Transcripts For CNBC Power Lunch 20161019

Regulators proposing new cybersecurity rules for banks and the government sees one million more people signing up for obamacare next year, just under 14 million. Those are your headlines. Lets get to your money. Oil, the big story now, crude oil rallying 3 . The latest Inventory Data showing a sizable drawdown in inventory. The oil shorts perhaps throwing in the towel, stocks are pushing higher on the back of that, the dow is up about 70 points. And, by the way, for all of you market historians out there, today is the 29th anniversary of the october 1987 stock crash. And if you dont remember that, the dow fell 22 in one day. Though, michelle, it did end the year higher. How is vegas . Yeah. Vegas is interesting. Remember the trading floors used to be so full like that. Not anymore. Im Michelle Carusocabrera live in las vegas. This is the spin room behind me, the site of the third and final president ial debate between Hillary Clinton and donald trump. We are just about eight hours away. The anticipation is building. Tonights debate will be moderated by foxs chris wallace. Six 15minute segments, no commercials. Hillary clinton will get the first question, decided by a coin toss. Here are the topics. Maybe because it is moderated by somebody from fox news, a lot of red meat here for conservative voters. Debt and entitlements. These arent going to happen in any particular order necessarily, but debt and entitlements, for example, probably discussion about social security, medicare, and how theyre eating up more and more of government spending. The economy. Immigration. The supreme court. Foreign hot spots. Pitfalls potentially for both individuals. Donald trump could once again be critical of her role in foreign policy, when she was working for president obama as head of the state department, what does that mean, and hes got to demonstrate he knows a lot more about foreign policy. And then the final topic that could be loaded with mudsling g mudslinging, fitness to be president , where issues related to the number of women who have come forward who say, yes, donald trump did grope them, questions that have come out as a result of Hillary Clintons hacked emails or the campaigns hacked emails, those could all be part of that segment. And perhaps throughout the entire debate, the question is will they get to the issues, will the gloves come off, we point out immigration is one of the topics, havent heard the wall come up in the last two debates, which is pretty incredible, considering it was so important to Donald Trumps rise to the gop primary. John harwood joins me now as he always does, during these events. What are you watching for tonight . What are the last two debates tell us about tonight . The best predictor of what is going to happen tonight is what we have already seen. Lets look back at some of those highlights. In the first debate, the most consequential one, because the most people watch it, Hillary Clinton focused her efforts on baiting donald trump about his personal conduct, while donald trump made a strong argument for change. Why are you just thinking about these solutions right now . For 30 years youve been doing it and now youre just starting to think of solutions. I will excuse me. I will bring back jockjobs. You cant bring back jobs. I have thought about this quite a bit. For 30 years. You wouldnt pay what the man needed to be paid what he was charging you to do maybe he doesnt do a good job and i was unsatisfied with our work, which our country should do too. Thousands of people that you have stiffed over the course of your business not deserve some kind of apology . Now, hillarys strategy worked better in that debate, especially when she baited him about alicia machado, the former miss universe. She got even more ammunition from that hot mike tape from 2005 in which donald trump talked in lewd ways about women. Hillary clinton used that in the second debate to go after him, but then he got personal with Hillary Clinton. What we all saw and heard on friday was donald talking about women, what he thinks about women, what he does to women, and he has said that the video doesnt represent who he is. But i think it is clear to anyone who heard it that it represents exactly who he is. If i win, i am going to instruct my attorney general to get a special prosecutor to look into your situation, because there has never been so many lies, so much deception, there has never been anything like it, and were going to have a special prosecutor. Now, clearly donald trump rallied the Republican Base with those attacks on Hillary Clinton. But hes mostly been on the defensive since then, especially as more and more women came forward after donald trump denied to Anderson Cooper in that second debate that he had done any of the things he had been caught saying on that tape. Take a look at the polls, the average of polls in real clear politics give you a sense of the state of the race overall. Hillary clintons above 46 , mid to high 40s in almost every poll. And donald trump is stuck below 40. Hes had trouble cracking 40. Hes at 39. Thats a sevenpoint lead, pretty substantial. So donald trump has his work cut out for him in this debate tonight. Certainly does, john, thanks so much. John harwood. Lets bring in one of Donald Trumps lead supporters and see what hell be listening in for tonight from tonights debate. Foster freeze joins us, chairman of freeze associates, but long time viewers of cnbc will know hes been a guest for many years on cnbc because he had a long time role on asset management. Good to have you here. Im foster, mr. Freeze is my dads name. Okay. Foster. Ill take your point. You heard what john was saying about the polls here. What can donald trump do tonight if anything to turn it around . Well, it is pretty simple, actually. If he can just concentrate on the issues. For example, Hillary Clinton at the end of last debate said she wanted to arm the kurds. Well, i sat next to the key guy in charge of iraq and said the state departments policy is that we have a one iraq policy, and we dont want to arm the kurds for fear that the theyll secede and become more independent. So i went to camp black tire, the peshmerga camp and i promise you theyre not getting the simplest things. They dont have night goggles, bad guys are throwing grenades into the bunkers at night, they dont have the ability to diffuse. I believe for her to say shes arming the kurds, the question is why arent they armed . Can donald trump stick to those topics tonight, do you think . Can he focus the debate on those issues . I think he will. And another one is what about health care. We let the left use the fancy sounding terms like public options, single parent system. Some people believe the whole thing was designed to implode so they could move to the public system and people in desperation would embrace it. But if