>> live from bloomberg headquarters in new york, this is market makers. >> president obama speaks to the united nations as the u.s. takes the lead on islamic state and ebola. >> cisco has got its head in the cloud. company is how the making its big change to cloud computing. >> what you can learn from google and eric schmidt. the chairman will be right here to talk about his new book, how google works.

good morning. it is a wednesday here in new york city. you're watching market makers. now, we willom hear from president obama. before then, breaking news on housing markets. new home sales are officially out. michael mckee has the new headlines front and center in the newsroom. >> we have a whole account housing. we have been disappointed but new home sales rose 18% in the last month as people went back and started buying. we also see a big decline in the number of houses available. , we have seen disappointing housing starts. that is starting to come home to roost. we have only a 4.8 month supply down from 5.5. 500-4000 range. this is the biggest since before the economic crisis. all of a sudden, americans

decided they did not just one existing homes. they won 18% increase in new home sales for the month of august. >> all right, michael. we are waiting for president obama to address the u.n.. is in d.c.. we see the brazilian president speaking live and president obama will follow her in a few minutes. little doubt he will be talking about syria and the islamic state. tell us what else we president might say. >> he will talk about a forceful role for thec united states and the leadership in the world. the president will make the case the u.s. is stepping up when it comes to dealing with the ebola crisis even on the very thorny

process of climate change. with others alongside, there has been progress made on these fronts. that could be open to some debate as to whether or not that is indeed the case, whether the u.s. role is actually helping along those lines. push forxpect a big the president to try to build on the coalition of countries joining in the fight of the islamic state, not just the five arab allies, but more countries as well. those who offered to do something in the coalition, the president will join to express the islamic state poses a threat not just to the region and the united days, but to the world as a whole. also resign later this afternoon for a special meeting talking about the problem of joining the fight on behalf of the islamic state. countries need to do more to keep the fighters out in the first and.

>> it is no surprise the president will ask for more support in more countries. that wille likelihood actually happen? >> it is an interesting dynamic here it is going to the u.n. and not asking for any endorsement or authorization. even the airstrikes in iraq. will still use the opportunity to make the case this is necessary and that countries need to step up. there is a level of confidence that there will be more companies providing more support and some fashion to the effort eye andkeep a careful watch the new resolution dealing with foreign fighters and whether or not there are any votes against extensions there. >> what about iran? the president has focused on and thes against iran threat that nuclear weapons in iranian hands would pose not just to the middle east but the rest of the world, and now, that

iran is a potential troubling ally in the war against the islamic state, what does he do? out foricate ellen sing this president and for john kerry. they are still dealing with nuclear issue, still facing the deadline to finally have a deal with iran. they are still moving toward that and suggest progress is being made. everyone knows there are major sticking points that still remain. it was this time last year the president had his first phone call with the leader of iran. could they have a face-to-face meeting? it is something to watch carefully. the president walks a fine line and they're and they're trying to do that specifically with iraq and serious suggesting they may have a almond goal. they will not do it hand-in-hand with the iranian government. >> clearly serious anti-islamic state are the hottest issues at the moment.

ukraine,till russia, and ebola. will the president address either of those? presidentl or the address both those and he will make the case the u.s., particularly ebola, is doing a lot more than the united states may be is giving credit for her the president announcing u.s. military forces helping with logistics in terms of getting health care workers and more equipment into africa to help those countries dealing with it. you will hear the president making the case that the u.s. has stepped up on ebola. this is, again, a situation that could get worse before it gets better. u.n. is doing its part to try to get a handle on it here it >> peter cook at the white house. john hannah.g he spent four years as vice president cheney's advisor. he was there in the opening years in the war in iraq. he is now the senior fellow at

the defense and democracies and an advisor at the policy center. i will guess you have got big problems with the president's strategy in your -- in iraq. what would you do differently? would dot sure i anything differently right now. i support the president has done. my complaint is that he did not do it much sooner. a problem in the making for 2-3 years inside syria. we allowed a vacuum to develop their in which isis group. that is a direct affiliate of al taxa, planning and plotting immanence in the united states and we withdrew forces in iraq heaving a vacuum there and leaving malik need to burst to his policies and alienated them and ended up having sunni tribes in iraq open their eyes -- their arms to isis. >> was president bush who decided to leave iraq in 2011? >> yes. he had an agreement in which it

was a possibility we would leave iraq in 2011. he fully intended, and if you read his memoir, talk to any senior officials in that administration, there was full intention to follow the advice of commanders and negotiate very hard for a stay behind rigid visual force in iraq that would continue to give us leverage over that government and iraqis security forces to continue to mentor them so they would be a force capable of protecting security inside iraq. >> isn't it too easy to look with the perfect clarity of hindsight at the withdrawal of troops in iraq and say, now, that it was a mistake? you and i and everybody else knows how tricky a political situation that was, how much pressure there was on the president and the administration to bring those troops home from iraq.

>> that is true that these are never easy calls. being president is not an easy job. you have a responsibility not to follow the polls, but to leave you can on behalf of keeping the country safe and pursuing our national interests. across the board, president obama's commanders inside iraq and military men, as well as people like leon panetta, were telling him, mr. president, you have got to pull out all the strings and pressure malik and secure the residual force in iraq if we want any degree of confidence that we will be able iraqintain what we had in having really crushed al qaeda in that 2007 time. we do not want it resurrected but unfortunately, that is what happened. >>he should have done what? i can tell you the president, i

think, made one phone call to prime minister malki and the entire time leading up to that negotiation, on keeping a residual force in iraq, president bush of course was having almost weekly video telephone conferences with malki to try to keep malki in line. it was clear early on that the president did not have his heart in trying to get a stay behind for us and that he was just as happy to have us withdraw 100% of our troops in iraq and that is of course what he campaigned on quite successfully in 2012. the fact that we had gotten all of our forces out of iraq, the tide of war had exceeded and the iraq war had finished. the enemy got of what -- a vote in that, unfortunately, and the iraq war is clearly not an issue. right nowa new phase and president obama, whether he likes it or not is reading the a's. questioning past actions does

