two glorious hours of news. all the stuff you need to note and your weekend begin your weekend. i am erik schatzker. matt: i am matt miller. on the agenda, greece. china. oil forever and ever. apple. we could do a show on this every day. erik: health care technology is matt: coming up this hour. -- erik: health care technology is coming up this hour. greek law officials approved the third bailout. the three-year plan has been approved after an all-night debate. this could bring greece 85 billion euros. none too soon. greece mucst make a large paymet six days from now. primus or alexis tsipras urged passage and he won support from

opposition lawmakers while members from his own party resisted the cutbacks to creditors demands. finance ministers are meeting today in brussels to consider the whole package. you figures revealed a slowdown in your area growth. roseross thomistic product 3/10 a percent. economists expected a stronger showing. the weakness especially pronounced in france, where gdp stagnated 20 -- to zero. germany's economy grew 4/10 a percent. we will hear from our rome bureau chief and a couple moments. and hans nichols is here as well. matt: 4/10 a percent. we would not be happy in america. be seen inction to ages stock markets. china's currency stabilized. the unexpected devaluation earlier this week rattled world markets.

the currency is studying the second straight day, easing some of the uncertainties. the un's reference rate with china's central bank rose for the first time since the evaluation tuesday. just 1/10 of 1%. japanese prime minister shinzo other -- abe express profound grief for all who died in world war ii. seven --s after the the 70th anniversary of the country's surrender. he also expressed apologies for japan's actions. erik: a surprise for the football field. tom brady in uniform. the patriots quarterback was the starter in new england's preseason loss last night. he has been in and out of courtrooms fighting the deflate it suspension. -- deflategate suspension. matt: we start with the five things you need to know this morning.

i get to talk about autos. its stock offering to 2.7 million shares to 2.1. it is looking to raise 250 million. it was only going to raise -- erik: but when your stock rises on it diluted share offering -- matt: bring it on. erik: for it is more than a $3 million market cap. they could do more. matt: elon musk said their capital expenditure needs are amazing. erik: in the billions, right? oil headed for its longest run of weekly declines since january. t drivingl what -- glu prices to the lowest in six years continues. just a fractional recovery. oil trading at around $42 a barrel. it hit $41.35 yesterday.

opec is saying we want not cut production. we will see who can stand lower prices longest. you are talking about the marginal costs. the marginal costs in west texas is $10 to $20 a barrel. having gary shilling to talk about deflation is like having the pope talking about catholicism. erik: some people listen to a is oile gary saying how $10 a barrel? but it was there at 20 years ago. matt: we moved to julie hyman for our number three story. julie: you guys have been eagerly awaiting apple tv offerings, but you will have to wait longer. it is not coming in on so christmas of 2016, if it does not get pushed back again. the company is delaying services

until next year. people familiar with the talks says that the license programming talks with networks are progressing slowly. they also do not have the computer network capacity to ensure a good viewing experience. in talks to offer music for $.99, they had bargaining power, but it is not clear how much they had in this case. matt: they are still expected to announce a new apple tv box. erik: two different things. matt: but it is called apple tv. it could be misleading. erik: or inspire confusion. -- iser if apple will beginning to run into more resistance from some of the content providers, given the angst around the future of the cable bundle that has arisen in the past couple weeks. julie: we saw that with all

their various media companies feeling pain from declining ad at espn, the case slowing subscriber growth. the train has left the station. it seems like cable companies will have to adapt. matt: hbo has done well with hbo now on apple tv. most htc, it was once the best -- the best-selling brand here. but it is planning to cut operating expenses by 35 percent. its workforce by 15%. people are questioning whether htc is a viable manufacturer in the smartphone market. it is such a dramatic change from four years ago. this is the company google turned to to build the first android phone. it has ceased to become relevant along with nokia and blackberry.

matt: this is an industry where you can go from champion sue loser in a quick amount of time. is nor to be seen in second quarter smartphone shipments. matt: iron member when nokia was the only mobile phone brand anyone cared about. erik: but where we are moving is only havely where you apple and samsung selling smartphones in the developed world. matt: in the u.s., we are already there. when you ask someone what kind of phone, you asked you have an apple or a smart -- or a samsung? aly total weirdos have blackberry. from canada. i am joking. not surprisingly, hedge funds in hedge funds that are invested in china had their worst month since 2011.

dealing with the slowing economy, a $4 trillion loss in equities, pine rivers' china fund loss 6.3% in july. it could get worse. 6.3% is not so bad, considering what happened in the markets of their -- there. hedged.od they were erik: for not that leveraged. we need to move on because the euro area economic growth figures we saw this morning were very disappointing. france is no longer growing. do not color a recession yet because it is just one quarter of data. but you can see what is going on. the point is growth is slowing. thisolicymakers called "recovery" disappointing and said they are ready to adjust stimulus if needed. we want to dig in more deeply. our rome bureau chief assange a

migliacci -- alessandro migliacci and hans nichols is with us. these numbers are worse than you think. a votto the german growth was driven by consumer spending. unclear if that continues. and german exports have been renovated right a weaker, softer euro. think three, if you france is bad this quarter, wait until you see what happens next quarter when they had to deal with greece when it was a better influencer. greece was not really priced in. with the exception of greek numbers, greece was not priced in on a negative side this quarter. that will show up in the third quarter. up becauseending was consumers were worried about capital controls. they started buying big ticket items. that drove greece higher. >> is there a difference in the way europeans measured gdp?

