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tv   Charlie Rose  PBS  July 22, 2014 12:00am-1:01am PDT

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>> charlie: welcome to the program. we begin this evening with ukraine, the shooting down of the malaysia airliner, and the relationship between russian separatists and vladimir putin. we talked to david remnick who was recently in moscow. >> i think he is a rational actor, but he has used old tools and it has unleashed very ugly things in the russian society. people are starting to recognize that i had a meeting with povlovsk can i, one of his political advisors for many years, and he thinks that it became so ugly at the kremlin's wishes that it unleashed sentiments that went beyond putin's grasp. >> charlie: we look at rupert
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murdoch and 21st century fox's offers to buy "time." we talk with henry blodget and andrew edgecliffe-johnson and mario gabelli. >> when we look back on the dow jones deal, a lot of people said this is rupert's deal. he wants to go to his grave with "wall street journal" written on his tombstone. now we look back that and laugh. this is the tenth of the size of the likely price of a time warner deal. so this is something of enormous ambition. >> charlie: concluding with ian bremmer, the founder and c.e.o. of eurasia group and talk about american foreign policy and the obama doctrine. >> in the world cup when the united states was playing germany, the u.s. was yelling u.s.a., u.s.a., u.s.a., the germans were screaming n.s.a., n.s.a. in the german newspapers, this is continual headlines, front page, every single day, it
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matters a lot. but they had a problem with iraq. they had a problem with libya. they have issues generally speaking with the way the united states projects power around the world and the way the french and brits are more comfortable. >> charlie: vladimir putin's russia, rupert murdoch's offer, and ian bremmer's look at american foreign policy when we continue. >> and by bloomberg. a provider of multimedia news and information services worldwide. captioning sponsored by rose communications
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from our studios in new york city, this is charlie rose. >> charlie: we turn to ukraine, the fallout from the downing of malaysia airlines flight 17 over east ukraine continues. the international community is hardening in the belief that the plane was shot down by russian-backed separatists using a russian anti-aircraft weapon. russian military officials continue to deny any involvement. earlier today the rebels allowed dutch forensic experts to search the wreckage after days of destruction. new reports of fighting. president obama spoke earlier today. >> my preference is finding a diplomatic resolution within ukraine. i believe that can still happen. that is my preference today and it will continue to be my frerches, but if russia continues to violate ukraine's
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sovereignty and back the separatists and they become more and more dangerous and now are risks not simple only to the people inside ukraine but the brord international community, then russia will only further isolate itself from the international community and the costs for russia's behavior will only continue to increase. now's the time for president putin and russia to pivot away from the strategy that they have been taking and get serious about trying to resolve hostilities within ukraine in a way that respects ukraine's sovereignty and respects the right of the ukrainian people to make their own decisions about their own lives. and time is of the essence. >> charlie: david remnick knows russia well, editor of the "new yorker" magazine, i am pleased to have him back at this table. he returned from moscow several weeks ago. welcome. >> good to be here. >> charlie: you know lots of people over there. >> yeah. >> charlie: what are they saying about vladimir putin?
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this was before -- >> well, it's interesting. foreign correspondents tend to -- in their daily lives, anyway -- see people a little bit like them. a lot of liberal intellectuals, people who are good sources and so on. i really made it my business a couple of weeks ago to spend day after day after day speaking with what i think is the new class, the putin 2.0 class of neo-imperialists, russian nationalists, because you are seeing a new wave of putin conservatives and it has to do with social conservatism at home and a kind of aggressive rhetoric abroad, particularly anti-americanism that outstrips anything you may have seen eight, nine, ten years ago. >> charlie: as reflected in the views of these 2.0 people? >> absolutely. some of the people began in the '90s as outright liberals and
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either because they became disgusted or because they're outright opportunists and smelled a paycheck and rise in power, they changed. the key is information. the vast majority of people in russia get their information, their sense of what's going on in the world, whether it's this incident with the malaysian plane or ukraine in general or the united states through state-run television. it is almost orwellian in its reach and in recent years since putin came back is far, far more sophisticated, strict and all encompassing in its propaganda. if you were to turn on russian television tonight to get a sense of what's going on in the world, what's going on in eastern ukraine, who did what to
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whom, who's to blame, you would be appalled. you would be shocked. you would be disoriented. >> charlie: there's no free television in terms of independent of the kremlin? >> there's very, very little. there's an internet channel called "rain" but it's being pressured vastly. i was there to see people and their headquarters was being moved to the far fringes of town. their access to the air waves is getting more and more limited. so even the liberal outputs, the liberal outlets are feeling the pressure and there are far fewer of them. the main way information comes is from channel 1 from russian tv, and everybody watches it. >> charlie: the essential question about this incident -- it's not an incident -- it's what happened in the tragic destruction of 280-plus lives, the central question is in what way is russia complicit?
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>> i want to be careful and i don't want to say that we know or don't know. >> charlie: you made that point in your piece. >> and i think we should, even now. but when we put the pieces together, when you see the way -- first of all, who had the weapons to do this, what is the geography, what are the motives, are other planes shot down by the so-called separatists? yes. >> charlie: military planes. are they done with russian collusion, yes. is there at least minimum communication between moscow and these groups. yes. were there phone calls and so forth and what about the behavior at the crime scene? it was disgusting. and i think what's happened overall is putin unleashed you could say the dogs of war, but unleashed something very ugly
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not only in the military sense but in a societal sense since the opening of this terribly complicated crisis with ukraine and the west. he's done it through -- >> charlie: which began with crimea. >> it began before that, obviously. it centered on the drama having to do with victorria yanukovichd a conflict with the west, and it's rooted in a sense of resentment against the west that's developed over a decade's time. it's developed with some western errors as well, but really the singular actor here is vladimir putin. >> charlie: but it may be out of control, you're suggesting? >> i think that putin, if we consider putin a rational actor, and i do. sometimes you hear about him being delusional. no, i think he is a rational actor. but he has used old tools, and it has unleashed very ugly
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things in the russian society. people are starting to recognize that i had a meeting with poove povlovski, one of his political advisors for many years and he thinks tv became so ugly at the kremlin's initiative that it's unleashed forces and sentiments that have really gone even beyond putin's grasp. i went to see people who now have regular access to the air waves who would make linden larushe's people look like moderates. >> charlie: not just the separatists, but in russia. >> there's a connection. there are people like alexander who runs a newspaper and has for years called "tomorrow" filled with antisemitic and neo-imperialist rhetoric, and he used to be a marginal figure, now he's on national television
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all the time. this has aroused people's resentments, their anger at the west, their fury. i think we have to remember what happened 25 years ago. people woke up in a country where an empire had suddenly become one country. >> charlie: the collapse of the soviet union. >> the collapse of the soviet union. everything people taught was black was white, and vice versa, our friends are enemies and enemies are friends. the amount of disorientation and anger and resentment and feeling that the west is being triumphant, all of these feelings have percolated. you see it in the rhetoric of putin today, and it wants much stronger in its rhetoric now than a decade ago. >> charlie: and popular at home. >> it is, partly because he's made it popular. >> charlie: he controls the media. >> it's more sophisticated than
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soviet times, the way this is done. it's less bland and boring than the old soviet propaganda. there's no department of ideology in the kremlin that there was in the communist party but there is an ideology that's developed. >> charlie: these people who may know him, how far do they think he will go? >> first of all, he changed the people around him. there used to be a dynamic in the kremlin. it was never a pleasantly democratic place, but there were people especially on the economic side, for example, who were very interested in the development of a proper market economy, but, yo you know, the interest in russia is so powerful that some of them are out of a job, living in paris or gone. the people who surround putin immediately are the people with
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kgb backgrounds, people who are like him. there's not a lot of diversity of opinion in the kremlin. >> charlie: how far will he go? what does he want? >> well -- what's he want... you know, sitting in the olympics in s so s so sochi, ans with the ukraine had already started to perk late, if you told me he would move in next to crimea, i would be shocked, and the idea that he would then destabilize so much of eastern ukraine -- >> charlie: and get away with it in terms of crime yanchts absolutely. in fact, when we're talking about all this on the international stage, crimea is now a given. >> charlie: exactly. a given. >> charlie: so when you look at where we are. >> and the russians, by the way, the russian leadership, at least pretends to laugh off economic sanctions, and sanctions really work, and in the immediate
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way -- >> charlie: and focusing on your experience in russia, you were recently there and had conversation with people, is there any real oppositiono to him or does it have high visibility? >> two years ago, there were tens of thousands of people on the street angry principally that putin high-handedly decided to come back and win the presidency in what can only be described as a non-transparent process. a lot of angry people. who were these people? well, they weren't all liberals, but they were all of what you could call the new class, the new middle class, the creative class, the office class, and these people were enjoying prosperity and freedom to travel and freedom from political assault on their private lives like never before in russia and, yet, they were politically angry. putin resented these demonstrations like you couldn't believe, and as soon as he was elected president, he crushed
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them and, instead of making common cause with these people anymore, he moved his focus and his politics and i think his ideology to the far more conservative majority of the country. that's the shift that's taken place in the last two years. ideologically that putin, through the use of certain rhetoric and touch stones and resentments has changed his emphasis and moved with the far more conservative. >> charlie: is it possible in terms of people you talked to that this is a turning point against him, one, europe, in terms of the use of sanctions which he might respond to, sanctions with europe, a much stronger than things without europe, because of germany and people who have a powerful trading relationship? >> in order for that to be true and i hope it is and it could be, it demands that one set of priorities overwhelm another set. it demands putin recognize that,
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in order to be a member in good standing of the international community, in order for russia to knit itself into the international economic system at a time when -- remember, his popularity in the early days was built on the fact that he was presiding over a country with 57an7 or 8% growth rate. pensions paid, debts were being paid down. >> charlie: food. middle class was accumulating. food -- forget food, cars! people were traveling abroad, a real midding class, that's where the popularity was centered. now with near zero% growth rate, he -- near zero percent growth rate, he has fanned up nationalist emotion to paper it over. that's where the 85% popularity is now based on that kind of
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stuff and that has no great horizon. it might for a while. that's why i think he is, for all his vaunted intelligence, is a very poor strategist and tactics. i think this adventure in ukraine has been one improvisation after another. the plans for such a move, as they were in georgia, long been there as a contingency, but to do one thing after another, forget about this final catastrophe, was a series of tactics, because the strategy, where does it bring them? >> charlie: would vit made a difference in -- would it have made a difference if europe would have acted strongly and come forward with a deal that would have let ukraine have a connection to europe as well as russia -- >> there's no question ukraine itself is a deeply divided society. we have to remember what terrible shape ukraine is in economically. poland after the end of communist has tripled the size
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of its economy, ukraine has not grown one bit, which is quite an achievement with the communist collapses. the political class of ukraine has raped that country, has bled it dry. everyone. there's not a great hero to be found on the ukrainian economic and political landscape anymore than in the kremlin. >> charlie: they were all corrupt? >> which makes the west or made the west very wary of sending more aid because you might as well mail it straight to a swiss bank account. >> charlie: right. and they're really unlike, say, poland in the '80s. there's no great mass political accounting and movement in ukraine. there hadn't been for many years. the orange revolution was a failure, in the end was a failure. we can only hope for the best now. the man who's the president, poroshenko, i have to think his
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fortune was not accumulated in the most gorgeous way possible either. >> charlie: but he has a certain boldness as president. >> he has. >> charlie: there's also this question with respect to putin, do they have any sense of where he is responding to his own judgment about whether president obama will respond? >> it depends on what "responding" means. "in other words, when i watch lindsey graham and john mccain get up on television and demand, this is the result of feckless american foreign policy, what are they asking for? tanks into ukraine? >> charlie: well, they say no. then what? >> charlie: i assume they want more support for the ukrainians so they can fight, that's what they'd argue. >> more arms? >> charlie: yes, but not american boots on the ground. but that's always -- there's no calling for boots on the ground. >> but we have been to this movie before. >> charlie: no, in places where it turned bad, we put boots on the ground. >> we are looking to step back
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for more armed conflict. >> charlie: clearly, americans are saying, look -- but they're looking at afghanistan and also they're looking at iraq and they're saying, you know, we've spent -- >> and a reluctance to do anything militarily about syria -- >> charlie: and pressing needs at home as well, so put those things together. here's the question, though, regardless of all that, if you look at, say, crimea, we just did nothing. is it possible he has a calculated judgment about what president obama might do and has a calculated judgment he could, a, split the west and withstand the sanctions? and you combine that with the messianic instincts he has to restore russia to greatness. >> complicated no doubt in. one of the complications, the europeans are much more reluctant t about even sanction,
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why because europe is more knit into russia in energy. >> charlie: in a way, dependent on russian energy. >> exactly. i don't see, beyond the kind of somewhat hysterical rhetoric from the obvious corners, and i think it's a tiny minority, i don't see anyone of reason anything that greater military -- either militariestic rhetoric or action has any place in this conflict. the history of crimea is well known. most russians, even a lot of liberals, by the way -- a lot of liberal friends i know in russia are very happy about crimea. >> charlie: sho khrushchev gavet
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away. >> eastern ukraine is another matter. this notion of a russian world in which russia should control every place with russian speakers, that edges into something else and it's memorable from history in germany and elsewhere. >> charlie: one more question. close your piece with this question -- what is vladimir putin's next move? do you have an answer? >> well, i can hope what the answer is, and that is a murky retreat. that's the best that can be hoped for because, see, he can't throw up his arms and say, you know, considering his home audience which he has whipped up into a frenzy, he can't suddenly -- or he feels he can't suddenly get all nice about this and say, you know what? my bad. you know, i don't know what i was thinking here. empowering a guy like i gor igor
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strelvkov, a kind of murky semi-diplomatic language, withdraw is the best we can hope for. >> charlie: in the interest of -- >> peace at home. >> charlie: peace at home. changing the subject, everybody knows magazines are also part of the digital revolution, having to relate to find opportunity in the digital revolution, you just created a new within site. what did you try to accomplish and where does a magazine find itself today? >> for us, it was very different than the experience of the "new york times." >> charlie: okay, that's a newspaper. >> for the "new york times," and it's an enormous thing to try anyway and you had to do it. >> charlie: right. you took what was in the paper and transferred it to digital. >> charlie: that was the first thing they did. >> and then there are bells andç thing they did. >> and then there are bells andç
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things. th first thing we did was, okay, we put that stuff online but, on the other hand, i didn't want to away for free for obvious reasons. the newspapers made that mistake, we don't want to repeat it. for us, it wasn't the same thing. we had to figure out what would be the proper way for the "new yorker" and its writers to, given this way to more quickly respond to the world, how can we do this, in what measure? because i don't want to be a b-level "new york times." i want to be the best we can be both in print and online. so what you've got today when
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you go on which is completely and beautifully designed and more fluid and all the rest is you have everything available to you. everything that was in print, archives, everything beautifully done since 2007 in the best way possible. right now for the beaks little while, you can have it for nothing. this is a time for you to see what this is. >> charlie: sample it and if you like it a lot, you will have to pay for it. >> someone on twitter compared it to how drug dealers behaved. this is isn't drugs, this is something much more interesting and edifying and will help your life. it has to do with -- you know, people online are rightly very demanding. they want to surf things quickly
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and easily. >> charlie: what do you expect newsstand sales to do for you? >> it is the aspect of newspapers which is a challenge. >> charlie: subscription. subscription, this is the great peat part of what's aping at the "new yorker" is subscriptions in print continue to go up -- not astronomically, but they continue to go up. online, it's taken off, and amazingly people are reading the "new yorker." what's the faster way to read it? on your phone. who would have thunk it? >> charlie: is that right? fastest growing... >> so many things about the web, so many things you're told 15 years ago turned out to be opposite to be true. one of the most evangelical principles, when i would be invited to some web event as the tyrannosaurus rex, you know, i'm the old guy, i was told over and
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over again, especially vis-a-vis the "new yorker," no one would read anything of length. that turned out to be completely nonsense. one of the most popular pieces we've ever had online is larry wright's 25,000 word piece on scientology. this happens over and over again. what's the most popular piece online today? other than our little note to the reader about what we're doing, is the long profile of joe biden. i find inevitably the readers want the best of what we do. >> charlie: it's always about the writers. >> absolutely. >> charlie: in the end, it's about the writers. >> it's the wine, not the bottle. >> charlie: thank you. thank you. >> charlie: back in a moment. stay with us. >> charlie: it is a huge business story revealed last week 21st century fox run by rupert murdoch is mount ago takeover bid for "time." if successful the combine nation
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would bring under one roof content. the initial $80 billion offer was rejected by time warner after lengthy discussions. it decided it was not in it's best interest or those of the shareholders to accept the proposal. where it goes next is yet to be determined. mario gabelli, henry blodget, andrew edgecliffe-johnson, i am pleased to have each of you here. why does rupert want time warner? and it's easy for him to afford it. >> charlie, that's interesting. back in the early '80s, rupert came after "time." it was called warner. herb stegall bailed him out. rupert was not an american
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citizen then so he couldn't on control of television stations so they cut a deal in central park. that's kind of an easy way to do it. a year ago on august 8, an analysts meeting, portfolio meeting in l.a. where fox got up and shared their vision after they spun off news corp and they said, look, we're going to do the following -- over the next ten years, you have a rising middle class in india and china. second, the smartphone gives you mobility and need for content and that's growing exponentially. so content is king. then rupert's timing, i think, he also at that time talked about the satellite business -- sky, deutsch tv and italia and india and merging those together. there was a discussion that it would happen, and the question was when. the media conference to take place a month later, a proposal.
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a lot of these proposals come in with a price that is open for discussion, and that was the dynamics, as far as we could with tell. >> charlie: is it always true with rupert -- because some suggest that he really makes his final offer at the beginning, as he did in some other transas transactions. >> yeah, you look at the dow jones but nobody else came to the table. nobody else wanted a newspaper then. >> charlie: give me the personal dynamics of this in terms of rupert murdoch. 83 years old. >> when we look back on that dow jones deal he just mentioned, a lot of people said this is rupert's legacy deal. he wants to go to his grave with proprietier of the "wall street journal" written on his tombstone. he has ink in his veins, this is the ultimate achievement. now we look back and laugh. this was the tenth of the size of the likely price of the time
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warner deal. so this is something of enormous ambition. but there are two mote varieties for m&a as well. besides ambition and aggression and confidence or there's anxiety. the point about content is king, we're actually seeing the new kings merging in distribution. comcast is already neck and neck in disney for the world's largest media company is on the distribution side. we've seen cable networks being mopped up in europe. so rupert is selling to moguls for pennies to pump out content and could get more powerful. >> if you are the owner of great content on the internet now, suddenly you have the option of not only selling to cable companies and satellite companies but going to internet distributors, so you get another huge check for your content and that will only grow for the next
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several years. >> charlie: when will we see a higher price from rupert murdoch? >> likely weeks. probably not months or days. they'll call to figure out what it would take to get a deal done. is there a cash component, more voting at the table, a higher number, which seems to be uniform? >> charlie: seats on the board might be an issue as well? >> i don't think there's any probable. conversable with ten year life exchangeable into the bond which is an idea i picked up from steve ross about 25 years ago or a contingent value right which allows a shareholder -- we think the fox stock will go to $65 in three or four years if they get this deal done and with rupert having confidence in doing that and laid out the numbers like anybody else and knows them better than we do that he could offer it.
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that option or a convertible preferred and i get 6.60 of $100 preferred, no cash laid out 3,% cue upon, that's $140 a share in cash and we'll sing and dance and there are some taxable dynamics to it but that's okay. >> charlie: what's in the mind of time warner? >> first of all, i think he's a rational c.e.o. >> charlie: a man who became a c.e.o. of spun-off property. >> it's the cow that keeps giving. it's been phenomenal in terms of what he's given back. >> he's one of the ware c.e.o.'s who made his company smaller. he spun off time warner cable, aol and he's made it a more edible target. the first thing in their mind is putting to their shareholders why they're worth more than the current offer and maybe future
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offer from fox. so we'll see probably around the time of earnings in early august is them laying out a case which says we've now done the hard a work of cleaning out the businesses we didn't feel belonged in this business. we now have a video focus company, warner brothers movies and importantly this massive television empire h.b.o. and turner and this is where the profits come from. >> not only did he give value to the share holds. 1.2 billion shares outstanding when he spun off the cable business only 888 million. it's a simple concept. i don't know who the lead horses are on the board, but they'll say give us our present value today. >> charlie: 135? that's three or four years out. >> charlie: what do you think the present value is today? >> you know, the old story is you need a stalking horse to get the higher bid but i think if
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you want to cut a deal you've got to talk and if you want to talk, i want seats ton board, currency and more money. >> seems to be folks are coal coalescing around $100 a share. >> charlie: what does that get you in terms of -- >> about $88 billion. >> charlie: i the spinoff of crn cnn, part of the deal rupert is offering because he has fox and digital cable and doesn't want to look at the anti-trust possibilities, is it worth 10, 15 -- >> $8 billion to $10 billion. it will ultimately be worth what a buyer is willing to pay. >> charlie: cbs interested? he said he would look at it if it came up for grabs. i think it is one of the great franchises. obviously it's had a lot of trouble in the ratings. produced an awful lot of cash so it has a lot of value.
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>> charlie: there is this argument by jeff whether he makes it in-house or public i don't know but it's the idea that he thinks if they wait two or three years comcast would have done all the spinoff they want and be ready to make a bigger offer for something that adds to its -- >> that is a non-startable deal given -- because they already own a major studio, they already own a lot of content and own distribution. >> charlie: so they'd not be interested. >> no, it means john malone has more interest and others may have more interest in content but i don't think comcast is a player for this asset down the road. but cnn is global, and if you think global you think about sports, news, entertainment and news is cnn in the world and al-jazeera paid $10 million for a little asset base. >> charlie: blockburg --
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don't exclude bloomberg from the cue on cnn or anyone else you want. i mean, this is chump change. >> time warner looks ahead at two to three years and says at that point we'll be in a great position to put ourselves on the block to many potential takers. they're viewing apple and google as potential buyers. i think there is a chasm in terms of the dna of the silicon technology valley and big media companies. but jeff yo bukus has gotten ito where he wants and in a few years may want to be c.e.o. of the company and not ready to sell. >> i think there is a question about whether a potential white
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knight two or three years down the road. we've talked for years will apple buy or google buy movies. the problem with the theory is you buy one and the others don't want to work with you in hollywood because they don't trust you because they think you favor. so the question of whether apple or google could run a movie studio or television is a real hurdle. >> charlie: this is likely to happen, in your judgment? >> yes. >> charlie: because there's no reason not to? >> if they can get close to the market value four years out, what would this company be worth to somebody, yes. >> charlie: is it possible they'd say to jeff, we want you to make this acquisition, be for the acquisition and run it three or four years till my kids are ready? >> i don't know. chase carry's done a great job and jeff bukus has done a great
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job. >> charlie: they both have but rupert made it clear he wants his kids to run the company. >> and james will play a central role -- >> that's not a problem. i've owned fox voting stocks and time warner, i understand that, owned it a lott long period of time. time. >> charlie: why is fox stock going down? >> people are worried murdoch will overpay and write it down. so the concern is he'll have to pay a very big number to win it and the fox side is doing a very good job of saying, no, it's not happening in this case. >> and you can take away more debt if you offer more cash. and his bigger deals haven't paid back so well. dow jones, he bought at the top of the market for -- >> charlie: but he doesn't
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regret it one moment. >> he's enjoying it hugely. >> charlie: made ate better newspaper. >> but wrote off half the value in 18 months. >> based on the formia, you would have $10 billion debt in four years, 3.3 billion shares outstanding fully diluted and the family would control it and everybody would be happy. >> charlie: who is the largest stockholder of time warner? >> that is a public company, we have unfortunately -- i have the list and i don't have it. august 15, everybody has to file, charlie, that has 100 million under management and that time you will know, the etfs are the big holders, the state streets, the one black rock owns. >> i think the last time i looked it was capsule group. >> selling the big piece.
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very diverse. >> charlie: why? i don't know. they're not my client. >> charlie: you have opinions even when it's not your client. >> that's what i get paid for. >> charlie: are we looking at the beginning of a connell sol days or a continuation of a consolidation or end up with disney and comcast and fox? >> continued consolidation, absolutely. i think to andrew's point earlier, there has been real consolidation on the distribution side and now you're seeing the content side do the same thing. >> charlie: time warner spun off, fox separated into two, viacom separated into two. everybody tries to put what the low p.e. companies are in one pile so they don't detract from the value of the i.p.e. firms. >> that's interesting.
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the question, did the comcast team taking distribution buying content from g.e., was that the right strategy or time warner selling distribution and focusing on content and buying back stock? which is the better strategy? going back to the point about malone, he's the global fingerprint that's out there everywhere in europe and the united states in terms of distribution and trying to get to it content. >> charlie: he says he buys all the cable companies, only for him broadband, that's where -- >> speed, of course. >> charlie: it's not cable, it's broadband companies. >> we agree on that. through the internet, you look at the big opportunities in china, india and other emerging markets, they're not going to build out cable in many cases. they'll build out internet, mobile distribution, tremendously powerful position. >> charlie: it's such a great story because of rupert murdoch.
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i mean, the whole dynamic of a man at 83 who's had a remarkably successful year, built a great company, had a difficult time in london because of the hacking scandal, has emerged from that and now making what some might believe is his last great offer but others would say i never say it's his last great offer. >> when you come back on warren buffett, he's elephant hunting all the time. he hasn't gone up to a $100 billion deal, but clearly the same context. >> charlie: warren is the same age. >> when i was visiting the shah in china ten years ago, it was 93, i think he lived to 110. we don't need to win the british open in money management, you need judgment and he's got judgment. >> charlie: thank you, great to see you.
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>> always a privilege. glad to be here. >> charlie: it has been a summer of turmoil around the world. islamic state of iraq and syria threaten regional and global security. eric holder u.s. attorney general called the terrorist group's partnership with the yemeni bombmakers more frightening than anything he's seen as attorney general. "wall street journal" wrote the breadth of instability hasn't been seen since the late 1970s. ian bremmer, president and founder of yiewtio eurasia grou, political firm. you tend to agree with the "wall street journal"? >> i do. they're connected. >> charlie: how are they connected? >> because the united states does not want to be the world's policeman there's no one else to play that real, there are lots of countries in eurasia, in the middle east, in asia that believe they would love to be
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the local sheriff and they're acting that way, but they have very different views than other neighboring countries, so we're experiencing a level of geopolitical creative destruction in between orders, and we're going to see a lot more conflict as a consequence, just one little thing. when the chinese look at the u.s. and the lack of u.s.-european response on ukraine to russian military action, that absolutely informs the way they think about, say, vietnam, which is not an american ally. >> charlie: they can take aggressive actions against japan or vietnam or the united states would not respond? >> less so japan but certainly vietnam. i think the chinese think the ability to take relatively risk' free military steps to test the status quo is an interesting idea for them strategically now in a way a few years ago it wouldn't have been. >> charlie: how did it come to this, if you accept the presently snies.
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>> if you accept the premise, there are a lot of things that happened at the same time. one, the idea that americans across the board, ideologically, democrat, republican, a hangover from iraq and afghanistan, a president who is not elected to do foreign policy, quite to the contrary, and really believes -- >> charlie: and he perceived was elected to take us out of war. >> and he would say his biggest success to date on the foreign policy front has been iraq and afghanistan. we have a europe led by germany much more than france and britain, distracted immensely by all the internal challenges they've had and continue to have these days, and germany's international orientation is much less geopolitical. it's much more economic and bilateral. >> charlie: does it look east or west? >> well, when merkel, last week, is in beijing and right in the middle of that trip is talking about u.s. surveillance and
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espionage on the ground while she's standing there, i wouldn't say she's looking east but i would say she's engaging in vastly more hedging and balancing behavior than we've seen from the germans in a long time. >> charlie: how much da damage did the spy story do after trying to smooth over edward snowedden? >> i don't think much in asia. but in germany. >> charlie: what you had in germany is snowden, addressing that, the president calling and saying we're not doing that anymore. then the germans kick out a c.i.a. director and station chief and they also, you know, accuse german nationals of spying on the united states. >> well, in the world cup with when the united states was playing germany, the u.s. was yelling u.s.a., u.s.a., u.s.a.,
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the germans before screaming n.s.a., n.s.a. in the german newspapers, this is continual headlines, front page, every single day. it matters a lot. but they had a problem with iraq. they had a problem with libya. they have issues generally speaking with the way the united states projects power around the world and the way the french and the brits are more comfortable. >> charlie: they have a problem the way the u.s. projected, meaning germany wants the u.s. to do what? project less or more power? >> germany wants us to be much more multi-lateral. they want us to be much more willing to accept constraints on u.s. military power when other countries aren't as comfortable with them. they want us to be more qualified in what we do and don't do not just surveillance but drones, boots on the ground,
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projection, navel force naval fl these things. with the middle east, it's bilateral. they don't talk about concerns of industrial espionage from china. they don't talk to us much about the concerns of china's increased security footprint and the threat it causes to the east china sea, the allies in japan, south china sea, the allies in the philippines. the germans don't have much interest in that. the transatlantic partnership, the germans have been lukewarm. they see americans using the dollar to put sanctions against largely european banks most recently b.n.p. at the tune of $10 billion, and the germans don't like that either. >> charlie: nor the french. nor the french but the french kind of know this game and they were caught red handed. but if you ask looking around
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the world of all the relationships that have been damaged with the united states and we've taken hits over the last few years and you and i talked about brazil but germany is the most important taking the biggest hit no question and the ability of the germans to look elsewhere both not coordinating with us the way we might like on ukraine and also specifically in being able to work much more closely with china -- >> charlie: the point is we need the germans most. >> just more than anybody. we like the brits but the germans are much more important. >> charlie: there have been gains against i.s.i.s. >> yeah. >> charlie: the germans are saying to the sunnis don't be disengaged with these guys. you know, how much influence they have with the old line sunnis who tried to disengage it before and came back because they were treated badly by maliki is a whole other story, but you see that and they have funds and resources.
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>> oh, they have funds. they have to be the most well-financed terrorist group in the history of the world and that has to concern us very greatly. >> charlie: because when they take them down, they take the banks. >> and you have hard currency and gold sitting there. >> charlie: but at the same time, you know, you do have the saudis saying to their sunni friends, don't get involved with -- and they weren't saying that in the beginning because all those people were saying i would rather be with i.s.i.s. than maliki. that was the tradeoff, right? >> yeah, and i think the saudis have been surprised themselves with just how far i.s.i.s. has been able to move in a relatively short period of time. >> charlie: what's going to happen in iraq? >> well, the kurds are in a very good position now. they've taken probably 40% additional terrorist in the course of the last several weeks on the back of i.s.i.s. fighting with maliki and the shia.
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in addition to kirkuk, they've taken oilfield and kicked out the iraqi national operators of the fields and you have kurds doing it. so the kurds look good, talking about declaring independence. frankly, they don't need to. they need to sit with what they have. >> charlie: the united states would like to have some kind of government in baghdad that they could support. >> right. >> charlie: as a force against i.s.i.s. a government that would allow sunnis to be part of it and shia and kurds so that, you know, partition would not be the only way to find a solution. >> yeah, i think we can get a government that certainly will oppose i.s.i.s. getting a government that opposes i.s.i.s. that is sufficiently, you know, oriented towards the rest of the country that we can support them, given how little reason the kurds would have to join such a group and how hard it will be -- >> charlie: what do you think the kurds will do? >> i think the kurds, they've already boycotted cabinet. i think they're going to make
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pretty significant demands on changing the nature on how the money is accrued to them as the oil is pumped, and they're going to sit and eventually i think kurdistan becomes a state, i really do. >> charlie: eventually is how many years? >> oh, certainly within five. >> charlie: what are the turks do? >> i think i'll be okay with it. certainly now a lot of the fighters inside eastern anatolia are back in iraq. it's also a relatively stable place the turks can make money. >> charlie: got a lot of kurd support the last time he ran. >> i think the united states will engage in some form of military action on the ground. >> charlie: if they can get support. >> even without it i can we will. we have 700 folks on the ground right announcement we say they're military advisors. they're special forces. they're trying to understand how strong i.s.i.s. is and where the
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vulnerabilities are. at some point if we consider i.s.i.s. to be a proximate terrorist threat that is growing not just against iraq's central government but against us, we're going to sit there. i think if the u.s. doesn't take a lead observ on that issue, thl effect more in the gulf. we don't want to see that. >> charlie: thank you for joining us. see you next time. captioning sponsored by rose communications captioned by media access group at wgbh
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this is "nightly business report" with tyler mathisen and susie gharib. >> battling back. it started out ugly, then got a little less so after president obama made it clear that, as of now, there will be no new sanctions against russia. turning investor attention back to roft. netflix milestone. 50 million subscribers now use the service. helping profits double. but is it enough to keep the stock firing on cylinders? >> as wall street turns, what are the business world's biggest soap operas just took another twist as the chase for allergan grows increasingly hostile. all that and more tonight on "nightly business report" for monday, july 21st. good evening, everyone and welco welcome. i'm tyler mathisen. >> i'm sue herera filling in for susie gharib.


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