you look at another way of phrasing it, why would we want to take the private Health Care System and convert it to government control, epitomized by the government control, one, the accessibility reflected in the phoenix of Veterans Administration hospitals, two, the military, you get no choice, and three the indian Health Care System run by the government and i have not heard of a 747 arriving from saudi arabia to get a heart transplant. So i think the American Public have a lot at stake here to make sure we can maintain the Health Care System and stave off the government takeover. Thats another subject that he could hit very hard. We have known each other a long time. You are a deeply spiritual person. The tape, where you listen to what donald trump said about women, how do you defend donald trump . You dont. You dont. See, i tell you, it just deeply hurts me to see how far our country has drifted from the judeochristian values system on which our country is founded. The whole beauty of what jesus said is forgiveness. Thats one of the key things he came for. And for we to have a society that digs up something 11 years ago for which hes expressed regret, and then play it again and again and again, thats hardly, i think, what our nation wants. And people say, why arent good people running . Why arent good people everyone knows if they dont have something bad in the background, the other side will come up with something. And happens to both republican and democrat. So i believe when i saw that, my heart went out to our country, because i remember David Brinkley was part of our Luncheon Group in jackson and he said the press knew, they knew Franklin Roosevelt was having an affair with lucy mercer rutherford, and also they knew with margaret lahan, but they hid it. They hid it from the public because they did not want to diminish the role of the president. And to see how far the country has migrated from those judeochristian values, we got to get back to those. This is a nasty, nasty environment. Times are very, very different. Foster freeze, thank you for joining us. Michelle, nice to be with you always. Hope we see you soon. God bless. Be sure to watch cnbc special coverage of tonights president ial debate 9 00 p. M. Eastern time. Fast money Halftime Report celebrating an anniversary this week. Nelson peltz weighed in on the markets and concerns about europe. I think that youre going to see a little growth in europe this year. I mean, for the first time. Not going down anymore. So i dont think things are as bad as people want to i dont know why they think about having an Interest Rate hike. I dont think we need a stronger dollar. But i think things are not nearly as bad. And as i said to you, i think there is huge opportunity on the core side. Interesting that he talked specifically about rates and not needing another hike and the strength of the dollar in a month that has seen the dollar index go up by 2 . Well, one of our viewers posed a smart question, what happens to the dollar if the fed does not raise rates . Shre coupkumar will answer that question. Jim chanos joining halftime today. He sounded off on tesla. To me the key is not deliveries, it is production. Because thats the real problem here is getting geared up from the model s and model x, which are doing about 100,000, little less, units a year to what they hope for is an initial run rate of 500,000 of model 3. Thats an entirely different kettle of fish. Interesting to hear chanos talk about tesla. In a couple of months, so news filled and the stock has been pretty resilient. Arent we supposed to get potentially new news, this mysterious production announcement. That was moved from monday to today. So is it after the bell . I believe it is after the bell. Widely covered. Speaking of tesla, were waiting on this mysterious new Product Announcement. It could cross after the bell. It may cross at any time. We dont know. Whenever it crosses, now, later, youre going to hear it first on cnbc. Plus, the white house wants to improve air travel. That sounds good because you cant make it worse. But just how are they proposing to do it. Stick around to find out. And huge interviews you cannot afford to miss. Look at this lineup for the rest of the show. Goldman sachs ceo lloyd bla blankfein, steve case, and kyle bass. Were back after this. Will your business be ready when growth presents itself . American express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. Find out how American Express cards and services can help prepare you for growth at open. Com. When youre on hold, your business is on hold. Thats why comcast business doesnt leave you there. When you call, a Small Business expert will answer you in about 30 seconds. No annoying hold music. Just a real person, real fast. Whenever you need them. Great, thats what i said. So your business can get back to business. Sounds like my rides ready. Dont get stuck on hold. Reach an expert fast. Comcast business. Built for business. Tesla getting ready to unveil a new product today. What are we expecting . It is your guess is as good as anyones right now. There is a lot of speculation that it is out there. We know it is a new product. We know it is from the tesla end of the company, this isnt a solar city event. We know that elon musk said last week, look, we need more time for refining. It needs to be more refined and we do know it is not expected by most according to elon musk. The running speculation, the most popular speculation out there, is that it might be some advancement of the auto pilot system. But, again, thats pure speculation. As we look at shares of tesla, dont forget the company will be reporting its Third Quarter earnings next week. So while this is the news getting a lot of attention today, it is next week when people will say, okay, what exactly did they do in the Third Quarter, cash flow positive. And more importantly, what happens during the Conference Call after the earnings report. Definitely in terms of the stock, very volatile. In terms of speculation, im going to risk asking you to speculate on the speculation, but in terms of the could it be that is that a fact, speculate on the speculation, is it two negatives . Highly speculative speculation in terms of auto pilot, is it auto pilot to the existing vehicles that have the auto pilot feature or perhaps the model 3 could be auto pilot enabled once a switch is flipped, it will roll off the Assembly Line capable of auto pilot at a later date . I think thats always thats part of the plan that is already baked into the model 3. Though they have not been officially they havent officially announced that. Number of details about the model 3 were still waiting on. I would be stunned if they build the model 3 and dont allow it to have the capability of being upgraded in the future. With regard to the announcement today, if you want my opinion, i think that it is probably