not change anything today but it helps and warm the president on what he might do next. john, does the united states need to put those on the ground in iraq if withdrawing was the right decision? that could actually participate in a ground campaign, helping the iraqis and other forces in the region as well. >> at the end of the day, depending on your timeframe, but if you want relatively quick kurdish forces, the iraqi security forces, sunni tribes in western iraq to really be able to stand up and take on isis and hold and control think you will have a lot of u.s. trainers and down at thees italian level with iraqis doing the fighting in forward position that are going to be facing combat whether or not u.s. officials or shoulder -- or

soldiers will fire the weapon, they will be in harms way if we will succeed in the mission the president has allied -- outlined. >> i want to bring in peter cook. you have a question? >> i want to get john's take on the coalition of president is building. to it todayto add at the u n general assembly. is your opinion on the fact the u.s. got five countries to participate in some way in the airstrikes. we understand the preponderance of the bonding was done by u.s. forces. will it make a tangible difference going forward? >> we have got to distinguish. militarily, i think it will be quite marginal. diplomatically, it is huge. a real victory for the administration, that they ought bebe bragging about and

quite proud of. the center of gravity, the key human terrain and the fighting is isis, it has got to be the sunni population on the ground and in the area east.r middle that is the only way over time we will defeat and destroy isis. it aims to me, having be quite proud of. the center of this sunni by-and-by the most powerful and influential sunni states in the region is an absolutely critical ingredient to the long-term success. >> the president is about to address the yuan, what about iran? >> we have got to be very careful. i just said the sunnis are the center of gravity in this fight here for us to appear in any way, shape, or form, to be in kaluz with iranians, to destroy isis, to prop up the regime in syria, i think will work directly opposite to that. the president does not want to get into a fight with iran, but also does not want to ear to go hand-in-hand with them in this

fight. >> thank you. you.ll be back to i want to take is not to president obama, who is at the podium. >> we come together at a crossroads between war and peace. andeen disorder immigration. between fear and hope. around the globe, there are signposts of progress. the shadow of world were that existed in the founding of this is urgent has beenaround the gle lifted and the prospect of war between major powers reduced. the rank of member states has more than tripled and more people live under a government they elected. hundreds and millions of human beings have been freed from the risen of already with a portion of those living in extreme

poverty cut in half. economy continues to strengthen after the worst financial crisis of our lives. today, whether you live in manhattan or in my grandmothers village more than 200 miles from nairobi, you can hold in your hand more information than the world's greatest libraries. together, we have learned how to cure disease and harness the power of the wind and the sun. the very existence of this institution is a unique achievement. the people of the world committing to resolve their differences peacefully and solve their problems together. him people telling in the united states that, despite the headlines, this is

the best time in human history to be born. you are more likely than ever healthy, be literate, .ree to pursue your dreams and yet there is, a pervasive unease and our world. a sense that the very forces that have brought us together have created new dangers and made it difficult for any single nation to insulate itself from global forces. here, an outbreak of ebola overwhelms west africa and threatens to move rapidly across borders. russian aggression in europe recalls the days when large nations travel small ones in pursuit of territorial ambition. the brutality of terrorists in syria and iraq forces us to look

in the heart of darkness. each of these problems demands urgent attention. there also symptoms of a broader problem. the failure of our international system to keep pace with an interconnected world. we, collectively, have not invested adequately in the public test the of developing countries. failed to we have enforce international norms when it is inconvenient to do so. we have not confronted forcefully enough the , sectarianism, and hopelessness that feeds violent extremism into many parts of the globe. fellow delegates, we come together as united nations with a choice to make. we can renew the international

system that enabled so much progress, or we can allow ourselves to be pulled back by an undertow of instability. we can reaffirm our collective localsibility to confront problems, or be slumped by more and more outbreaks of instability. for america, the choice is clear. we choose hope over field. -- over fear. control butt out of as something we can shape for the better through concerted collective effort. we reject fatalism or cynicism when it comes to human affairs. we choose to work for the world as it should be, as our children .eserve it to be much must be done to meet the test of this moment. would like to focus

on two defining questions at the root of so many of our challenges. whether the nations here today will be able to renew the purpose of the u.n.'s founding and whether we will come together to reject the cancer of violent extremism. first, all of us, big nations and small, must meet our responsibility to observe and enforce international norms. we are here because others realized we gained more from cooperation than conquest. ago, a world were claimed the lives of many millions. with the terrible power of modern weaponry, the cause -- the fall of empire often leaves -- leads to the graveyard. it would take another world were

to roll back the forces of fascism, the notion of racial supremacy, and form this united nations to ensure that no nation can subjugate its neighbors and claim the territory. recently, russian's actions in ukraine challenged this post war order. here are the facts. after the people of ukraine mobilize popular protest and calls for reform, the correct president for life. -- fled. against the will, forward arms in eastern ukraine, violent separatists in a confident killed thousands. when a civilian airliner was shot down from areas these proxies controlled, they refused to allow access to the crash were days. ukraine started to reassert

control over its territory, russia gave up the pretense of merely supporting separatists and moved troops across the border. this is a vision of the world in which might makes right. a world in which one's nation borders can be redrawn by another and civilized people are not allowed to recover the remains of their loved ones because of the truth that might be revealed. stands for something different. we believe right eggs might. nations -- bigger nations should not be able to bully smaller ones and they should be allowed to choose their own future. yet -- these are simple truth and they must be defended. america and our allies will support the people of ukraine as they develop democracy and the economy.

natoll reinforce our allies and i'm told, our commitment to collect the defense. russia impose a cost on and and counter falsehoods with the truth. uscall upon others to join on the right side of history. small gains can be one of the barrel of a gun, but they will ultimately be turned back of enough voices support the peoplesof nations and to make their own decisions. moreover, a different path is available. the path of diplomacy and peace and the ideals this institution uphold. the recent cease-fire agreement in ukraine offers an opening to achieve those objectives. if russia takes that path, a resulted for stretches

in prosperity for the russian will lift our sanctions and welcome russia's role in addressing common challenges. that is what the united states and russia have been able to do in past years, from reducing stockpiles to meeting obligations under the nuclear nonproliferation treaty, to cooperate and remove and restrict -- and destroy syria chemical weapons. that is the kind of cooperation we are prepared to pursue again if russia changes course area this speaks to a central question of our global age, whether we will solve our problems together in this era of mutual interest and mutual respect, or whether we descend into the disruptive rivalries of the past. ground,ions find common

