tv Market Makers Bloomberg July 18, 2014 10:00am-12:01pm EDT
some fear. >> fragile complacency. >> we will be back on the markets once again in 30 minutes. "market makers" is up next. ♪ >> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. ininvolving the crisis ukraine, the un security council looks for solution the day after the malaysian jetliner was shot down. >> a republican plan to do -- to turn blue cities read. democratic lawmakers keep attacking companies like goober and --uber and airbnb, we will stock -- talk to an rnc strategist. machine.moneymaking happy friday, everybody. i'm erik schatzker.
>> and i'm stephanie ruhle. let's start today with the latest on the plane crash in ukraine. the government there is trading accusations with russia over who shut down the malaysian airlines jet with a total of 298 people aboard. at this hour, the un security council is meeting to meet -- to talk about the tragedy as the investigation gets underway and president obama will officially speak about it at 11:30 a.m. we will have it live here on bloomberg. it to ryanlet's take chilcote, on the phone with us from kiev. latest? he >> the latest is that at the time of the crash -- after the time of the crash, they have begun the rather grim task of recovering the body. -- the bodies. 298 people were on that flight, so they have a lot of work ahead of them. the crash site spreads over about 10 square miles.
the plane is very high up. that is where you get such a spread of debris. the bodies will be transferred from there to a city, which is under the federal government's control. you see how confusing it all gets. and the militants -- and the relatives that are scheduled to arrive, some will be traveling on a flight scheduled to arrive soon and they will go together with interpol to try to identify their loved ones. >> i know there is ongoing blame between russia and ukraine. at this point, what are both sides saying? they have both come out with some serious allegations in the last few hours. the latest of which was that not only did the russians provide the surface to air missile thatm, but they are saying it was operated by three russian
servicemen and they are demanding from the kremlin the names of those men. they also said they detained two russian citizens near the border hadde ukraine, one of which paperwork on him that suggested he was a missile operator in the russian military. the russian government has denied it and said they had nothing to do with it. ultimately, they are blaming ukraine. the russian president is saying ukraine is responsible for the civil war and that is the only reason this crash happened. >> what was the flight doing there in the -- to begin with? why was it in this part of the world? >> that is a good question. donetsk, the eastern part of to fall just happens between western europe and southeast asia. a lot of airplanes were flying over that area for several years now. before the conflict, before this
, about 400 flights transited through the airspace there everyday. since the conflict, that is down to about 100. flight 17 was in the right where it was flying at about 30 3000 feet. it was above the 32,000 foot ceiling. at 33,000 feet. it was above the 32,000 foot ceiling. someone should have thought about that a little bit more. >> thank you for joining us live from kiev. ryan chilcote. former secretary of state hillary clinton has now officially weighed in on the issue of who is to blame. she was interviewed by our own charlie rose last night. >> the questions i would be asking is, number one, who could have shut it down? ?ho had the equipment it is obviously an antiaircraft missile. who could have had the expertise to do that? because commercial airlines are
big targets, but at the time they got over that part of ukraine they should have been high, so it would have taken some planning. the ukrainian government has been quick to blame it on terrorists, which is their name for the russian insurgents. and there does seem to be some growing awareness that it probably had to be russian insurgents. how we determine that will require some forensics. but if there is evidence pointing in that direction, the equipment had to have come from russia. russians may or may not have done, we don't know. as i was walking into talk with you, i read that the russian stock market has dropped. there is a great deal of concern that not only was a civilian plane shot down, but what this means about the continuing conflict in eastern ukraine and the role that russia is playing. can watch all of charlie
rose's interview with hillary clinton tonight here on bloomberg television. that is 8:00 and 10:00 p.m. eastern time. >> who makes the next move in ukraine and what should it be? the first u.s. ambassador to adviser innow an business law throughout the world and he comes to us from washington this morning. mr. ambassador, what should the move -- the next move be? should it be vladimir putin's or someone else's? >> glad to be with you. first, what happened in the ukraine is a tragedy and our prayers and thoughts go to the victims as well as their families. having said that, it is a big political issue for the united states. the next move right now is for the international community to see and to get to the bottom of what happened and who is responsible. it is important to get access to the site and it is important for experts to get to the site to
examine the fragments of the plane that came down and determine what transpired there. >> how hard will it be to get that access? you know that region of the world better than us. difficult, it will be to get unbridled access. i would assume at this stage of the game, but time would tell. you are dealing with the sovereign rights of the ukrainian government, who obviously wants to be in charge and in control. and then you have the problems with the russians and all that has been happening in eastern ukraine. to untangle all of that is going to take a few days. hopefully, the international community will be able to get good access to the site. remember, there are well over a dozen countries represented on the plane in terms of the victims. there is a wide international
base of concern for what transpired. they have to get to the bottom of who is responsible. >> mr. ambassador, if it had been an american airline whose plane had been shut down, what would be happening right now? the united states would be very, very concerned. it is always difficult to deal with hypotheticals in situations like this, but if it had been an american airliner that had gone down, obviously, the united states would be taking the foremost of lead to get to the bottom of this. dealing with the russians and the rest of the international community to get unbridled access to the site. >> the facts are still a little murky, but if we accept the idea , the theory that it was ukrainian insurgents, pro-russian insurgents, who shot this jetliner down and they did it with a missile launcher provided to them by the
russians, what can the international community do? the sanctions that have been applied thus far do not appear to have changed that much. many question whether harsher sanctions will have more of an effect. >> that is a very good question. this.d have to say if it proves that the russians were involved directly or indirectly in the situation -- obviously, all of the evidence right now indicates that the russians were involved in one way or the other. don't forget, they have been fomenting a lot of the conflict going on in that part of ukraine and have been responsible for it. the next best step right now is for the international community to get together. this is a golden opportunity as i see it, for the international community to see if they can freeze the border between ukraine and russia, thereby preventing the continued shipment and equipment of personnel into ukraine that is causing this kind of -- these kind of events to take place in
