david: we are live in bloomberg's world headquarters in new york covering stories out of san francisco, washington, dublin and sweden. u.s. stocks retreating from near record highs and the dollar strengthening on expectations that the fed is moving closer to raising interest rates. we'll hear from the fed vice chair and show the charts that put the fed's actions into perspective. vonny: then apple is facing billions of dollars in taxes. the jury takes aim at the tech giant ordering the largest penalty yet. >> this selected tax treatment of apple in ireland is illegal under e.u. state eight rules. it gave apple a significant benefit compared to other businesses. david: and a potential

worrisome development for the oil market. new discoveries of oil at their lowest level in 70 years and explorers are slashing their budgets. does this mean a supply shortfall is coming? markets close in about two hours. u.s. majors are strayeding solidly in the red right now. we see the dow down about half a percent. e s&p 500 down about 3/10 of a percent. the nasdaq down as well. we go to the nasdaq in manhattan. >> hi there, david. you do have the nasdaq trading down. in fact, just hitting near session lows moments ago, starting to recover. we'll see how the next two hours do play out. as for what is dragging today, the worst percentage performer is g-3 an apparel and accessory maker. the stock is plunging after the company just had a horrible second quarter. they also guided down, as for

the miss in the second quarter, they missed sales estimates by 9%. they guided third quarter earnings below the street by as much as 28%. some investors are probably not too surprised. there's a short interest here of 12%. as for what's helping, there's a bit of attention with the nasdaq down not too, too much. shares are nicely higher, on pace for the best pace in two months after the company says it is no longer going after hershey as a $23 billion acquisition. this following stalled takeover talks. but many are pleased with this. investors clearly with the stock higher considering hershey is slow growth and possibly a potential drag. and finally we do have the shares of ebay trading, hitting a record high as it is an attractive target for online retailers, considering that ebay as an extensive presence.

what's interesting here, there's not a lot of love on the street for ebay. 65% of the analysts have either a hold rating or a sell rating. interesting because the stock is actually up 16% this year. but the investors who are truly happy are those who got in on the i.p.o. back in 1998. the stock is up 3,740% over that time period. so a big winner there over the long run. >> thank you. down at the nasdaq there. now let's check in on the bloomberg news. mark crumpton has more. mark: the white house says the obama administration is concerned american taxpayers will ultimately bear the brunt of the european union's decision requiring apple to pay billions of dollars in back taxes to ireland. >> the obama administration officials not surprisingly have heard from officials at apple who are concerned about the way they're being treated by foreign governments.

i think that's -- shouldn't be a particular surprise to anybody. but what's also true is the obama administration has repeatedly indicated our willingness to go and fight for american taxpayers and american businesses overseas when they're being treated unfairly. mark: apple c.e.o. tim cook says the company never asked for nor received what he called special deals on its taxes from ireland. and the treasury department says retroactive tax assessments by the e.u. commission "are unfair, contrary to well-established legal principles and call into question the tax rules of the individual countries in the european union." hillary clinton has an eight-point lead over donald trump in pennsylvania. according to a university poll, clinton leads trump 48% to 40% in the battleground state. 6% backed gary johnson. independents are twied at 39% for trump, 36% for clinton. two states hold primary

elections today. arizona senator john mccain is seeking a sixth term. his main challenger in the republican contest is kelly ward mccain is hoping to win big so he can focus on a general election caling from ann kirk patrick. florida voters also go to the polls. marco rubio is on the ballot. patrick murphy and alan grayson are the two leading candidates to possibly face rubio in november. 37 victims of last week's deadly earthquake in italy were honored at a state funeral in the devastated town. the service was held in a covered area constructed overnight after relatives rejected plans to have a funeral in an airport hangar 40 miles away. the death toll from the quake stands at 292. global news powered 24 hours a day in over 120 countries.

i'm mark crumpton. this is bloomberg. >> fed vice chairman is saying the path to an interest rate hike will be based on economic data. he spoke cluffly with bloomberg earlier today. >> the work of the central bank is never done, and i don't think you can say one and done and that's it. we can choose the pace. but if we choose the pace on the basis of data that are coming in, so clong we know at the time we start whether it's one and done or several. it depends entirely on what's happening in the economy. >> in your speech, you sated "i am an optimist." you are surrounded by pessimists. we speak to them every day on bloomberg television and bloomberg radio. i want you to redefine marvin goodfriend's comment in jackson hole of pervasive pessimism. it's out there.

