get us to think he is being constructive to

prevent the sanctions from happening. we've heard this from president obama earlier in the day, from angela merkel, the one in the whowho has the -- the eu has the ability to build consensus. it's not the words they care about. of frenchwords president francois hollande, he announced france will no longer be delivering warships to russia . what more can you tell us about that change of heart? been a real big sticking point with the united states and other countries in the european union, like the united kingdom. france has planned to go a said -- go ahead with the sale of two helicopter carriers. the sale was agreed years ago. it is worth $1.2 billion. the french have always maintained they have the right to go forward with the sale. the sanctions that were introduced not too long ago banning weapons sales to russia

were not retroactive. theoretically, the french could go ahead with the sale. they were arguing -- just about an hour ago, the french president announced that russia has not met the conditions necessary for the first of those two or craft -- t wo craft to be sold to russia. the french kind of joining ranks -- closing ranks with the u.k. and the united states and germany and foregoing that sale. >> ryan chilcote joining us live from south wales, the site of the nato summit. in other news, duke energy wants to bring natural gas produced in pennsylvania, ohio, and west virginia to the southeastern united states. the company has partnered with a $5-- piedmont to build billion pipeline that will run from west virginia down to north carolina. the president and ceo of duke energy is standing by with alix steel.

>> to put this into perspective, we are talking about 1.5 billion cubic feet per day of natural enormous amount of this good quality gas from the marcellus shale and the utica shale. how much money do you wind up saving with a product like this? >> there is an extraordinary benefit to our customers of having a great source of natural gas. has given us the opportunity to bring this gas to the benefit of customers, all of which will be directly reflected in their bill as the gas begins to flow. >> is that one for one? you save one dollar, they save one dollar? -- when we have an opportunity to bring low-cost gas to the state, our customers benefit. >> part of it is you have to buy the gas and you have to transport it, which can add cost. at watch -- at what price point does this become uneconomical?

>> when i think about what we've been trying to accomplish with this pipeline, there has been an extraordinary discovery of natural gas in the u.s.. we believe as we look at the price of natural gas into the future, it will continue to be a very competitive source of fuel. this pipeline to -- pipeline brings it to our customers so they can experience the low cost of energy. >> when i look at increase in demand for natural gas, at some point, demand is going to pick up and that will lead to higher prices. it as. what you see >> when we look at the long-term price of natural gas, given the supply we have in the u.s., we believe the price will be in the --ge of $3.50 what we experienced in the winter in north carolina, because there is not enough pipeline infrastructure, the gas price exploded and was like 100

dollars per unit. as we bring more infrastructure, it allows the great supply to come to our customers and hopefully lead to a less volatile price. vortex -- polar vortex volatility. how does this translate into annual gross sales? thee will earn a return on pipeline investment itself, but the benefit of it is to provide a reliable service to our customers. that's ultimately what we are trying to accomplish. --does this put coal plants how many more coal plants does this put out of business? >> we've had a modernization effort for a while and we have retired half of our plans. natural gas will be part of the future and we will see more as we continue to address the modernization of our system. mix become inhe five years? 1/3 is probably the

mix in five years. if we expand the timeline, i would expect to have a stronger mix of natural gas and less coal. >> this is you -- >> this is your first major expansion into natural gas since 2006. at what point would you look to spin this off into another company? >> the structure is not a great structure to drive investment into the natural gas. this is our first investment in this. we will have to see if it makes sense for us over time. >> you need more business to make it viable. they have -- they are very popular in the energy world. >> those structures work when you have a lot of growth to put to work. we will need to develop that business before it makes a lot of sense for duke. >> what about your renewable business? you mentioned you would be open

to spinning it off into a reit, for example? how big would it have to be for you to want to do that? >> renewables are an increasing part of the utility -- the portfolio. we see this as a growing part of our generation infrastructure. we continue to look at whether or not the yield coke makes -- yield makes the sense. it could potentially be part of our solution in the future. >> is that a goal you are actively pursuing in the future? >> we think renewables and bringing them into the mix continues to make good sense. we are trying to find great projects to complement what we are trying to do for investors, and then we will evaluate whether that structure should be part of duke in the future. >> i have talked to you a few times. it amazes me. a lot of ceos that have exposure to cold get -- to coal get angry. coalpa wants to "attack"

. why do you not feel that way? nuclear,e coal, natural gas, hydroelectricity. we can provide electricity in a reliable way no matter the season, no matter what the market conditions are for any commodity. tell the government, hey, you are trying to put 1/3 of my business out of business? >> our job is to adjust and continue to provide reliable service to customers and deliver great returns to shareholders. we work it through. >> work it through. very calm response. a pleasure to see you. good to get the insight into duke energy. lynn good, ceo of duke energy. >> coming up, analysis of the beige book. we will take a look at the current economic conditions in the united states. michael feroli of jpmorgan chase when you continue. -- when we continue.