something related to auto pilot that has greater enhancement of the system. In other words, they already talked about what the vehicle can do in terms of seeing ahead, seeing around objects on the road in terms of using the radar. My sense is perhaps what theyre going to say is were going to show you how much more enhanced that vision is from the vehicle. Again, thats purely speculation. We do not know exactly what tesla plans to announce today. And, by the way, as a quick aside, phil, if youre interested in solar city, mens journal of all magazines, kind of odd, did a deep dive into solar city. I know the last Magazine Reader in the world deep dive for for mens journal. Mens journal. Multipage is about the business model, about musk. If youre interested in solar city, might want to check it out. Topic number two, phil, the white house announcing new efforts to improve travel. Nobody could possibly make it worse, so what can we expect to try to make it better . Well, these are new rules that are either being implemented or being considered by the department of transportation. Essentially comes down to airfares as well as the advertisement of the airfares. Here are the rules being implemented. Refunds for delayed bags, airlines have to give those for bags that are gone missing, they need to stop selective posting of airfares. That has to do with the airfares posted with Third Party Vendors like trip adviser or kayak, et cetera. Protect travelers with disabilities, do a better job of doing that. And give a clearer picture of actual bags delivered. Right now they give a percentage. What theyre saying is, no, you need to tell us, how many thousands of bags are not delivered or are mishandled, et cetera. With regard to the airfares, the dot is also considering all in pricing of tickets. Instead of saying here is the fare and some fees will be added on and you find out when you finish, what the cost is, theyre saying maybe we need to make it all in pricing. And also, when you look at the impact of this, the airlines are saying, wait a second, this is not fair. In terms of youre pushing for more transparency, will drive up the cost for us, the airfares, by the way, have dropped, about 6 in 2016. Airfares have been trending down. A lot of people wonder about that. Airfares have been trending down. Look at shares of the Airline Index or how the Airline Index is doing right now, not shares, it has been a volatile year, but look at that run that it had over the last three or four months as the stocks of airlines have moved higher, and one other note, you to not want to miss this interview. A cnbc exclusive. Were going to be talking with the ceo of american airlines, doug parker, tomorrow on power lunch. Well be at the american headquarters in dallas, talk to them about their Third Quarter earnings as all of these airlines move towards the Fourth Quarter and next year, focusing on passenger revenue per available seats, getting that out of the negative territory and at least a break even. I need to correct you. That interview only happens if youre able to get out of ohare on time and to dallas, 50 50 based on my experiences at ohare. I dont have problems with that. Rowe roll in the back door. Ive never seen you at the gate. Phil lebeau, thank you. Being an Airline Reporter has its advantages. It does. Your captain phil lebeau speaking. Something new cooking at facebook. The companys latest move may surprise you. That story straight ahead. eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. Welcome back to power lunch. Rick santelli here, live on the floor of the cme group in chicago. We have Baseball Team playing tonight. Lets look at some month to day charts. Month isnt over. Ill tell you what, you can learn a lot. Month to date two year note yields, they dont seem to be moving up. Theyre dipping below 80 basis points as we speak, a little over a twoweek low should they close there. If you look at the tenyear and 30year looks the same, completely different pattern. Yes, it is down a bit, actually today it is unchanged, mid170s but holding tough. Another area holding tough and knocking at the door of historic passes at 100 is the dollar index you see as the third chart month to date. And right now we saw that goldman had a great trading month, mario draghi is affecting that by buying things like corporates, credit spreads are narrowing. Look at the price. It is about ready to challenge and make a new pass at the highest price since august of 2015. Brian sullivan, back to you. Lets hope that the pro team shows up tonight, not the aa team of last night. Facebooks efforts to be all things to all people all the time making another move today. Now, through the facebook app, youll be able to order food, buy movie tickets or do things like book appointments. It all comes through the partnership to Services Like delivery. Com, fandango and my time. What do you think . Great idea for the company and stock or getting a little too up in your business . I think it is a great idea for the company and the stock, you can conduct all your business, great for businesses to want to get on to facebook. And have a page there. This also comes a week after facebook launched marketplace section where people can buy and sell goods. So the monetization of facebook is happening. It is interesting to see what happens to the other services. Grubhub is one to watch. A publicly traded one. Grub. That stock was down more earlier on this news. But, it is going to disrupt a lot of folks out there. It is. I argued only semitongue in cheek that facebook is trying, and in some i was suways succee become the internet. They are their own world. Almost a little bit like, we can talk to steve case about this, when he comes on in the next hour, how is that for a tease, like aol of 20 years ago, a little closed ecosystem. You think so . You spend all your time in there. News sites and email. Why go to the internet when you have facebook. You dont have to go to the internet facebook, i got it. Good thought. Countdown continues. Only 19 days, 19 days until voters cast their ballots for the next president of the United States. A year ago, a year ago donald trump made a tenfigure promise to his campaign. He broke that promise. A look at how much he actually spent out of pocket. Thats next. When bad news is good news for the housing market, we will explain straight ahead. The lexus rx, rx hybrid and rx f sport. This is the rx. Elevated. Get up to 5,000 customer cash on select 2016 models. See your lexus dealer. Im courtney reagan. Here is your cnbc news update at this hour. Explosions today rocking the area around mosul, iraqs second largest city. Iraqi government launching an offensive just two days ago to reclaim the area from isis. It is the biggest military operation in iraq since u. S. Troops withdrew in 2011. While donald trump and Hillary Clinton polish off their arguments for this evenings debate, it wont change the minds of millions of voters. At least 2. 