caliphate. silicon valley looks for warm bodies. america's oil renaissance runs up against a law of the jungle. >> good morning, everyone. "bloomberg surveillance." we are live from the world headquarters in new york. it is monday. i'm tom keene. joining me, adam johnson and scarlet fu. >> i want to start in china. the economy is slowing, but the government is not necessarily going to do anything about it. that is not what we have been hearing out of china for the past umpteen years. that is why futures are flat. what do you need? >> just looking at the screen. it is an interesting monday. >> i hear that.

the chicago fed national activity. executive home sales. there are a couple of oddball earnings. i'm going to get a note from a pr guy. autozone. don't call my company and on ball. ok, it is not an oddball. it is just out of the normal flow. global initiative is today. treasury secretary lou will be willg a keynote -- lew beginning a keynote address. ecb president mario draghi is addressing the european parliament. >> let's do a did a check. equities, bonds, currencies, commodities. yields come in. euro does nothing. nymex crude. hydrocarbons are down.

gold, it is now on the 1200 watch. let's look at goldbach a zillion years. this is inflation-adjusted. -- gold, back a zillion years. this is inflation-adjusted. we really rolled over. we are at critical support at $1200 per ounce. harkin -- lly hearkener of disinflation. buying sigma, a chemical company of its own for $17 billion. this works out to $140 per share in cash. friday thatoned on

there was a possibility that they were looking to -- that was the other deal. is what is staying in a nice rank for eight hours will do to you. >> absolutely. we have another deal we want to tell you about area and >> this is a large transaction. hugelyldrich is associated with st. louis, missouri. this is about chemicals. they do fancy chemicals. they do refined, specialty, high-margin research chemicals. what this goes back to is that we get these transnational transactions, like siemens. >> you have the siemens-dresser-rand deal. you also have emc looking to move. they are considering making a

deal. they have held talks on and off with hp over the last years. they have also had talks with dell, which is now privately owned. we know that elliott fund management. >> to me, it is scale. it is 60,000, 70,000 employees versus 300,000 at the big players. it is a little different than the transnational. >> we will keep you up-to-date on all of these. to reiterate the headlines at the top of the armor, merck of germany will be buying sigma aldrich for $17 billion. $140 per share is the deal. >> hello. >> 36% premium. >> not only is it another monday with several deals announced, see two european

companies buying to american companies. >> transnational. >> we are on a -- on track for a record year in ipos. still in 2000, when ipos raised to $105 billion. of course, the big one is ali baba. alibaba is now officially the biggest ipo. have ipo transactions sending you record. we have m&a transactions setting of record. >> this is terrible. the bears love this stuff. the froth and the excitement. >> a sign of the end of the world. >> licking their chops. >> let it go to cash. as i was having a beverage of choice this weekend, i said, are you really and leverage? yes. >> we are also monitoring

developments overseas. geopolitics. u.s. and allies are training kurdish forces to use military hardware. that they arery expected to supply for a stepped-up counteroffensive against islamic state. this has been taking place for the last month the northern iraq. we have been going at one speed and the events are going on another. >> stunning. nosome point, the turks said and there were so many people that said yes. 130,000 is one of the headlines from the turkish government. >> turkey is trying to remain neutral and they are reluctant to provide military help to the us-led coalition. >> those are our front page stories. a busy front page.

>> futures, -9. technology is booming. companies,he global to mention the chosen, there is a crushing problem. the talent wars. silicon valley has a challenge for success. wonderful to have you back. what has changed in the last six months? >> a lot. a lot of companies are going public. capital levels are increasing. the pace of technology innovation continues at a rapid race. there has never been a better time to be an entrepreneur. graduates.ge >> do you talk to them? you are so safar -- far in the stratosphere, what to college

graduates do? >> the new rock stars are all the college graduates. they are actually the high schoolers. if you look at the internship rogue rams -- programs, our youngest intern was 17 years old . >> what does he or she do? >> this gentleman is going to princeton. he is very excited about his next chapter in life. he is going to keep working alongside. facebook had a 16-year-old the summer. it is getting younger and younger. >> did you take coding> ? >> no. my kids are now doing minecraft every day aren't excited about the world of programming. and are excited about the world of programming. techen you look at the old dinosaurs coming together, is it kind of shuffling the deck? the world i am in everyday is

the foundation base. we need the hp's to survive and continue to thrive. for the world of innovation, it is about the next phase of talent, the next phase of entrepreneurship. >> if you have one of these young interns knock on your office door and say, i need to get some advice. where should i focus? would you tell this person on coding, would you say go to social networking and focus on marketing, what would you say? >> for me, innovation, programming, that is the key to economic independence for anyone, for any person young or old. mark zuckerberg give a talk to high schoolers in woodside, california pretty much saying the same thing. this is where we see job growth, job creation. >> either that or go into oil. "law of the jungle." this reads like a movie script

to be honest. "law of the jungle." you talk about ecuador. we will get to all of that in a minute. renaissance within your research and the job issue, is it for real in america? >> it is absolutely for real. we see new boomtowns cropping up in places like north dakota. we see areas of texas which now have renewed oil boom. this is changing the complexity of the oil industry worldwide as the united states is moving toward energy independence. body shortage and technology? i would suggest that there is some in petroleum engineering. >> in petroleum engineering, yes. i think that is a field that young people will find for the next couple of decades will be a huge source of jobs. even down at the lesser skilled