ukraine. >> how would that be done? peacekeepers? who could seal the borders? the cooperating forces in europe have been monitoring the region and they could play a role. i think the osc could offer its services. the international community can exert a lot of pressure on the russians to accept this kind of plan. have monitors on the actual border where they can monitor the goings back and forth between the two countries. that should be considered by the two bodies as a first up, but the osc can definitely play a role. >> realistically, do you think that could actually happen? could they band together and organize and take action like that? one could argue it's a good idea, but how realistic is it? goodat is also a very
question, stephanie. rush albeit they want to keep will place as fungible -- russia obviously wants to keep the whole place as fungible as because any other action would curtail their activities in the region. that there is heightened concern isut this conflict and it incumbent upon the united states as well as the rest of the international community to try to take the step. if they do not take the step, it an opportunity lost. >> the un security council is meeting right now. we've been showing our viewers live coverage of that. what might that meeting produce? russia sits on the security council and has a veto. we know that means the prospects are somewhat limited. but within that scope, what could it? -- what could it be? >> i think you will see them try to get to a consensus in terms of the statements that will come out. at a minimum, what the un security council will do is call
for an investigation and call to seeess to the site how this whole incident transpires. i don't see any kind of political activity taking place in terms of the u.n. condemnation at this stage of the game. theill be to get access to site and calling for a very fair investigation of what is going on. and probably ask for not only access, but for all the parties to stop their activities in the region, meaning the separatists accept the cease-fires that the ukrainians have offered in the past. part of theably political push that the un security council will push at this time. >> mr. ambassador, thank you for your time this morning. , the former u.s. ambassador to ukraine. >> it is time now to see the top business stories from around the world. another american company will be taking up legal residents overseas so we can pay lower
taxes. abbvie cleared the way for that today. it has agreed to buy british drugmaker shire for $55 billion. according to les moonves, 21st century fox would be willing to if they team up with time warner. endowment may be underperforming its peers when guess what,p&l, but the pay of its executives is right up at the top. executives that came from harvard received a combined $44 million. the 2012 endowment have the worst performance in the ivy league in 2012. it is good to know that they do not have to be linked to performance when it comes to the
>> it was a different kind of earthquake in silicon valley last night, a big change on apple's board. plus, meg whitman gets a promotion. one of google's top executives make his exit. from san francisco with cory johnson. let's start with meg whitman. she was the ceo, and now going to be the chairman of the board,
as well as hewlett-packard. >> traditionally, we know that flat out better corporate governance and separating the ceo and chairman's role always leads to better than average performance on wall street. this consolidation of power comes in the context of -- think about the results of this company. 11 straight quarters of sales decline on a year-over-year basis. and the business is getting smaller and so is the diversity on the board with way -- with meg whitman taking the most important roles -- the two most important roles on the board. less diversity of opinion on that board with her in charge as the ceo and the chairperson. >> let's be fair to meg whitman for just a moment. >> are you trying to be unfair? >> no, i'm with you that it is not a healthy sign that the chairman and ceo should be the
same person. but as far as the sales decline at hp, maybe it was too big a hasness and maybe she brought it down to something closer to the right size. >> what warren buffett always says is when the representation of a -- when the reputation of a business is crummy, it is the the business that must succeed. that business has gone far beyond what negligence that it was going to do. -- whathe restructuring meg whitman said he was going to do. >> and the restructuring charges with it. >> one quarter of her performance bonus is based on results before restructuring charges. while investors might be looking at the net profits of the company, she's looking at the net profits not including restructuring. the more restructuring goes on, the better portion of that bonus she gets. >> this week, we side jimmy
cookns of -- with tim shaking hands. ibm is in trouble. is that why they are in business together? >> ibm need better products to sell to its customers. that is why they made this deal with apple because their customers are demanding ipad and iphones as well. an initial glance at the results doesn't tell you. you have to get under the hood to see what is going on. almost every portion of this company is shrinking. and it has been shrinking over nine quarters of sales falling. but there is a lot of stuff that is not quite as obvious. if you dig into this, first, share buybacks are a substantial portion of the trading of this stock. it did reduce the amount of shares, close to about one billion shares now. little adjustments like the tax rate help them make the earnings number that they otherwise would have missed if they had cap taxes flat on a year-over-year basis. that is not a strong sign for a
company like this. >> i would like to shift our attention to the third leg of the school, google. google also reported earnings last night and also continues to grow at a blistering pace, may be slightly slower than it has in the past, but ibm would love that kind of growth and so would hp. nakesh cash aurora -- aurora, one of google's most senior executives, walking out the door, how big a loss is this? part ofs been a big this company in every way and they have been wise to boost them up in every way. 14% year-over-year sales growth, but when you dig into the numbers, you saw a lot of specific nikesh arora initiatives. was three times the rest of their business.
that was one of his initiatives. it is those kinds of initiatives that will let google grow tremendously. revenues are devoted to this quarter. theseof it is because of platform that he has brought there. >> he just got married two weeks ago, and now getting a new job. all of these big changes. >> thank you very much, cory johnson. have a good weekend. my favorite, one of segments, hot money. an environmental treasure and economic powerhouse -- we are talking about the park service. ♪
>> we are approaching 26 past the hour, so it is time for bloomberg to go on the markets. i want to point out a couple of tech names. over at google, shares are up six percent after the top number -- numerous estimates. gets paid every time someone clicks on an advertiser link, so higher volume means more revenue. ibm shares also on the move this morning. the dow down 1/10 of a percent this morning after sales dropped. last quarter put pressure on ibm to extract more revenue from cloud computing and other businesses it is venturing into. and finally, shares of amd tumbling right now, off by almost 20%, the biggest drop in 8.5 years. quarter missed analyst estimates.
>> live from bloomberg headquarters in new york, this is "market makers." i am erik schatzker. >> i'm stephanie ruhle. >> america's best-known anti-text activist is waiting in the debate -- when the debate. people love them, city and state governments don't. that is aquist says big opportunity for republicans. he is with us to explain why. grover, how is this an opportunity for the gop? of a series.