1 million voters have already cast their ballots in advanced voting. Europe could be moments away from its First Successful landing on mars. The European Space agency confirming its mars probe touched down. No word on the status of the lander, which has been on a sevenmonth journey. And a country superstar is putting his music on amazons paid streaming service. Until now, garth brooks shied away from all Music Streaming Services in favor of his own ghost tunes online music library. It is important to note that amazon music is sponsoring his latest tour and how big is garth brooks, you ask . Only the beatles have sold more albums in the u. S. Big deal. Thats your cnbc news update at this hour. Back over to you. Such a big deal, you can say that the thunder rolls when he made that announcement. He has friends in high places today. Apparently he does. Melissa, you are furiously thank you, courtney. I just noticed that elon musk just tweeted that the announcement is live at 5 00 p. M. California time. Followed by 30 minutes of media q a. Tweeted this 30 seconds ago. 8 00 p. M. Eastern time. After the close. The close apparently in guam. 8 00 eastern, right before the election, by the way, where all the networks are already going to be in their coverage mode. Where is the east coast bias when you need it . Lets get a check on the overall markets. As all this stuff keeps happening, the dow is up another 80 points today. But intel is a big change from that. Intel shares, they got whacked yesterday. Down another 6. 5 today. I listen to fast money last night. You talked about it. The Current Quarter wasnt that bad. The guidance and the guidance on gross margins, took that down. Some people are thinking is this peak margin, for a stock that has run up with the semiconductors in general. Tell your crew, they got to stop using the term peak. It is peak. Peak oil. I dont know if theyll listen to you. Seven and a half hours to go until the third and final depressid president ial debate. Were on west coast time, in las vegas. Im with john harwood, here to help us preview what is going to happen tonight and also to talk about the state of nevada, where we are, important for two reasons. What happens at the top of the ticket, and also because of the Heated Senate race here. Harry reid is retiring. He was in office since 1987. So now this could be a democratic or republican seat once again. A doubleheader here in nevada. First of all, six electoral votes, swing electoral votes. The growing hispanic population has made democrats more competitive here. But it has been a close race. Hillary clinton appears to have a lead now. Our next guest will tell us how real that is. In the senate race, the republicans have very few opportunities on this 2016 map to pick up democratic seats. They got a lot of vulnerable seats. Just as democrats were more vulnerable in 2014 and 2010. Harry reids retiring. He won in 2010, but joe hack is a republican congressman, pretty strong candidate, running against Catherine Cortez masto. That race has been competitive and the better Hillary Clinton does, the better the democrats have a chance of holding that seat. Lets bring in the guest that john mentioned, nevada political commentator john ralston joins us. Lay out the race as you see it. The president ial race as john pointed out seems to be tilting towards Hillary Clinton now. It was a tossup for a while. But since the access hollywood tape, it started to move towards clinton. The last three polls ive seen show her up by six or seven points. That is going to affect the senate race here. The conventional wisdom in both of those campaigns is if Hillary Clinton can win this race by seven, eight, nine points in nevada, thats going to help Catherine Cortez masto, the former attorney general who will be the first latina ever elected to the u. S. Senate. Shes been anointed by harry reid as his successor. Joe heck, though, the congressman, threeterm congressman from a district here in suburban las vegas is a top quality candidate. He is very, very good, out there on the stump. Hes very good on issues. He knows them encyclopedically. I think he might be the only one who read all 2700 pages of the Affordable Care act. But hes got a problem. Hes got a problem. That problem is donald trump. Heck played it very, very cool with trump. Said some critical things then. He called a press conference, appeared at a rally about ten days ago, disavowed trump after the access hollywood tape, not only said hes unendorsing, said he should step down. Hes getting crushed on conservative talk radio and so you have to wonder, what is going to happen, whether that tilted the race now slightly towards cortez masto. But all the polling ive seen shows that within a margin of error. John, it does feel like it is ground zero for the civil war that is happening within the Republican Party when it comes to what do you do about donald trump . And immigration is on one of the topics tonight. We havent heard the wall in the last two debates, which is pretty amazing. You mentioned this, john. You expect this to play a bigger role tonight and ill talk to you afterwards, how is that going to go down with voters here . John, first. This will come up, right, we assume. States in the west that had high immigration rates are both sources of democratic support and resistance because people see their communities changing. I expect donald trump would make a reference to that issue, but you dont know whether hes going to be focusing all his fire on Hillary Clinton and bill clinton and scandals that hes trying to elucidate. One question about joe heck and the senate race. Before the question of disavowing trump, how well had republicans brought their Party Together . We all remember Sharron Angle was the candidate, the one candidate who harry reid was able to beat in 2010. A lot of people thought he wasnt going to win that race. Is joe hecks nomination a signal that more mainstream republicans are in control in nevada . Well, there is no one in control of the Republican Party here, john. The Republican Party has been a shell for a long time. There has been a lot of work arounds that have gone on that they had very little money and until the rnc sent some operatives out here, a bunch of people on the ground now, about 60 people on the ground. So it is essentially the Republican National committee that is erecting this infrastructure. But the Sharron Angle, harry reid race is instructive in one way that you alluded to. Harry reid, no one gave him a chance to win. The reason that he won was because of his campaign and because of the infrastructure that Harry Reid Democratic Party machine here. That still exists. Harry reid does not want to go out. That machine does not want to go out having lost his seat to a republican. Joe heck, is a first class candidate. And