, you are finding places all over the country which are now seeing employment levels rise. you are seeing ancillary businesses. hotels, restaurants, they are really coming back to life. there is always a downside. is there a point at which the technology effectively starts killing some of the jobs within an industry that has typically employed literally hundreds of thousands? >> no. this technology expansion is going to continue to provide jobs, particularly at the blue-collar level. are able toies drill more effectively and put more holes in the ground closer to one another in this area where they have unconventional oil. >> it is an amazing book on keystone and some of the oil dynamics.

heroes orre no villains, a lot of blurred lines. >> harrison ford is in the movie. have ang up, we blockbuster show. alibaba's blockbuster debut. this is "bloomberg surveillance." streaming on your tablet, your smart phone, and bloomberg.com. ♪

>> good morning, everyone. "bloomberg surveillance." i'm thrilled to tell you i will be speaking with clifford asness . he is the smartest math guy on the block. onwill talk to him today "bloomberg markets: most influential summit." i'm sure we will talk hedge fund beat. i'm sure we will talk asked dave

-- active versus passive management. >> this is "bloomberg surveillance." it is now the biggest ipo ever, alibaba. a deal, big numbers. they eclipsed their margin by 15% because of strong demand. on friday, ali baba jumped 38%. the offer price was $68. >> you wonder why they priced the thing a 29 times earnings when there are so many other companies trading a lot higher than that. >> now it is at 40 times earnings. this jump of 38% is the biggest one-day jump for an ipo of $10 billion. it took a while for the trading to begin. a time lag. perkins is the most

successful venture capital firm in the world. why were the pricing at a 29 times earnings and then get such a pop? >> a more interesting angle that we are excited about is the importance of tech companies in china. for us in silicon valley, what it signifies is the power shift. have 80% of all commerce in china that is flowing through ali baba. you have a company with a hugely strong cultural underpinning. you have the yahoo! investment. the dynamics here are really important and it will be interesting to see how the company matures from here. >> there is a case where investors are using ali baba as proxy. the partnership structure has a lot of people torn up. you hear any concern about that in silicon valley? forave people overlooked it

the growth potential? >> people are always aware of that. the we are staggered by is size of the market. it is big. it is china. if you look at the revenue projections, the valuations, this is a big opportunity to roll into. i think of your firm that has gone through generations. i want you to explain the generational shift we are seeing in these transactions. this is clearly not 2000, which i hate to say was 14 years ago. day-to-day within the kleiner perkins office, what is the difference now with ali baba, with facebook, with google? >> speed of innovation. mobility. access to everything in your phone. that was really demonstrated by apple and the sale of the iphone 6. >> i have an iphone 6. i'm carrying my 5 with me this morning. i arrived in new york city and

there were still lines around the block. the importance of innovation shift and the speed to market, that is what we are talking about. john scully telling us that he thinks the next big thing is using all of the cheap computing power in the cloud to crunch that data. >> there are so many companies doing it. the start up landscape is really significant. just watch this space. that is why you are seeing talks around hp. there are really good things coming out to read >> what are the risks of the cloud? you have all this frenzy. when you sit around the coffee isp or kleiner perkins, what the fear that you have of the frenzy over the cloud? obviously one. we are making key investments in those areas. that is really the central concern. making sure that the security and privacy state the forefront.

we also have paul barrett of ""bloomberg businessweek." buying merck of germany sigma-aldrich based in st. louis. the price tag is $17 billion. $140 per share. , theg up in the next hour executive board chairman ed merck of germany will be joining us to discuss the transaction. in the next hour of "bloomberg surveillance." a 17 billion dollar deal. this is "bloomberg surveillance." we will be right back. ♪

>> good morning, everyone. "bloomberg surveillance." later on "bloomberg surveillance," we will speak to the two executives involved in the merck-sigma-aldrich deal. and adamscarlet fu johnson. time for the morning must-read. >> my morning must-read is on last week's historic vote in the u.k. to scottish discs -- decided stay in the 300-plus year union. ,s far as policy is concerned britons have deluded themselves into thinking the system of government could survive with a little tinkering here and there. there will be more tinkering now that the scottish have decided to stay within the union. david cameron has made many concessions to make sure of that. have greaterwill authority to tax themselves and spend the money as they see fit. >> absolutely. we want to bring in our guest

host who was watching the vote carefully. >> i am have scottish. i was educated in england. it is important to me. >> war you thinking as the polls indicated that the polls -- what were you thinking as the polls indicated that the vote was a lot closer than anticipated? >> that is exactly right. it came up i surprise. i think a lot of people, myself included, were surprised to see that suddenly, there was a chance that scotland could secede from the united kingdom and the implications of that, economically and culturally, were significant. >> your family was all in favor of staying with the u.k.? >> completely. >> do you give prime minister brown the victory lap? >> i think he was very fortunate, as was david cameron, the way the vote came down the way it did. it would be a very different debate if it had not.