you sell this when the internet started selling, amazon and others, the first thing democrat said mayors wanted to do was tax internet sales. they did not see this as a tremendous expansion of people's abilities and freedom to shop in the middle of the night or not have to travel to get things the next day. they said, we don't want to hear about this until we can tax this and regulated. there's a vote democrats are pushing, demanding in 10 years they tax internet access and in the same bill, they tax into net sales. what we now see -- that was the previous 10 years fight and now the democrats are pushing hard to tax sales over the internet. they think they're going to win. we will see. in city after city, you have, i would say, corrupt commissions that want to keep out competitors. they haven't figured out how to tax them. they have special deals with the hotel guys where they have
agreements and you give us money and we are happy. all of a sudden, there are new competitors and democratic mayors and city councils and the congressmen and senators who answer to them are saying, we are with the past, not the future and i think this is dawning on people who think of themselves as san francisco liberals, meaning, they want to see the world move forward, not back in the 1960's and 1970's. >> where's the opportunity for republicans? people don't generally think republicans side with the disruptive innovators. andoint in fact, they do they are. the people you have to be in washington, d c to let uber stay, mcauliffe and virginia have been trying to stop uber from spreading in virginia. they're sort of the corruption index you can do. the more hostile they are to uber, the more corrupt the local
government, meaning, there are some reason they don't want new entrants into the market. las vegas is very, very problematic. the guys down there are trying to stop uber. that is a city that needs competition. we got it in severance is goa from underneath the government. uber stepping around some of these democratic city councils and mayors and going to the people against the politicians. and that is why republicans who are not mayors or on the city council can say, look, we need new leadership in the cities because all of these innovative technologies, every time they come out, are being opposed by the establishment here in the city. >> you are making the case, grover, the debate over uber, lyft can give the republicans an opportunity to make a beachhead in some of these largely democratic cities from coast-to-coast in america. but isn't part of the problem the fact you are framing it in fairlynd fairly --
narrow terms including taxation, ,nnovation and corruption people might be interested in signing up for those but in order to do that, they have to accept a republican party party that stands for whole lot of ,ther things like gun ownership pro-life, and a number of things that many city denizens don't side with. >> i hear that. >> but the other big issue here is the number of states passing laws -- louisiana, indiana, arizona -- that are allowing hundreds of thousands of people to have the $5,000 the state contributes per student to go to school, rather than take it any public school were to private schools as well. it is the democratic party telling a single mother of four, you can't have control of $20,000 to educate your kids.
we will send you a letter telling you where you go to school and you will take it and do what we tell you to. shut up and go away. it is not just yuppies benefiting from uber and airbnb. it is the base of the modern democratic party being told that they answer to the teachers unions him and not to parents. that is what obama did when he showed up in washington, d.c. forkilled school choice 2000, 3000 lower income students. that was put back into place by john boehner. >> hang on the second. you may be right. the democratic party does injured of the teachers union, but somebody who disagrees with you -- does answer to the teachers union, but somebody who disagrees with you could say the republican party answers to the rifle association. two things, the national rifle association polls better
than the teachers union. but those are dealt at the state level, rather than the city level. when you're talking about city decisions, you're looking at a bunch of decisions by mayors and city council members that get in the way of parents having control over their own kids education, of having people be able to make decisions, and of disruptive technologies that are spreading. uber is in beijing, china. and not in northern virginia and not in las vegas. there is a problem here, and the people were standing in the way happen all the democrats. this is why it is an opportunity for republicans. >> is this an opportunity for the republicans to rebrand their party? someone like me who supports uber and charter schools has a big issue with allied -- with a lot of the southern ideals associated with the republican party right now. do you need a rebrand? >> you are looking at rand paul who's doing this and a whole
series of subject lines, and the other is not all issues translate into city issues. some of the social issues are either national or they're not theirs, but they're not city by city am an even state-by-state in many cases. people can run and make the case that they are technology -friendly, future-friendly, and not owned by either the trial lawyers or the teachers union. the problem with most democratic mayors and government structures at the local level, they're paid for and owned the union leadership and the trial lawyers, which means they have to be the enemies of innovation and disruptive technologies. more important to americans than a conversation about the balance between liberty and government. i think this is a great conversation. thank you for bringing it to us, grover norquist. >> coming up, fashion meets art at the opening of a big store right here in new york city.
>>. them back. areion, art, and commerce colliding right here in new york city. the 57,000 square foot museum inspired store on fifth avenue is the largest in the u.s. and will offer all of its product line for the first time in one place. get this, he wanted the largest or along. h&m planning to open a 63,000 square foot ashore in -- store in herald square later this year. congratulations. when you're opening a store that is 57,000 square feet and partnering with a global artist like jeff koons, do you want to be a tourist destination? >> thank you so much. we are happy to sit here today.
we opened global flagship yesterday and it was an enormous success. now we have the possibility to collaborate with a famous artist , icing on the cake for yesterday. we like to surprise our consumers by doing different collaborations. we are known for our designer collaborations. we are so flattered jeff koons wanted to work with us. together it has been an enormous success. >> are you trying to make it a tourist destination? the museum of modern art is the place where people from around the world go. jeff koons is not someone i would associate with fashion. how do you connect them? >> we wanted to surprise our consumers by doing something that was unexpected. by doing that, they want to come does the cousin never know what we have done. everyday we have a new collection in the store.
we do collaborations, surprising moments for our customers. finding new angles of surprising by collaborations with artists. before it was designers. we never know because we are going to surprise. >> are the collaborations the way you get people in everyday? if you're just selling products, people don't have an excuse. are you selling a limited number of your jeff koons products? >> yes. we don't have it in huge amounts. that is one of the surprise. it sells out. when you have things, you have a moment of selling out, people have to come back, the consumers, because tomorrow there. there. that is one way of driving traffic to the store. >> can you buy it online? >> in this case, we have offered a both in retail stores and online. >> it seems you're somewhat late to the party when it came online. a few years ago, h&m did not have her presence. why the change?