pervasive pessimism exists today. how do you push back against that? >> well, the question is what is the pessimism about? it's not about employment. employment is very close to full employment. it's about growth, and that problem is largely about productivity growth, something which is very hard to control. by pollmakers. it depends enormously on what private individuals are doing in their companies. and it's very slow at the moment. it changes from time to time. but we do not know when it will change. i expect it will change somewhere down the road. there are remarkable things going on on the technological front, but they are not yet in the data. >> you mentioned also the unmitigated blessings of the united states. america's different. certainly you're running the central bank distinct from the

challenges that other central banks are. do you feel going into the september meeting, or for that matter the december meeting, that you are the central bankers to the world, or can you be discreet and look only at the united states' chicks? >> well, the world is becoming increasingly interconnected, particularly the capital markets of the world. so what we do affects many other countries. that was always so. it's also true that what they do affects us, so we're dealing with interconnectedness. and we are probably the most important of the central banks, but the european central bank is operating in an area of about the same level of g.d.p. and what it does matters a great deal. and so on. different economists have princeton and m.i.t. have an idea to go back to simpler

economic models, simpler models, more hooked into the real economy. the debate at jackson hole and the debate you're having at the fed, does it need to go back to simpler models that you taught years ago at m.i.t.? >> well, we all love simplicity. the question is, i think, d.s.g. models, as they're called, those which are fundamentally forward looking and the fult matters and expectation matter, or those which are more traditional, but may be very big. the basic model that the fed ses, the so-called frbus model is actually large and quite complicated. but its structure is one that one could explain to economic students. >> i would like you to explain it now to bankers. what i would suggest respectfully, sir, there's a

hole system out in jackson hole. when we look at negative rates, sub par economic growth and the product that you mention, i don't see the economists addressing the dysfunction to the financial system. within the debate that you're having for september and december, are you sensitive and aware to global finance and global banking having to deal with negative interest rates just as one example? >> well, we're sensitive to what's going on. one hears about it. one hears and reads about and talks about -- >> you just have to look at the stock prices in europe, sir. >> what's happening in japan, for instance. yes, we take all that into account. the united states is fortunate that we're not in a passion where interest rates are negative or have to be negative. and we're not planning to do anything in that direction. but we're certainly following the debates and we certainly follow the theory of negative interest rates.

david: stanley fischer earlier today on bloomberg television. i want to pick up on that. take a look at this chart. a big takeaway was him saying essentially that two rate hike ress still on the table. didn't say that directly, but alluded to it in the way a fed official would. the probability of a rate hike in september rising, surpassing the possibility of a fed rate hike in december. you see the probability in white. the september rate hike in blue. a turn there based perhaps in part on his comments. it was discussed at the jackson hole symposium a few days ago. >> see friday's jobs report. david, 3140 in your bloomberg chart library, you'll see the target. it's that purple line right there at 2%. this is year over year, which

is what the fed is watching the fed said it's not too concerned and that it will rise. but a couple of years. so what's it going to take for this to come up to here in a couple of years? you can only imagine. this is p.c.e., so not core. this includes things like oil, things like health care, things like services and so forth. this is what the fed is focused on, but it's a long ways to go from there to there. david: you mentioned the jobs report. a lot of evidence from fed officials here that they are satisfied or getting satisfied with where employment is. now the focus shifts here to inflation. coming up in the next 20 minutes, donald trump is set to give a critical speech on immigration tomorrow in arizona. will he be able to stay on message? >> the technology behind virtual assistance has made big strides in the last two years, but for many consumers, it's still a long way to go. we'll explain how tech companies are trying to turn up the volume. david: new york is 12:12, wall

street time. the dow down almost half a percent. the s&p 500 down to 2271. the nasdaq down 23 points at 5,209. this is bloomberg. ♪

david: this is "bloomberg markets." vonnie: it's time now for a look at some of the business stories in the news. the securities and exchange commission is giving $22 million to a corporate inciteder who helped the regulator uncover fraud.