just really to comment quickly on the immigration issue here, theyre pounding heck on the immigration issue, even though he has said he supports a path to citizenship, he did vote against the executive order saying it was processed more than actually deporting all those dreamers. But a recent latino decision poll shows something very interesting. Hillary clinton leading donald trump here among hispanics, 7217, but joe heck is behind cortez masto 5434. First latina ever elected to the u. S. Senate potentially, only getting 54 of the hispanic vote, thats a possible problem. Very interesting. All right, john and john, thanks so much for joining us. Dont forget, cnbc special coverage of tonights president ideal debate starts at 9 00 p. M. Eastern time. We want to bring you up to date on the tesla Product Announcement. It was widely speculated that it would happen sometime today. We now know from elon musk himself through a tweet that it will happen at 8 00 p. M. Pacific time, california time. 5 00 p. M. Something to look forward to ahead of debates tonight. Just to point out, we are at session highs for the overall market as well. So you got individual stocks doing well, the dow is doing well. Not a huge gain, but still we have kind of quietly been creeping up. The dow is close to gaining just in terms of capital appreciation. 6 this year. Throw in the dividend, 2016, i know it is not over, we still got this election thing coming up. But 2016, turning into a relatively decent year for the stock market. Speaking of this election thing, a year ago, donald trump said he would spend up to a billion dollars of his own money. That was huge. Didnt happen. But the donald is still apparently spending a lot of money, robert frank is here with more on the big money and big election story. That billion dollar pledge that he made when he first announced the run for president is now sort of closer to around 100 million as he said in the speech yesterday. Remember, by the time this ends, i will have spent over 100 million on my campaign. Hillary spent nothing. She gets all her money from the special interests and donors. All right, so what is he actually spent so far . Election filings show trump spent less than 60 million of his money, thats through september. And trumps contributions to his own campaign have actually been falling this year. The First Quarter he was giving his campaign more than 5 million a month, that peaked at 11 million in march. By july and august that was down to 2 million a month. Even trumps 60 million may be a little overstated. His campaign spent more than 8 million to reimburse trump owned or trump related companies. So some of the money hes spending on his Campaign Goes right back to his companies. Now, if you look at the time he has left, 19 days to spend that 40 million to get him to 100, clinton hasnt spent any of her own money that we know of, but the Trump Campaign saying that mr. Trumps contribution more than covered the cost of reimbursement to him or his companies, and that he has contributed an unprecedented amount of money to his campaign. Although it is not exactly unprecedented, ross perot gave 64 million in 1992, over 100 million in todays dollars. Steve forbes spent 70 million. Michael bloomberg, over 105 million just on running for mayor. So compared to these guys, trump is still not quite putting up the money yet. 19 days to go. Yeah, well see if he can spend that much money in 19 days. Well see. Ill let you know when it is all over. Robert, thank you very much. Here is a riddle for you, america. When is a lower number a better thing economically . Maybe when it has to do with housing. Diana olick is here with why lower Housing Starts number may actually be a positive this industry, we like big numbers, we want numbers to go up. Why is the number going down a good thing . Leave it to you to give the riddle. At face value, yes, this number looks like a big miss for Housing Starts, down 9 . You dig in it, and you see a big divide inside. Multifamily starts dropped a dramatic 39 for the month. And that drove the headline drop. And it is likely an outlier given that permits dont jive with it. Multifamily members can be skewed by a few big developments that spike the data one month and drop it the next. The real news here is Single Family Housing Starts. Up 8 . That is welcome news for an industry that is only 75 back to its historically normal production. The biggest problem hands down in housing today is a lack of supplies. So while the knee jerk for the stocks are the big builders was to tank on the numbers, theyre bouncing back. The public builders have gained market share, grown Balance Sheets and acquired a lost land. They are well positioned to take on 2017 with demand running very high. The only red flag in this is that the Single Family permits which are an indicator of future construction, they were flat. So if you want to look at the numbers more, cnbc. Com. Diana, thank you very much. We will. Dont you go anywhere. You do not want to miss this. Steve case, Lloyd Blankfein, kyle bass, all coming up. Only one will survive. Im sorry. Wrong show. Those are big interviews and all coming up with some big money advice for you. You wont want to miss that when power lineups return. Recently, a 1954 mercedesbenz grand prix race car made history when it sold for a record price of just under 30 million. And now, another mercedesbenz makes history selling at just over 30,000. And to think this one actually has a surroundsound stereo. The 2016 cla. Lease the cla250 for 299 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. But they demand the best shopping experiences. They may want the latest products and services, theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. Will your business be ready when growth presents itself . American express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. Find out how American Express cards and services can help prepare you for growth at open. Com. All right, whole lot of green on the screen. A lot of green out west too. Vanity fairs third annual new establishment summit taking place today in San Francisco, titans of tech, business, media, the arts, all being brought together to discuss their visions for the future. Andrew ross sorkin went west and is at the event sitting down with kyle bass, principal of haymon Capital Management for a cnbc exclusive. Andrew . Hey, brian, thank you. Kyle is here, and you just got off the stage with jim chanos making a pretty compelling bear case for china. And you also talked about tesla and other things. But the thing that i thought our audience should try to understand, given how bearish youve been on china, is to understand the timing of that bearishness, meaning what is the inflexion point, and also how do you actually trade it, it is one thing to say china is going to hell in a hand basket, another to see what you do about it. Let me back up and say im just being realistic about the Banking System. Im not bearish on china. Im not havent been bearish on china for the last decade. Their Banking Systems reached an inflexion point, already there. Theyre now 330 of their gdp and 20 of their Banking System is an asset liability mismatch products like abc and sibs here going into our financial crisis. We had 2. 