not fiddly based on power, but on principle, we can make enormous progress. i stand before you today committed that investing america's strength to working with all nations to address the problems we face in the 21st century. as we speak, america is deploying our doctors and ported by it -- supported by our military to pursue new treatments. we need a broader effort to stop a disease that can kill hundreds of thousands. inflict horrific suffering. economies and move rapidly across borders. it -- it is easy to see this as a distant problem until it is not. to mobilize other

countries to join us in making concrete commitments to fight and enhance our system of global health security for the long-term. diplomaticpursuing a resolution to the iranian nuclear issue as part of our ofmitment to stop the spread nuclear weapons and pursue peace and security of a world without them. place if irantake seizes this historic opportunity. leaders ando iran's people have been simple and consistent. do not let the opportunity pass. we can reach a solution that meets your energy needs while ensuring the world that your program is peaceful. america is and will continue to be a pacific power, promoting

peace, stability, and the free flow of commerce among nations. but we will six -- we will insist all nations advised by the rules of the road and endure territorial disputes peacefully. that is the only way to protect progress going toward. america is committed to a development agenda that eradicate extreme poverty by 2030. we will do our part to help people feed themselves and power their economies and care for their sick. the world asked together, and we can make sure all of our children and jordan lives of -- enjoyty and dignity lives of opportunity and dignity. have increased our investment in clean energy. we will do our part helping developing nations do theirs.

us we can onlyls succeed in combating climate in theif we can join effort by every other nation come by every major power. that is how we can protect the planet for our children and grandchildren. in other words, on issue after issue, we cannot rely on a rulebook written for a different century. we lift our eyes beyond our borders and if we think locally, and if we act cooperatively, we can shape the course of the century as our president should the post-world war ii age. future,we look to the one issue risks a cycle of conflict that could derail so much progress. that is the cancer of violent

extremism that has ravaged so many parts of the muslim world. terrorism is not new. speaking before this assembly, president kennedy put it well. terror is not a new web -- new weapon, he said. it is been used by those who cannot prevail either by persuasion or example. the 20th century, terror was used by all manner of groups who , but in thispower century, we have faced a more lethal and ideological brand of terrorist. who have perverted one of the with's great religions access to technology that allow small groups to do great harm. they have embraced a nightmarish vision that would divide the world into infidels, killing as

many innocent civilians as possible, employing the most brutal methods within their communities. i made it clear america will not base our entire foreign policy on reacting to terrorism area instead, we waged a focused campaign against al qaeda and its associated as is, taking out their leaders, denying them the safe havens they rely on. same time, we've reaffirmed again and again that the united states is not and never will be at war with islam. islam teaches peace. over aspire told live with a sense of dignity and justice. when it comes to america and islam, there is no us and them. there is only us. millions of muslim americans are part of the fabric of our country.

we reject any suggestion of a classical civilizations. permanent villages work is a misguided believe of extremists. it is no exaggeration to say humanity's future depends on us uniting against those who would divide us along the phone lines of tribe or sex. race or religion. this is not simply a matter of words. collectively, we must take concrete steps to adjust the danger posed by religiously motivated fanatics and the trends that fueled the recruitment. moreover, the campaign against extremism goes beyond a narrow

security challenge. while we have degraded methodically core al qaeda in support of a transition to a sovereign afghan government, extremist ideology has shifted to other bases. particularly in the middle east and north africa, where a quarter of young people have no jobs. food and water could grow scarce. -- rabbit,is rented and sectarian conflicts have become increasingly hard to contain. as an international community, we must meet the challenge with a focus on four areas. first, the terrorist group known as isil must be degraded in all duly destroyed. terrorized all who they come across in iraq and syria. mothers, sisters, daughters, have been suggested -- subjected

to rape. innocent children have been gunned down. bodies have been dumped. religious minorities have been starved to death. crimest terrific imaginable, innocent human beings have been beheaded with videos of the atrocity to shock the world. no god condones this ever. -- terror. no grievance justifies these actions. no reasoning, no negotiation with this random evil. the only language understood by killers like this is the language of force. united states of america will work with a broad coalition to .ismantle this network we do not act alone.

nor do we intend to send u.s. foreign lands.y instead, we will support iraqis and syrians fighting to reclaim their communities. we will use our military might in a campaign of airstrikes to roll back isil. we will train and equip forces fighting against terrorists on the ground, and we will work to cut off their financing and stop the flow of fighters into and out of the region, and already, over 40 nations have offered to join this coalition. i asked the world today to join in the effort. those who have joined isil should leave the battlefield while they can. those who continue to fight for a hateful cause will find they are increasingly alone. for we will not succumb to threats and we will demonstrate

the future belongs to those who build and not those who is an immediate challenge. the first challenge we must meet. second, it is time for the world, especially muslim communities, to explicitly, forcefully, and consistently ofect the ideology organizations like al qaeda and isis. it is one of the tasks of all great religions to accommodate, devote faith, with a modern, multicultural world. no children are born hating. no children anywhere should be educated to hate other people. should be no more

tolerance of so-called clerics who call on people to harm innocents because they are chewing or because they are christian or because they're muslim. it is time for a new compact among civilized evil of this war at itsadicate most fundamental source. that is the corruption of young minds by a violent ideology. that means cutting off the funding the fuel -- that fueled this hate. that means contesting the states that terrorists occupy, including the internet and social media. their propaganda has coerced young people to travel abroad to and turn youngs people. potential into suicide bombers.

we must offer an alternative vision. means many people of .ifferent faiths together all religions have been attacked by extremists from within a some point. have aple of faith responsibility to lift up the value at the heart of all great religions. do unto thy neighbor as you would do unto yourself. the ideology of iso -- isil, or al qaeda, will wilt and die if it is consistently exposed and confronted and refuted in the light of day. look at the new forum for promoting peace in muslim societies. describe its purpose. we must declare war on war so

the outcome will be keys upon peace. at the young british muslims who responded to terrorist propaganda by starting the, not in my name campaign, isis is hiding behind a false islam. look at the christian and muslim leaders who came together in the central african republic to isis is hiding behind violence.ect listen to the mom who said, politics try to divide the religion in our country, but the religion should not be a cause of hate, work, or strife. later today, the sturdy council will adopt a resolution that underscores the responsibility of states to counter violent extremism. resolutions must be followed by tangible violence. commitments, so we are accountable when we fall short. next year, we should all be prepared to announce concrete steps we have taken to counter extremist ideologies in our own

countries. by getting in tolerance out of schools, stopping radicalization , and promotingds institutions and programs that build new bridges of understanding. third, we must adjust the cycle of conflict, especially sectarian conflict, that creates the conditions that terrorists prey upon. is nothing new about wars within religions. christianity endured centuries of vicious vic carrion conflict. today, it is violence within muslim communities that has become the source of so much human misery. time to the knowledge the destruction brought a proxy wars and terrorist campaigns, between

sunni and shia across the middle east. it is time political and religious leaders reject sectarian strife. let's be clear. fight no one is waiting. a brutal war has killed nearly 200,000 people, displaced millions. iraq has become terror -- has come terribly close to plunging back in the this. the convict created a fertile recruiting ground for terrorist to inevitably support the violence. the good news is, we see signs the tide could be reversed. we have a new and inclusive government in baghdad, a new iraqi prime minister welcomed by his neighbors. rejectingactions those who tried to invoke work.