i constantly see fractional numbers every quarter. here, we are used to seeing -- 2% is tepid in the u.s.. half a percent in germany is not so bad. >> that is right. it is the way the economy is structured. these are slowly economies. the labor market is often rigid. things move slowly. italy, the government was happy with a zero point 2% increase. the real problem as hans pointed out is the european economy is on steroids, basically. zeroyou're seeing these oe point growths. what will happen going forward? people governing be able to pass reforms, be expected to pay for tax cuts they promised to get the economy going?

if this is happening with the economy on steroids, we will not know what happens next. >> can we talk more about renzi? it looks like he finds himself in a is a cult show me situation as prime minister. he made these promises, yet the economy growing just tenths a percent last quarter. >> exactly. he is in a difficult position. his popularity has fallen. he is still ahead of his rivals, but the problem is with this popularity decline, he might be facing internal issues. people in his party not happy about some of the things he is doing. not growingnomy enough, he may not be able to deliver on promised tax cuts. one of the big things he wants to do. he cannot cut is less taxes, important to boost the economy. he could face some sort of palace coup, which is not

unusual in the land of machiavelli here. >> you tease this out to see what it would do quickly. it will be difficult for francois hollande to re-win you action. he promised growth higher and lower unemployment. it will not happen, especially if france slips into recession. we have a difficult vote in the u k -- u.k. palace coup, a reshuffle, or snap elections in italy. we will have snap elections in greece likely in september. how that gives any investor and then we will be in the same route again. mario draghi will keep the printing press running for fight sometime. >> angela merkel will hold her position strongly. erkel is not- m really in threat. there.eave it

hans nichols in new york this week. alessandro migliacci, our rome bureau chief. cloud.ealth care in the we find out how one company is using tech to revolutionize one of the fastest-growing growing areas of the industry, coming up. ♪

♪ >> would you look at that? where it secretary of state john kerry arrives minutes from now to raise the american back over the embassy for the first time in 54 years. matt: wow. erik: is that hd? matt: it looks nice. could go to the hospital for an mri or cat scan and have your results in less than 30 minutes. one company is turning wishful thinking into reality.

imaging advantage is using the cloud to transform radiology as we know it. here is their ceo and chairman, naseer hashim. thank you for joining us. the real revolution is that if i move to los angeles, god forbade, and visit a new doctor, i can get all of these images, or he or she can access them instantly by the cloud. >> that is exactly right. that is nearly impossible today. even if i wanted to go down the street where i live to get my images three or four weeks ago -- in fact, i went to the dentist to get my x-rays. he did not have them. he had to retake them. costly but this is a significant amount of radiation. having this in the cloud for people who need health care on an emergency basis is critical and is not available today. matt: why not?

it seems like a no-brainer. why does not everyone do this? >> that is a great point. people always ask me why do i have to wait two days for my results? why do i have to get testing done again? so expensive, i do not even know how much the imaging costs? this is the fundamental structural problem of health care. ofo not want you to think there are individual players making it more complex. it is a $2.9 trillion industry. it is incredibly regulated and being practiced the same way it was 50 years ago. radiology is almost identical in the way the patient goes into the room, the scan is taken, and the radiologist reads the tests. most hospitals have one or two doctors. the hospitals are not interconnected.

erik: why just radiology? includeexpanding to more types of medical records? >> first of all, not today. we are very focused on the $20 billion industry where we are at the early stages of it. part it seems it should be of a more comprehensive solution to this medical records problem. >> the technology we have deployed would work for other areas. emergency departments as well. to prove the concept on a large scale in one area. we have been successful in radiology. we do not want to de-focus because if you start to do three or four different sectors of health care, you will not get the results we did. matt: you mentioned regulation. i wonder if there are some other

types of concerns. every time i go to a doctor, i have to sign a million documents saying they are allowed to look at my blood test results. an important concern . we are regulated by them and any kind of transmission over the internet. we are in the departmental of defense. we are protected by the dod and fda standard. we are very safe and secure in terms of transmitting data. erik: how is it that your company, imaging advantage, clearly provide a valuable service, has a $1 billion valuation? is there that much money to be made, is there that much a growth opportunity in this industry? >> first of all, thank you for that number. the opportunity is

tremendous, which is why you see companies like google and ibm getting into this. we are at an incredibly early stage of unlocking this complex puzzle of health care. there is $1 trillion of waste in health care today. google's revenues are about 66 billion dollars. so a magnitude of 18 on the waste alone is the opportunity for companies like google. if you look at the entire auto industry, it is about 600 billion. it is almost two times that. even if you say we are worth one billion, it is a small fraction. the cloud computing you are seeing and the supercomputing you are seeing, which we are doing and google and ibm are doing today, when you apply that to a complex industry like health care, we think of it as hyper innovation. it there.ave to leave great having you here.

ceo and chairman of imaging advantage. we will be back in two minutes. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about.

i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. ♪ later today, to below ceo and founder joins us to talk requiringrules companies to disclose ceo pay. erik: fire still smoldering after an enormous exposure at a warehouse in china. officials say hazardous materials in storage containers spark the blast. the force of one explosion equaled 21 tons of dynamite. this crippled the 10th largest in the world.

history will be made in havana, cuba. the american flag will fly there half a first time in century. secretary of state john kerry will lead the ceremony as the flag is raised. today's event is the newest in the normalization of relations being pushed by the obama administration. is still unsettled. republicans still see another way. >> would you like to try to capture more people as president? >> if the people have information that is important for us to keep our country safe and they are organized to destroy us, of course. >> where you put them? inyou keep them there guantanamo. this is not a torture chamber. an expensive operation, but there is no other option i can see. erik: marco will denounce the

administration's cuban outreach today in a speech to a conservative group. officials say the current el niño is already the second strongest on record or this time of year. it could also be one of the most potent weather changes of the past 65 years. warming in the pacific ocean, cause winds to shift and change. the weather that is. andght-stricken california the east could have extensive rain. there are concerns about mudslides in areas hit by wildfires. matt: want to take a quick break? erik: we will. matt: you and i will discuss el we have this programming. ♪

>> you are watching "market makers." the measure of hold sale inflation climbing at a slower pace in july then june but rising twice as fast as economist had estimated. percent on a month-to-month final demand basis. if you exclude food and energy, a gain of three times a percent, in line with what analysts had been anticipating. this 2/10 percent increase following a 4/10 gain in june. some economists saying this firming up an increase in inflation we are seeing will fade away in the fall, especially with this continued oil prices. the federal reserve says that downturn is transitory and does not take into account the effect of oil prices. that is the trajectory we may

see as we head into the fall. for now, a little increase in wholesale inflation. you. thank julie britain as to the ppi headlines. the state fair in iowa kicks off. to barn animals and butter sculptures, almost every presidential candidate will make the rounds. big deal for is a iowans. you have to come here if you're running for president. almost everyone running will come because you get to meet people from all over the state. comment, you will snub the traditions. and lots of -- mix with thell voters. most of them, not donald trump or hillary clinton, will stand on the "des moines register" soapbox and take questions from all comers.

who is getting the most crowds? aside from the press pack, which is one indicator like animals before a storm, but who is getting the most crowds at the state fair? >> it started yesterday. mike huckabee and martin o'malley were here. eason-sized crowds. another reason candidates, and is that there are lots of people here. people see the cameras and gather around. bernie sanders, donald trump will be here tomorrow. i suspect they will draw the biggest crowds. >> defense has been known to define campaigns in the past. the fortunes of any or all of the 2016 candidates? we check in with doug heye. erik: because hans was on earlier, i have to ask this question. he described the iowa state fair

of the dabbles -- davos of americans state politics. i do not understand the analogy. they are sometimes inscrutable. -- was sayingwith why this anachronistic tradition remains so important. >> it is politics on a stick right now. you can have anything on a stick. but what you see is that it is the premier event in iowa, the first state that will consider all the presidential candidates. this is the opportunity for republicans and democrats to not but alsok on the stump to interact with voters one-on-one, which is crucial in iowa. without the iowa straw poll, which is not happening this year, that makes the iowa state fair even more important. it is a massive event and it is hard to understate how every

candidate has the opportunity in front of voters. how much of what happens in the iowa caucus will tell you what happens in the general election? >> the iowa caucus will not tell you who will win but it winnows down the process. it is like the first round of the ncaa. just because north carolina wins the first round, it does not mean we will win the championship, but we see which teams will not win. this is where we seek candidates drop out. conversely, all the attention is on the republicans because the field is so crowded. by if you're not in the race the time of the iowa state fair, can you still get in the race? over the past couple days, we have learned that possibly al gore is considering a run for the democratic nomination. matt: and possibly joe biden. hear a lot of

uneasiness with hillary clinton's campaign now. this e-mail server situation changes every day. we have been talking about hillary clinton and e-mails since february. it affected her announcement. it would not surprise me to hear joe biden may be taking a second look. the al gore news is brand-new -- erik:'s spokesman denies -- matt: his spokesman from his previous run. it shows there is a real uneasiness with democrats. if there is a hillary implosion -- we do not know if that will happen -- but you look at the poll numbers bernie sanders has now, the crowd sizes he has throughout the country, there is cause for concern. biden, oral gore, joe someone invested in those two, you want to sit pretty in case the implosion happens. it is shocking about bernie

sanders. he is putting up some real poll numbers. in iowa, which does not strike me as a very socialist state. >> iowa is this weird dichotomy. iowa goes both ways when it comes to democrats and republicans. erik: you are the deputy chief of staff to eric cantor. you know the power the tea party can wield. >> it hurts. the republican candidate is marshaling that wing of the conservative vote the best? trump's who everyone is talking about. the more interesting thing is the rand paul versus ted cruz fight. i thought it that whoever emerges victorious from that fight will determine the next 10 years of the republican party. it looks like ted cruz is winning now, but we have a long way to go. a lot of rebates. and rand paul is here to fight.

matt: is in the tea party incredibly fragmented now? you have parts that are libertarian and believe in total freedom and parts who want to control what you do in the bedroom. dichotomy part of the in the rand paul-ted cruz fight. mike huckabee also fighting for those voters. donald trump. have 17 people running for president. also, we have an open seat. we are so easy to take back what we lost in 2008. erik: pleasure talking to you. doug heye, former deputy chief of staff to eric cantor. he also runs the iowa caucus. back torn our attention the turmoil over china's devaluation. ♪

>> what is really going on in

china? the shock devaluation and the ham-fisted efforts to prop up the economy. are we on the outside looking at the wrong data and drawing the wrong conclusions? nicholas lardy's senior fellow at the peterson institute. i want to begin with a specific reference. these are three things people have been zeroing in on on an effort to explain what they think is happening in china. on the one hand, slowing auto sales. in 8% drop we saw in exports july. the collapse of the stock market. skeptics say those are better indicators of what is going on in china. and that explains why the chinese had to devalue the yuan. i am intentionally baiting you. what is really going on? >> of course the economy has

been slowing the last two to three years, but i do not think there is new development that warrants the kind of response we saw this week. the slowing of car sales is tied into the moderation in property sales. there is a high correlation. a lot of new houses in the suburbs where there is no mass transit. when people buy a house, they buy a car. property sales have been moderating quite a bit and is now showing up in car sales. i do not think it is related to stock market developments over the past two months. matt: is it just a bump in the road? generalof ford and motors say they will continue to invest in china because in the longer term, it is still a huge growth prospect. ownershipent of car is still low. it will rise over the medium-term. we may have a few soft quarters,