>> when we do something, we like to do it properly. it is easy to add it onto retail store and make it quick and simple. we have an extensive buildout and in our offering with online, we also have offered a capital business. we launched both at the same time, offering online and mobile and catalog. that was the moment of time it took to develop. >> has the demographic of your customer changed a lot in the last years? when he first came to the u.s., intimacy like a forever 21 brand. when you partner with an icon like this, this is a very sophisticated partnership. >> in the beginning when we were coming, many people think h&m is only ladies and young fashion. kids,er to ladies, men's, underwear, cosmetics, sports. h&mle start shopping by
that had no reason to leave because when they're growing, they get families or have husbands or their husbands are coming, yet no reason to leave h&m. over time, it is going to build and grow our brand. it will be a household name in america, that is our goal. >> now that you have almost 60,000 additional square foot on fifth avenue, some of the most expensive real estate in new york city, you have huge overhead. how much pressure to sell massive volumes from this location? >> we have predicted high volume in the store to be able to afford the high rent we have on fifth avenue in manhattan. but we have the volume of tourists coming, a lot of american people that come and shop with us. so many tourists are coming in a big state like new york. we have been looking for this for many, many years. none of our stores to date on fifth avenue have met the full
offering. finally, we have the full offering. >> do full pressure to raise your prices now that your overhead is higher? >> no. we will extend our offering, meaning we can have more quality to our products and we accommodate the higher price with that, but still the best price on the silk blend or that sweater. we will have a price range from lower to higher range. >> the more collaborations you do, the more money you are giving way to that partner. h&m doesn't get to keep all that money themselves. isn't that a risk for you to do more collaborations? >> we're not giving away, we are giving back to the consumers. the customers who love h&m like to have collaborations. you have to stay true to the brand because if you do that, there are some surprises all the time -- that is collaboration. it can be jeff koons or something else. that is part of the whole idea of giving back to our consumers. >> when i walk in the store,
right now someone who goes into h&m today, what is your favorite item in the store? for $39.90. a premium shirt. that is my top favorite item. to buyst found out where the tiger dog. congratulations. h&m north american president daniel kulle. when we come back, a lot more to cover. how about the great doors -- outdoors? we will talk to the director of the national park service and our moment of "hot money." ♪
park service to tell us how he is making our national treasures more appealing to millenials. how do you do it? how do you get young kids off the screens and into the parks? >> that is a great question. thanks for the invitation to be here. the parks are open. they are great experiences. we have programs for kids and parents and our greatest generation as well as millenials. in fiscal 15, starting next year, we are going to launch a promotional campaign around the national parks leading up to our centennial, which is in 2016. we are targeting the millenials, really inviting them to confine their park, to have an adventure, to share it with their peer network. using traditional media, social media, marketing, advertising, and partnerships we think we can connect to this next generation to their national parks.
>> does that mean old faithful has a twitter handle? >> probably a twitter handle, facebook site, and instagram, you name it. i think all of those are sort of teasers to get this next generation connected. >> do you need to do more to market to american tourists? on the last trip i took out western national parks, i was shocked were so few american tourists. his end of the germans, nordic people, canadians. there were very few americans. >> we host probably 60 million or so international visitors from around the world, and we're certainly seeing an increase coming out of china for out of the pacific rim. we have long traditions from japan and germany and europe as well. they have particular interest. if you go to death valley in the middle of the summer when it is 120 degrees in badwater, you're
basically going to hear german. the germans have been coming to that site to experience that forever. this campaign is both. we are working with brand usa to market overseas, because that is new dollars dollars into the economy with international tourism and we have set a goal for america to be the number one destination in the world. but at the same time, we are marking -- marketing to americans. historically, we had a great program "see the usa in your chevrolet" in the 1960's worlding the returning of war ii veterans. today with our returning veterans and is very diverse, somewhat urban american population, we need to connect to them to the national parks as well. >> the national parks service has been budget constrained. you have had millions of dollars taken out of your budget in the past few years, so you have to make some tough choices. when it comes to reaching this
group of younger people, what do you give up? what kinds of advertising and marketing have you done in the past to an older demographic that now you just cannot afford to do because you have to get younger people into the parks? >> one thing we're doing is emphasizing our presence in the urban space. a lot of people think the national parks are all out west, yellowstone and yosemite and the grand canyon. certainly, they are, but we have a very strong presence in new york city with the statue of liberty or golden gate national recreation area in san francisco or the santa monica mountains outside los angeles. these units of the national park system are just as important and just as protected as the iconic parks as well. so attracting the urban population into these spaces so they can learn about their broader system, it can be a threshold experience for them as well. we are not really giving up
anything, just refocusing our efforts where the people are. >> what is your biggest challenge right now? >> i think there are a number of them, one of them is this issue of relevancy, of being relevant to the next generation. so they can see themselves and bring their families as they age and experience the american growth in their own economy. the second one, i would also say is climate change. we are seeing the effects of climate change to our national parks right now whether it is fire or drought or receding glaciers were migrating species. those are really challenging issues. and i do have an $11 billion maintenance backlog in facilities and roads in the parks as well. >> the money invested in the parks, what kind of return does it generate for taxpayers? >> it is a great investment. for every dollar invested in the national parks, there is a $10
return to the economy. i want to emphasize that return is often local. so around a national park, if you're at canyonlands or arches, the contribution to the communities of moab or around yellowstone or yosemite are very, very significant. we have an operating budget for the entire national parks system of about $2.6 billion. that converts into $26 billion contribution to the american economy. when you ripple that across to hotels -- >> john, i'm sorry to cut you off. we're about to run out of time. john jarvis, director of the national park service. have yourself a great weekend. stephanie, i don't know about you, but people don't recognize how freaking amazing national parks are. >> grand canyon? i love it. we will be back. ♪
>> president obama weighs in. the president will speak about the malaysian air disaster 30 minutes from now. you can watch it here live. generalal election -- electric on a diet. selling off something else every time you turn around. >> nasdaq gets hacked. how cyber crooks broke into the servers and could have taken it down. welcome back to "market makers." >> in about 30 minutes, president obama will be at the
white house briefing room. 11:30 is when he is scheduled to speak. peter cook is at the white house. little bit of a preview from obama's ambassador to the u.n. >> samantha power speaking in the last few moments in new york. same with the u.s. knows at this point, the plane likely came down because of a missile fired from an sa-11 missile battery likely operated by pro-russian separatists in eastern ukraine. the battery she suggested would require some technical skill to operate and she made it pretty clear in her statements that the u.s. expects a clean investigation, full cooperation by the russians and others to allow international investigators to determine exactly what happened. up till this point, without