be followed byt broad truths. nowhere is this more necessary than syria. together with our partners, america is training any thing serious opposition to be a counterweight to the terrorists of isil and there is death assad regime. the only lasting solution to the war is political. and inclusive political transition that response to the of allate aspirations syrian citizens, regardless of .thnicity and create cynics may argue such an outcome can never come to pass, but there is no other way for this madness to end. whether one year from now or 10. it points to the fact that it is time for a broader negotiation in the region in which major

powers address their district -- their differences directly, honestly, and peacefully across the table from one another, rather than through gunwielding proxies. i can promise you america will remain engaged in the region that we are prepared -- region. we are prepared to engage in an effort. my fourth and final point is simple. countries of the arab and muslim world must focus on the extraordinary potential of their people, especially -- here, i would like to be directly to young people across the muslim world. you come from a great tradition that stands for education, not ignorance. destruction.ot life, not murder. away fromcall you

this path are this tradition of not defending it. you have demonstrated that when young people have tools to succeed, good schools, education economyand science, an that nurtures creativity and entrepreneurship come societies will flourish. america will partner with those who promote the vision. where women are full participants in a country's politics and economy, societies are more likely to see it. that is why we support the participation of women in parliaments and she's hospices. schools, and the economy. if young people live in places where the only option is between the dictate of a state or the lore of an extremist underground, or to research strategy can succeed. but where a genuine civil society is allowed to flirt,

where people can express their views and organize easily for a better life, you dramatically expand the alternatives to terror. such positive change need not come at the expense of tradition and faith. we see this in iraq, where a young man started a library for his peers. we link iraq's heritage to their hearts and gives them a reason to stay. we see it in tunisia, where secular and islamist hearties work together through political processes to choose a new constitution. synagogues, where civil society thrives alongside strong democratic government. malaysia where entre nor should his propelling a former colony into the ranks

of advanced economist. we see it in indonesia, in what began as a violent -- has evolved into a genuine democracy. ultimately, the task of rejecting sectarianism and rejecting extremism is a generational task. it is a task for the people of the middle east themselves. no external power can bring about a transformation of hearts and minds. be a respectful and constructive partner. we will neither tolerate terrorist safe havens in occupying power. we will take action against threats to our security and our allies, while building an

architecture of counterterrorism cooperation. we will increase efforts to lift up those who encounter extremist resolve.s and seek to and we will expand our programs to support civil society, education, and youth. ultimately, these investments are the best antidotes to violence. we recognize as well that leadership will be necessary to adjust palestinian and israelis conflict. as bleak as the landscape america will not give up on the pursuit of fees. understand the situation in iraq and syria and libya should secure anybody of the illusion that the israeli consulate is

the main source of conflict in the region. for far too long, that has been used as an excuse to distract people from problems at home. the violence engulfing the region today has made too many israelis ready to abandon the hard work of peace. that is something worthy of reflection. within israel. clear -- the be status quo in the west bank and gaza is not sustainable. awaynnot afford to turn from this effort. not when rockets are fired at innocent israelis, or the lives of so meet palestinian children are taken from us and gaza. so long as i am president, we will stand up for the principle that israelis, palestinians, the region, and the world, will be , withust and more safe

two states living side-by-side in peas and security. -- peace and security. this is what america is prepared to do, taking action against media threats while pursuing a world in which the need for such is diminished. will never shyes away from defending our interests. we will also not shy away from the promise of this institution and is universal declaration of human rights. peace is notat merely the absence of war but the presence of a better life. i realize that america's critics will be quick to point out that at times, we have failed to live that americaals, has plenty of problems within

its own borders. this is true. in a summer marked by instability in the middle east and eased europe, i know the world also took notice of the small american city of ferguson, missouri, where young man was killed and a community divided. so yes, we have our own racial and ethnic tensions. and like every country, we continually wrestle with how to reconcile the vast changes wrought by globalization and greater diversity with the traditions we hold dear. welcome the scrutiny of the world, because what you see in america is a country that has steadily worked for dress our problems, to make our union more perfect. divides that

existed at the founding of this nation. not the same as it was 100 years ago or 50 years ago or even a decade ago. we fight for our ideals. we are willing to criticize ourselves when we fall short. because we hold our leaders a freeable and insist on press and independent judiciary. ouruse we address differences in the open space of democracy with respect for the rule of law, with a place for people of every race and every religion and with an unyielding belief in the individual men and women to change their

circumstances and their countries for the better. after nearly six years as president, i believe this promise can help light the world. seen a longing for positive change, for peace and for freedom and for opportunity and for the ends of bigotry. circumstances and their countries for the better. after nearly six years as president, iin the eyes of you'e met around the globe. me that no matter who you are or where you come from or what you look like or what god you pray to overview of -- or who you love, there is something fundamental we all share. eleanor roosevelt, champion of the u.n. and america's world in -- role in it, once asked, where universal human rights begin? in small places, she said, home, some -- close to

small, they cannot be seen in any mass in the world, and yet they are the world of the individual person, the neighborhood he lives in, the school or college he attends, the factory, farm, or office where he works. people,he world, young are moving forward, hungry for a better world. around the world in small places , they're overcoming hatred and bigotry and sectarianism. they are learning to respect each other despite differences. the people of the world now look -- to bee two bst for

as decent and courageous as they are in their dear lives. -- their daily lives. i promise the united states of america will not be distracted or deterred from what must be done. we are heirs to a proud legacy of freedom and we are prepared to do what is necessary to secure that legacy for generations to come. i ask that you join us in this common mission for today posted and tomorrow's -- for today's children and tomorrow's. thank you very much. [applause] >> that was president obama covering a number of topics, has suspected. russia, he made very firm remarks. ebola, climate change, and an ofended discussion, monolog, serious and the threat posed by

islamic extremism. let's bring back the former security adviser to dick cheney and her own chief washington correspondent peter cook. john, let me begin with you. listen to the president's marks, firmnessuck by the with which he discussed user ukraine. do you share that view? more important, what else surprise you? >> i do share the view. i thought he was very strong going after the russians in going after putin for what they had done in the ukraine, and what the president talked about, a fundamental challenge russia's accident posed to the world were to order. a little less specific on exactly how we will help ukraine . technical question is whether we will provide lethal military support that would allow the ukrainians to continue pushing back these russian backed separatists.