5 of our system there. Now 10 of their system, 20 of deposits. What im telling you, it is already reached the point where it is going to have a problem with losses. What does that mean . My job is to figure out how to help people hedge their chinese their chinese exposure. A lot of people have investments in chinese hedge funds, private equity and equities, public equities, and my goal is to help educate them on what is likely to happen. In the only to their equities, but more importantly to the currency cross if youre arguing there will be a financial crisis or a banking crisis if you will in china, does it not spread to a financial crisis in china and therefore does it spread to a Global Crisis . My view is that it is really simple. They have to recapitalize their Banking System. We recapitalized our system post crisis. We pumped in 660 billion of new equity throughout the crisis. Equity and preferred. They have 2 trillion of equity. They have 37 trillion of assets. We only had 17 on Balance Sheet and maybe another 7 off. Point being, their system is much more levered than ours was going into basically theirs has been more recklessly built, and the leadership in china has been managing the financial market, their Financial Markets existence for about a decade. What im saying is you have to be very careful studying how fast and how recklessly they built their assets. Jim chanos talked about the dominos that fall, caterpillar, mining, that whole world. When you start to look out and when you try to understand the permeatations of where this goes, how far beyond the Banking System does it extend . What it does to your point, it will slow global growth. What im saying is the valve is going to be their currency. Theyll do Everything Possible to recap their Banking System like we did. They will they do that under the cover of night, though . Will we know it . It was somewhat more than somewhat very transparent in the United States when the u. S. Government recapitalized the banks. Right. In china, are we going to know when they do this . I think well know more than we have in the past. And when you look at they recap their system and after the Asian Financial crisis, between 98 and 2001 and if you read the settlement papers about that recap, it cost them about 30 of gdp to recap their banks. The way they did it is they essentially created the room on their Balance Sheets and expanded their Balance Sheet and they rekapd their bacapped thei. Orders of magnitude, for an economy that is 12 trillion there, ours was 17. Their economy was much smaller than ours was and Banking System is three times larger. Thats the point im trying to make. How do you feel about the u. S. Economy now . Markets in particular . My own view on the globe is youre starting to see ppis and cpis move. Consumer prices move. Oil is trading 51, 52, and last years First Quarter was lapping about 36. So you have owner corporate profits are down 2. 5 , but 2. 3 of the 2. 5 was labor, wages moving up. Wages up, real estate rent moving up, now you have commodities bouncing. So 2017 will be a year of increasing inflation, but Economic Growth lagging. What do you do about that . Moving into a stagflationary environment. Youre doing what . So you dont want to be long any long bonds. What about equities . I dont have any equities. I have a couple of equities. It is just im not saying the market is going to crash. Im saying it is going to have a hard time Generating Positive real returns in the next few years. The debate tonight. You have a view . I mean, look, in the end, trumps a circus clown and hillary is the only thing weve got. I think you have to vote for hillary. Well leave the conversation there. We appreciate your time today. Thank you. Youre welcome. Brian, back to you. All right, andrew, thank you very much. Appreciate that. As those guys said, there is this debate tonight. You might want to tune into cnbc a little later on. Coming up, the daily segment we know you cant live without. Street talk, which includes one biotech nearly every analyst who covers it says will have big gains ahead. Plus, another gigantic interview coming up on cnbc. David faber sitting down with Goldman Sachs Ceo Lloyd Blankfein. Big show still to come. Anything worth pursuing hard work and a plan. At baird, we approach your Wealth Management strategy the same way to create a Financial Plan built to last from generation to generation. Well listen. Well talk. Well plan. Baird. Make sure its ano make a intelligent one. The highly advanced audi a4, with available virtual cockpit. Time now for street talk, your daily dive into the key wall street calls of the day. Melissa, kick it off. All right. First off, Credit Suisse upgrading yum brand to outperform from neutral, price target 96. Primarily to what the analyst is calling the new yum, which will exclude china once that business spins off. The base case for yum is up to 35 upside over the next two years with the return of 7 billion to shareholders through 2019. Relatively low risk to new yum, given the balance portfolio of cross brands and geography and low sensitivity to same store sales. I found this upgrade interesting because the stock is at 26 times trailing earnings 21 times forward earnings. It is hardly discounted from a valuation perspective. All right. Stock number two is dupont. Nomura, 78 target. The merger has the potential for meaningful value creation. Some of that unfortunately is cost cuts, probably job cuts. But the analyst says the stock has a three year runway, Free Cash Flow should be up 30 annually, and thats 78 target on gd is about 11 upside, not huge upside, but they pay a dividend. One year performance up 22 . Some of the upgrades seem to be coming at odd times for big slower moving companies. I agree. Third stock here, lululemon, getting a positive note from oppenheimer which says investors have been overreacting to speculation there may be high markdown in clearance activity at the stores showing that clearance is limited to one or two racks per store. Theyre down, down substantially from august highs. Consensus reflects sales and margin miss which could mean there could be an upside surprise. Oppenheimer sticking with the outperform rating, 70 price target. I saw the 70 target, i thought, wow, thats a lot of upside. Then i looked at the chart, and it has been an 80 stock twice. The past few months. I said it is not as wildly bullish as i thought. This call is. Last stock is coheris biosciences. Chrs. Small cap call of the day. Rw baird, seventh analyst to follow the stock. Outperform, 40 target, 35 upside. They call it an underappreciated pure play biosimilar company with a robust stage pipeline. This company is going after pricing drugs made by amgen and humira. It is not generic but going after a bigger drug, correct . Exactly. For the treatment of the same disease but not exactly the same. Not close enough to be sued, but close enough to work. To make the money off of it. Small cap call of the day. The latest read on the health of the u. S. Economy is straight ahead. Plus, it is the final round. Will the gloves come off during tonights debate . What each candidate should or not do to win the debate. Romantic moments can happen spontaneously, so why pause to take a pill . Or stop to find a bathroom . Cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. 