knowing exactly what happened, it is pretty clear the u.s. believes russia bear some responsibility. take a listen. >> it may take us some time to firmly establish who shot down the plane filled with innocence, most council members and members of the international community have been warning for months about the devastation that would come if russia did not stop what it started. if it did not rein in what it unleashed. the endent on to say at of her comments, russia can into this war, putting more pressure back ann wagner posco or for russia to take -- i can't --puttingutin scored more pressure back in vladimir putin's court. >> while we will be hearing from president obama, are other global leaders also speaking out? >> they are. the dutch, who suffer the greatest loss with this tragedy,
speaking out. you have also had the australian prime ministers speaking out. australia lost several people on this plane. much tougher language than we have been hearing from some of these countries in the past about what should be happening, the de-escalation in ukraine. and the questions about whether this will lead to tougher sanctions imposed on russia. there is been a gap between what the u.s. and the eu has done. perhaps at a minimum, that gap will be diminished. >> we know accusations have been traded on both sides. the separatists say was the ukrainian army that file the missile. theounds now as though united states is making pretty clear it's analysis addressed the ukrainian army had nothing ukrainian army had nothing to do this. >> that is what we have heard from u.s. officials. samantha power was the most explicit today. she did say it was not definitive, but pretty clear the
decision the united states is making. we will see if the president goes any further. >> thank you. back in about 30 minutes with a live comments from the president. >> you can call it the incredibly shrinking general electric, shedding assets left and right. the latest that it plans to unload its consumer appliance unit. in the meantime, scooping up more european energy assets as the ceo shifts the focus. alix steel has been digging into the story and with us on the phone is william blair and company analyst. at int we want to look terms of what ge has shed the last two years, quite a bit. sold real estate holdings, stakes in foreign banks, exit nbc universal, sold its plastic business, spinning off as much as 50% of its consumer financing operation. we heard more details from that
on the call issued ipo by the end of july. offlso is going to shift its appliance unit as well. we have heard reports. what is left? forget about toasters and financing, looking at things like power and water from the oil and gas. this is where the company is making its money. aviation is also going to be a big leader going forward. you still have health care and energy management. overall, jeff ml wants his company to be an industrial company. revenue is up 7% in that part of it in the last quarter, organic growth was 5% compared to ge capital where revenue is down 6%. >> does shrinking and focusing ge make it a better company? >> i think so. today in theg global world of infrastructure, if you're really not very focused, you're not going to do particularly well. if you have eight or 10 lines of
business, i mean, look at siemens. they're on their third program to get their margins back. scrambling tore try to figure out how to get involved in markets that have a growth like oil and gas. talks how long do you think it is going to take for ge to be able to complete his transformation? some are saying, i would rather go with the pure industrial that doesn't have the finance unit weighing it down. >> that is been a concern since the great recession in 2008 and 2009. but i think today, ge is on a clear line of sight to be able to get the financial service by 2016.down to 25% out of thertainly less volatile segments of the finance markets like the consumer sector. >> does it seem like just immelt is taking down the house that jack welch built? >> jack and dennis were
exceptionally appealing about the opportunities for financial services, particularly the consumer finance sector. because the revolving credit for , certainly inls developed economies, was still quite low in the early 1990's so there was immense amount of room on the consumer side as well as on the commercial lending and leasing. commercial lending and leasing is still an going to continue to be a strong market and a key part of the ongoing pace of ge capital. but i think today, there's a lot more variability about funding, about regulatory oversight that is more burdensome and probably has less growth opportunity then you see in many of these core -- power, oil and gas -- sectors. >> you mentioned power and water.
that makes up about 70% of ge's revenue and also the main profit driver behind ge capital. it seems like that is where the growth is going to be for now. what is ge going to look like in the next decade? what is the growth driver there? >> i think starting in 2016, once the transaction is completed next year, power and water will be the principal fulcrum behind the industrial growth and return to double-digit cost certainly, earnings growth, and strong mid to upper single organic growth. as you get out to the end of the decade, ge is working diligently to try to make a very destructive move in the oil and gas that your, and that is to bring -- sector, and that is to bring processing for oil and gas -- today done at the surface -- to the seabed floor. if you do that, it is a dynamic change in the cost of recovering offshore oil. >> does ge have everything it
needs to fulfill that ambition, or is oil and gas the next frontier for an acquisition? about $15ay, ge spent million not has years to spin a $20 billion business. it is a $300 billion business and the oil and gas sector. probably 95% of it means to be able to pull off -- of what it needs to pull off his engineering feat to bring the processing to the seabed floor. >> you make in his justin point. on the call, some analysts were concerned because of the $17 billion purchase, ge did not have the flexibility or capital to make extra acquisitions if possible. he heard the executives say, look, we can still divest more. >> thank you so much. up, rupert murdoch's next move.
top techtime for and media. giving up control of the media empire, the forbes family will officially turn over its magazine to the widely followed ridges people. a hong kong group. the transaction valued forbes at $475 million. digital media has been cutting into forbes ad revenue. steve forbes will remain
editor-in-chief. bitcoin, lost 45% of their value after hitting 1100 last year. according to the latest poll, the virtual currency will fall even further, 55% of the financial professionals surveyed said bitcoins are trading at unsustainable prices. and now you can been john brooks the same way you do with tv shows on netflix and amazon prime -- binge on book the same way you do with tv shows on that puts an amazon prime. kindle unlimited includes more than 600,000 book's. may be 83,urdoch many thought his days a big deal making were done. well, that was until he stunned the media world with the bid for time warner this week. sense.r, and make the only question, what is time warner worth and will murdoch overpay? let's ask for fully managed for
-- for fully a manager. jason, the question of what william murdoch is willing to spend is important one for you and for them with 60 million fox shares at stick. what you think is prepared to do? >> good morning. thank you for having me. to show aox is going lot of discipline. we think the combination of the two businesses would create an incredible media force. at the same point, we think it will be disciplined about what they're willing to pay. fox on its own has the premier content assets in the business. we think the combination could have strategic merit, but we still think fox is best positioned of all the media companies. >> what does disciplined mean and dollars? table, $85 to the accommodation of stock and cash. what could it be? and at what point would you grow concerned? on where they're
willing to go. we think there will probably be a bump from the first offer them and maybe in the low 90's. but we think they will be very disciplined because they're very well strategically positioned, specially globally. it would not make sense for them to overpay on this transaction. >> are you ok with something the low 90's? >> i think that might make a lot of sense. you would have an incredible global media powerhouse. considering the distributors are consolidating, and make sense for the content players to become bigger. >> at what point do your ears begin to bleed? >> somewhere in the low to mid 90's would certainly do that. >> what other big giants are likely to weigh in next? amazon? google? >> i think the best fit for time warner, if there is one, really is fox. i don't think it really makes a lot of sense for the other players to be overpaying to be
taking the time warner business. when you are fox, you have so much additional value it would create from the two businesses, so the others are bidding against somebody that has an incredible amount of strategic value in the transaction. fox wins andif this passes, who loses? >> it depends on the price. >> what does this say to you about rupert murdoch? as i alluded as we are coming into this conversation, a lot of people thought his days as a big deal maker were done, that he had been burned, maybe, with the dow jones purchase. you wanted it so badly. and subsequently had to write up pretty much half the value. what does it take you about the 83-year-old rupert murdoch? >> rupert murdoch continues to be an incredibly dynamic media titan. he is never been afraid to make