line is the president was tough on russia and i thought appropriately so. the other thing i have to say that really jumped out at me was that discussion of the broad phenomenon of violent extremism grounded in the muslim religion. the president went well beyond the focus he has had in the past six years on a narrow russian of al qaeda or cooler -- work for al qaeda -- al qaeda or core al qaeda or even ices. world, someslamic portion of the population all too readily walking to the flag violentnce is -- radical islamic extremism. the president went farther than ever before in expanding the area of the battlefield and taking it beyond not just a fight purely on security and military grounds, but on a

generational struggle. what president bush called the freedom agenda. president obama going far beyond, what do you think that means? >> it means the president chosenands the policies for the past six years of narrow counterterrorism strategies go after core al qaeda at the heart of the problem has -- is not enough. it has to be a much broader strategy that does include the united states working, doing the hard work on the ground, diplomatically, economically, clinically, to help these societies and give their people a choice, a third choice, not just extremism on one side and dictatorship on the other, but a more open, transparent, civil society governed by the rule of law to give these young people that dominate the middle east demography some degree of hope

and a better future. wordsre was not much given to the question of iran. how do we interpret that? if the president reluctant to antagonize iran at a time where they might play a role in the middle east against syria and the islamic state? >> it merited a few paragraphs in this beach. not the kind of tone we heard with iran with the threat posed by the islamic state. you could read it a couple of ways. there are intense negotiations with iranians over nuclear programs. they are involved in the syrian conflict. is a president who would like to move forward to a diplomatic view of the leadership issue and other issues. they are not there yet and not ready to go hand-in-hand with iran on anything. you, peter cook. john, thank you very much for the former security advisor to dick cheney. >> we need to take a break. when we come back, we will stick

with the chairman of google, eric schmidt. ♪ . .

>> live from bloomberg world headquarters in new york, this is "market makers" with erik shatzker and stephanie ruhle. >> you don't need google to find this -- look for a book on the world's most popular search engine. google's chairman, eric schmidt wrote one. fax is this the passport to the blackberry turnaround? the one-time leader launches its new smart phone. we will talk to blackberry ceo, john chen. >> welcome to what will be a great hour here on "market makers." fax indeed it will be. >> there have been dozens of

ands written about google others one by a true google insider, executive chairman, eric schmidt. he cowrote it with jonathan rosenberg, the company's former product manager who helped develop gmail and android. makers." as irket like to joke -- how google works, i typed in google. >> that's the whole idea. it's got to be that simple. >> and that's the idea of how the company works and that's the culture? >> it takes a lot of culture behind that but it talks about of you build a come any smart creative to build a company for this new world. >> you have been a google since 2002. >> correct. google's success would you attribute to its culture? >> i think the fact that people at google really believe the slogans, they live the mission

is one of the primary reasons we've been successful. there's absolutely no question that having people who are the smartest creative's completely engaged in the mission and vision of the company is what drives our success. >> that statement, believe the mission, is what makes people like silicon valley. but is it too flowery? google is a cutthroat business. believeeople actually this stuff and we know it because we test them for it. do they understand what we are trying to do and do they care about changing the world? it's easier to manage at company where this frame that way then you have to work hard to get this extra set of earnings. if you set an model and ask people to push themselves higher, you get it. >> if culture is that critical to google's success, is it something you can put a value

on? if so, do investors have a clue how? at the tail end of this process. hire the people, build the product, the product does really well. perspective, they probably don't care how the formula works, so long as it works for the long-term. the model we describe is a generational model. >> they care about it inasmuch as some companies have it and others don't. don't have a successful, productive culture. google is a pretty innovative topany and has managed remain an innovative company even though it generates $60 billion a year in revenue. lots of other big companies are having trouble innovating and i wonder how much of that is in regards to culture. >> google is not first and foremost about revenue and earnings will stop its about

innovation and impact, and the employees believe that. our goal was to make innovation occur over and over again. u2 and many thing -- >> the only reason i brought up revenue is for other companies, it seems to be a size problem. once it does, it becomes difficult to innovate in a transformative way. then they just seem to run out of good ideas. i don't know how much of that is a function of culture or leadership. >> i think you try to focus on small teams and you try to focus on small teams chartered to attack big problems. acts, not 10%. to dollows people

something like grant like a self driving car or giving people all over the world internet access. >> just yesterday, we sat down with the ceo of digits self who says -- i'm going to share what he said. >> google says to all of these people we are having a party at our house. they are not giving us any revenue share, so we pay all the. they are having a fantastic party but not bringing anything, bringing any drinks or food to the party. >> he's basically saying you want the world to become connected and help the developing world, but you are not doing anything to help that. >> on the contrary. we are building balloons that

will allow people all over the world who currently do not have internet access to be able to get online and they will be doing it with smart tone that they've never had before. the roads and the mcdonald's and the franchises to make that happen. these are products we need. driving -- all of the telcos are seeing fantastic ire list data growth. >> you mentioned smartphones. how do you feel when you drive by annie apple store and there are people lined up around the block? way more people carry android phones -- how does apple have the desire factor? >> samsung had these products a year ago. >> and no one had a huge hearty. in the last month when samsung launched their new products, nobody was having a party. >> i think samsung had the part