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Reporting economic activity, continued to expand at a modest or moderate pace from late august to early october. And most districts expect that pace of growth to continue. Most districts saw an uptick in retail spending with outlooks for modest growth as well. Manufacturing activity mixed, the strong dollar, however, dampening manufacturing exports. Residential construction in real estate activity expanded further, although low inventories continue to constrain sales in a few districts. Demand for business and consumer loans increased. Signs of stabilization in the oil and natural gas sector with continued optimism among Energy Contacts in kansas city and dallas, they expect 2017 to be a much better year than 2016. Back to the labor market, hiring strongest in richmond, chicago, st. Louis, and the San Francisco districts. Wage growth showing rising pressure in certain sectors, wage hikes driven by a shortage of workers in some districts. Some Small Businesses owners in San Francisco, for example, are reinstating Health Care Benefits to attract new hires. Back to, again, looking at consumer spending. The majority of the districts we said reported increase retail sales, but unseasonably warm weather impacted cold weather sales in new york and cleveland districts, construction in real estate, second anecdote there. Sales of higher priced homes slowing in new york, chicago, and the dallas districts, low inventory slowing sales in boston, philadelphia and minneapolis. And finally a quick look at agriculture, it is a mixed bag. Strong production of crops but low Commodity Prices putting pressure on farm incomes. Back to you. All right, thank you very much, Hampton Pearson. Quick check on the markets here, very little reaction to the beige book, media upward. Look at tesla shares, theyre at session highs right now. And this after elon musk tweeted tesla Product Announcements at 5 00 p. M. California time, which would mean 8 00 p. M. Eastern time, 30 minutes of media q a to follow. Lets get back to that beige book. And the macro data. How will that latest data from the fed impact the market if at all. Lets bring in shre kumar. Thank you very much for joining us. You heard the read. Not to take anything away from it, you want to say, oh, big news, seems like this is kind of more of the same. Would you read it that way . I would agree with you completely, brian. I think you didnt hear anything new, anything dramatic in the latest beige book statement. Only thing i would add is that hampton talked to us about reduce slack in some labor markets, tightening labor markets. But Janet Yellens recent statement talked about availability of labor. The thing that comes out, if anything, pretty pedestrian report, the contradictions. We have here that we dont know whether the labor market is tightening or not. Yes, the wages are increasing. But they are still not at the comfortable pace as far as many workers are im going to jump in, you said it best, it is old, not news, you cant spell news with the word old. Only new, nothing new in it, lets move on to something else. Okay. You tweeted out this morning that basically that Stanley Fisher and janet yellen seem to not only be saying sort of opposite things, but maybe openly in conflict. Arent they supposed to be working together . Why dont you answer your own tweet question. Absolutely. I think so far we have had lots of contradictions among the various voting fed members who are talking about whether to increase Interest Rates or not to increase Interest Rates, brian. But to the triumvirate, supposed to be in one camp and they were supposed to be thinking along the same lines. What was very confusing about the latest exchange between the yellen statement on friday and the fisher statement at the new York Economic Club on monday is that yellen was still talking about High Pressure economy, which is interpreted as looking for higher inflation rate, lower rates for longer, thats the implication of what she said, where as mr. Fisher on the other hand, on monday said he wouldnt want to increase Interest Rate inflation target from 2 to 3 . He talked close to full employment. These are contradictory messages, brian, and i dont know why they make these statements two days apart. So i want to get what you think. Youve been firmly in the lower Interest Rate camp for a very long time, calling probably a shockingly low rate yield, i should say, on the tenyear. Are you still in that camp given the selloff we have seen in bonds. We have seen a selloff in a lot of bond proxies. A lot more than 10 off the 52 week lows. We have an altria down, and look at the bond etf, down 7 from the 52 week high set this summer. Where do you stand on bonds at this point and yields . Melissa, that is a very timely question. And i will refer back to what the feeling was in early december of 2015. Just before the fed hiked on december 16th of last year. The sxexpectation was that the curve was going to steepen and youll have much higher ten year yield. If you compare what happened in the aftermath of the fed rate hike, when the yield curve did steepen, and you look at what happened to the yield curve in june of 2016, six months later, all the various rates, fiveyear, tenyear, 30year, significantly lower and the yield curve had flattened. The reason is that the yield curve and the tenyear and 30year yield are dependent upon inflationary expectations, they are based on the base of Economic Growth. I dont think inflation is going to pick up. And 2016 is turning out to be the slowest growth since the financial crisis, so thats the reason, melissa, why i would look again for the yields to come down along the curve. We got a quick question from a viewer by the way, before we let you go. What happens to the not a callin show, but ill do this anyway. What happened happens to the b the treasury if the fed does not raise rates. Thats a good question. If the fed does not increase Interest Rates, i think the bond yield comes down because it is more of a sign of a fed leniency with respect to