the second biggest payout ever. the whistleblower gave information that helped the s.e.c. stop illegal activity at the individual's employer. now the agency hasn't provided any information on the prn's identity nor on the company involved. david: clear skies ahead for the first u.s. commercial flight to cuba. jetblue's flight will originate in fort lauderdale. it will be the first of many daily flights to cuba. american airlines will begin flights from miami to cuba in september. vonnie: and space social security ex has a recycled rocket. s.e.s. says it will send its next communications satellite into orbit on a previously flown rocket. it has recovered six boosters following liftoff. the s.e.s. launch will take place this fall. and that's our latest stories. david: donald trump is set to give a critical speech on

immigration tomorrow in arizona after pulling back on some of his controversial rhetoric l he be able to stay on message? i want to get some perspective on this. let me ask you first of all, we heard a lot about donald trump's message on immigration, how it's changed or it may not have been consistent. as you look at it, how constant has he been? what has changed over the last few weeks, last few months? >> david, over the last few weeks what donald trump has changed a little bit is he's backed away from his promise during the primary to do a massive deportation programs, essentially round up and expel 11 million people who are estimated to be in the country illegally. -- it would be extremely expensive. even immigration hardliners are not clamoring for this. they realize it's not particularly realistic or practical. so trump has softened on that under pressure and under questioning, but everything else in his platform is pretty

much the same. he remains opposed to any kind of legalization for the people here. he's still in favor of building a wall on the mexican border and he still favors things like tracking system for visa overstays. this has been a centerpiece of his identity. it was the reason that he catapulted so high and so fast in the republican primary. vonnie: we have new polling which shows surprisingly thin margins in three battleground states including michigan, and also pennsylvania, they're tied in ohio at 43%. i mean, does it surprise that you these are such slim margins at this point? >> not particularly. i wouldn't make too much of it right now because this is one poll and most of the polls we've seen have the margins much higher. so clinton's lead in each of these states is much bigger. so you know, this is the start

of a shift where the polls are narrowing and donald trump is closing in on her in these states. yes, she should be worried and yes, it would be troubling for her. it's too early to know. i'm strongly of the belief that we shouldn't look at any one particular poll, even if it's the latest poll or a credible one. but we should look at polling averages. right now the averages show clinton doing very well. david: there's a piece looking at hillary clinton's strategy here talking about donald trump and his platform. she has made an effort since the speech in nevada to draw a istring dash distinction between donald trump's parties and the republican party. there are some who wish he hadn't. >> that's right. this is a subtle but important area of disagreement between hillary clinton and some democratic strategists outside her campaign. what she is trying to do is create a structure for republicans to ditch donald

trump by saying he doesn't represent your party. he doesn't represent the mainstream but he's on the radical fringe and she accused him of trafficking in white supremacist sentiments. so her argument is that he doesn't represent the party. democrats who are focused on winning races down the ballot in house races and in the senate want to do is they want to tie every other republican on these ballots running in these races to donald trump. and they want to say that trump is a reflection of the party, therefore, you should vote against every one of them. so that's a dispute between what the clinton people want to do and what some other democrats want to do. vonnie: on a completely different matter, if you don't mind, we found out today that the obama administration has spoken with apple about the european commission decision to tax apple in arrears, or to have ireland collect taxes. how interesting is it that an administration would take a position on something like this? >> well, i mean, it is interesting, but it's also not

totally unexpected. we are talking about a lot of money here, and what the white house spokesman expressed concern over was american taxpayers would end up bearing costs and of these the hit to the united states treasury would be pretty significant. the issue connects to something president obama and the white house have been very focused on, you know, the idea of individuals and corporations dodging taxes here. either setting up offshore or elsewhere and trying to use loopholes in the tax code to avoid it. it's kind of all part of a bigger picture where it doesn't totally surprise me that the white house decided this was ignificant enough to weigh in. vonnie: thanks for joining us. and you can follow all of the politics action on the bloomberg app. everything you need to stay up to date on the race for the white house. more on that big apple story, by the way, later this hour.