-- have the project a year ago. >> does it worry you at all that the companies that have adopted can't make as much money in the smartphone business as apple does? >> it's a great business model for google. you populated the world through these mobile devices. increasingly, the likes of samsung and others aren't delivering results. >> if you look at digit cell as an example, they pioneered a low-cost models across the world. they've been a good partner. you can make a small market share with a lot of products or you can make the same amount of money with the same amount of market share. we go for volume in our strategies. >> and it is a model creating far more choice for consumers and it is driving the cost of smartphones down for consumers. >> this riddle competition between apple and google over

android and ios has enormous benefits for consumers worldwide. competition benefits billions at the people level. >> is it as brutal as it ever was? >> yes. theven though you finished patent disputes. >> for handset manufacturers and for the benefits of the consumer , there are phones in china that are a $100 retail phone and in india, they are $70 phones. think of the impact on humanity a window on the world. >> would it be better if it was something more than a duopoly? >> it's always good to have more competitors but between apple and google, you see enormous

racing. >> how does it work? amazon is a competitor as well as a partner. how do you balance the two? and do we believe it? how does it work? toes.y keep us on our collectively to grow the pie and build the industry as opposed to fight over smaller portions. >> amazon is an android user. google is a large search partner and tough maps competitor. >> what about alibaba? has largely been separated from everyone else because they are primarily focused on china. job have done a fantastic of anticipating the emerging middle class in china and china is a very big place. a has been saying that

is very much what he has in mind. >> jack is incredibly clever and deserves all the credit for building one of the great internet companies of the world. it remains to be seen how the chinese model moves outside of that. this is the next great challenge for them. we partner with them if we can. >> are you concerned about their ability to acquire? he's got an awful lot of money to buy some big businesses here. >> so does google. >> there you go. you think you're going to anytime soon? what is the best way to enter a new market. could rephrase the question -- you don't enter new markets, you build fantastic new

products that can change the world and that defines the market strategy. we talk about this in the book. you don't define the market, you define the product. think about the thing an incredible product and changing. >> how many companies around the world do it that way? certainly plenty of new ones uber did. look at what they took information is basically free. every driver in every consumer has a phone and they can connect the needs through the smartphone and fundamentally change things. >> or tesla reinventing the automobile. in every market, there is someone who has reimagined the product in a way that is challenging incumbents. what raw that has changed a world the most? google, facebook --

>> how about the internet? 10 years ago, nobody in our audience here was sitting here with a mobile phone next to the bed. this connectivity has changed everything. , text, picture, picture, picture. it only happened in five years. >> we have talked about alibaba and amazon. wait. do you think that hurts humanity? a huge benefit. i have a strong opinion on this. empowering individuals is the with this as al society, as a country, as the globe will stop empowered people are smart. human nature is good. give them the tools and let them run. >> does your mom think that?

>> yes. >> many people think some level of humanity has been lost. fax i think when you look at technology, when someone says they don't make them like they used to, what onyx are they talking about? >> love letters. >> 10 years ago, there is a huge thing about bowling alone. remember the whole thing -- everyone's going to be isolated. everyonebowling with all the time. >> i don't want to bowl with anyone. but few have an off that and. >> marissa mayer work for you for 10 years or so. >> 13 for jonathan and myself. >> can she save yahoo!? >> yes. the quintessential smart creative. yahoo!, shen save can. she's the best ceo they've had in over a decade. she has clear product vision and understands the kind of

functionality they need to build. >> jerry yang is responsible for alibaba. >> ultimately, leadership is around products, not about cash stop the fact of the matter is you can invest and make money. what matters is does the product make the world better. >> do you see products coming out of yahoo! now question mark >> i use their weather app every day. are going to save the company? >> marissa was the chief designer of the single page you mention. she's a very talented product designer. >> you are so proud of the book. it is extraordinary. as people who are on tv everyday, it's hard to watch your own stuff. have you read the book? >> yes. not only did we write it, we read it again. >> what was the most special takeaway? >> the strategy part. the definition of smart

creative's. why is it you can isolate and identify what makes google so special and ideal a force for good in this world and the folks across the pond in europe see it a totally different way, that google is the biggest anti-competitive threat to microsoft. >> europe has to choose innovation and right now, they are in a tough situation, entering a third recession. the only way for europe is to embrace innovation. they are going to have to have and flexible labor markets there's plenty of talent in europe will stop the model has to shift. to doclear if you want that, you have to play in this world. >> thank you. congratulations.

eric schmidt and jonathan rosenberg. >> coming up, blackberry shifts gears. the ceo counting on a new smartphone to win back business users. you will hear from him in just a few minutes. theisco wraps up competition. we will speak to the company's cfo. ♪

>> you are watching "market makers." the ebola outbreak in africa is getting worse, not just by the day but by the hour. there are 6000 confirmed cases but the actual number is likely to be much higher. the center for disease control says there could be more than a million. the united states has pledged to help combat this deadly disease but a report in bloomberg businessweek shows how unprepared the government is here for a potential outbreak. brendan, where are these failures taking place. there is a drug -- >> there is an idea. the problem is the government has to be a pharmaceutical company. we don't have a choice will stop the government has to be a pharmaceutical company. i will walk you through why. for viagra and lipitor, there are markets and the reason to develop that drug and invested

billion dollars. you don'tor anthrax, need it unless all the sudden everybody needs it will stop there is no natural market for it until there is a catastrophe which is why the government has to get into the business of sponsoring research and the pharmaceutical company operation of taken an idea and moving it through clinical trials. >> the u.s. government has proved its capable of doing many things but has proved itself and that in doing many other things. based on what you have seen and what you know, could the u.s. government do this? x yes. of peoplewo teams working on this -- one is on the pentagon side and one is on the human side. let's start with the pentagon -- the cocktail of antibodies that may have an affect on ebola seems to have helped two people. years --stuck for two and i'm not making this up -- in the contracting process at the

defense threat research -- reduction agency in the pentagon. ,he agency said this is a idea we want to get it into trial but we have to get into the contracting department will stop that took two years. access not unique to how the system works. it's worse than anywhere else in the pentagon and its definitely not conducive to getting drugs for approval of stop on the civilian side, you have part of nih. >> which basically lost all of its funding. >> yes. they can contract faster, get moneys to drug companies faster. it takes a lien dollars to get a drug through approval. they have a $100 million budget. >> why don't they treat it like a defense contracting case for the f 35? budget, but at the end of the day, we may get the