>> we have our own vote coming up in 44 days. >> is that it? >> yes. i run midterms -- our own midterms. writing today. success depends on the votes. give republicans higher marks on dealing with the economy. dangere some sort of that we put people into these buckets and we do not think about them as people? >> it is a really good question. that is why i am pleased that the tech companies are releasing their diversity data and that that conversation. if you can't measure it, you can't management. the leadership of the company's

is acutely aware of this. they are working hard to change the diversity. i have written larger pieces about women in technology. to keep women in the workforce past the age of 35 and until we can figure that out, we are not going to be able to change it. going to continue this conversation on diversity in the tech world. diversity reports are coming out companies.ch there is not a lot of diversity. we will be right back. ♪

>> good morning, everyone. "bloomberg surveillance." redskins nation has a reason for gloom. domestic affairs are the focus and foreign affairs creep in

this morning. serious challenges on the syrian-turkish borders. our twitter question of the day at bloomberg surveillance has to do with washington. what is the most important issue for the midterm elections? this is "bloomberg surveillance." good morning. i'm tom keene. with me, scarlet fu and adam johnson. we could do a 20 minute company news this morning. >> let's do it in 15 seconds. the financial times says an aggressive hiring spree is behind the push. oculus showed off its prototype in los angeles. inis expected to go on sale 2015. emc ponders options, including a possible commuter -- merger with hewlett-packard. from annder pressure

activist shareholder and recently lost its longtime chief executive to retirement. a spaceship rocket store the --ernational space station rockets toward the international space station carrying a 3-d printer. it should arrive on tuesday. >> you have the majesty last night orbiting mars. stunning accomplishment. congratulations to all at nasa on that. that takes science, it takes mass, it takes people that are smart. how about in silicon valley? on at general diversity at general mills is different than diversity in silicon valley. center on the debate over diversity.

outis the tech industry front on this versus many other industries? >> i hope this will be a call to action for many other companies to make this a central issue. we don't have a reflective sense of our employee base, our customer base reflected in the leadership of many companies. the leadership of tech companies is 20% women. we have a systemic issue we need to solve. engineer out of dartmouth who got five job offers. she did quite well. i know a female engineer out of duke who got for jobs. these are huge offers. her parents were blown away. does it start with the undergraduates or is the issue of diversity intact at a higher level of the industry? >> it starts at a very young age. we have to make sure that girls and every form of minority are studying computer programming and pursuing that as an active career. and we have to make sure that

people stay in the workforce. women atan effect that age 35. that is the gap right now. is it different than at exxon or general mills? >> what would be the diversity breakdown had a big oil company? >> in the ranks of engineers and people working in the field, it would certainly be something on the order of 90% to 10%. the question i have on all of these issues is that women leave the fast track at age 35. is that something we can necessarily reengineer? of women are going to leave to have children, there may be issues that are not susceptible to being changed by politics. >> i think there is an opportunity from an economic, societal, and cultural standpoint to do something significant within companies. to get have a long and lengthy

debate about that, whether it is gender specific or not, the main thing right now is making sure the companies are aware of it and can actually try to do something about it. >> there will be attention. there are certain issues that are not susceptible to being just resolved. >> like what? babies you have to have in a certain range. you cannot have the one you are 12 and you cannot have the one you are 60, so women tend to have them in the 20's and 30's and it is difficult to raise small children while having a 60 hour a week job. that tension is not something we can just wish away. >> know that the big silicon valley forms -- firms have disclosed these reports come up people were surprised tell overwhelmingly white, male, and asian these firms are. what are they doing about it? >> they are making progress, but it is not coming quickly enough. i think many of the companies in silicon valley have diversity officers.

they are measuring these numbers. they are thinking through policies, programs. 's defense, i love what you said about we are counting the beans, but what is the action plan that marissa mayer is doing this morning to engineer, 32er years old, has one child, and wants a second child? to marissaot speak mayer specifically, but i do think it is great that we have young, dynamic ceos at the leadership of these companies and that will actually continue to inspire people to stay in those leadership roles. i have a 10-year-old daughter and she looks at people like orissa meyer as aspirational. i hope that she will look at that and say, it is important for me to have a career. >> how was it that you are able to choose to stay in? >> i have very supportive infrastructure around me.

a very supportive relationship and a really supportive partnership. we have seen how google and do so well, versus the rest of the city is left wondering where they can live? valley has silicon created 20,000 new jobs in the last year. error 4 million tech jobs around the country that are still open. i am excited about the opportunity in terms of pure job creation. the bayage salary in area is high. it's it is -- it is an expensive area to live, but what is an exciting opportunity is the amount of opportunities. >> steve ballmer. professor steve ballmer. [laughter] the former microsoft ceo is going to be teaching. he is going to teach a class at stanford.

i believe that starts today. andrganizational leadership than he is apparently going to teaching down in los angeles at the university of southern california. >> didn't he have that big program where he reorganized everything? >> yes,. >> what is the message that a admittedly on the one hand grew net income 40% over his 14 years, but took a lot of heat for not doing enough, what is the message that he is teaching? would love to audit his glass. it would be very fascinating. has assisted that with bill gates and independently in building one of the most iconic companies globally. yes, toward the end, they lost out on the innovation race and on some key investments, but this is still a really

important, significant company. i find it very interesting, that oftend to be so dismissive old taca laggards, but these companies tend to be significant learn a lotu can from failures and adversity. it would be quite interesting to talk to him about the early years for us the later years. the ponies almost all go through that kind of cycle. >> now you have my attention. it almost becomes a whole business school case study. steve ballmer on what i did wrong. that is a class i would like to take. >> uncertainty. how could -- often you hear companies blame travails on uncertainty. that is next. ♪