old moves. we might expect this will be his last bold move. >> oh. what could be next? >> you never know what will be next. at the same point in time, we expect rupert murdoch to run news corp. -- fox in this case -- for some time to come. >> and you think he is the one behind us? >> well, it is going to be a team. ceoe carey ran directv as for many years. he obviously has good input. you have a very diverse team at the 21st century fox group. i think there's a lot of should you just merit as long as the deal is the right place. >> jason, a lot of people look at the timing of this offer and say, it is genius because 21st century fox has just completed the spinoff of news corp., time warner has just completed the
spinoff of time, so they're very both clean, focused media companies. and at the same time, comcast is tied up with the time warner cable acquisition. at&t is tied up with directv. up with vodafone wireless. do you share that point of view of genius? >> genius. rupert murdoch has been building this business since 1954. >> 1954? 1954. he has made bold moves. he is one of the few newspaper titans to be able to transform into a very powerful for relevant global content play today. we like the fact they're willing to make old moves as long as they're very strong price discipline attached to it. >> let's say jeff fugate somehow comes out ahead here, that he persuades shareholders that tendering their shares to the fox offer and ending up with a
classic stock with a controlling interest in the form of the murdoch family isn't such a good idea and fox cannot find the firepower either in the form of stock or in the form of cash to satisfy these people, what would murdoch do next? the firsturrently, issue is, i think if they did that, it would be a big loss for the shareholders. i think it would destroy a lot of value. clearly, much more value in the combination of the two then there is independently. we think fox is better positioned, so the shares they would receive in fox would accrue to the benefit. i think you might see another transaction. we own shares in viacom and they could be a potential target. you might see them continue to operate fox on its own. fox has incredible growth path for the next three to five years and beyond. one thing people don't realize about the fox content business, over the last five years, it has
had an annual growth rate of more than 20% a year. over the last 15 an even higher. we think the growth path has a lot of room to continue. sharesk the time warner are well served. the foxx cable network could be a lot better. and by putting these companies together, you just got two messes that become one bigger mess. geo group that? >> we think fox is firing on all cylinders. they have been an investment mode is you're creating fxx andfox sports1. if you look domestically and internationally, fox is doing great. we think they will be able to reinvent the content effectively. on the time warner side, i think
you're correct, they do have some challenges at the tnt.tainment -- tbs and >> jason, thank you for joining us. his voice matters in this discussion. >> hackers target the nasdaq and some investigators say russian fingerprints may be all over it. we will have more in just a few. you are watching "market makers." ♪
tragedy, 298 people dead and accusations now supported by the u.s. government that separatist rebels in eastern ukraine brought down the jet for the russian-made surface-to-air missile. the un new york, security council is meeting to discuss this unfolding crisis. ambassadors from the united states and u.k. are linking russia to the attack. the pressuring moscow once more to end its support for these insurgents in eastern ukraine. the russian ambassador speaking, calling or has been speaking and called for an impartial probe of the crash. the chinese ambassador has warned against "jumping to conclusions." they have made their positions clear, pointing fingers at the separatist rebels and saying, they fired the missile that brought down mh17.
>> welcome back to "market makers." i am stephanie ruhle. i was enjoying the music. i love this show. and i realized it was time for me to talk. >> inx ask her. nice to see you again. imagine this, a cyber attack on the nasdaq so serious it could wipe out the whole exchange. it sounds like a hypothetical. as a matter of fact, it happened. the parent company pretty much whitewashed the events in his disclosures to shareholders and regulators.
the cia and nsa spent years investigating this hack and are strong indications of russian involvement. bloomberg businessweek of the whole story in an exclusive on the latest cover story. riley investigated the story, wrote the story and is here with us in new york. this is an amazing piece of reporting. why don't you explain to us and our viewers, give us a shorthand of what exactly happened. >> it turns out there's a lot of hacking that goes on in the world, but one like this comes along really rarely. this would've to the president. he was briefed on it three different times. the cia was involved. what is originally found inside like twooks to the nsa things. one, the russian government. two, an attack tool. a tool that could actually destroy computers -- >> as opposed to just take data. >> right.
because it was inside a stock exchange, that was a really big deal. turns out the investigation takes a lot of twists and turns. they eventually discover the tool has a disruptive capacity. and they did not try to get into the exchange itself, so there were probably in there for an entirely different reason. it took them months to try to figure out, one, where this was and what was happening, and even four years later, they don't know exactly what to make of the whole thing. ,> what if those responsible potentially the russians, had decided to press the button on the cyber bomb? >> if they had tried to make their way into the exchange and they had used the disruptive capability of the malware -- >> it would have taken down the net. >> it had the potential to disrupt the stock exchange. any of the panic associated with that. what happens if an exchange gets
hit by cyber attack and how does the market respond? >> do we have any idea of what the motive was? >> this was an investigation that took so many twists and turns. first of all, they think it is the russian government and then they think it is a chinese cyber governmentks for the and has a secret gig on the side. the third time, they thought it might be an elaborate act of cyber crime. even the conclusion was only about 70%. fbi works fo weeks and weeks, digs into the investigation and is a focus on where the hackers activity was, it was in a set of servers that contain a lot of technology. trying to turn moscow into a financial hub in about exchange. they did conclude this was about asdaq pots a.p. -- nasdaq
's ip. >> you covered target and now nasdaq. when you look at corporate america, how are they addressing this cyber hacking massive threat? >> it is an epidemic. it is very serious. i think in both of those cases, nasdaq and target, it shows the very heart of company security safety, whether they can thrive in the world, is at risk because of these really sophisticated hackers. aey are working -- if there's moral to the nasdaq story, nasdaq spent a lot of time and money in the last four years trend upgraded systems. the question is, are they still vulnerable? reqs we've known previously that nasdaq was hacked. nasdaq did say something publicly to that effect. but we have never known anywhere that you described in your
story. why? i used the word whitewashed, and i mean it. >> hold on. should they? >> absolutely. >> from a security perspective, doesn't help shareholders and the nasdaq to air every single piece of dirty laundry? everydoesn't have to be piece of dirty laundry, but shareholders and the people who transact on nasdaq exchanges need to know the skill to which it was vulnerable and what the company is doing to patch -- >> why? today lose money as a result of it? question about the vulnerability. there's no question nasdaq downplays it. they said almost nothing about it at the time. what they did say was, they did not take anything and this is a minor incident that we discovered ourselves. they didn't discover themselves. an this is what is called
external notification. the fbi went to the men said, you've got a problem. apart from that, there were questions, legitimate questions, d but something like this out at what point do you because that in itself creates -- >> yes. >> fair enough. agreeing?nd of >> nasdaq is the same company that watched the -- >> facebook -- >> ipo. they deserve some accountability. >> what investigators found it would nasdaq network was not with expected. they expected the stock exchange to have some of the best cyber security in the world and that is not what they found. they found the security team have a lot of expensive platforms and security devices, but did not necessarily know how to use them. the kind of lobbying they would've need to reconstruct investigation wasn't there.