but i do not think it affects long-term output -- outlook. erik: i know you have taken a instructedna and others that you should not easily with the economy the way it was in the 2000. can you explain why? , industry was's the driver of china's economic growth which was reflected in the high rate of investments. we are moving into an environment where consumption has become the biggest driver of economic growth. money onending more services, education, health, tourism, entertainment. , likeaditional variables industrial output, are not a good proxy for what is happening in the economy. people still look at the industrial data because it is one of the high frequency numbers. we get the data every month. we do not get comprehensive data

on services on a monthly basis -- on a monthly basis. it is only on a quarterly basis. people fall back on the industrial production numbers, and they are weak. they have been offset set in a pickup in private consumption and service sector output. erik: support of the problem is there is not comparable data sets for private consumption, at least regular ones or ones that do not come with a huge time lag. had you help people who look at the factors you said earlier and others like the ghost cities and draw the conclusion that china is somehow a house of mirrors and that the big, official data the chinese government posts -- publishes masks and underlying weakness? i think you have to take a

more balanced approach. focus not just on the industrial sector, which is weak because property investment is therating, but look at all indicators, including what is happening in the service sector. people are saying free to transportation is down dramatically, the economy must eat in negative growth or in extremely low growth. that is because demand for steel is down so they do not need to haul as much coal. passenger freight transport is booming because there is an increase in terrorism. this -- a lot of this occurs on the rail system. what kind of growth do you think china has, relative to the growth in the u.s.? their data are not perfect by any means, but i am of the belief that they are growing roughly around 7%. year as a whole, we will

be in the high sixes, low sevens. i do not think there is a big discontinuity here and i do not think the stock market correction will have much effect on real economic activity. the share of the population that has exposure to the equity market is only about 10%. we will not see a big wealth effect. erik: will kind of conclusions do we draw about the way the economy is being managed, when receiving chinese respond to the selloff in the stock market by imposing ciccone and draconionns -- restrictions. in the devaluation no one seems to think was well-managed. >> the intervention in the stock market is regrettable. they have interfered in the stock market going back decades. this occasion was worse. i think it is regrettable. prices bed let

determined by supply and demand rather than intervention. on the other hand, i do not think the change in the exchange rate mechanism is shockingly mismanaged. you do not announce a change like that in advance. you have to do that without warning, otherwise you have chaos in the markets. i know it is not perfect, but if we compare it to quantitative easing here, as practiced eye and by and why the ecb the bank of japan, there was plenty of notice. it was not a surprise that the fed again to -- began to buy bonds. it was a question of when, not if. >> exchange markets are different from the connotative easing you're talking about. look at what the swiss national bank did. they did not send out advanced notice, they just did it. in the foreign exchange market, you have to do it -- that is the

what you have to do it. we are moving into a more stable period. we have some depreciation. but i do not think this move was intended to prop up the economy. >> and not a refection -- a reduction of japan. reflection of japan. >> i do not think so. the imf report came out last week. you will see the chinese move this week. >> thank you for spending time this friday. nicholas lardy is a senior fellow at the peterson institute. thank you. matt: let's take a look at futures. we could end of the week little -- the if the market stock market comes down a little today. 1% in up about 3/10 of

the week in the s&p. a gain after the drop last week. if futures are any indication, we could move lower through the day, erasing the gains we have seen. we will come back. 40 minutes until the new york stock exchange wrings its opening bell. ♪

♪ >> welcome back. two big names in the retail space on the move. julie hyman joins us with the details. here i am here: one doing well, the other doing worse. 4.9% tom has shares up earnings beat estimates. sales beat estimates. the company raising its forecast for the full year. its success more notable given we had disappointing earnings

from macy's and kohl's. stores have been struggling to some extent. not because for nordstrom. the company says copper both sales will rise up to 4.5%. are also better than we are seeing them the rest of the industry. the company seeing better sales of younger women's apparel. the man'squired personal shopping service. it says that is continuing to do well for the company. then we have jcpenney. jcpenney is still losing money but it lost less money than analysts had anticipated. thana share is narrower analysts estimated. the company is continuing its turnaround. mike ullman, who came back to be the ceo, is transitioning to

marvin ellison, who is coming from home depot. and you guys talked on it. i want to mention tesla again. it is rising again after increasing the amount of its share sales. we talked about yesterday that it is unusual for a company to offer more shares, diluting value for existing shareholders unhappy stock go up, which is what happened yesterday and is happening again. the size of the offering going to 2.7 million shares. >> i want to draw attention to one more thing in nordstrom's results. nordstrom rack is growing like a weed. revenues up 13%. -- comparable sales up it suggests nordstrom's getting most of its earnings power out of more fully priced merchandise. that is a big difference from macy's, which had to discount a lot of stuff. from: it is also a change

where the engine had been. rack had been the engine at nordstrom for a while. does this suggest if traders are trading up to nordstrom? unclear. at the am looking website and wondering why. what does nordstrom have that others do not? i do not get it. matter of the merchandise they have. also, nordstrom in the industry is known, in terms of customer service, it is near the top. erik: nordstrom sales to the upper-middle-class customer. i spent a lot of time walking back-and-forth or nordstrom. i suspect i suspect i am one of the only people to spend a decent amount of time in shopping centers. on hise arrives motorbike. next hour, we talk about