fighter plane we may need and at the end of the day we may get the vaccine or treatment. >> it's a great question. a fighter plane is not a vaccine. how tocompanies know take 100 ideas and kill 99 of them. the government doesn't know how to do that will stop it takes forever to buy it at 35. the pentagon knows had two fighter planes and by aircraft carriers. the active starting a program, they know they don't have a problem doing it. focusing on one drug in getting it to the process, that is not how pentagon contracting works. solution.he >> what does this say about how prepared or unprepared we are for biotech? >> every president relearned this. bill clinton freaked out about bioterror toward the end of his

administration. he appointed someone to do it and then was fired by george w. bush and then rehired in 2001 when they realize there was a problem. withcheney was obsessed bioterror. ,nside the bush administration it took until 2006 to realize they had this problem that we have research but we cannot turn it into drugs. then that research got lost again with the new administration and now obama is hyper focused on bioterror. every president has to relearn this. that's why we are bad. it is really hard to do two things as a president. one is to do money -- to spend money on something that hasn't happened. -- who is doing it right? >> nobody. >> isn't that scary or? >> the scariest thing about that is everybody says what is going on right now in west africa has no precedent stop there is some

understanding in the world. >> influenza in 1918? >> yes. all of that expertise is lost and we did not handle that out rate very well. ebola has been containable in small villages. there's no agency in any country that knows how to deal with it. -- and this may go beyond your area of expertise, but would help if the who declared this an epidemic and countries were first -- were forced to respond accordingly? those responding to the outbreak and those watching from afar. >> we have a problem which is that we don't -- one thing that's happening is in all of these west african countries, the ones helping are the traditional colonial powers. it is amazing that relationship still exist. thosea and liberia --

former colonial powers are not talking to each other. this idea of 15 countries converging on an area of the world, trying to fix a problem the scale of which we have never seen before, we could throw money at it but we don't know how to fix it. >> they wanted an air force jet to bring home americans that were infected. >> the air force is specific about making sure i understand this correctly. and they have not confirmed this happened, but i was told by two people -- when the president said we are going to bring americans home who have ebola, you have airplanes outfitted to do this. have a couple of c-17's with containment units -- the state department said can you do this any air force as we do that for servicemen and women of stop this stuff is hard.

it makes every administration look feckless because we don't know how to do it. just getting the air force and state department to cooperate is really hard. >> we are back in two couple of minutes. ♪

>> live from bloomberg world headquarters in new york, this is "market makers" with erik shatzker and stephanie ruhle. >> welcome back to a great day ane on "market makers." >> amazing lineup of guests. you are about to meet another. it's thethe gross -- 800 pound gorilla in the networking business and in rates a ton of cash, but not much in the way of new revenue. sales fell for the first time since the financial crisis. cisco's chief financial officer is here and armed with the

answers. frank omelettes again with this question. why is it hard to grow? >> the first thing is the scale. when you are a $50 billion company, you've got so many different markets and geographies around the world. for us, every quarter is new revenue we have to generate stop 80% of our business has to be new every quarter. softwareanies like companies have recurring revenue and sign up a license agreement and there's ongoing revenue. we need to sell a new product every quarter. as you start dealing with the size and some of the variations that occur in the marketplace. this past year was emerging markets and the political environments and emerging markets were challenged. that's what he 5% of our business. the key thing we focus on and

how you start this is where is the growth. we are growth company and we have to emphasize where the opportunities are in the market lace. wehave to invest in that and feel the work we've done to realign the investment, focus on cloud data center, focus on security, services and software, those are areas that customers want more of. >> why is by the biggest cloud or trying to be the biggest cloud the right move? what it starts with where the customers are going. if you think about the whole internet, it started with disconnecting people and then it went to e-commerce of stop it's really what is happening in social. the next phase is the internet of everything and that is being driven by two things -- cloud and big data. how do you access more of that information and make it more pervasive in business and

society so you can make more intelligent decisions? cisco, wewe have in want to make sure we can on behalf of our customer, go to the cloud and enable the technology to give them what they are looking for. clearly you are trying to transition a company from the business everyone has known it were two other things like cloud computing and security. it would be so much easier if you could behave like a startup and not have to remember your legacy products and customers. why not just say i'm sorry? you've been there for us for years but we need to focus on these new markets which, by the way, you need to focus on also. >> for us to grow as a company, it goes back to innovation. innovation is article. how do you continue to innovate?

we innovate in three different ways. we try to get small teams to focus on those types of innovative technology. the second thing we do is acquisition. we have done over 170 acquisitions. even to that we just announced last week. bring that an early and help develop. the third way is we do what we call spin outs. we get seed money and a small team funded completely by cisco. bear left on their own to develop a stop fax you are going to stay with us but we need to go to san francisco for a moment where our colleague emily chang is sitting down with the ceo of black berry. >> i know you guys are addicted to your blackberries. i have been trying out the new blackberry passport. it looks a lot different and the

square screen is radical from a design perspective. joining me now is john chen, ceo of lack very. this is the first smart phone you have unveiled globally. how did you come up with the square screen? >> we talked to our customers and they love at how they use the device for productivity and looking at the new style apps and vertical apps and health-care apps come a we wider one to one ratio is what everyone will need for achieving more. that is how we came up with that. >> how many do you think you will sell? my background is very noisy. >> what is your goal for the phone westmark how many do you think you will sell?

>> we expect it to be successful, but the market will tell me that. we have various different ideas we could use as a mother-daughter type approach. how thehave to gauge market responds and so far it seems to good. >> let's talk about the market. idc says blackberry global shipments are lower than 1% and by 2018, market share will be oink 3%. where do you think it will be? >> my job is to make sure that doesn't happen. good plan ande a good set of portfolios. despite everything we have gone through, this is the third own we have released this year. there is one coming out in a couple of months. zedtarted out with the

three and it's now and 13 companies. we just announced the porsche designed phone on september 17. we are doing it here in toronto and my colleagues in dubai and london, i think we could pick up be pace and we should gaining market share as we move forward. theour job is to make sure phone doesn't bend. you took a jab at apple, challenging us to bend the passport. what do you think of these reports that the iphone can bend ? i've seen it happen in a video. >> i have no idea. i read before i came here this morning and i thought it was amusing. i cracked the

essay in good humor and not to be mean to anybody. hand, our passport it'stremely well else and somewhat of a challenge but you have to put in your pocket and see whether events are not. i doubt it will happen. >> seriously -- did you guys actually 10 -- did you guys actually bend this for testing? >> we do a lot of mechanical testing. we do theow if bending but we showcase the five layers of the phone, including the antenna, which is a complete steel frame inside the phone. bending that needs a little effort all stop >> what do you think of the new iphone and the apple watch? >> what do i think? -- i don'tw enough