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>> let's get more on our top story, the release of the beige book. let's turn to michael for rowley, the chief u.s. economist at j.p. morgan chase -- mi feroli, the chief u.s. economist at j.p. morgan chase. any surprises from the beige book today, or business as usual? >> no major surprises. i think overall it was a pretty solid report.

momentum sincein the last beige book, which was looking back to the second quarter, which was a quarter in which we had 4% growth. i wouldn't want to take the bait book and say we are going to have 4% growth -- the beige book and say we are going to have 4% growth in the fourth quarter. but economic activity begins -- is solid as we begin the third quarter. >> talk about the data in 2014. a lot of it is seasonal. a lot of it weather related. what goes into analyzing this data, where you can make at anst uninformed -- at least informed judgment for yourself and your clients? >> the first half was messy. it was really hard to interpret what was signal and what was noise. as we look over the last two or three months, it is less of a of aer bounceback and more clean rating that we are getting

on the economy. overall, it does look pretty good. there is no doubt about it that the first half of the year was one of the messiest we've seen in a number of years, certainly. >> did that noise affect your ability to accurately, at least see what was coming echo -- coming? >> it made interpreting the gdp numbers tricky. we tended to try to look through some of the first quarter as appointments, -- first-quarter disappointments, which paid off. the second and third quarters suggest that was a good strategy. it seems like fed policymakers did, too. continued to taper even as we got disappointments in family -- in january and february. >> one of the things in the beige book that jumped out for a majority of districts cited increased loan demand. what does that tell us about

credit and what does this tell us about the american consumer? >> most consumer loan demand falls in two categories, mortgages and auto credit. we know that home sales have been improving the last few months, existing home sales have been up for four months straight, i believe. we saw today that auto sales are going through the roof. what we are seeing a loan demand mirrors what we are seeing in autos and homes -- seeing in what we aremirrors seeing in autos and homes. >> no clear evidence from the survey that the economy is expanding so fast that the fed might want to raise interest rates sooner rather than later. >> that was definitely one of the nicer things to see in the report. in its description of inflation, most districts reported that prices remained stable and benign, i think were some of the words used. it doesn't feel like we have an

inflation problem growing. there is a lot of talk about the fed being behind the curve, but the hard inflation data don't suggest that, neither does today's base book. -- beige book. >> how will the federal reserve interpret this data? what will janet yellen the other policymakers be looking for? >> this friday will be a very important data point. the labor market is very key in what they are looking for. we'vecontinue to see what been seeing over the first half of the year, which had payrolls averaging 230,000 per month, they will continue to signal they are getting closer and closer to the exit, which we thinks happen -- we think happens sometime next year. pivot awayradually from the accommodation they are signaling now towards signaling that they will get close to normalizing policy sometime next year. >> in our last 30 seconds, we talk about exiting the balance sheet, which is over four dollars -- over $4 trillion.

how does the fed do this so as not to be disruptive to markets? >> very carefully. there will be a lot of technical expertise on their part. they have been planning for this exit for the better part of the last five years. i think they are getting close to a final plan for that. we believe it will be effective and we believe they will announce those details at the next meeting, which is in two weeks from today. >> michael feroli, chief u.s. economist at j.p. morgan chase, joining us from his office in new york. always good to talk to you. tank you for your time. -- thank you for your time. we will take a look at what under armour is doing to promote its women's athletic apparel. a business which generates more than $500 million in revenue. under armour ceo kevin plank sits down with my colleague, stephanie ruhle. ♪

>> taking a hands-on look at samsung's new virtual reality headset, the gear vr.