we're speaking with the president and chief analyst. david: the race to voice control. we'll explore how tech companies are trying to upgrade their digital assistance. this is bloomberg. ♪

avid: here's our report. >> you ideally interact with your voice. so a good example on the market right now, you have siri where with the push of a button, you know, you're supposed to be able to ask her for things like the weather or to set a timer or to return a bit of information. and the, you know, the dream, that's sort of the version that we have now. but i think the dream that a lot of people see authorize these things su being able to do things like, you know, turn down the lights or, you know, ask it to do more complicated things like, you know, maybe book me a vacation, you know,

in x place later in the month or the year, something like that. so kind of more complex tasks than we can do with them right now. >> so integral to doing this sort of thing, whether it's with i is having a microphone that can pick up what you're saying. what's been the difficulty in developing something that works effectively? >> so it's kind of interesting because we actually do have the technology right now to make a very, very sensitive effective microphone, but the problem is that you run into these tradeoffs. you have to have one that's sensitive, but when you're talking about consumer technology, it also has to be small. it has to be very, very low on power. it has to be reliable. and obviously all of those things are really important when you're talking about, you know, smaller devices and mobile devices. and so that's sort of interesting on the one hand. as far as the microphones themselves, i mean, you're seeing, especially with voice interaction, you want to be able to sort of recognize a voice, or any other sort of

input as clearly as possible, right? for that, you want a really, really high signal to voice ratio, which means that the microphone has a better chance of distinguishing the signal, whether that be your voice or some other input from the noise, maybe that's the noise from the world around you or the noise that's generated by the microphone itself. and then in addition to that, you have acoustic overload point. and best example of that is you go to a concert, you try to take some video with your phone and a lot of times the audio through and it's this wall of really bad sound. exactly. and so bringing that acoustic overload point up is one way to compensate for that as well. ♪

david: from bloomberg's world headquarters in new york, this is "bloomberg markets." vonnie: the markets are closing in new york. let's take a look at today's biggest movers.

back in the spotlight again today after bloomberg broke news that they're in talks to merge. that's confirmed now. the deal comes as fertilizer companies struggle with depressed crop prices. over the past year, prices in the u.s. have fallen 34% and other crops have gotten cheaper. we're also keeping our eye on oil sliding below $47 a barrel ahead of a report forecast to show crude inventories rose last week. with oil prices down by more than half since the price dropped two years ago, budgets are cut to the bone. the result oil discoveries have sunk to the lowest levels since 1947. let's discuss it now with our bloomberg energy reporter. discoveries are low or is there is no more to be discovered, all the fields have been discovered? >> there's plenty probably to

be discovered, but investment has gone down. it's less than half of what it was two years ago. and now we're seeing that -- the results of that. production is still growing, but say in 10 years we could be in for some problems. david: where are companies vesting their hopes now? is it in u.s. shale? u.s. shale is one of the more promising places. it's proven to be a sweet spot, and yet they're abandonning things that are much more expensive, say deep sea or in canada. vonnie: is it very short-term projects being abandon or is it the long-term projects that may yeel more out into the future? >> probably a little bit of both, but unless the economics are really great, you would not put a lot of money in something that will come online, you know, in a decade or so. david: we've had downturns before. this is quite a diminishment in terms of exploration.

why this time around does it seem to be so bad? why has it been curtailed so much? >> because of how sharp the decline in prices has been. i mean, it was eight years ago we were at over $100. and now, you know, we're trading around in the $40's. so you know, companies need to make money. vonnie: so it's partially because the cash strapped and partially because they won't get enough for a barrel of oil they do discover. in context n. 2015, new supply that was discovered came in at 2.7 billion. that sounds like a lot, but it's really nothing, i guess. this year drillers found 736 billion barrels of conventional crude. just who is drilling? is it still independent drillers out there, or some of the majors still drilling? >> you have some of both, but they're looking at the real choice -- choice spots. you can't just make money by putting a whole in the ground