>> good morning, everyone. "bloomberg surveillance." i'm tom keene. with me, scarlet fu and adam johnson. >> a nasa spacecraft enters mars's or vet -- orbit. measurements.e it will make observations of

the, that will approach mars next month. within 82,000 miles of the president. and in counting investigation is underway at tesco. it has asked its u.k. chief to step aside for the time being. first half profit guidance was overstated. shares of the lowest in more than a decade. merck is expanding. the german drug maker has agreed to buy sigma-aldridge. will pay $17 billion. coming up in the next hour on bloomberg surveillance, we are going to be joined by the two men behind the deal. that is going to be coming up in the next hour. a $17 billion deal. >> very timely.

let's go to our single best chart. it is all about uncertainty. we hear about it so often. down, twoak it professors at brigham young university say there are two types of uncertainty. demand uncertainty and the other one is technological uncertainty. they plotted out where different industries fit in this world of uncertainty. technologytracks uncertainty. the y axis tracks demand uncertainty. metals, utilities. low uncertainty overall because demand does not fluctuate wildly over the short term and the technology you are using is basically what it has been used in the past. the long-term, there are changes, but in the short-term term it is relatively measurable. if you move over to insurance. you can generally predict demand

uncertainty, but you do see technological uncertainty because big data and analytics investment will drive revenue. revenue -- restaurants, hotels, retail, high demand uncertainty. think about the way you consume things. but technology really has not changed all that much over the years. the upper right-hand quadrant is the one i want to focus on. software, computers, medical medical equipment, trucks and cars. it is each or be in. -- eat or be eaten. >> i look at that chart and i'm not sure i ever want to go into the medical equipment business. you get hit on both sides. >> everyone is looking to get into the software business. >> or social media. it is kind of weird. i feel like if you are not a you are ata company,

least nothing at this moment in time. how absurd a statement is that? [laughter] right? that is where everything is going. it used to be the internet. now the social media. going mobile. those are the buzzwords. "we will go mobile." >> let's put apple in the mix. social mediaon the policy and look at the success. >> paul barrett, when you look at that matrix and easy precious metals and a uncertain part of the matrix, does that make sense to you? >> those basic commodities are going into making copper wire or other things. the basic ingredients we have for industrial activity, the demand is basically going up. that chart is striking to me is

where you would put the old media industries, with a maximum uncertainty on every access. >> off the charts. >> i think media companies, whether broadcast television, , both, print journalism demand and technological uncertainty changing in such a rapid pace. i think that chart helps explain why our industry is changing so rapidly and why the only companies that will survive will be those that are rethinking everything they are doing. >> that would explain the turnover in management as well. >> absolutely. >> talk about rethinking everything. we want to talk about chevron, obviously rethinking some of what it is doing. he was in $19 billion lawsuit that is the subject of paul barrett possible "-- paul barrett's book "law of the jungle." are watching "bloomberg

surveillance." streaming on your tablet, your phone, and bloomberg.com. we will be right back. ♪

is "bloomberg surveillance."

i'm scarlet fu with tom keene and adam johnson. we have top photos this morning. >> we're going to focus on the one thing that really matters. if you are in new york city today, or a should say yesterday, it was difficult to get around. 300 10,000 protesters according to "the new york times." all of these people are protesting climate change. it was incredible. i don't know if you guys were trying to get around. >> trying to cross the street right in the middle of it. >> you were waiting for 20 minutes. >> we fought our way through. they fought back. >> i spoke to a police officer. >> there's al gore. >> yep. officer said, this is going to be huge and it matters. >> for those around the world and i'm glad you mentioned the former vice president, that was the audience. it was al gore's audience. >> leonardo dicaprio was there. >> rex tillerson of exxon.

[laughter] >> this is the head of what is happening -- and ahead of what is happening at the u.n. were is addressing lew things. >> how are we going to get gas to ukraine? >> and it is getting colder. >> paul barrett has just written his new book "law of the jungle." it is a great read. if we could just step back from the intricacies of the book, what is it that you think has brought that debate about the jungle of ecuador to the streets of new york? why are we so aware now in a way that we were not two years ago? >> as people see images of arctic glaciers melting and polar bears wandering around on bare earth, when they should be walking a nice, it is finally dawning on people that there was something tangible going on in

connection with climate change. which is not to say that there is a straightforward or easy way to deal with this truly global situation. you have countries like china and india, which are quite determined to pursue economic growth and that will require burning fossil fuels for the foreseeable future. here, evenl tension within our own country where there is a lot of awareness and concern. the issue has become very ideological. you have the republican party, which is going to oppose reforms to matter what the facts are. can't shut down coal because it is jobs. >> it is an extraordinarily complex issue. look at coal. you have the coal states resisting change, but you have a lot of liberal activist who are opposing the transition to natural gas, who are demonizing fracking, as if that method by itself is the problem, when in fact if we could make a

transition from very dirty coal to much less sturdy natural gas come a we would put a big dent in climate change in the very short-term. that is something we can do now. >> thank you for naming the first chapter "surveillance." we will get a royalty check, i'm sure. [laughter] it really opens like a movie script. harrison ford knew that they would circle back. they always did. there is that tension here as you take us to ecuador and back. donziger, situation, who represents thousands of poor farmers in the rain forest, is literally being followed by the private eyes hired by chevron because the stakes in this case are so high. that n became convinced

donziger was running a corporate shakedowns keim and they have now proved it. -- shakedown scheme and they have now proved it. naïve is the event that we saw yesterday based on the research we have seen about china? about india? about the global use of hydrogen? >> protests are designed to be naïve. they are designed to be the opposite of debate. they are designed to marshall popular opinion, even if that opinion is relatively crude and does not include all the nuances. there is a real tension. >> the protests serve a purpose. >> certainly, i think they are entirely justified. this is how to have the debate.