applebee laying its live television service until next year and why. ♪

>> this is "market makers." erik: good morning once again. it is the second hour of "market makers." i'm erik schatzker. matt: i'm matt miller, happily in for stephanie ruhle. plunging energy prices are starting to show up in the u.s. at the wholesale level. wholesale prices climbed at a slower pace in july. the increase in the producer , affirming was 0.2% that inflation may be on its last legs. the global oil glut is expected

to last until next year. the price of the barrel keeps falling. the greek finance minister is meeting with eurozone .ounterparts the greek parliament approved the three-year plan today after debating all night. it is the third bailout since 2010. the deal could bring greece $96 billion in rescue money. into today's meeting, the dutch finance minister says there is no guarantee that deal will be okayed without changes. erik: new figures reveal a surprising slowdown in eurozone growth. the gdp expanded in the second quarter by just 0.3%. economists expected a slightly stronger showing than that. the weakness was especially pronounced in france. french gdp flatlined. french consumer spending up just a fraction.

the german economy expanded by 0.4%. matt: after being held for nearly four months, the flash trader suspect could be free. he has not been able to make his bond payment, but i london judge changed the veil terms this morning. judge changedn the bail terms this morning. let's talk about havana. at the. flag will fly cuban capital for the first time in half a century. john kerry will lead the ceremony. the secretary of state has just arrived in havana. these are live pictures. he will meet with the catholic archbishop. he will meet with cuba's foreign minister. this is the first time the u.s. had a secretary of state in cuba in 56 years, i believe.

is it 56? yeah because the secretary of state did not go there when we closed down our last embassy. it is the latest in the normalization of relations pushed by the obama administration that will surely be a hallmark of president obama's legacy as president of the united states. it is something that still causes a lot of tension for sure. and with certain members of the republican party. marco rubio. matt: cuban-americans or more against this than anyone else in the entire country. erik: how many caddies the uc in the entire country -- do you see in the entire country? matt: i would love to go to see the cars -- they have so many 1950's cars suit up with modern

engines and suspensions -- souped up with modern engines and suspensions. erik: negotiations with programmers including cbs and 21st century fox stalled for streaming service. let's begin. apple has been in negotiations with content providers for quite some time. there was a lot of anticipation that apple tv or the television service would be live this year. why now a 2016 situation? >> apple had been planning on introducing a tv service sometime this fall. it would cost about $40 or half the cost of your typical cable tv subscription. they have been talking to major programmers at this point. the biggest sticking point is cost. apple wants to create a service that cost $40 and they want to

include as many channels as they can, but the programmers want to get fair value for their channels, as well. that is the major sticking point. matt: it is harder and harder to draw a different between apple an apple life tv service, and the apple tv box. you can watch baseball on it, you can watch hbo, bloomberg is on apple tv. as they add more and more content providers, what is the need for any kind of live television service? >> that is really what this is about. that's why this is a big step for apple in terms of going to the live streaming. we think it comes out early 2016. the delay is a slight negative. this is the broader vision for apple as they penetrate further into the consumer landscape on

screen, on wearables. this is really about negotiation pricing. they would rather get it right the first time. you never have a second chance to make a first impression. this could be a seminal event. erik: do you think that apple has the potential -- i hate to use the term -- to disrupt the television industry the way that apple pay is disrupting the payments industry? it could have an earthquake-like impact to the industry. that is why there is a lot of fear of what it could do. this.are a lot of eyes on across the industry. to see with this court cutting service could really do. they have been working on this for 5-6 years.

it looks like early 2016 is one it will happen rather than late fall. they thought they would announce it september 9. matt: hasn't the traditional television industry already been disrupted? cable television anymore. i watch literally everything on apple tv or my xbox or whatever, as do most people, right? >> you are not alone in that. matt: most young people who have access to these kind of things. >> we have been talking about cord cutting for a while, but pay-tvst quarter, the subscribers -- companies lost more subscribers than ever before. last week, we saw this big selloff in media stocks. investors are concerned about core cutting -- cord cutting. 100 million people still pay for

this. there are more and more people who can find pretty much all they need on tv, from netflix and amazon and hulu. , ifou are a tv program or you have sports or a hit show that people cannot live without, you are any good position. erik: quickly, before we run, we have been talking about cord cutting and un-bundling is a real possibility for a couple of years already. is this selloff and media stocks an obstacle for apple? if companies like disney and 21st century fox and cbs have to be recognizing that this now presents real risk for their companies and their ability to generate earnings and revenue going forward. >> you hit the nail on the head. it is more competitive. the bread-and-butter is hardware

and iphones. it is a little bit of an uphill battle, but it does speak to the headwinds they have in competition as they move in. there was a lot of focus on what the next step is. erik: thank you very much. the managing director at sbr capital markets. -- fbr capital markets. matt: with oil near six-year lows, wire producers turning off this they get? producers turning off the spigot? ♪

matt: 29 dollars per barrel. that is where oil could be headed this quarter according to our next guest. after hitting a new low, oil is in a very bear market. jim burkart says it is only

going lower from here. he is with us from our washington bureau. why do you say $29 per barrel? too highices have been to push down on u.s. production. be $40 or $42 for a couple of quarters or could fall even deeper -- even steeper than that for a shorter period of time to begin to really impact u.s. production. one of the things that some prognosticators failed to foresee where the subsequent collapses in drilling costs. how much longer can that continue? is there not a floor for drilling costs? jim: a lot depends on the price of oil. if the price of oil continues to , it is a pretty

simple relationship. the lower oil prices are, that tends to drive down costs. that is one of the big developments we have seen this year. the cost of developing new oil supply globally. i've heard incredibly shrinking figures on how much it costs to put a shale oil well in the ground. how cheap is it to produce oil what is the threshold? jim: for some of the best wells. matt: four shale, how cheap is it? jim: you do not get a lot of shale from marcella's. you are looking at the best places, particularly in south