you can see it on the web, on your mobile device, on apple tv, and on amazon fire tv. i mean up on 26 minutes past the hour. bloomberg television -- we are theng up on 26 minutes past hour. bloomberg television is "on the markets." >> we want to get you caught up on where stocks are trading. we had a big drop in the nasdaq, still down about 0.5%. the s&p 500 unchanged at 1202 -- at 1002. ford and gm posted u.s. august light vehicle sales. ford surpassed estimates with a 4/10 of 1% game. i have to point out that chrysler put out almost a goofball forecast of 17.4 million car sales for the full year. a lot of analyst watching that closely. it is -- a lot of analysts

watching that closely. it is way except -- way above what they were expecting. has alaxy note edge display running down the side. that's all for "on the markets." ♪

>> welcome back to the second half-hour of "bottom line" on bloomberg television. i'm mark crumpton in new york. thanks for staying with us. under armour is continuing its push to appeal to more women. the athletic apparel company just added supermodel gisele bunchen to its list of female endorsers. stephanie ruhle is joined by kevin plank, ceo of under armour. >> last time we spoke, it was the relaunch of your women's product, i will what i want.

i asked is gisele bundhcen -- gisele joining the family. you said, no answer. >> what better than coming out on a tuesday morning and talking about gisele? >> why would a supermodel be a great face for under armour? in the 1990's, we connected supermodels with concave stomachs and diet coke. >> what it says is she is a real human being. we were moving from lindsey vonn to someone who sees herself as the absolute depiction of what it means to be athletic and a beautiful woman. is aspirational in every way, shape, form, and not in a way that companies have traditionally branded the aspirational athlete. >> you had the most youtube views, 5.9 million, of her

video. what does that say about who customer is and who they think the female athlete is? >> we could still crack 6 million. it has taken us 18 years to get to this point and be in position. >> i thought you were 29? >> i'm working on it. taken 12 years of making women's products to get to a point where we feel like we are connecting with the female consumer and giving her a brand she can relate to. i'm not sure anyone has done it right yet. it is a journey. we are proud of chapter one with misty copeland. coming back with chapter two with gisele. it is all about social and the way people react. i love gisele and away she interacts. why did under armour choose a supermodel. what does that mean? that is part of what we want to do with the campaign. >> everybody is watching.

has it impacted sales? >> it is early to tell. we are several weeks in. without question, anecdotally, the number of e-mails, texts -- ask yourself how you felt when you saw the misty spot. no one believed in me, then all of a sudden, i did it anyway. that is the underdog story, something to articulate with misty. to an extent, it articulates with gisele. this is not the super confident supermodel that you see today. we all have questions. it is cool to see that human side of someone as beautiful as gisele. >> you are making the question to woman. -- the push into women. we have to talk basketball. do you need a marquee name, and m.v.p. to make an impression -- p. toquee name, an m.v.

make an impression? >> we have been building for the grassroots for a very long time. aboutmpany -- it is never betting yourself on one activity, one league, one athlete. the statement we have, and we haven't said it publicly -- this is the first time we will be talking about it. there are three trains we want to accomplish -- three things we want to accomplish. kevin durant is an incredible basketball player and an even better human being. he will take what was originally a $200 million offer and walk away with $350 million. >> so, you were there to help him bid it up? >> not at all. we believed there was a great opportunity for us. we wish kevin the very best. we wanted to send a message out to every athletic director, every president of every teen club, every league commissioner club, everym,

league commissioner, that you should call us if we haven't already called you by any chance. the third message that came across from kevin durant is that we are going to grow 20%-plus next year with or without the deal. we are very pleased with where the business is. we are going to be opportunistic. when we see chances, we're going to go for it. >> the fact that you are part of the conversation, the fact that we were saying "under armour" next to kevin durant, even if you didn't end up with him, do you think you won? >> no, this wasn't a winner. the great thing about our business -- i think you're seeing there is a two horse race that has been created. we are happy to be part of that race. a quarterly conversation. it's not even an annual conversation. but in time -- we are a young, hungry, aggressive brand that has a lot of runway in front of us and, frankly, we are just getting started. this is a good idea of what's to come. >> doesn't make sense to bid on

a single athlete when it could cost you $300 million? >> brand is an important thing. first and foremost, we look for what is the lowest hanging fruit. i have these whiteboards in my office. there is offense and defense. they are somatic in the way i -- thematic in the way i think about our business. overpromise and over deliver. great ideas get funded. big bets with big partners. when we see the chance for us to make a difference with an team,e or a league or a we were at the table for manchester united. it was a line that we got to and said this is how we value the deal. they could be a terrific partner. but there are places we look and say that is not a great allocation of our dollars at that amount. we have to be thoughtful. our job is to decide how to deploy the resources, time, people, money.

air is only so much of any of them. >> in terms of technology as it relates to basketball, how much -- we saw an athlete signed with adidas and get injured. some said maybe they did not have the right technology. it do you have the technology to keep the athletes in top shape and also safe? >> these are human beings. things are going to happen. i'd be careful about betting your company on anyone deal. this is not a $30 billion company versus a $3 billion company. we have leveled the playing field with the fact that we can sit at any table, any time, any league, anybody. we are open for business and looking forward to doing big deals for a long time. >> the nfl season is here. college football is here. you have two teams, notre dame and maybe. what's in store for us -- notre dame and navy. what's in store for us? >> we are incredibly proud of all the division i programs that

will be kicking off this year. notre dame -- i had the pratt -- the privilege of going to navy academy and seeing these individuals that choose to serve every day. the opportunity for us to outfit them -- just incredibly proud. maybe did a great job against ohio state. a great job against ohio state. and what happened with notre dame, how cool was that? >> why notre dame? "rudy" is your favorite movie? >> the first game that georgia tech -- that i outfitted was against the fighting irish. i went to that game with georgia tech. i could not afford a hotel room. i slept in the visiting team locker room with the staff from georgia tech. to be part of that press conference 17 years later and saying, by the way, we are the ones who will be making your uniforms, was a pretty cool day. it is something i'm proud of. it is pretty cool to be an

american. >> you live the american dream. when you watch those athletes play -- you played college football. do they deserve to get paid? >> i think it is a great question. there are kids in need who don't have a chance to do things. whether it is bus fare or going for different books, clothes, the things that you have to live -- there are different situations. i don't think there is a clear-cut answer. i hate seeing the teams that won't be able to compete because they can't afford to pay. there are some schools that can afford whatever they choose to do. i worry about the fringe programs that may go away if that were the case. i think it is about the kids. getting them a great education. is probably more that could be done. i want to be clear that my heart is out there for the kids that are struggling. >> there is one team i'm not worried about, the under armour team. kevin, congratulations.

gisele needs any workout tips, she can call me. i'm here to help. congratulations on the deal. back to you. kevin plank, ceo and founder, american dream embodiment. >> coming up, argentina settles default swaps triggered by its failure to pay interest on its bonds. that story when we continue. ♪

>> welcome back. it is time for today's latin america report. credit default swaps ensuring argentina's debt would have to pay 60 in a half -- 60.5 cents on the dollar. argentina failed to pay interest on its bonds. we are covering the story. following up on something that has been going on for a while. the hits keep on coming. what does this mean? we have at least this

settled, the credit derivatives option for argentine cdf's. it was an interesting story. default totype of ordered, so court to speak. argentine bonds are very particular. you have bonds that trade at various levels, which is kind of unusual after a default. after a default, bonds all fall the level, say $.30 on dollar, whatever investors think they will be able to recover for it. in this case, you have bonds that are structured oddly. you hope this will eventually go away and eventually people will come down and sit and the default will go away. bonds -- some are trading very high and some are trading very low. >> according to the story we have on the bloomberg terminal, argentina, the first nation to trigger contracts in this

market, since greece -- in this market since greece restructured its debt in 2012. greece is still paying a price because there is stigma attached to something like this. >> this option was very peculiar. the bottom line is the option and the way that this function isnew and -- this functioned new and surprising every time. was we found here is there a small group of bonds that was trading much lower than everything else. folks were expecting them to be brought into the market. there was some dispute over whether or not they would be brought into the market. payout if you own cdf's is much higher. those bonds were brought in. between the first and second