and shale -- unless you're in a really good spot. they're being very selective. david: mark, thanks for being with us. vonnie: let's check in on news at this hour. mark crumpton has more. mark: the head of the f.b.i. says the bureau is actively trying to determine if hackers connected to a foreign government want to meddle with u.s. elections this fall. the director spoke today at a cyber security conference in washington. >> we take very seriously any effort by any actor, including nation states, maybe especially nation states, that moves beyond the collection of information about our country and that offers the prospect of an effort to influence the conduct of affairs in our country, whether that's an election or something else. mark: the director didn't cite a specific country, but federal officials have raised the possibility that hackers linked

to russia could try to disrupt u.s. voting systems in november. hillary clinton's advisors are preparing their candidate for the first debate with donald trump, and their strategy reportedly includes goading trump into blunders. that's according to the "new york times," which reports the clinton camp is consulting psychology experts to gain insights into trump's deepest insecurities, hoping to needle and undermine him before a live tv audience. the first presidential debate is september 26th. the spokesman for islamic state has been killed in syria. the media service says he was killed by surveying the group's defenses. he was a syrian national. it was impeachment proceedings continuing today. this after the president failed to sway senators who will decide whether she is permanently removed from office. she answered questions from senators for 14 hours in her

impeachment trial. lawmakers on both sides of the aisle expect the senate to vote gainst her tomorrow. global news 24 hours a day powered by over 2,600 journalists and analystses in or than 120 countries. i'm mark crumpton. this is bloomberg. vonnie: mark, thank you. now let's turn to the state of housing. u.s. home prices rose 5.1% in june year over year. and you can see the library chart 3151 has an interesting comparison. prices have been rising since 2014, at least when it comes to the index. slowly but steadily. personal incomes have taken a dip lower. now in the last month, obviously, not so much. the idea, i suppose, is that personal incomes on the decline really sort of press house

prices declining. we'll have to see if that is the case. it is the last three months rolling average. so we'll have to see. have a listen to this. a yale university economics professor was speaking earlier today and said it is all about the pace. >> well, there's not a lot of momentum in home prices. they're different from the stock market. they've been going up since 2012, but at a slower pace. it was more like 10%. now i'm kind of worried that it will slow further. seasonally adjusted, we're just about flat in the latest month. no change. so half the cities are slightly down. so it seems to be a weakening market, but with still apparent uptrend. >> so how much more can prices then fall? what would be your expectation for the next 12 months for home prices?

>> well, for me, i would say something akin to the inflation rate. something around 2%. so that they would be kind of fixed in real term. not as exciting but not horrible either. >> i want to bring in the u.k. perspective. thank you for joining us. in london, we're obsess wednesday housing prices. the minute we see a cooling down, panic strikes. we focus so much on what that makes us feel from a consumer point of view. does this spell doom and gloom going forward for the u.s. economy? >> well, doom and gloom is too strong a word. but i agree. i've done research on this myself with some partners. housing is a very strong wealth effect. because housing is held more broadly than stocks are, and it's not held in retirement portfolios. people see it. and they're very aware of these house price movements. so i think it is possible that

there could be weakness, say, coming this fall. when the seasonal pattern no longer boosts home prices. and if -- if the fed should raise interest rates, it might be -- taken as kind of a signal that the market is headed down. and so there could be a change in confidence. we haven't seen it yet though. >> from your perspective as a university lecturer on economics, should the fed raise rates come september? >> i'm a little doubtful about this. capital expenditures are not, they're not where they should be. and we see this weakness in the housing market, i think i'd wait and not -- in the september meeting if i were there, i would vote against an increase. >> professor, we heard from mr. fischer today earlier. it seems like the rhetoric out of that conversation was he was less hawkish than what we heard last week.

what is the fischer that we heard today, where we could be one and done? we might not be one and done, we don't know, we are data dependent. what's that fischer compared to the fed speak that we heard last week? >> well, i actually -- if you talk about the jackson hole conference, i thought it was a pretty intellectual tech conference. and so i guess janet yellen was talking positively about -- a more likely upswing in interest rates. yeah, i guess the labor market reports have been strong recently, but i -- overall, it's kind of a nebulous situation for me. and i wasn't there at jackson hole, but i don't know that i would have changed my opinions from listening more to these papers. david: that was the president of the america economic sorings, professor of economics at yale earlier today. vonnie: we head to break, the