texas, it may be 30-30 five dollars. demand dictated where market prices go. we believe that oil is a reasonably open market. one of the factors affecting demand, which is not something people talk that much about these days is the shift to electric cars. it is not affecting demand much right now. the oil side think it is going to take a long time before electric cars you into demand, but people on the technology side, the optimists in silicon valley think it is around the corner. what do you say? jim: electric cars are a fun and exciting topic. battery costs have come down. electric cars of a very interesting future long-term, but that is a bit of a distraction for the oil market, at least in terms of looking at the next 5-10 years. the bigger impact today and in

the next several years ahead are rising fuel economy standards around the world. that has a much bigger impact on demand today and in the years ahead. electric vehicles are very exciting and very interesting. matt: thanks a much for joining us today. jim burkart there. i want to quickly get over to julie hyman. industrial production numbers were out that are better than expected. julie: twice as high as economists estimated. in july. the number was revised lower for june to just 0.1% gain. capacity utilization coming in in line with estimates at 78%. 0.8% inproduction up july after falling in june.

utilities falling in july after rising in june. mixed when you look at the particulars. erik: thanks. we are taking a quick break. you are watching bloomberg television. ♪

matt: when it comes to company pay, usually the boss gets the biggest paycheck. not so when it comes to jpmorgan. the head of the corporate and investment bank took home almost $8 million in cash salary last year. the bloomberg paid team crunched the numbers. dimon, $1.5amie million is a cab ride for the guy. he got paid a hell of a lot more than that.

you are talking about simple salary. >> exactly. the u.s. rules, daniel pinto cost salary was $7.4 million. pinto is based in the u k and eu rules have shunted the side bonuses, the cash bonuses. what they are calling his cash fixed allowance has been moved into a salary column in the u.s. erik: cash fixed allowance. a euphemism for salary? >> the euphemism for bonus. matt: pushed into a salary. regulators have limited what he can receive in bonus. >> it is one of the situations where the rules have been put in place and the company moves around the ruler little bit to pay the guys. matt: are the gaming the system? >> i would not say that. erik: despite the best efforts of regulators to diss incentivize traders from trading inappropriate risks and other

similar efforts in the united states, banks, as they will come a continued pay people what they want. >> exactly. the same thing happen in the u.s. in the 1990's. bill clinton passed a rule where anything over $1 million -- i'm make any was a way to pay over $1 million to be taxable. rule that you put in place regarding pay usually has the opposite effect of what is intended. read i think that rule with the bonus. if you will. >> exactly. that is where you started getting really big, where salaries now look small. a million dollars, something less than a million dollars. erik: $1.5 million. matt: jamie dimon's salary.

what do you think he got paid last year all in? >> we know it was about $20 million all in. matt: still, he is working pretty cheap. got $15, daniel pinto million. erik: he is the ceo of the corporate investment bank. >> the mix has changed. that is the difference. matt: when regulators mess with the rules, the banks will game the system to get the outcome they prefer. which we knew and thanks for the proof. [laughter] erik: thanks very much. we will be back after this short break. ♪

erik: here we are just a few minutes from the opening bell in new york city. bloomberg markets editor --

executive editor is here with us . the three things you need to look at. welcome. the three things every day. >> i do indeed. erik: bring it. are going to, we take a look at the nonagency mortgage-backed security market. matt: that sounds really exciting. we should have teased that. >> this is a market that has been pretty much dead. that is non-agency outstanding. it has been going to zero for the past three years because we had the financial crisis and housing glut. we just got a deal from lone star, a very small deal, but it is the first non-agency rmbs deal for riskier borrowers since the crisis. erik: you mean a securitization? >> yes. we have had some jumbo loans from major wealthy people. this is a first one that is a slightly riskier profile. erik: it is not subprime.

>> but be very careful, it is not subprime. matt: why are we being so careful? >> because the credit scores are so relatively high. it was like 688 in the pool. matt: so because it is not subprime. >> that is significant in what you are seeing across lending broadly. you are seeing higher credit standards. i think it risky borrower in 2015 is a very different risky in 2008. erik: how important is that that the private capital is moving back into the main dream? >> it is a clear sign that the recovery in housing really has infirmary. home prices have been rising at a firm basis. we are seeing a bit of an inventory problem. i think this is the first sign that investors are willing to embrace risk after what was a tumult to as years following the crisis. erik: that is an understatement. >> should we go over to india

for our second thing? erik: why not. >> let's take a look at the indian stock exchange -- stock index, rather. we have just had the biggest one-day gain in about three months. everyone is betting that the indian central bank is going to have to cut rates. seen signs of lower inflation over in india. this is that exactly the same time as the fed is raising rates. it feels like everyone except the u.s. is cutting rates. it is a big divergence in markets. >> divergence in monetary policy is going to be a significant one in the next coming years. japan, the bank of ecb, china, now possibly india thinking along the lines of easing, meaning we are looking at more market volatility. what is particularly interesting are the implications for the

currency. over the past three rate hike cycles, the dollar has weakened after the first rate hike. a lot of people are talking about the dollar continuing to strengthen. a lot of it has to do with this dynamic you pointed out. interest rate differentials are going to get to the point where, why would you hold onto dollars if everyone else is losing them? erik: the focus has been on china, whether it is the mishandling of the chinese stock implosion. on the point of india, how powerful a combination is the reformer narendra modi on the one hand, the prime minister, and the highly accomplished central banker? >> i'm more comfortable with what india is doing, purely on a transparent see -- transparency standpoint. china still feels like someone of a black box. that said, when you have two massive countries in the emerging markets missing -- making a poke toward easing,

that is going to affect the broader market spectrum. the question is, will the fed continue tightening? just because -- look, we have been tightening for a while now. now, it will take the form of an interest rate increase. a more traditional tightening. will we not make that move? >> i think you've hit the nail on the head. i would say that a 25 basis point increase is coming in september. i think we see one before the end of the year. that is normalization to me, not tightening. the fed needs to show they are real. then the stronger currency is a governor on the edge and the fed will probably high grades in 2016 as quickly as the dollar will let them. the dollar has been tightening the economy for us. >> i'm going to bring you some bond market nostalgia. today is the last trading day for a u.s. treasury note with a 10% coupon. erik: i brought it up on my

screen. >> erik has it on his screen. it matures tomorrow. erik: here is what you want to look at. i'm circling it with my cursor. >> nowadays, we are in low single digit. matt: how about just the price over the last 10 years? >> when this was issued, ronald reagan was president, paul volcker was the fed president. erik: let's go back to the terminal. this is fun, too. the long bond issue in 1985. >> oh geez. [laughter] matt: it is pretty interesting to see the first 6-7 years of it. >> investors clamored to sell

this back during a debt buyback offer from clinton. matt: this is the full history. >> the thinking was that wanted to get out of that bond position and go into tech stocks. there is another blast from the past. matt: we had producers that were not born during this bond issue. better way tos it phrase the question, at what point do we enter the bond bear market? this shows us what a 30 year bond bull market looks like. >> when do we start feeling the pain? erik: exactly. >> rates are at zero and we all know about the relationship between bond yields and bond crisis. if we go back to what we were talking about in terms of central bank and easy monetary policy, i think rates are going to grind higher. 5%on't think we will see a 10 year treasury. i think it will be a gradual

adjustment that removes a lot of the pain people have been expecting. one concern we have is that as investors see rates highs, perhaps they see a slightly negative return, with a lot of the changes in terms of regulation over the past few years, primary dealers are not the source of liquidity they once were. i think we can feel pain in that sense, but not a pure rising rates standpoint. erik: terrific conversation. david. and our executive editor of bloomberg markets. both of you have a great weekend. >> thanks. >> thank you. matt: we are going to watch three stocks getting whacked following disappointing earnings reports. julie hyman joins us with some losers. julie: i was on the floor of the new york stock exchange last year when this company had its debut. there were little people dressed "candyharacters from

crash." this is the biggest drop we have seen in a year and a day compared with its earnings last year at this very same time. the backward looking earnings that appeared to be the problem. it is a forecast that is disappointing investors. although the company also said that its monthly unique payers, that is its metric of subscribers and users, fell about 10% quarter over quarter, although analyst at piper jaffray said monetization per player, although it fell slightly, was ahead of estimates -- it seems to be the forecast that is disappointing. another company that came public last year, l oil loco -- el loco, i thought we were doing that next. but let's go to applied materials. first-quarter sales could full short of estimates because of

lower than expected orders because of some chipmakers that outsource. it is seen as a forward indicator for the semiconductor industry. semiconductor makers place their orders for machinery several in advance. the fact that the company's forecast a short could be a bad sign for the industry. let's get to el pollo loco. shares are down 17%. it is a record drop for the company and it is that a record low, as well. this. -- this company had its debut last week. comp store sales will rise about 3% this year. it is also going to over three fewer franchise restaurants this year than it expected. i guess demand is following for crazy chicken. matt: you don't often make reference to them, but your producer comes up with some of the greatest drafts. laying an egg is his headline for el pollo loco.

julie: it is pretty good. apparently it was david braley -- matt: the pa, nice job. erik: full credit where credit is due. how he knew cyber optic cable in theive you an edge foreign exchange market. ♪

erik: this is "market makers." trading, even microseconds matter. a new fiber-optic cable from new jersey to london could give traders a huge edge, but one firm is trying to keep traders from taking advantage of this speed advantage. lane andall it a fast a roadblock, i suppose. what is going on?

this sounds very reminiscent of what michael lewis wrote about. is that a fair comparison? >> it is a fair comparison. the focus then was new york to chicago. erik: in "the flash boys." tha>> that was for stock futures. this is going under the sea and it will be connecting two of the biggest fx trading hubs. erik: it is connecting -- there is another connection to the jersey and trading hubs around new york, but technically it goes from london to halifax. matt: what is wrong with getting an advantage using advanced technology? [laughter] erik: matt asks a loaded question. matt: no, it seems like there should not be anything wrong with it. if you use better technology, even before we had trading over internet, you still had an advantage, right?

thehe 1950's, probably in 1800s. right? >> absolutely. is there a question of nothing wrong with it or is it illegal. icap is a publicly traded company. >> they are not on this new network. they will be moving slightly slower. we talking fractions of a millisecond. erik: as was the case with i ex in "flash boys" the objective is to level the playing field for all participants. >> as much as possible. it is never going to be completely level. your ownve infrastructure and faster systems, the trading venue cannot go into every broker and give them the same systems. they are trying to say, we are doing the best to make a level playing field, the rest will be up to you. the new cable going under the

atlantic is so much faster. that is the issue. erik: it is a terrific story. go to bloomberg.com. pull up the story. i urge you to read it. now, a new hbo series called "show me a hero" premieres on sunday, the latest creation by david simon, the man and coveredwire" cops and crime for the baltimore sun. it is a true story about desegregation and public housing in yonkers, new york. here is a clip. the affordable housing portion of the judge's order of the supreme court. matt: that story took place more than two decades ago.

ferguson, missouri and baltimore remind us that race remains a big issue today. bloomberg set down with david simon to speak more about it. >> we have grown into our adolescence when it comes to racial issues. as a country, most of us now know you cannot swim around the racial epithet. those things will not play. we have a vernacular that allows us to play the same games. now, it is all about personal freedom and liberty and my property values and not in my back yard-ism and what it really comes down to is fear. so, you've seen it. i want to get your take. a show about public housing in yonkers during a racist period in america's history does not sound like something i would want to watch. >> it does not summit the stuff

of drama, but david is adept at making these stories come to life. a federal judge said to yonkers, you have to build public housing and it was a protracted fight the lasted for more than two decades. he was referring to how economics is what underlies the entire fight. they said it would bring down property values. it was really about the seismic change in yonkers that fueled all of it. six episodes, six hours long. i was presently surprised with how riveting it was. the main actor, oscar isaac, tremendous performance as the charismatic young mayor who has to deal with all the pressure. erik: did you know that matt miller lives in yonkers? >> i did not. erik: you are an official resident. >> it rings true to you. erik: david simon's show may touching her. matt: yonkers is a very big and

spread out place and this show is about a very read-out part of -- specific part of yonkers, a part which is in pretty serious economic ruin. >> it was 80% white and now it is a majority of immigrants. it has changed. matt: regardless of the racial makeup, it is a horrible place. economically. with very bad infrastructure problems and a lot of crime, better education. it has not turned out well. >> you elect to live there. [laughter] erik: this is going to come across sounding like a cross question. i'm curious whether you talked to david simon about whether incidents like ferguson and michael brown or eric garner in new york city and the emotions that those -- that they provoke make content-based around race relations good business.

>> we did not talk about that. he has a platform where he can comment on what is going on since he did "the wire" and people will listen to him. he is very cognizant of how they affect businesses in these communities. he has lived in baltimore for a very long time. he spoke about what it was like to live in baltimore after the freddie gray shootings and the riots that followed. onsaid that seeing buildings fire was not something that was that all productive for the city, which is still in very tenuous footing. matt: it is a great question. from a lot of the reviews, it paints a picture of very serious problems and does not offer solutions. is it productive beyond raising money for hbo and david simon? >> he has a real gift for humanizing people at all levels. you are seeing people going through the problems. you get new empathy for what they are going through. matt: that is a good point.

thank you so much. anything on hbo, i'm sure it will be a huge hit. >> hbo does some great stuff. here is a look at havana. matt: we are awaiting the reopening of the u.s. embassy. john kerry has traveled to cuba, the first secretary of state on cuban soil in 56 years, to raise the stars and stripes. we will bring you more after the break. ♪

a big day for cuba and a big day for cuban-american relations and it is a nice shot. matt: it is beautiful. erik: it is a beautiful place. matt: it reminds us how nice it would be to go and check it out there. erik: that may have been for many americans in the not-too-distant future because america is normalizing relations with cuba today.

cuba.a's embassy in that is happening this morning. john kerry. matt: i would love to know the details of this. did we just put that building up ? did we buy that? have we had people and they're putting them of the letters on the building? i think it is fascinating, just the mechanics. in what else is fascinating? erik: etf's. matt: etf friday. we are going to go to julie. julie: thanks, guys. the government tossed evaluation killed three years of gains in one shot in china. analyst is here to talk about it. we talked so much about the currency itself, the ruble effect, we did not really talk

about the etf story. there is an etf or a couple that track the yuan directly. >> there were multiple ways to play this. etf's wrapped up the different methods. yuan etfm tree china uses derivatives to do hong kong-traded yuan and mainland traded yuan. another way to do it is the market factors etn. this one does three-month currency forwards and tracks it three months out. you cannot get mainland, so they

do it using hong kong traded or derivatives. it is an etn to boot. you have the counter risk. the currency shares fund, this one is more like gld. this buys hong kong traded yuan stores them in a bank account at j.p. morgan and you on that shares. best.ne tracks it the julie: for better or for worse. >> that's right. julie: then there are fixed income etf's. that is not a very direct way, but it is one way to try to track currency and fixed income. >> this may be the most intriguing area. we talk about how investors can get a share oh sure through etf's. these guys have hooked up with hong kong companies that have quota. paper, thisrcial

holds ultra short-term debt. essentially, it is a backdoor way of getting mainland exposure because it buys that debt and yields 3%. no interest rate risk. rated credit. but you have chinese government risk. julie: very quickly, we did not talk about the market vectors. also on the bond, this is way to get local. >> did will yield a little bit more. the bond market for mainland china is opening up. we have a few million dollars in the space. same with the currencies. at all this up. china is slowly opening up all of this. there are all of these crosscurrents going on. it is a tricky space to invest in, but there are the portals for the etf's. julie: really interesting stuff. thank you so much.

talking to us about the china etf play right now. erik: thank you very much. etf friday on bloomberg television. i'm going to be back after this break. i shall. everybody else, sooner or later, you will get to enjoy the weekend. come back and watch us on monday. we will be talking to sydney chase. helping to save water and prevent drought. save water during the drought in california. matt: stick around for the raising of the flag. ♪

♪ (ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring (don't fear my darling...)

(the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. betty: good morning. erik: you are watching bloomberg's "market day."

olivia: we will bring numbers down for you. erik: growth slowed last quarter. turmoil in greece takes its toll. olivia: jcpenney reports men's clothing helped the company deliver stronger than expected results. good morning. i am olivia sterns. erik: i am erik schatzker. we have consumer sentiment. julie hyman has more. alysts is what an anticipated.