if everyone stays home and leaves it to the handful of people the way they are running things now, things are never going to change. this is what is great about the country. there are two republicans in the greater silicon valley area i'm told. paulas the debate of barrett playing out in the most liberal of liberal cities in america? usit is pretty staggering to , the current debate on climate change. california has never had more of a drought. i was looking at pictures this weekend. the complete dry out a of the state. we have invested significantly in clean technology. i was really pleased to see the strength of what happened in new york this weekend. the amount of people that are actually making a call to action. >> thank you so much. paul barrett on "law of the jungle." let me do a forex report.

i would focus on ruble. the focus this morning on iraq, ukraine, still very fragile. >> coming up in the next hour, the executive board chairman will be joining us. ♪

>> turkey takes in 100,000 kurds as they look to extend the islamic state here in -- state.

its shares plunged to their

lowest in more than one decade. siemens expand his business with oil and gas in the u.s.. the largest company agreed to buy. pay $83 ays it will share in cash. that is the latest. just a quick romo here in the next couple of minutes -- just a quick promo here we will be karl-ludwig kley. this is breaking news through the weekend. this is quite important. on the turkish syria border this morning, there are some challenges. we see some smoke and real challenges here as many refugees escape to syria over the turkish border. these are the kurds divided i turkey, syria and iraq.

this has become a focal point as the president considers his coalition. witnesses morning the former governor of oklahoma, frank keating. you have expertise away from this, but i am reading kissinger's book right now. haveike in his book, we two discussions at two different speeds. up toe president catch the real-time speed that we observed over the weekend. >> this is the president i have. the president seems behind the eight ball on a lot of things. if you look at the islamic state, a lot of things were underestimated. as these events happened, there is a real concern about when the rubber hits the road, will we be

able to act? >> frank keating you had been in the trenches of a congressional and state debate of support for federal washington. do you sense as we build a coalition that the residents back is covered by the governors, i the senators and the house? >> in domestic policy no. in foreign policy a cautionary yes. most of us know that the only way to defend america's role in federald is by a strong residents that knows what he is doing. there is a lot of uncertainty. people are not sure that is the case. but theway too young, fact is we are exhausted. kissinger has a quote in his book. we have three wars across two generations that we had to back out of area -- out of. comingchildren are still

out of the fence in the southwest border. the country has a $17 trillion debt. the isis role is rolling. all of this is concerning. phrase, and sandler , thisich is -- san lerfa is mostly kurdish and arabic. these people are escaping because isis is on the move. cohesiveey are the one military force that is able to stand up. >> both of you gentlemen are republicans, so there will be a partisan bent, but if you can back away from the partisanship and think of this, the difference between now where it is difficult for the u.s. to put together a coalition versus 2001 where the world stood with the u.s., what has changed? >> i think there is a fatigue around war.

people are extraordinarily cautious about engaging given the missteps we saw going into iraq in 2003. people are understandably concerned about why they are acting, how they will be acting and are they acting on good information. those are things going through people's minds. to expect thate our friends and allies in the region are skeptical. generationhe vietnam and i think that experience chilled a lot of the energy for foreign policy entanglement. 2003 venture, the people aren't sure the government knows what it is doing. >> what would mitt romney do differently? >> is a matter of staying ahead. intalk about engaging putin

a particular way, the importance of recognizing the threat from the islamic state. it is about recognizing and acting on it earlier. >> now that we have recognized it, both the house and the senate have approved the plan to equip moderates in syria. when i found interesting is that within the house the proposal went only because a vast majority of republicans back him. that was not something i anticipated. >> there can't be a tentative trumpet. president and our we want them to succeed. i was on the other side twice, that we want them to succeed. the world community and the domestic community want to know what the plan is. if the plan makes sense they will support it. has he effectively tied his hands by saying no boots on the ground? >> if you read between the lines

it is no boots on the ground now , but let's see how things evolve. leadershipmilitary to say let's look at what is happening, i think that shows flexibility. >> i would say the resonance of what you said is that robin williams in good morning vietnam, in the teletype room going across with the daily cadence you and i lived in vietnam. just another 50,000. that is what haunts this debate. what would you say is the to do list of secretary kerry? things.ple of to go back to the notion of the international coalition, he has to cut back during -- cut back. he has to get these folks on the same page. the u.s. is not going to commit drown troops.

someone has to do it rather -- whether it is the syrian element or others, he has to hold this together never mind the ukraine and the issues between israel and the palestinians. he has a tough job. well, isisating as on the move seems to be the front story. hour, karl-ludwig kley the executive board chairman is joining us to discuss this deal where that company is buying sigma aldrich. we will broaden the discussion to health care because it has been almost one year since obama care. ♪ >> bloomberg "surveillance."

i am tom keene. let's get to scarlet fu. >> can you believe it has been almost one year since the obamacare website rolled out? isn't, all of the revotes in the house have kept it fresh. over 7 million americans are enrolled in the president's health care plan. anniversary is nearing so let's get a prognosis on the progress of this plan.

how big of a deal will this be? >> i think it is baking the cake. even though we are not hearing of a as much. up ins many seats as are the states that governor romney obamacare was such a bad story for the first part of 2014, a lot of those factors are baked into people's evaluations of the president during -- president. >> health inflation has started to fall back a bit. i think it is a little early to give kudos to obamacare. a lot of things will take a few years to sort out. the slow recovery has something to do with it. we are leveraging technology better and that is why some of that inflation is comeback. >> the focus has been so much on

security flaws within the website. is that taking us away from the main issues? >> technology was never the issue. i knew they would get this sorted out and they did. the bigger question is the architecture of obama care, the notion of that are allies and the health care system. was that the smart thing? >> how is it going? legislation usually doesn't make the results does it? >> the eight years i was governor i never noticed how much medicaid costs. today in every state it is a huge number. i'm concerned about that. everyone will be on medicaid and that's where those folks are going. it will cost a lot more money to provide treatment and services. this obama care policy is a silver policy. mandate or that you and i

have to have health insurance than i would by the cheapest policy i can find. today you can't do that. you have to have the mental health part, ob/gyn services. that cost money. >> that's the point to pay for people who can't afford it. you do that by making people pay for more stuff. >> we will discuss coming up on surveillance.

>> bloomberg "surveillance." tom keene, scarlet fu and adam johnson is with us. an important conversation with scarlet fu. >> let's recap the headlines. germany's merck is buying sigma aldrich for $17 billion. when hundred $40 per share in cash. $140 per share in cash.

thank you for coming in this morning. you mention the deal came together quickly. what prompted this acquisition? life-sciences for us is a sector we have always invested in and the focus of key revenues. sigma aldrich has always been the gold standard in the twostry, so by talking great things came together. >> i understand growth and your earnings growth has been made teens year in and year out. what makes it so resilient? >> we are highly diverse. if you think about the whole health care value chain, we are

a leader in the discovery business. whether discovery of new drugs. i can say there is no drug today in the world that at some point didn't use sigma aldrich to develop their drug. we are also in manufacturing and diagnostics. that makes an incredibly powerful company. i think this combination with merck is complementary. congratulations on 18.5% per year total return for the last 10 years. how many employees at sigma aldrich will lose their jobs? pieces -- when the customers when our business wins and it should create more opportunities for employees. there is a lot of work to be done between now and close. within the millions of

dollars of synergies how will that sort out between the companies? can you combine together with minimal job loss? ,> we have to get the approval we have to go into integration planning, but we have given a clear commitment to the city of st. louis, the majority of the u.s. jobs. >> do like the st. louis cardinals this morning? >> i didn't look at it. >> i think we lost last night. you would talk about janet yellen, let me talk about aria druggie. are these transactions happening because mario draghi is giving free money? >> i wish he would. low interest rates help in financing but this is a business deal not an interest rate or tax deal. this is business logic. >> i notice according to the

press release -- why does it take three years for a deal that is effectively a wad of cash? >> we have to get the business together. we are adding two businesses. we are to go to synergy realization. we assume it takes three years to realize all alternatives area -- alternatives. >> is been a terrific industry and a terrific rollup, why did you affect this transaction now when you could have done this five years ago? why now? >> this industry is evolving. the whole life-sciences industry is evolving. we had a very interesting time. our customers want more solutions. two years ago we organize our company to become more of a

solutions focused company. a combination with merck allows richnessirectness -- of their science and our science to offer the solutions. two byw there were recommendations and 13 hold recommendations for sigma aldrich. >> went to get away from pharmaceuticals, we were talking a while -- about obamacare. why do not want to invest there in the moment? >> we do want to invest -- >> you are shying away and putting the interest elsewhere. >> we have three businesses we are developing globally. one is pharmaceuticals, the --er is life sciences3 sciences. acquired same time you the other company in 2010.

there is a certain episode this on the chemical side of the business. >> we have to build. at the outset it was not ready to stand up at the build market. >> i notice your 10% dividend growth for sigma-aldrich, there is more of a tradition in germany to have less of dividend growth. are you going to take a little bit of the sigma-aldrich kool-aid and increase the dividend at a greater rate? are you going to get an american dividend growth? atin addition if you look our story over the last years it has gradually increased dividends and we will certainly not fall. meanwhile, we have a european timeny on you -- u.s.

where tax is a part of the equation? >> didn't even factor in. a business deal driven by strategic considerations. if you look at the consummate or a side it makes sense. >> thank you so much.

>> our twitter question of the day this morning, what is the most important issue for the election? how many days away? >> 44. >> what is the most important

issue? tweet us. alibaba getting ready for date to. -- date two. day one was impressive. that record-setting ipo. have just initiated with a target of $90. the only problem is it's stopped at 93. is this as good as it gets? >> that is an interesting question. this is not the first company we have had that issue with. jack ma had -- given himself this long i think we will give him a couple of quarters to prove the public company. i think you have to look at alibaba for what it is.

a concoction of 12 companies that effectively dominate not only e-commerce in china but online advertising and other things. whatu look at it beyond the company did on friday, you would be very excited for what he can build this business into. >> you mentioned there are 12 different companies essentially. they work well together or is that the area for growth? >> i think they are pretty well integrated. on the back and everything is running off of the same cloud-based computer platform. the other is he is making sure that each has a separate rant. which is smart. -- brand. which is smart. overtime there are some issues which may collapse more, maybe cross marketing? my bet with talk telenav can

is that they have $23 billion in cash flow, will they add that back to the balance sheet, are they a blue chip company? mr. ma really shook people up and institute a dividend and apply it like use of cash? >> no absolutely not. who is he competing with? google with $60 billion in cash, with facebook. he needs to invest in the business very aggressively. today they are a chinese company. their international business is 9%. googled is 50% during -- 50%. growth inar is at 34% the next year 17% growth? what is the glidepath? let's try to use a crystal

ball. in the case of google, it showed accelerating growth over time. facebook shows accelerating growth over time. they need to eventually show that either growth stays in the but then it will be unbelievable considering their size. >> it just came out that alibaba has said that it's underwriters exercised the option for upwards of $48 million. >> i want to address scale. stuffompany sells more than amazon and ebay combined. how do you possibly continue to grow at 40% when you're that big? >> there are 4 billion people in have gones than 25%

online and purchased something within china. that tells you there is a market for 75% additional opportunity. >> just within china? and china is what percent of the total business question mark -- business? >> china is 80%. >> so that is the key. get bigger and china and internationally. >> you adopt an amazon model. and ebay model. you create a different model altogether so you're not competing against these established players. alibaba you imagine running together alliance with ebay or amazon? ebay, maybe? because of the paypal asset. with amazon i don't think so. amazon competes in china but it is number 10. ebay lost china and never looked back.

i don't think a partnership with amazon is in the cards. doesn't make sense to acquire ebay altogether western mark -- altogether? to get that credibility to do business outside of china. >> thank you, very positive on the stuff even though he only has a $90 rice target. >> raising interesting possibilities as well. >> let's get you a data check now. futures trading a bit lower. 2.57%eld coming down to >> adam johnson has our top headlines. >> let's jump in and give you a couple items. hundreds of thousands marching through new york city and other cities demanding action on climate change. organizers call it the largest climate demonstration other -- ever. it was difficult to move around

the city. but this is an issue we need to focus on. the treasury secretary will be making a keynote this morning. massive wildfire in northern california continues to spread more than one week after it began. three dozen buildings have been destroyed and thousands are at risk. the fire east of sacramento has consumed 128 square miles. 10% of the blaze is considered contained. a nasa spacecraft has entered mars orbit. it will take measurements in the upper atmosphere. first it will take observations on a comet that will be approaching mars next month. those are the top headlines. now to our guest host, frank keating. the former governor of oklahoma. the banks are getting crushed by dodd-frank new regulations.

had a pass that expense to the consumers? dodd-frank applies to everybody. fossil three -- applies to everybody. think about dodd-frank right now. i don't question the fact that some of it was well-intentioned and some of it may only be good. of final rules and the average bank has 35 employees. and 95%the communities of our members have less than $1 billion in assets. their operating revenue goes to compliance. can you imagine here in new york where you have a restaurant were 15 to 20% had to satisfy the new york health department. >> where are the mergers? my history 101 says that when these shocks occur people

consolidate to adjust to the cost of regulation. >> they are taking place right now. >> give us one. >> since the fall of 2008, we have lost one day per week, five days per week at community banks since then. we have lost 1500 community banks. you add that together and that is not good for flyover america or small-town america or medium-size america. the largest institutions will do fine, but it's the community banks that are certainly being hurt. that is not good for americans. >> a lot to talk about here. coming up, we will look at the nature of elections. mark hopper and john heilman are focused on politics.

what is the most important issue for the midterm election?

>> this morning on bloomberg

television and radio, and influential stomach. -- summit. look for that at 8:30 this morning. everyone wants to know what ray dalio thanks. this is bloomberg "surveillance ." i'm tom keene let's get the company news. >> we start with a gm recall of cadillacs and him paul is. recall is tied to breaking problems that could start a fire. more than 130,000 vehicles could be affected. chrysler could bring back 190,000 autos due to fuel pump failure. the report says the private equity group has been frustrated in its efforts to find deals in russia.

is the biggest manager of alternative assets. and edwards airline eyes a u.s. expansion. that is according to a company spokesman. the u.s. currently just drive 7% of their sales. that is the latest company news this morning. news, stever allmer is going to become compatriot of yours at stanford university when he too will be a professor. he starts teaching a new course on strategic organizational leadership. -- you famously advised mitt romney in that topaign, what is it like lead what you're doing and step into the shoes of a professor. better place to be a member of the faculty than stanford. it is like paradise.

how does anyone get any work done? it is a tremendous group of people. grade students and a great intellectual environment. it's like the hot ring to be at stanford. >> you think he will be waving his arms and shouting and yelling? >> i think that's part of the deal with him during >> the ultimate salesman. >> he will also be teaching at the usc business graduate school. eight two term governor of oklahoma, why have you never taught? >> i've written for award-winning children's books, that is as far as i can go. anyone who's older than i am i can't talk to -- >> what was the book? i donate all the proceeds to the museums involved and it is fun. i enjoy that.

are you on an airplane going, night...? >> on a child's book you have to leave out all the adjectives and adverbs and i love children, i have 10 grandchildren. >> i learned something about you mr. keating. >> let's get to the twitter question of the day. what is the most important issue for the midterm elections? ♪ >> bloomberg "surveillance."

tomorrow daniel roth will join us. editorial at linkedin. he has a huge following. i'm scarlet fu with tom keene and adam johnson. let's get you started with some company news. release of theng virtual reality headset. bigfinancial times says a

hiring spree behind the push. oculus showed off its present-day prototype in los angeles. inis expected to go on sale 2015. the storage giant emc is pondering its options including a possible merger with hewlett-packard. emc under pressure from an activist shareholder. and the spacex cargo ship launches toward the international space station carrying the first 3-d printer for astronauts in orbit. it is bringing more than 5000 supplies -- 5000 pounds of supplies. the midterm elections we have just recounted are now 42 days away. republicans and democrats alike scrambling to win voters. what the president's approval stuck in the 40% range, with the

gop finally gained the upper hand in the senate? the pew research surveys have shown that republicans are more enthusiastic than democrats to vote this fall. what does the gop do to transform that enthusiasm into a turnout edge? >> some of it is built-in because there is such an energy about president obama and sending a message that people are dissatisfied. the turnout edge is going to be higher. republicans are more interested to start with. and the issues favor republicans. governor keating what have you learned about the middle moved to washington post and i front and center focus and how you win a primary? where is the middle for republicans?

>> rhetoric has a lot to do with it. if you are angry and bitter and accusatory, apel don't like you. people want to like the person they vote for. , and heans need to talk is right about jobs and the economy and the situation in the middle east will move people toward barack obama and whatever we can do to help him if he is becoming a leader, but jobs and the economy are very serious. one out of three young americans live with their parents. --t is unheard of during unheard of. discussion with pat roberts in kansas right now as a metaphor for the midterm elections? >> he needs a house in kansas to start with. the reality is people want to know you're part of them. you may be a u.s. senator but

you're from kansas. >> did we just see genuine frank keating? >> is there something unique to kansas? kansans are very middle-of-the-road in terms of their rhetoric. they want people not to yell at them and to converse with them. they are a state that will elect democrats in a state that most often elects republicans. as long as you focus on the things they care about. talk tory important to what ails the people of kansas. >> i think of it as the home of the blue dog democrat. like a clinton. fairly middle-of-the-road. >> i had a democratic house and senate my full eight years, we finished the transportation infrastructure, got rid of

welfare, or a democrat house and senate. it can be done. >> you're not in charge of rhetoric you are in charge of policy. this policy drift away in the final seven weeks? >> a lot of that discussion happens before the last seven weeks and it residual he -- residually comes up in the last weeks. foreign policy does not move voters but there is something about this chaos we see in the world. naturally their mind drifts to has the president then effectively leading? to the extent that people this year see the chaos and think the president is in some way responsible, that could impact the election. >> do the politicians of the republican party have to move away from it who talk receipt? utocracy?

>> we see 1% of america and everybody else. -- >> republicans have to grow the party. that is a basic truth. the demographic issues we face across the country retire -- require republicans to be more inclusive and recognizing that it is important to bring new people into our party who may believe in the value of limited government. and emphasizing how the policies will and if it them. point, isernor's about showing people we can be inclusive. >> let's be clear, hollywood is democrat, wall street is democrat, middle america should be republican but we have to address the issue of young women and minorities. we are a country that embraces

new faces, we need to focus on that area and -- on that. we asked you what is the most important issue for the midterm election russian mark -- election? >> are we referring not to hacking but nsa? >> i think you can defined national security with a broad umbra law can you not yet know -- not? >> people turn on their tvs and see the middle east and the ukraine. even though the ukraine stop is not as front and center, there is a tendency to say what has happened? are things better or worse? this one, for most of the year i would've said the economy but a fat -- fast

changing dangerous world -- finally, terrorism. >> terrorism made all three. >> let's move onto the agenda that war with focus on the stories shaping the day. turkey haspolicy in some clumsy news coverage over the weekend. it is really not on people's radar. the images are stunning. -- this is way east of damascus as citizens try to stumble over the border. the turks said no, and now this has to do with the future of the kurds. there will be much more on this. >> there will be much more on housing. at existing home sales going back 10 years you

will see we are nowhere near where we were. fortunately there it is. way below trend. have the banks loosened up lending? iny held onto the money 2010. you have to have jobs and an income if you're going to buy a house. this isn't the fall of 2008. to banks want to loan money people who are in a position to buy a house, the problem is student loan debt burdens younger people. the qualified mortgage rule requires 42% debt to income, it is tough. >> bloomberg markets most influential summit. a.m. the chairman of economic advisers will be on bloomberg television and following that michael bloomberg

will be sitting down with ray dalio at 8:30. >> thank you so much. >> bloomberg "surveillance." ♪

>> you are juliet de bauginy -- "in the loop."

i am in for betty liu. we have an all-star guest lineup. from our bloomberg market most influential summit, michael bloomberg and ray galliano will be joining us on success. and leon cooperman to discuss how to invest. let's take a look at our top headlines. the investigation into counter practices of the uk's against mark -- grocery campaign. a huge deal in the chemical industry, merck has agreed to buy sigma aldrich, a u.s. company that makes chemicals. $17 million. ipo is now the biggest of all time. alibaba ended up