know how to comment on that. my audience is people who strongly need productivity and this phone should feel to them. >> one thing you do know is the president is addicted to his blackberry. did you send him a passport to test out? don't think we gave it to the white house yet. i could be wrong. i would love to have president obama use it. a lot of head of states use back barry with extra security and this will continue on. >> how about this -- black berry shares are up almost 70% you to go over. investors are counting on you and seem to believe to you and you say blackberry will be by 2016.e any likelihood you can do it

sooner? we will beeople profitable in 2016, so sometime in the 2015 calendar. dependingand by it, on the receptively of these phones and the classic coming out in two months. expecting to see some growth next year. oni could get some growth the top line, i will be able to make it profitable sooner. john chen, thank you so much. i will send it back to you. >> like berries are near and dear to me. i don't have this new passport will stop everyone is big.aining they are so have you seen the new iphone? asked let me get it out of stop it has not -- let me get it out. it has not ends on me.

>> stick around. we have a lot to cover. we will be continuing our conversation with cisco ceo, frank l baroni. frank calderon he.

>> we are handing out awards here today and the rise of patients goes to frank calderoni. we were having a fascinating conversation. let's continue it. you say cisco has a number of leaders that it can pull. cisco has a whole lot of acquisitions will stop i know -- is nowy has been not the time to consider something transformative has paid $6co billion for a company back in 1989.

-- 1999. >> what those exciting mean? >> financially exciting. i'm trying to think like an investor here. for us isiting thing innovation. how do we continue to innovate? we do from an acquisition standpoint is make some investments, either small companies we invest in and let them grow within the company and that helps us innovate and start to disrupt. an example i was sharing before is mcm a network switch we funded outside of cisco and the fining networks and how do we start changing the landscape. putting the software layer in through applications that allow customers to then control more of what they want to do and make it more flexible to meet their incrementaltop fax innovation -- you need a lot of

incremental innovation to make a difference on the bottom line. company and it takes a lot to move the needle a big company. >> you think about software design -- that's a big move. >> hardware becomes a commodity -- >> it is leveraging the hardware because companies have invested a tremendous amount and you need the physical layer of the network. the key thing is the software layer and that makes the hardware they are much more intelligent. companies thatng want to use the network to look at it supply chain from one side to the other, having the application, big eta and cloud opportunity makes it much more efficient, and effective in their business. >> what is the transformational acquisition? where do you need to go to say this is the next and ration cisco? >> i would say it's moving much

more into software, having services play a much more critical role because we have to help our customers as they transition. the other thing is security. top of mind for customers -- all of the breaches we have seen, the network is critical in that. help you manage that security as things continue to get more complex. they are not safe today. how do we make them safer in the future is to mark >> there are a lot of people who think you should buy emc. partner for many years that that's not one of the acquisitions we are looking at. >> the cfo of cisco -- so good of you to stay with us will stop x good to finish the conversation. arehen we come back, we talking about another all-star -- not only will derek jeter

sell you the shirt off his back, he will sell you his dirty socks will stop there are a lot of things i want around eric jeter and it's not his dirty socks. ♪

>> welcome back. i'm stephanie ruhle. if you want a piece of the legend, new york yankees star derek jeter is wrapping up a career that has lasted over two decades and it seems like he's a link to sell you everything but his undies. a memorabilia company is offering one of his game worn dirty socks for only $410. you don't even get the complete hair for that price. just one single thought. a dirty wristband for $700 -- eight ring training cap, almost $2200. eight game worn jersey, complete with jeter sweat, $25,000. there must be some big yankees fans out there. doesn't that kind of blow your

mind? >> yes. >> a single dirty sock -- where are you going to put that? in your man cave? gross. that leaves me speechless. >> me to, which is why haven't been saying anything. >> i do like derek jeter. ♪

>> i'm saying it -- an awesome

way on "market makers." >> including eric schmidt and john google -- john rosenberg from google. it sounds kind of warring, but it's not. >> and how much they like marissa mayer. >> if anyone can turn around yahoo! -- she worked there for 13 years. >> the question is can anyone question mark >> we're going to goodbye. 66 minutes -- 56 minutes past the hour and that means bloomberg is on the markets. >> we are diving straight into derivatives because it's time for today's options inside. guestg me for more is my from bayshore partners. we had three straight days of declines. u.s. stocks opened mixed and we have a little bit of a rebound -- 17,140.p 500

we still have the rest of the day. is this the return of volatility everyone has redacted? >> i think the vixen is telling -- part of the markets are feeling stress. -- the debateets thet now on wall street is russell is going to impact some of the industries and bring the market down. i don't inc. that is the case as we stand right now. what we see is people buying protection and some of the industries. eyeing inot of put emerging markets, so there are other areas of the markets and we have not seen a rush to get protection on the s&p just yet. >> how about the rush for small caps?

>> yes, but volatility is not the prediction is still very cheap. >> let's stick with the big caps for a minute. my trade is by the great. the october 198, 190 foot tree. you are effectively buying the 198 put spread and you are paying for the cost of that with an additional 190 strike put. you are effectively getting three dollars worth of section. if the markett is then you have to

buy at that point in time, but don't forget it is a one-month trade. the opportunity to buy the extra 191 you are selling. trade. is a short-term how about bed bath and beyond question mark this company came out with results and the stock is moving. what does it indicate? >> we are seeing weakness in other retailers, but bed bath and beyond surprised to the upside. selling and weit -- 75 call spread for three dollars and change which effectively tells me people are saying it's nice but at the same time the upside from here is

somewhat limited. the stock is turning out to be cheap, whether it is price to sales or price to earnings. they are buying a lot of stock to help the numbers. is right now, the market positioning for a little bit of a false. spike in thebig share price. thank you for joining us. we are back on the markets in 30 minutes. "money clip" is next. ♪

welcome to "money clip their ." ebola by the numbers and then there's ebola in reality -- we will get a perspective to the worst outbreak of the deadly virus. buffett versus benmochet. the turf or has not amounted to much. this is a bloomberg exclusive. the mysterious case of the disappearing ceo and missing cash in china has been solved. a story will only see right here on bloomberg.