dow and the s&p 500 for the month now. look at. that the dow is down today to 18,425. s&p down as well. eight-point drop. and the nasdaq down. if you take a look at some other metrics, the dollar index is rising once again. a little strength there. nd look at that for the yen. that is a weaker yen by two big figures in the last few days. now the two-year yield unchanged after that move. the spread remains very low. you're watching bloomberg. ♪

vonnie: this is "bloomberg markets." david: let's head to the nasdaq to look at some movers this afternoon. >> lots of stock to move here, especially within the retail space. and we're looking at laggards. down 3.5%. down five days in a row, this after the company reported last week it was guidance that was slightly disappointing to investors. but the story here, expectations were high. they've put up monster quarter after monster quarter. this s was one time that they did not surpass investor expectations. in fact they're saying that the stock was priced to perfection, suggesting that it could cool off. when we take a look at a chart from the bloomberg 3040 q, it shows that the stock going into

that quarterly report was 33% above the moving average. so it was somewhat extended the last two times that it was well above the moving average, it quickly snapped back down. we could see a level of 206 or so right where that moving average is. we also have weakness among some retailers. fred put up a disappointing second quarter. lower than the street was looking forward. dollar tree has been down after a disappointing quarterly report last week. same-store sales lagged. and finally costco is on a big losing streak here at levels down 1% at this point. david: thanks very much. time now for the biggest business stories in the news right now. south africa's ruling congress is urging the finance minister to cooperate with a police

investigation. authorities are looking into allegations he set up an investigative unit when he headed the national tax agency. the a.n.c. says it has full conference in him and is criticizing the special police unit over its treatment of him. and del says it expects to close its acquisition of e.m.c. next week. today the company receives clearance from china for the deals to go ahead. shares of the new stock were expected to begin trading on september 7. and that is the bloomberg business flash. vonnie: david, coming up, ireland vows to fight a record tax bill in european union courts. that's next. this is bloomberg. ♪

david: this is "bloomberg markets." vonnie: now apple's big tax bill. the european commission has ruled that ireland granted apple illegal tax benefits worth up to $14.5 billion. the ruling requires that ireland now recoup that amount plus interest from apple. earlier today the ireland finance minister said why his government is ready to fight the decision in european courts. >> apple has between 5,000 and 6,000 people employed in cork. and they have substantial economic activity there, and they pay full tax to the irish authorities on the profits generated by their activities in ireland. how they manage their profits internationally is a matter for apple. but anything that was due to be taxed under irish law was taxed under -- vonnie: when you say full tax, what do you mean? the employee tax or apple pays

-- >> no, i mean that there's -- i mean, there's a corporation tax rate which is applicable to the activities in ireland and they paid that. we cannot tax people in ireland for activities in california. the ipad and the iphone are apple's probably most successful products. they were both generated in the united states. so the activity which gave rise to the profit was based in the united states. now, if that's tax -- vonnie: funded by -- >> not a matter for the irish authorities. vonnie: half that r&d money came directly through the headquarters in ireland, if we can show this graphic. you see that all profits from european sales were recorded in ireland and half of those left ireland and went to california and places for research and development. >> yes, but we don't manage how apple organize their affairs. we tax on the economic activity that multinational companies

carry out in ireland. if there are arrangements made beyond irish law and beyond the confidence of the irish tax authorities, and if an argument is being made that internationally apple doesn't play enough corporation tax, well, then it's a matter for other jurisdictions. and the commission ner her press statement today as acknowledged that because she said that some of the tax that she's attributing to ireland may be due to other european countries and she advises them to look for their tax. she also says that if apple wants to make an all turn tiff arrangement with the u.s. authorities in terms of transferring profits to research and development costs, then they should do that. so by her own press statement she admits that the liability may not be in ireland at all, but may be elsewhere. >> more than 700 u.s. companies have units in ireland. they employ 140,000 people.