options -- end, folks are recovering a lot more than they expected. of this, what does all mean for argentina, its economy, specifically its currency? how has their currency been reacting to all of this? >> the options have nothing to do with the government. the government does not have to pay for it. the sellers of contracts do. in terms of the defaults, we are seeing more and more pressure on the economy as things drag on. there is no clue right now as to when the government. wants to settle this right now, -- as to when the government wants to settle this. right now, they are debating a plan to ignore the default and try to solve it globally, which investors are not excited about. in terms of the government's true intentions of resolving it, that remains to be seen. in terms of the economy and the pressures there, they are growing the exchange rate in the

black market. -- the exchange rate and the black market is going to new highs. it is over 14 pesos per dollar. 8 per dollar on the official market. those pressures grow. the pressure on the government to do something gross. >> katia, thank you so much. coming up, one of amazon's biggest acquisitions to date. .rish regan joins me next ♪

with trishsmart" regan, my good friend, starts at the top of the hour. what's coming up? >> we have the ceo of the moscow exchange, which is going to be interesting given all that is going on in ukraine. >> some movement. maybe there is a cease-fire agreement. >> i think people are encouraged by that, but there are some questions whether or not that is really going to -- i will be talking to the ceo of the moscow exchange about fovesting in russia -- the c of the moscow exchange about investing in russia. the executiveco, vice president. we will talk about what he is anticipating for the u.s. jobs market. have you ever been on twitch? >> i have no idea.

i don't look online. >> it is amazing. tens of millions of people are going to this site for live gaming events. it rivals television. it is absolutely incredible. >> just to watch people gaming? >> to watch people play a video game. amazon is so excited about this that they just spent nearly $1 billion acquiring the company. i've got the ceo on. we're going to talk about which in her active. -- about twitch interactive. hear will talk about the attraction of all of this and the deal he has with amazon. >> if you spend that time gaming, i guess you would get a case of the twitches. stay with us. another check of the market is on the other side of the break. ♪

>> join us tomorrow for coverage from the bloomberg sports business summit. big guests all day long, including the milwaukee bucks lasry, nba commissioner adam silver, carmelo anthony of the new york knicks, and new york yankees president randy levine. get the latest on your tablet and on bloomberg.com. that does it for this edition of "bottom line." i'm mark crumpton reporting from new york. markets" with matt miller is next. i will see you tomorrow. >> it is 56 past the hour, which means bloomberg television is

"on the markets." not terribly exciting for the s&p or the dow jones industrial average, both indices little changed. the s&p has slipped slightly numberhe insignificant of 2000. the nasdaq is looking at a real drop of 2/3 of 1%. also want to highlight some of the financial stocks. take a look at jpmorgan and bankamerica. banks are down about 1.25%. jpmorgan was upgraded from a buy to a neutral. it had been up. you just saw it go down in front of your very eyes. the firm said that rating changes were berst -- based largely on each bank possibility ability to deal with new capital requirements. they voted to put a strict new set of standards on large banks to moderate -- mandate the holding of enough liquid assets that they could whether another

weather another crisis. joining me is bloomberg news' jesse hamilton. we are trying to make sure these banks are too big to fail? what's the idea here? >> this is part of a years long effort now from the regulators to saddle the banks with an array of rules that -- on capital and liquidity to try to improve safety in the balance sheet. this particular rule today requires that the banks set aside a war chest of 30 days of stable assetsvery that they could make it through a potential next crisis. >> liquid assets they could grab in case there is emergency. thee, what kind of shape is industry in? i'm thinking specifically of bank of america. theeet the demand if

department of justice and the sec continually go after it for tens of billions of dollars in fines and punishments as hard as they can? to setdy are they then aside this kind of liquid assets? >> it is a tough rule, no doubt. the bank has had so long to get ready for this. they've been setting aside stockpiles of these assets for quite a while now. the largest banks are all in great shape. easy reach of the target of this. they have quite a cushion of time left before the rule is implemented. the regulators estimate that industry, thehe overall industry is actually within easy reach of this target. that said, they don't -- the banks don't like this. they have to hold considerable amounts of low risk, low return assets.

which is not a friend to their interest. >> thanks so much for joining us from bloomberg news in washington. we are going to take a quick break. "street smart" is next. ♪ ♪ >> welcome, everyone, to the most important hour of the session, one hour to go until the close, and investors gauging resolution to the campaign. i am trish regan, and "street smart" starts right now. ♪ up on the big show, today, russian president vladimir putin and outlines a peace plan for ukraine, but is a likely?re and a new era in walst