>> i'm so disappointed we are out of time because i am dying to know, what does the nasdaq think about your story? and foresight, we are out of time. mike, extraordinary score he -- story. this week's issue of business week. >> thank you. >> the president is due to be making remarks, his first substance of remarks on the tragedy in eastern ukraine. you know malaysian air flight 17 went down yesterday. lost their lives. many questions remain to be answered. who took down the plane? how was it taken down? peter cook is at the white house right now. i'll hunt is in our washington bureau. is in our washington bureau. there are so many crises going on around the world right now, not just in eastern ukraine.
what is chuck hagel most concerned about? reqs i think it is like a juggler at the carnival rehab all the balls in the air and you have to watch every single one of them. whether it is ukraine, russia, the middle east, iran, iraq can't even china. all of those balls are still in the air. >> doesn't make sense the president was in new york city last night at a fundraiser with 24 people a $50,000 a plate? some are saying that is in poor taste. >> if we were left to me, i would take all of those fatcats out of politics and publicly financed things of that fatcats did not have that kind of influence. but unfortunately, that is not going to happen. the government goes on.
>> even after a plane crash that killed almost 300 people, it still makes sense to stay on schedule and hit that fund-raising dinner? >> no, i would cancel all of them if they're left up to me. i would get all of the fat out, but that is not the real world. >> it is not. thanks to the supreme court and others. peter cook, our chief correspondent in washington. you told us what we had heard from the white house earlier in the show, why don't you recap that ensure anything new you have learned. >> the message we have gotten from the u.s. government and the obama administration can primarily this morning from the ambassador to the united nations so met the power. samantha power. she walked up to the line essentially suggesting russia played some role in all of this and at a minimum, the u.s. believes the missile that brought down the plane came from rebel held territories the separatist held territories in
eastern ukraine and they could not rule out the possibility of assistance for the separatists and operating what is a sophisticated missile system. will wait to see the president is prepared to go even further. samantha power said russia can and the war of a lot of responsibility on russia's plate. we will see the president goes further and to what extent he uses this opportunity to ratchet up more pressure from the europeans in terms of sanctions. will there be a new sanctions push, at a minimum, come out of this? >> how far can the president go and do you think you will do it? >> i think it depends on the evidence. it is clear. must everyone who has looked at it it was perpetrated by those dissidents. do they have any evidence that the russians were in collusion? if they have any of that, then i think they're going to bring it
out. i'm not sure what they have. it has only been a little over 24 hours. we are limited resources over there. it is quite chaotic, i guess. the former european ambassador -- i want to put the question to you. if it had been an american carrier whose jet was shot down, what would be happening right now? the reason i asked the question is to put it into perspective. the malaysians and the dutch don't play nearly as strong a hand as the u.s. government does. >> there are limits. the road be even more of an outrage, suppose, but remember back in 1982 there was a plane that was full of americans that was shot down accidentally by the russians -- they denied it for a long time and then finally it was clear they had done it. cane are limits to what you
do the tragedy like this. >> i believe that was korean air lines flight 007 and 1983. was, but there were a lot of americans on that flight. >> former secretaries to hillary clinton has weighed in on the crisis in ukraine. last night she spoke with charlie rose about what the malaysian air disaster means from russia's president vladimir putin and the best way to do with him. is pushing then envelope as far as he thinks he can. i think he has annexed and occupied crimea. he is willing to keep ukraine unstable in order to try to intimidate the new ukrainian government to back off from their approach to the ee you -- eu. and i think the only language he understands is one that is very tough, very patient, very clear. >> hillary clinton. al, what do you think of her
response? >> i think she is right. i think if putin doesn't withdraw the support from those rebels or whatever we call them in eastern ukraine, i think we are ratchet up the sanctions all the more. the question, though, can we get the europeans to go along? maybe this horrible incident will make that a limit more likely. but that is been a problem so far. >> peter -- >> let me get in on that. the initial signs are not great, to be honest. tough words from angela merkel. germany has lost people on these plans. she says putin their summers possibility but says so far the current eu response is adequate. it doesn't suggest germany is lobbying hard for initial sanctions. we will see that changes over the next 24 hours or so. well.being resistant as no clear indication all the europeans are on board for
tougher sanctions even though some within the eu may be. >> is a possible this disaster helps the president, for that matter, chuck hagel, focus americans attention on what is happening overseas? >> i think the answer to that is, it is perhaps an opportunity for that but only if vladimir putin changes his ways. if the u.s. gets more defiant, that doesn't suggest this is a powerful president able to flex his muscles in terms of foreign policy. still needs to be determined, but it is an opportunity to get not only u.s. extension focused on this but -- attention focused on is that european focus and pressure on the russians as well. >> it is hard for many americans to get too exercised over issues that divide the separatist and ukrainian government. does this get more people to care, the deaths of 298 innocent people?