will this damage jobs? what's your message to u.s. companies doing business in ireland today? >> well, first of all, when the european commission with the assistance of the irish authorities were researching the apple case, they looked at, you know, almost 100 companies. most of the significant american investors in ireland were looked at. and the commission have come to the conclusion that the only possible case is the case that they're prosecuted against apple. so there's no con tageyun effect to other countries. what i'm seeing is we don't think this decision is valid. we're going to appeal this decision. and we're saying that we're going to stand by those comes that invest in ireland and we will apply the tax regime that is applicable under irish law nd we stand by them and we

have assure abses from many of them that they will continue to invest in ireland and create jobs in ireland. >> many people may be aghast today, maybe those who don't know the finer details of this. but sinn fein is among them. sinn fein has come out and said don't appeal. accept the money. why don't you just accept the money and shut up? 13 billion euros plus interest. that's a lot of money. >> because as minister for finance, i have a responsibility for advising the government on these matters. this is the government that rescued irish -- ireland from the verge of bankruptcy from 2011 on. and formed high-level jobs. it's fundamental to our economic policies. and we stan by our economic policies, and we're going to protect our economic policies. we're not going to get into a situation of short-term gain for long-term damage to the economy. vonnie: the ireland minister for finance speaking earlier.

david: apple insists it did nothing wrong. in a statement c.e.o. tim cook says "apple follows the law and pays all of the taxes we owe wherever we operate. we will appeal and we are confident the decision will be overturned." we're joined now by the president and chief analyst who joins us from san francisco. good to have you with us. my first question is about what this could mean for apple. i just want to pull up a chart here quickly on the bloomberg. looking at apple's sizable cache of cash, we see it has about $231 billion in cash on hand there at the bottom line there, the white line showing the money here, that penalty. what does this mean for apple and for apple's mode of doing business right now? >> obviously, if you look at that pile of cash, this is a small hit to them. as we know, they are not forced to pay it now. this is going to be delayed for quite some time. so i don't think it's going to be a serious issue, even long-term. the question you have to think about is will this, in fact,

transfer to other companies? will we see this issue become a bit of a con tageyun? apple is a huge target. you have to imagine other tech companies are going to get hit by this, but it raises so many, you know, unusual questions you've been discussing all morning. when you think about the fact that in assets, here's this big pile of money that nobody seems to want. how odd is that? yet you also have to say gee, is apple getting away with smings that are unfair? the general person is going to say this doesn't seem fair it? seems like a pretty strong argument that the e.u. commission ser presenting. so there are some questions about in the near term, i should say there are no questions near term. there's nothing that's going to impact then. longer term does it impact with how they deal with europe? i think there is a possibility there. vonnie: bob, the idea of looking to something in arrears is a little odd, right? is this the first time this has happened? will it be ruled legal to do

that? bob: well, that is, in fact, part of the controversy is why are they going back, right? i think that's part of the reason why there's so many people who are having a tough time with this issue, even if they say look i do think some of these taxes are unfair, but why should we go back after this old money? let's look forward instead. the issue is going to be if they can close off those loopholes, as ireland has over the past year, i think we should be moving forward, to be honest with you. that's really where the big question marks are. i think that's why there's so much debate about this issue is because, as you said, why should we be looking backwards at this? vonnie: my sort of overarching question is do countries need to be so beholden to multinationals, do they need more confidence in their workforces that they can attract those multinationals, whether they charge tax or not? bob: well, it's a complex question. clearly what ireland is saying, long-term we need the jobs. the money is great, but long-term, we need the jobs,

and that's important. and let's be honest, ireland's done a great job of bringing a lot of tech jobs to the country. there's a well-educated citizenry. there's obviously english language spoken there. relatively familiar laws. so there's been a lot of good reasons for people to invest in ireland, as a result they've built up this tech economy there. it's relatively robust and should be able to withstand these challenges. vonnie: bob o'donnell, thanks for joining us. david: our colleagues in san francisco will be talking about the apple case. that's later on "bloomberg west." ed williams will join them. this is bloomberg. ♪

>> it is 12:00 p.m. in san francisco. >> welcome to "bloomberg markets." ♪

vonnie: we're live from bloomberg world headquarters in new york for the next hour. plus, houston, boston, and dublin. the dow and s&p erasing their gains for the month. some of these consumer stocks drown -- drag down the market. >> vice chair continuing the on the federal reserve. highlights of his conversation on bloomberg television coming up. vonnie: donald trump is surrounding himself staffers packed with moguls. a preview of what a meteor empire -- media empire would be run by donald trump? david: