A considerable time. For nassular setback up on commerciallaunch program. Commercial space launch program. , theseconds after launch commercial rocket exploded. We did lose hardware. We lost quite a bit of research hardware, which we will work with the different providers to get those back to the space station. Spacex is also used by nasa. Spending will increase next year by as much as 70 . Here is the chief operating officer. The investments we are making our longterm. These are large and strategic investments. The payoff will take time, but we believe they will provide a Necessary Foundation. Nowacebook said that mobile is back up again. The french drugmaker fantasy has ed its drone the maker the world series is all coming down to a Decisive Game seven. The Kansas City Royals scored seven runs in the second inning and went on to beat the San Francisco giants 100. Game seven is tonight in kansas city. The giants hope to win their third world series in the last five seasons. Now back to facebook. Shares are tumbling in the premarket. It is the most active stock right now. The social Networking Company reported better than estimate thirdquarter earnings. Ey johnson who is a giants fan. That is not a nice thing to wake up to. They were awful. [laughter] lets focus on facebook. I want to talk about anything but the giants. Including facebook. The facebook numbers were really interesting. They announced that a lot of the whatsapp shares are coming on the market soon. It is going to be a big seller on the market. We learned a lot about the Company Including the user base. It is growing at a slower rate. How big can facebook be . Deceleration. We thought they might be getting a little better earlier this year. Growth, while amazing, is growing at just 59 on a yearoveryear basis. A slowdown in sales and user growth. Hasnt their ad platform that they had been rolling out the come more and more effective for advertisers . It is hard to say which is patient push or pull. Either way, we see a lot of things that are positive, not least of which the value of a user. How much revenue they get for each user on the platform come a we can see that that number is picking up. 3. 57, that is growing at little bit more slowly than it has been. We saw this Getting Better and better on a sequential basis. Great growth, but that is not the 41 you saw about increasing value at increasing pace. What about mobile . Are they reaching the saturation point . Not at all. The growth in mobile is spectacular. Youerms of flatter dollars, saw over 1 billion per week coming into facebook. 1. 1 billion in mobile. Im sorry, thats a many users they have. 1. 1 billion users in mobile. 2 billion in mobile revenue. 66 of facebook users were on mobile. From a company that has zero revenues in mobile when they went public, that is amazing growth. Thanks a much. Corey johnson on facebook. Day,e market event of the the fed policy meeting in washington. What they are not going to do. , finally, the end of qe. It is hard to believe we are finally there after three rounds of qe and a twist, the Balance Sheet has gone from 800 million 800 billion to foreign 4. 5 trillion. Now they finally taper. The real question for today is what does janet yellen and what do her colleagues say about the next major decision they have to make and that his Interest Rates . When did they start raising rates . We are not likely to get anything in the statement today. They are still on track for what they say is a tightening in the middle of next year. Sayingmarkets are something different. They dont see an increase until the end of next year. Which is kind of weird. You look at what the fed is telling us themselves, this is from their last meeting. Fedhe end of next year, the rate is at 1. 375 . How do you get to that . They dont want to shock the market by really raising rates a lot. So you back time it. Twitter fivet a basis point move, you have to start in june to get to that 25 basis point move, you have to start in june to get to that. You could start even earlier or you are going to have to go faster to get there. What has changed in the economy to change that forecast . Nothing, really. The Unemployment Rate is falling. Inflation, just below the 2 target. It has gone down a little bit, but did the stable at this point. Everybody was worried about the dollar being an influence. The last two weeks, the dollar is falling again. Gasoline prices, this is the good news for everyone. Yesterday, we were paying 3. 03 per gallon. That is going to be a failed when the economy tailwind to the economy. Headwinds. E a lot of iraq. Europe is one of them there are. Europe is one of them. As a person has ebola. Depending on who gets in power in washington, we could get fights again about sequestration. Other than that, we are still on track for a beginning of the rate rise in the middle of next year. Nothing the fed says today is likely to dissuade anybody from that. Thank you so much. Uncertainty, not to mention europe and ebola and other factors, investors are looking for more professional guidance. Person whoat the manages your mutual fund or retirement account would be better at you. Then you. Hyman has been looking at a study that it is kind of the opposite. It was a survey of swedish Fund Managers. They looked at those Fund Managers and looked at the personal portfolios. ,f you are a financial expert one would think that your personal portfolio would also outperform. They did not necessarily find that to be the case. , thelooked at their peers same background essentially, they found that in their managed funds in their professional lives, they performed pretty well on a monthly basis. They personal portfolios, returned about 0. 9 , which was about the same as the people who they are similar to. Thatis not necessarily new actively managed funds dont necessarily do well. Managerse investment managed similarly in their personal portfolios, they bought the same stuff as in their professional ones, they did better. In addition to that, the top 1 of the population outperformed them in the person or portfolios personal portfolios. There is an argument to be made that the top 1 is not going to benefit from the professional advice. Decided know why they to do this on swedish Portfolio Managers . Think there was a lot of Information Available on these people. Exactly. For makes the base case index funds. Just put your money in index funds as a mom and pop investor. Why pay to see someone who is not giving professional advice . We have seen an explosion in the amount of money in index funds. The one thing i would say from this study is that there looks to be some benefit in these managed funds, to having your money there. Is it because of the professional expertise or because of other factors . Thank you so much. Very interesting study. Coming up, what will next tuesdays election mean for the economy . That is just one of the subjects we will be talking about with roubini. Be sure to catch a big interview later. Will be of america ceo right here on Bloomberg Television on Market Makers. It is a crucial day for u. S. Markets. A single week from the midterm elections. This afternoon, the Federal Reserve has the wrapup of their meeting. With me to look at the u. S. And markets overseas is Nouriel Roubini, the cofounder and chairman of roubini global economics. Also with me is josh wright. Thanks for joining me, guys. Lets start with you, Nouriel Roubini. We seem almost certain that the fed is going to end their qe program. With the recent choppy economic justify a view that Interest Rates are going to take longer to rise . , i think that supposedly by the middle of next year, they will start the hike. But with the uncertainties all over the world, they may wait six weeks. The worst thing they could do to start the left off and then have to abort. Then you will lose credibility. Even if the economy is ready, they will write wait another six weeks. If they say june, it may come july or september. That does not sound like a whole lot of time. What if we are talking about six months . 12 months . Do we get into a danger zone . To wait six months or 12 months, i think it will still be the middle of next year. Of course, if the global headwinds that are coming from the eurozone and japan or china , if theing markets world is affecting the u. S. That makes inflation much worse than the fed is expecting, they have already said that the decision is dependent, went to lift off and how fast. It is not unconditional. I know you have written there is ae you say risk that the fed is focused too much on lowinflation. There has been some controversy in recent weeks. The st. Louis president came out and said that maybe the fed should keep buying assets or be prepared to increase asset purchases. That does not look likely at this point. It seems like that choppiness that we had it bounced right back. That is a testament to some of the other people who have been saying, we have been saying, we have to see a real trend established a four we take further action. Ben bernanke made his name. Make yellen is going to her name on how she pulls the world out of unconventional Monetary Policy and back to conventional Monetary Policy. Would you agree with that . Yes, the key thing for janet yellen is managing the exit from unconventional Monetary Policy, quantitative easing, credit easing. , you cannot rule out that there will be qe for at some point down the line. Maybe we will need qe 4. I dont think that is likely. The question is when you start lifting rates in the future. The key thing is that the data right now, there is not anything more unconditional. All of the actions depend on growth and global headwinds and the dollar. Havent you said that the longer we wait between the end of qe 3 and the beginning of raising Interest Rates that the longer that time period is, the more risk we will see some sort of credit bubble . The real economy justifies a very slow exit. Eventually, asset frothing us can become a cut frothiness can become a credit bubble. [indiscernible] [indiscernible] thiser two years of implies that credit buying a significant two years from now. Even at a baseline scenario. Stay with me, we are going to talk much more about scenarios overseas. Thank you so much for joining us. Up, the most expensive midterm elections ever. Who is spending the most money and where is all that cash coming from . We will be back. You are watching in the loop. Live on Bloomberg Television. s links aank thirdquarter loss after taking a hit. They set aside 1. 1 million to settle investigations of past wrongdoing. The bank named former Goldman Sachs partner to succeed a cfo in may. Posted revenue as Box Office Sales fell nearly 16 , the worst summer since 2006. Regal is exploring strategic alternatives, including a possible sale of the company. And Americans Airline merger with u. S. Airways is facing another major challenge. They are trying to mesh Loyalty Programs together. They are sticking with a miles based programs. Spending on to tickets in the loyalty program. This stuff is really important for these frequent flyers. Bloomberg television is on the markets. Equity futures are mixed as we head toward the opening bell. All eyes will be turning toward the fed statement later this afternoon. Yellen willjanet say about qe. We are on the markets again in 30 minutes. Investorson unnerving is can any economy or market stay in float if those in china and europe falter . Europe is actually seriously scary. China is seriously scary, although it is harder to check track. We are not an island. International independence can be overstated. You would not the u. S. Expect the u. S. To be completely immune. Here we are six years later, still very fragile. Still very fragile. Global economist Nouriel Roubini joining me, the chairman of roubini global economics. Do you think we are still on fragile territory . It is a fragile territory for the Global Economy. There are four engines of the global airplane. The only engine that is really working is the u. S. And united kingdom. The eurozone is falling. There one shot away from deflation. Japan does not look very good. Is going to be below 6 by 2016. We have three engines of Global Growth that are sputtering or stalling while the United States is picking up. The United States can decouple as long as Global Growth does not get worse. The stronger the dollar, the more the transmission to trade. , to your point, we have been buffered in the u. S. With some of the headwinds overseas. You see the biggest down risk as being in europe . Europe looks particularly fragile right now. The ecb should be going into qe. They are not going to do it until next year. Japan should be doing prop up qe on what they have already done and they are not doing it so far. Fiscal policy has become increasingly contractionary in terms of japan. In the eurozone, there is not the fiscal stimulus that mario ahi wants to do. Draghi wants to do. That economic views are bad for the markets. Is inertia on the policy side in europe and japan. Japan has been kind of a nonplayer already. They have been kind of dla for several years doa for several years. Do we need them to be a part of the Global Growth story to get lift off . Abenomics were to fail, that crisis would be in japan. It is the thirdlargest economy in the world after the United States and china. The trade channels metal for asian growth. Growth. R for asian weaknessy, japanese. Nsights a weaker yen weakness in the eurozone means a weaker euro. We are back where everyone tries to stimulate net exports. You have new rounds of quantitative easing. It could lead to tension across the world. Europe is clearly fragile and could go one way or the other. We just had the European Bank stress test over the weekend and they showed that it seems like the Financial System is recapitalized well and that they are far better off than they were six years ago. Is that a positive . A couple of caveats. Those dont control for a risk scenario of outright deflation and inflation at 1 . , deferred tax assets are being used to boost the capital of the banks and that is a problem in measuring the capital. , there isthe eurozone not a problem of credit supply. There is an issue of Credit Demand. If the economy is not going, they are not going to borrow on capital to invest in new capital and into the workers. The problem is not credit supply, but Credit Demand and that depends on aggregate demand and aggregate demand depends on monetary and fiscal stimulus that is missing. You cannot force the horse to drink when you bring it to the water. There is not a credit crunch problem. I listen to someone like you, people Pay Attention to what you say. I was making a joke earlier that if Nouriel Roubini sneezes, it is a headline. Who do you Pay Attention to . As you are outlining for me your view of the Global Economy, who do you Pay Attention to . Who do you think has it right on policy . Listen and every lots of those whopecially agree with me. [laughter] i spend time traveling around the world throughout many continents. More than listening to other people, you want to listen to the data and what is happening in the different economies, spending time in the different countries. If i had your schedule, i would have all gray hair. Your schedule is amazing and also quite brutal. You are in high demand. People want to know what you will say. Thehe u. S. , what about political situation . You have sounded off on what is going on in congress. It seems sexy gop is going to win control of the senate and we a Republican Congress and a democratic white house. Will that be a catalyst at all for growth . I think it is going to make things worse. More divided government will gridlock. Re reform, corporate taxes, energy policy, the debt ceiling, entitlement reform, we need lots of other structural reform. None of these things are going to happen because there is going to be even more division. If republicans when the senate, they are going to posture even more and the next two years will result in gridlock and fundamental issues. , the longere wait growth is going to be negatively affected. We have a long list of Structural Reforms in the United States and we have not done any of them for the last decade. If there is one you could pick out of the laundry list, what would it be that you think could have the biggest impact . I would say two things. Immigration reform is key. Corporate tax reform as well. Those are them the most important two. You travel, you have your home here in the u. S. Ine you soured at all living the u. S. . Do you feel like the country is going in the wrong direction . We are doing better economically. We have the cleanest shirt and the laundry bag. Thane much better off europe, japan, even many emerging markets. In absolute terms, this political gridlock is going to affect economic decisions and economic reforms. Are you fed up . I think that there is really a problem in the u. S. I would rather have a parliamentary system. If you do well, you get reelected and if you dont do well, someone will replace you. The u. S. Has a recipe that is not good for the long run. A parliamentary system here in the u. S. That is an idea. Nouriel roubini, the chairman of roubini global economics. Professor of economics at nyu school of business. Next week, midterm elections. It is one for the record books and the checkbook. We will talk money and politics. We will dive further into facebooks results. We will talk to someone who helped companies advertise on facebook and he will tell us why he likes it as a platform. Global economist Nouriel Roubini said he would rather europeanstyle parliamentary system in the u. S. , but we are stuck with what weve got. We are one week away until election day. The midterm elections are going to carry a hefty price tag. Peter cooke has been crunching the numbers. Breaker be a record heated races in seven spots. Campaign finance arms race continues even in the last week we dont have the final numbers. Expensive place in history i most expensive midterm race in history. It is light years from the 1. 6 billion spent back in 1998. Moneyplosion of outside thanks in large part to the Citizens United decision. Outside groups will kick in 900 million, nearly 1 billion. Much of that is spent in just a handful of races. They are very targeted and looking at just the competitive races. The money may be determinative in close races. Money game, republicans are expected to out space outpace. Billion spent on republicans. 1. 76 billion spent by democrats. Capturetals dont everything. Which is the most expensive race so far . Right now, it is the senate race in North Carolina between kay hagan. It has been a brutal and expensive battle. When hundred Million Dollars have been spent on that race alone. 100 million have been spent on that race alone. A lot of this has been outside money. Is democratic super pac pushing for democrats to maintain the majority and they have spent 11 million on kay hagan. Much of the outside money has been spent to bring both of the candidates down. Illis has had to overcome 32 million spent to knock him down. The final numbers will be even higher than this. Who is the biggest individual spender in this election. Someone you are quite familiar with. It looks pretty clear that tom stier, the hedge fund billionaire, is going to top the list. He has given 73 million in the 2014 campaign cycle, 66 million has gone to his own super pac, largely backing Democratic Candidates and Climate Change issues across the country. Although the group is still sitting on a whole lot of money, which raises a lot of money questions. He is the Sheldon Adelson of this cycle. He said he will spend whatever it takes to win in those states. He is putting his wallet where his mouth is. [laughter] just quickly, what about businesses . . Usiness lobbyists corporations . What are they spending . They are spending. They are active. The chambers of commerce are in the top four. Business groups are trying to tilt the balance of power in the senate. A lot of them are supporting republican candidates. A lot of this money is coming in late. This is the money that will decide these races. This final week could make or break the elections and could see the biggest package of spending altogether. , active to come investors may be hungry for mcdonalds. Could the fast food giants be the next target of activist investors . Is looking like an appetizing target for activist investors. Activist investors are not afraid to go after massive u. S. Companies. Investors want some sort of action to boost the stagnant stock. Joining us is the portfolio the company that with bahl gaynor. Why havent they gone after mcdonalds . I think it is still on the plate of potential. Mcdonalds has a great global brand and investment sheet. It does not take a lot of shares to really a choir and get some motivation a choir and gets quire and get some motivation behind you. Billu might only need ekman to Say Something to get something going on, get the stock moving and investors talking about it. In mcdonalds case, what would a scenario b if activist invest company. Into the what would you want to see them change it mcdonalds . Essentially, the menu. That is what is going to attract customers. They have to win on samestore sales. They have to see the traffic. They average check has been going up a little bit, but the traffic has been coming off really strong. You have to have something that is going to attract them. Winning at some of the categories like chipotle, which was a mcdonalds owned company until 2006 and even panera bread. They have had great traffic, great numbers, great growth. Driving. Hat is it is this fast fresh approach that is very attracted to the millennials, generation x. That is for mcdonalds need to takes some of their action. Mean completely changing the business model, wouldnt it . E, put my, panera chipotl panera, they are fast casual. We are talking fast food. Andnalds wins on the food on how fast they get it to their customers. Speed is very important. Mcdonalds has one of the strongest drive through traffic in the business. They have tried with different aspects. To smoothies to heighten the natural aspects and even salads. They do have some of those aspects out there, but there is still a question on food quality. We have even seen some of the recent research that is saying that that is where people are questioning the value of a purchase. Strategiespled with after the last quarter numbers came out weaker than expected, blaming a lot on foreign tax impact. Really, the strategy was to enhance the menu and enhance the digital strategy. To his credit, he has been trying to change up the menu and add more technology and use social media. He is trying different things. It still begs the question who might come in . This is also speculative, who do you think could be a possible active investor in mcdonalds . Could be a whole host of hedge funds out there that want to capture share at more value and they might come in with bringing in new Board Members or even trying strategies of some Financial Engineering to see stock changing someen of the mix of transferring more into a franchise mentality rather than a companyowned mentality, especially in the outside u. S. Markets, really capturing partners within these markets is definitely a more valued resource then the company tried to own them. Thank you so much for joining us. We will see what happens with mcdonalds. We will be back in two minutes on in the loop. To spinchrysler span off plan to spin off the luxury ferrari unit. Incredibly exciting news. Fiat is going to spin off ferrari. Very exciting news for people like me who have been following young, since they were as almost every young boy has. The ceo has been working on this fast pace. Fiatchrysler shares are trading up over 6 in milan. We will be back in two minutes on in the loop. Welcome back. We are 30 minutes away from the opening bell. Mortgage applications decreased. Investors are waiting to hear from the fed this afternoon. Central bank policymakers are wrapping up their twoday meeting. And the fed will and the Bond Buying Program and they are expected to signal that Interest Rates will stay low for a considerable amount of time. Nouriel roubini said that they will probably act later on Interest Rates, not any sooner. Thing they could do is start the left off and then stop and aborted. Then they will lose credibility. Everything else is equal. They may push it back 612 weeks. If they say in june, it may come july or september. He also said the Global Economy is in fragile territory. An unmanned rocket blew up last night seconds after being lost from nasas facility on the Eastern Shore of virginia. It was carrying supplies to the International Space station. Nasa is investigating what happened. Facebook warning that it has had a tough quarter and a tough quarter lies ahead. Investors are pushing down shares of the social Networking Company. Facebook is down 8 in the premarket. Facebook saying that spending may rise up to 70 next year. The investments we are making our longterm. These are large and strategic investments. The payoff will take time. Think they provided Necessary Foundation for the Advertising Industry to make the shift to mobile and for facebooks longterm growth. Mobile made up 66 of ad sales. Running into the same problem as other big banks, being hit by rising legal costs. Deutsche bank posted a loss in the Third Quarter after setting aside 1. 1 billion for litigation expenses. They are accused of rigging Interest Rates in currency markets and are being investigated for doing business u. S. Countries subjected to sanctions. Lets count you down to the open with the top 10 headlines hitting our radar before the bell today. Matt miller joins me. Number 10. We go overseas. Yesterday, alibaba muscled ahead of walmart. Here is the new king of the corporate world. Almost. I would say a prince. The reason they moved ahead yesterday is that tim cook said they might get married. He could not say enough positive things about jack ma. He loves doing business in partnering with people like that. Those two both gained strength. It is only a matter of time. There is a target price of 110 by the end of this year. They are in hollywood, they are looking to make deals. Good fore is pretty china ecommerce. Im going to say i love jack ma and both of your share prices go up. Taco bell is launching a new mobile app. What is really cool about it is you basically can order and pay for your tacos. And then go and pick them up. Do you think this is really cool . Are you a big fan of taco bell . Ive been customizing my talk is for the past 20 years. I dont eat red meat. In, you can be more specified. I dont get it. It is the whole u berization. You still have to go to taco bell. Unless im drunk at 3 00 in the morning, i dont want to be a taco bell. Everyone has been to taco bell. It takes 4. 5 seconds for them to make it talk of the way you want it. We are busy people. We need to skip lines and get moving so we can get you the stories. Movie chains feeling the pain from a week Summer Box Office. Nobody went to the movies or something. Fell, downtotals nearly 15 . A lot of the problem was there was nothing worth watching at the movie theaters. A summerl was not flick. It is amazing. It is not a summer movie, but it is incredible. That was the only good movie that hit the theaters. They want toys minimize the time that movies go from the theater to the library on the internet. It is going to be a challenge. Movies come out on demand before they go in the theater now. It is done. It was a big Summer Box Office for the kids. I had to go see teenage mutant Ninja Turtles three times. My kids are not going to be turtles for halloween and im surprised by that. Did you drive by taco bell . [laughter] and brought it into the theater. Reo may be getting a lifeline. They may be getting a lifeline from the fcc. Basically they could then become another cable channel. This could be another lifeline. It is kind of like the all the cards dream that we all have. 100 20 per to pay month for the whole bundle and you get a whole bunch of channels you never watch. Ill be watching spectrum of about 200 channels out of the thousands i am paying for. A lot more needs to be done. Congress is trying to figure out where they are taking this program. It is going to be a lot of guys going head to head to figure out how theyre going to monetize the base. I dont think a lot of people have hope for aereo really. It was game over after the Supreme Court decision. This could be a very interesting competitor. Customization. Cannot stempimco the bleeding if drafter even after the departure of bill gross. This is prudential breaking up with the less popular girl to go for a new popular girl, the moment. The movement blackrock fell out of favor five years ago but have received a lot of momentum. , all of the infighting and the drama and the soap operas. Who wants to deal with that . To go out with the girl who causes that much drama. You want a little drama. I want no drama. Prudential is definitely over 40. [laughter] to me. S a lot of sense this is a fascinating saga to watch. Pimco is surprised to way bill gross left the company. Are they really that surprised . The way he left. There was a lot of damage control after. You wonder if the damage is still being felt. They are still writing this narrative and he is one step ahead of them. Facebooks increased spending. We will dig deeper. The latest forecast and projections for advertising. , number five is facebook gearing up for a spending binge. Investors do not like that. A sixtht estimates for straight time. Mobile advertising is still growing, advertising rivals like twitter. It is closing the gap to the almighty google. Joining me now is the founder of spruce now. You know the different platforms that facebook has been rolling out. They have closed this gap slowly. Slowly and rapidly in other areas. What more do they need to do to make sure they are on par and can beat google and advertising one day . What we are seeing is that they are investing a lot and measurement. s ad tracking platform , the goal is to track user behavior. They want to do it more effectively. Is that when see advertisers start adapting that technology, they are going to start attributing facebook with more of the purchases that are happening online versus google and when that shift does happen, facebook hopes to see those advertiser budgets follow. Are really turning behaviors and they are translating those behaviors into actual spending, which is ultimately what the advertisers want. Out thata lot of news rolls out about facebook about the different platforms. These really do, the recent ones that have come out . There is lookalike. Facebook creates a lookalike audience for an advertiser. What does that do . Out aebook is rolling series of features that allow advertisers to use their own data and bring that onto facebook and then facebook will do things like create a lookalike audience that look like your customers. Ofy will use a combination theirers interests, demographics, their behavior online, and even who their friends are to create a very relevant set of facebook audience that looks like your customer base. Essentially, it looks like your customer base. It is going to want to buy the product that you are selling them because they are already your targeted customer. What about this other platform called the Audience Network . Tell us exactly how that is going to lift up advertisers, in particular the small and mediumsized businesses. The Audience Network is facebooks answer to googles network. That essentially allows advertisers to buy ads off of facebook. That is going to expand the opportunity for advertisers, drive more revenue for facebook, and impact because they can spend more. Small and medium businesses are finally figuring out strategies on facebook that can drive an immediate advertising return for them. That is a huge Growth Opportunity for facebook. Define atlas for me. The mores to be one of powerful platforms facebook is rolled out that is giving google a run for its money. Platform. S facebooks users are spending a lot more time across devices. The current ad tracking platforms out there dont do a usersjob in measuring how are purchasing as they potentially start the process on one device and finish it on 1 another. Facebook has rebuilt atlas from the ground up. What they are calling it is people tracking. People tracking is a lot more effective than the current tracking technology out there, which is typically a single device type tracking. Thank you so much for joining us on this. Facebook is getting more and more aggressive. As we saw in their call on rolling out more of these platforms and grabbing those ad dollars from google. We have much more coming up, including, did you sign up for unlimited data from at t . You may not be getting exactly what you paid for. This . U up in arms about we will tell you about this story in just a moment . Welcome back. Lets get you back to the most important stories before the bell. Ok. Number four. At t being sued by u. S. Regulators over the practice of data throttling. They began throttling speeds, and failed to adequately notify customers. First cramming, now throttling. It sounds a lot sexier than what we are actually talking about. At t is at fault and they should just own up to it. They should just do the right thing. I dont know why this is in court. Unlimited means unlimited. Of those customers. 3. 5 million customers were getting throttled and crammed. Phones and it made me so angry that i switched one over to verizon. Verizon also want to do do this and has backed off this practice. Hopefully, all mobile operators will take note. Decrease in your usage for downloading things. Unbelievable. All it takes is for two people like tim cook and jack ma to say they love each other in order to see shares rise. Rose the most in eight months after elon musk tweeted about the worldwide sales record and he refuted the article in the wall street journal. Andember was a record high up 65 year over year. Means, the article in the wall street journal said that teslas are basically on sale, offering discounts. That is what is incorrect. He said revenue remains the same. Look. The note came out saying that they might have problems reaching sales goals. Tesla will sell as many cars as tesla makes. They are going to be sold out. To sell 35,000 cars worldwide by the end of this fiscal year. One of the Biggest Challenges is going to be in china because there is not that many charging stations. Who knows . I dont think it is going to stop rich people from buying them. People live in one chinese block. Wait for the new d. It is going to sell like hotcakes. 700 horsepower. You have been in it. Speaking of automobiles, Fiat Chrysler is spinning off its ferrari unit. Woah. I absolutely love ferarri. The story spawned more questions than it answered. Favorite ferarri is the fs. That is in your garage right . [laughter] yeah. Does this mean they will continue to fund the giant formula one budget . My biggest hope is that they went another world championship. Why would they split up at a time when fiat needs ferarri more than ever . Are you going to sell maserati i linkup . He ferarr they are the biggest winners and racing of all time. Will that continue . Will fiat be able to continue arri . Fer Bloomberg Television is on the markets. A quick check of futures is right ahead of the opening bell. We will be back with the open. Welcome back to in the loop. Cannot get away without talking about the fed. Its number one. I dont know why. 2 00 p. M. They have a meeting. Tomatt winkler says news has be a surprise i doubt we will hear a surprise. Ok. We have before. Should we completely ignore the fed statement at 2 p. M. . I would love to do that. Thats the best plan ive heard all day long. Out of 64 Bloomberg Economist surveyed say we will see the end of qe. I would love to know who the other two are. This is a nonevent. We will not hear from janet yellen. She will give a speech tomorrow. To avoidy be wanting the real question which is what are they going to do about Interest Rates . Thats 100 correct. The markets are saying that we should not be seeing Interest Rates rise, possibly not until the end of next year or beyond given where we are with inflation and the economy. In our lifetime. The fed continues to say we will see Interest Rates rise by the end of next year. Obviously, thats the big debate right now and one of the big uncertainties for the market. I was fascinated by your with Nouriel Roubini. Interest rates would never rise. He said later rather than sooner. He was on with us early this morning. Play with he says about ending quantitative easing. Worst thing the fed could do is to abort it. Will lose its credibility and give us a hard landing. Maybe the decision will be made in june and will happen in july or september. For more on the fed future and what Market Participants are watching, i want to bring in david blitzer, the chairman of S P Dow Jones index committee. 612 weeks, you wait before you raise Interest Rates . That does not seem like a huge issue but its when you get further out that that will be an issue for the market . It will become an issue when they finally move. Acknowledge we all get asked when nobody knows. Janet yellen does not know, is dependent on what happens to the economy going forward. She has to know. She has to give some sort of indication. All, she has to not give any indication. The idea of being a central banker is mums the word. When they speak up, they occasionally get in trouble. When it has to forecast the forecast, in effect, what will the economy did the doing next july and they have given whatever that is and what will the fed be doing . Its twice as difficult at guessing what the economy will be doing. It really is data dependent. I can give you my guess which is the second half of next year. I think the economy will a pretty good next year. There is a disconnect tween what the fed is doing and what the markets are doing but James Bullard stepped in and supported stocks last week. And you see this rally said be supported by years end and i was drawn to this chart which is a consistency indicator created by bob schiller which tracks the monthly gains and losses from the past five years. We are currently at 2. 75. What many say is that you could see what you saw during the 2009 the market where will be supported and you will see investors take gains for granted. What do you think . Generally investors are taking a few too many gains for granted. They got very scared over the last 40 46 weeks when it took the sharp dive. And the coming back so fast yesterday was quite strong, i think everybody is saying thats over. I would take it deep breath and hang onto my stocks or by more. Was a different game on monday . Money managers are looking to support stocks as they close out the month and want to get the numbers on their sheet so it looks like they have done a great job in terms of returns. Are people going to see a different market on monday . No, if you look at the First Business day of the month, we got a fellow who looks at this thats the day when a lot of Pension Funds put the money in the market. They gathered during the course of the month and they put it in. Its not that you could trade it. The commission would kill you but it always goes up the First Business day of the month. November will start off with a boom. I assume you would also not recommend the average longterm investor try to trade these things anyway . Im guessing that you favor index investing over active management . Good guess. If you do that, how do you pick your indexes . Performance this year is split in regions and the nasdaq has beat the dow jones and in europe, the spanish index has risen while the dax in germany has fallen. If you look at asia, they have done better than the nikkei. Most americans will have most of their money in the United States. I put a big chunk of the equity inin nice rug based nice broadbased capital weighted indexes and i like the s p 500 and maybe the midcap 400. There has been a lot of research about choosing the right factors like small cap stocks or value stocks. Income, find love an index that focuses on dividends. Like the new ideas which we call factor indexing, some people like smart beta but nobody wants to have dumb beta obviously the simplest thing to do is to i and equal weighted index and you are overweight for small stocks and overweight the value stocks and he will outperform the cap index more often than not if you look at last two years and he will not pay many fees to the brokers. That is the whole point. You got it. Davidnk you so much, blitzer, the chairman of the S P Dow Jones committee. And to matt miller. Coming up, Sheryl Sandberg speaks and weve got exclusive comments from the facebook coo following the companys is appointing results. Walmart playsre, their call of duty card. They want to lure gamers away from gamestop with a new strategy. We are a few moments into the session, stay in the loop. Is from the highly anticipated call of duty warfare. It goes on sale next week with but what could be more to Game Changing in this blockbuster launch . Play in the big videogame business. It will sell the new game 24 hours before the official release which could not have competitors like him stop. Joining us now from l. A. Is Michael Pachter who covers the gaming industry and in new york is matt miller. Will you be sick that day . I would love to take november 4 off. I dont know where a walmart is in new york avenue. You need to go to my neighborhood. Its like four hours to get to your house. I would love to go and take the day off and get that and play it. I think a lot of people are still going to come at least for this release, going to gamestop. Gamers think of gamestop as the place to go to buy games or maybe best buy as a secondary. You dont necessarily think of walmart. Michael, do you agree . This is an adjusting an aggressive move by walmart but will it stop the gamestop sales . Right,at all, matt is there is two types of people who buy games, there is people who buy games for themselves and they go to gamestop in best buy and there are people buy games as gifts and they might be buying them because the kid does not have credit or connected to the store. Mom will go to walmart. And and game start gamestop have about an equal number of sales. Walmart has greater traffic and walmart is clearly doing this one day early thing as a traffic driver. Monday is a slow day and mom will take the kid to get it if the kid wants to play this game. Poor mom. It is clearly for that. I want to say to my mother shes watching mom, please go and buy me the new call of duty. That would be the greatest. She will say son, get yourself. Its too violent. There is another strategy by walmart which is yesterday they went live on their preowned videogame business. They started collecting since march old video games which they have now read pakistan with will sell with which they have repackaged3 will be different this time around . This is their fourth try. It will not be different. Think about walmart from the perspective of customers prayed walmart is trying to offer everyday low prices and try to offer the best value they can to the customer. And mom may is mom buy a used game and she will certainly see the used game cost less than the full price game. Gamestop has a similar strategy to provide currency to its core customer so they can buy new games. These are people who have no credit. The gamestop core customer is a kid 1330 years old. And then there is matt. Kids need tod trade in games for they cannot afford to buy in a game where they pay cash. Moms have credit but moms are looking for bargains of walmart. Walmart is appearing is appealing to their core customer. You have to wonder if trading in games is the one thinking this business alive. Whens the last time you bought a cd . Music a a cd music cd at a store in the same would be true of videogames today but that 13yearold kid bringing back last years halo to by this years call of duty that is keeping this gamestop store afloat. Cd comment is a commonly held misperception. But they have82 180 3 million cds that are bought. I buy them and burn them to my hard drive and let my friends have them. You are not 18yearold. My kids are happy to get a cd as a gift. I have had a rough 17 years. Is that, the difference there is no used market for dvds or cds. There is really not a huge trade and market for that. The game market, the used game market is gigantic. Ofr the last five years, 35 xbox 360 games and ps3 games have been traded in at gamestop. 50 in 2013. Its a gigantic market. There is a high perceived value for the tradein and the core customer at gamestop inc. Third game is worth 20. The truth is its worth 12 but they think that. We have done many Customer Service asking the question. Game cost 40ew because they are getting 20 for the game their trading in and they are unlikely to dead two demo the same game for a higher price. Spinning about downloading and these digital games, the online games like angry birds and candy crush and minecraft is now the big 1 the whole is that these games they were going to put Electronic Arts or other companies out of business and that has not happened. I not . Crush is a game for toddlers or 80yearolds. It was widely played at the apex. 300 millionakes to develop a game like the new call of duty. Its Serious Business and rovio is not doing it. Codic has a line that all games are digital but they are sold as a game. The casual market was killed so he look at the nintendo results, millionhas sold one units in the last 12 months. They are just getting destroyed by the handheld business. It is running under 15 million per year and they were selling over 30. The handheld business has been killed by mobile and tablet games and the wii casual business has been killed by candy crush and farmville. There is no call of duty player alive who said i am not buying this year because im addicted to candy crush. They play both. I am level 703 on candy crush. And i have Three Friends ahead of me. Do you play call of duty . Of course but i suck at multiplayer. You guys have great jobs. Thank you so much for joining us. Let me say that people can play me, my gamer tag is shower fan. And i am trash compactor. All right. We will get together. I have no idea what you just said but its on the record. We are keeping a close eye on shares of facebook. We are seeing a drop as a begins trading on earnings that showed slower Revenue Growth and higher revenue costs. Emily chang spoke with Sheryl Sandberg and she joins us now with some of the highlights. There, facebook shares dropped because facebook said yesterday we are going to spend more next year and spend more on things like oculus and things like whatsapp. Facebook has made this transition to mobile better than probably any company out there, better than google, city six percent of facebook ad revenue comes from mobile. This is in part due to efforts made by Sheryl Sandberg. She told me that if facebook gets one in nine minutes on the desktop, it gets one in five minutes now on mobile devices. That is incredible. How sustainable is this growth . How sustainable is the mobile ad Revenue Growth and facebook has been warning that it will not be growing at this clip. She told me that yearoveryear comparisons are based on growth of last year. Things are just not going to ramp up as quickly she says. One thing she pointed out his video. Consumer video is exploding on facebook. We are watching numbers, and consumers upload videos and share in a way they have never before. We always pay a lot of attention to the consumer experience. This is more expensive and valuable real estate for marketers and Facebook Says the experience is good enough that we feel comfortable showing ads to these users without attracting from that experience. This is the first time we also got numbers around whatsapp and their 22 billion acquisition. People say they overpaid but what did she tell you more about the business . People are saying they overpaid. App lost 230 3 million in the First Six Months of 2014. They knew that facebook was buying them but the deal had not officially closed. I asked Sheryl Sandberg when you will think about modernization app and she said user growth comes first and then monetization will come later. Not anytime soon. Thank you so much. We will return in two minutes on in the loop. That doesnt for today on a quote in the loop. Tomorrow, a snapshot of gaming at the jersey shore and we will be joined by the lansing city new jersey mayor, donald guardian, as more casinos including trump plaza shutdown. That is all tomorrow morning at 8 00 a. M. Eastern time. It is 56 minutes past the hour which means Bloomberg Television is on the markets. I am matt miller. 30 minutes into the trading day and take a look at where stocks are trading. Openw little change at the we are starting to see the markets move up a bit but not much. The s p 500 gained five points in the dow was up 53. The nasdaq is unchanged right now. Facebook is dragging on that index. Take a look at oil it has been one of the most ,nteresting stories and markets not equities but crude and brent oil is trading at 87. 13 per barrel and nymex crude is at 82. 33. It is all of the lows we have seen over the past week but still pretty close to them. Joining me for more on oil and the future of the fracking boom in america is isaac armes dorf. Need oil to sell for a certain price before it makes sense for them to spend the money to pull it out of shale. Which is not easy. What is that price . Thats an interesting question that many people are debating. Sanford bernstein says about 1 3 of u. S. Production is out of the market. The opec secretarygeneral said its more like half today. That is coming from opec. That is fascinating. Half of the business is ms. Country need more than 80 per businessess of the in this country need more than 80 per barrel . Fracking is more expensive. These wells cost 10 million instead of 1 million. They also deplete fasters enough to keep drilling more of them. And if you do it wrong, everybody is warmer water is flammable. Thats another issue. What about other means of getting oil in the u. S. . Everything else we are looking rises, theyand lower their forecast and it would be a more expensive options oh does not look like we will be going to those options if oil stays low. Ispart of what you see speculation that the lower price will stimulate demand. A 1re looking at kind of trillion stimulus of the Global Economy on these prizes and you can see demand taking backup. Most people dont decide whether to buy gas based on the price. You buy it if you have to, right . Thats true in this country but in other countries where oil is used for Power Generation and not just for transportation there could be more substitution. I was thinking about the fact that more and more cars are getting 30 miles per gallon. The cafe standards are closer to 50 Miles Per Hour per gallon. It does not change as gaskets cheaper. We still are in this mindset that we want to build more fuelefficient engines. How much does that hurt demand . In the longterm, that has been a huge weight on demand as has been average miles per driver which is declining. Its because of weaker Economic Growth and also people say maybe its social media. People can chat on skype so maybe they dont have to visit each other and americans are driving fewer miles in more fuelefficient cars. Thank you for joining us. We are on the markets again in 30 minutes and Market Makers is up next. Live from bloomberg World Headquarters in new york, this is Market Makers. Is bank is paid out more than 70 billion for its role in the mortgage meltdown, is that behind bank of america . You will hear from brian moynihan. Spending and Slower Growth trigger a selloff on facebook is mobile revenue surges. Trick or treating for a good cause ce