it inhink it personalizes a dramatic way. i think the american people probably thought putin is a bit of a thug. that probably understate the case. i think this makes that feeling more intense. i think there would be support for any kind of sanctions that we will engage in him again, the key being european. but i think russian economy is pretty much a basket case to begin with. mccain, a gas station pretending to be a country? i think even without full european support on the sanctions, mr. putin has his own problems, which are considerable. >> alhunt in our washington bureau, peter cook at the white house. the headlines are very much a fresh in our memory. the images of that crash, malaysia flight 17 in eastern
>> we are waiting for the president to walk into the white house briefing room and deliver remarks to news organizations about malaysian air flight 17 down to yesterday in eastern ukraine with 298 people on board, all of whom are dead. in the meantime, i want to go back to an exclusive interview that charlie rose conductor with the former secretary of state hillary clinton. he asked clinton who might be responsible for these heinous acts. >> the questions i would ask, who could have shot it down? who had the equipment? it is obviously an antiaircraft missile. who could have had the expertise
to do that? because commercial airlines are big targets, but by the time they got over that part of ukraine, they should have been high, so it takes some planning. and the ukrainian government has been quick to blame it on terrorists, which they're never the russian insurgents. there does seem to be some -- their name for the russian insurgents. there does seem to be some indication it had to be russian insurgents. to determine that will require forensic. if there is evidence pointing in that direction, equipment had to have come from russia. what more, the russians may or may not have done, we don't know. i read as i was walking in today to talk with you the russian stock market has dropped. there's a great deal of concern that not only would a civilian plane shot down, but what this means about the continuing conflict in eastern ukraine and
the role that russia is playing. >> the former secretary of state hillary clinton and a conversation with charlie rose. you can watch it tonight exclusively here on bloomberg television at 8:00 p.m. and 10:00 p.m. eastern time. let's turn to peter cook who is at the white house waiting for the president to make his remarks on mh17. we were talking about the possibility that this creates a political opportunity, it even if it does, the president still has to walk a fine line. >> and he is been getting more criticism than he has support from republicans on the hill up to this point. we heard some voices on the hill saying the president should have taken stronger action already. now you should raise on are providing more arms to the ukrainians, for example. that would be a touchy subject for this president. we will see if he gets into the course of that. it is a delicate line. he needs to satisfy the
europeans but also congress, and give the attention to the mac and people. >> when some say you should've taken action already, when exactly? >> there have been calls for more dramatic sanctions to impose sector sanctions up to this point. the president has been unwilling to do that in part because the europeans have been urging a more scaled-back approach, the ability to escalate over time. we will see if that is the next step. at his been that's right all along that it is been easy for republicans to say, he should've done that from the start. >> does the president have absolutely no choice to impose suffer -- tougher sanctions? >> i'm not sure that is his only option. i think what he would like to see is the europeans step up their sanctions, which would have more impact on the russians because of their ties between their economies, and the u.s. policy dr. that. you would like to see europe take the lead with the u.s. with
an active vocal role. usthe president is making wait to the podium. let's take you to the podium. >> malaysian air flight mh17 took off from amsterdam and was shot down over ukraine near the russian border. nearly 300 innocent lives were taken. men, women come and children, infants who had nothing to do with the crisis in ukraine. outrage ofs are an unspeakable proportions. we know at least one american killed.was our thoughts and prayers are with his family for this terrible loss. yesterday, i spoke with leaders of ukraine, malaysia, and the netherlands. i told him our thoughts and prayers were with all the families and the mecca people stand with them during this
difficult -- and the american people stand with them during this difficult time. later i will speak with the prime minister from australia who also suffered a terrible loss. by far, the country that lost the most people on board was the netherlands. from the days of our founding, the dutch have been and stalwart allies of the united states of america. today i want the dutch people to know we stand with you shoulder to shoulder in our grief and in our absolute determination to get to the bottom of what happened. here's what we know so far. the evidence indicates the plane was shot down by surface-to-air missile that was launched from an area that is controlled by russian-backed separatists inside of ukraine. we also know this is not the first time a plane has been shot down in eastern ukraine. over the last several weeks, russian backed separatist have shot down the ukrainian transport plane and the ukrainian helicopter him and claimed responsibility for shooting down a ukrainian
fighter jet. moreover, we know the separatists have received a steady flow of support from russia. this includes arms and training. it includes heavy weapons, and it includes heavy antiaircraft weapons. what must happen now, this was a global tragedy. an asian airliner was destroyed and european skies filled with citizens from many countries, so there has to be a credible international investigation into .hat happened the un security council has endorsed this investigation and we will hold all its members, including russia, to their word in order to facilitate that investigation for russia, pro-russian separatists, and ukraine must adhere to an immediate cease-fire. evidence must be tempered with an investigators need to access
the crash site in the solemn task of returning those were lost on board the plane to their loved ones needs to go forward immediately. the united states stands ready to provide any assistance that is necessary. we're party offer the support of the fbi and the national transportation safety offered we have already the support of the fbi and the national transportation safety board. they are on their way, personnel nationalfbi and the transportation safety board. i will continue to be in close contact with leaders from around the world as we respond to this catastrophe. our immediate focus will be on recovering those who were lost, investigating exactly what happened and putting forward the facts. i want to point out there will likely be misinformation as well . i think it is very important for folks to sift through what is actually based in what is simply speculation. no one can deny the truth that
is revealed in the awful images we all have seen. the eyes of the world are on eastern ukraine, and we're going to make sure the truth is out. more broadly, i think it is important for us to recognize that this outrageous event underscores that it is time for peace and security to be restored in ukraine. for months, we've supported a pathway to peace. the ukrainian government has reached out all ukrainians to put forward a peace plan and lived up to a cease-fire. violations took the lives of ukrainian soldiers and personnel by the separatists. russia has refused to take the concrete steps necessary to de-escalate the situation. i spoke to president putin yesterday in the wake of the additional sanctions we had imposed. he said he wasn't happy with them. i told him that we have been
very clear from the outset that we want russia to take the path that would result in peace in ukraine, but so far at least russia has failed to take that path. instead, it has continued to violate ukrainian sovereignty and support violent separatists. it is also failed to use its influence for the separatists to abide by the cease-fire. now is a somber an appropriate time for all of us to step back and take a hard look at what has happened. violence and conflict inevitably leads to a perceived consequences that unforeseen consequences. russia, these separatist, and ukraine all have the capacity to put in and to the fighting. meanwhile, the u.s. will continue to lead efforts within the world community to
de-escalate the situation and stand up for the sovereignty and territorial integrity of ukraine and support the people of ukraine as they courageously work to strengthen their democracy and make their own decisions about how they should move forward. before i take just a couple of questions, let me remark on one other issue this morning. prime minister netanyahu of israel about the situation in gaza. we discussed israel's military operation in gaza from including efforts to stop terrorist infiltration through tunnels into israel. i reaffirmed my strong support for israel's right to defend itself. no nation should accept rockets being fired into its borders or terrorists tunneling into its territory. while i was having a conversation with mr. netanyahu, sirens went off in tel aviv. i also made clear the united states and our friends and allies are deeply concerned about the risks of further escalation, and loss of more innocent life.
and that is why we have indicated, although we support military efforts by the israelis to make sure that rockets are not being fired into their --ritory, we also have sent said our understanding as the current military ground operations are designed to do with the tunnels and we are hopeful that israel will continue to approach this process in a way that minimizes civilian casualties and that all of us are working hard to return to the cease-fire that was reached in november 2012. secretary john kerry is working to support egypt's initiative to pursue that outcome. john isy mr. netanyahu prepared to travel to the region following additional consultations. let me close by making one additional comment. on board malaysian flight