Interest Rates and hiking. As far as the dollar is concerned, we have had a few days of strengthening of the dollar with respect to the pound, the euro, the yen. That is going to reverse. So the dollar is going to get weaker. And the bond yields are going to come down immediately in the aftermath of a fed not hiking on december 14th. Shre, always appreciate it. Thank you. Good to be on the program. Hillary clinton and donald trump square off in their third and final president ial debate tonight. Clinton leads most polls with 20 days to the election. Michelle is in las vegas covering all the action, also with us, trump informal adviser larry kudlow with kerry sheffield, the founder of bold. A platform aimed at millennials. You support neither clinton nor trump. Yes. Never trump, never hillary, yes. What do you think each candidate must do tonight . Well, for trump, i think he has to limp across the finish line without imploding essentially. I think he sort of did that in the most recent debate where there was the fear of the trump tape and i think he did stabilize things a little bit. There was some calls within the party leadership. Lets put in mike pence or somebody else it replace him. He was able to tamp that down a bit. But as far as millennials and women are concerned, hes already out to pasture. As far as hillary is concerned, i think she has to basically steady the course. It would look bad on her if she did what her running mate did in the vp debate, go on the attack. She needs to be president ial and stay the course. You almost put him out to pasture too, larry, right . Almost. Except for melania. Ive been honest about it, i think, all things considered, i was furious with him after the outbursts. So, okay, my piece on melania, a serious piece. It was. I think trump should raise this tonight. I think he should have a more contrite view. I didnt think he got that done in the second debate. Thats just my opinion. Melania, i just i know her a little bit. Shes a very strong woman, successful business lady, she didnt show up, didnt see her after those billy bush tapes came out for a while. And there was no fawning News Conference where she looks at her husband, you know, and while he lies through his teeth to the media, she didnt do that. She came out yesterday or day before yesterday, and told the story that she basically criticized him heavily, and that he apologized, and she accepted his apology, i dont think she would have done that if she didnt mean it, i do not. I think shes a very independent woman. Now, having said that, i think trump would be wise, before we get into the issues and stuff, to tell that story. That my wife has forgiven me, i misbehaved, we talked about it, and then reach out to the american viewers and say, i hope you will forgive me also. This is not me. She said that, she said, this is not me. This is not donald. I know him. The stuff he does publicly is just too weird, it is not him. Hes not going to sell that out. I get that. It is too late for that. But i think contrition, before i get to the issues, contrition is something i think you should tell melanias story. Yes, michelle, sorry. Greetings from las vegas. A lot has happened in the last week besides the tape. There is the wikileaks revelations. How much should he focus in on those, what should he do with those in order to try to achieve some points tonight and, kerry, ill follow up with you, do millennials care about the revelations . I think hes got to mention them. I dont want to see him as a 90 minute attack dog. I think that plays into his worst instincts and his worst, you know, cliches. But you had, for example, michelle, i dont know if you saw this, wikileaks dropped an email where obamas number one obamacare advise r sends a memo to hillary and john podesta saying what a disaster it is. This is a year ago. Shes been trying to sell it on the campaign trail, though her ultimate is going to be single payer government run Health Insurance, that kind of thing needs to be put out there. And all through these wikileaks emails, which theyre not as sexy as sex, so they havent gotten the coverage, but it really shows she probably doesnt have a dishonest doesnt have a honest bone in her body. I think thats what the polls are saying on lack of trust and popularity and stuff. So, yeah, i think trump has got a a lot of that has been missing from the clintons email is clinton herself. It has been a lot of podesta, a lot of other stuff. Do you think well hear maybe michelle, it is a better question for you, will we hear about that tonight . Will we fox news host dig into the emails . Wait, wait. Of course shes been involved. These emails go to her. She reads everything. I mean from her. Her speeches. With all due respect the point of my story kerry the point of my story is this. With regard to the wikileaks, here is a one of the key issues in this campaign is obamacare. It is a catastrophe. Everybody knows that. Their own top adviser sent this email that she knew a year ago about all these problems and she wouldnt fess up. Thats the kind of thing trump on issues basis, should raise. Thats all im saying. He should get it out there. To what degree do millennials care about the they dont. They dont. To what degree do millennials care. Do they reflect hypocrisy, you look at the wall street speeches, lack of honesty, as larry was suggesting. The thing is, most of the dishonesty and the distress happened in the primary. People, millennials in particular were very pro bernie. And the wikileaks confirmed what they already suspected and already had said very publicly that the dnc is pro hillary. This is old news. This new wikileaks stunt confirms stuff that came out months ago. There is the third party variable. That could move the needle for millennials. Theyre much more i see that i think we need im not pushing back on you or millennials, because i had this sort of thing about republicans and democrats, i dont like when people lump people in. Cant just say the millennials. Have you been to wisconsin . To ohio . I have extensively. A lot of millennials are voting for trump. You cannot say that in aggregate. How do you know . 70 to 75. Of what . Of millennials. Thats what the polling says. Im from utah. Polls. Millennials in utah are never trump. Theyll vote for utah is im just saying you see real clear politics. Pu pew data. You look at the polling Numbers Research on millennials. Heres the point. Who does the poll . You look at numbers of younger voters, a lot of them, more than older voters, have chosen to do the protest vote. A gary johnson or jill stein, which is a waste, right . Neither of those people are going to win. Hillary clinton loses more as a result of those people departing. Is that not the case from what we see from the numbers . Is there anything she can do to try to convince them to come back . You are right. Real clear politics your question of polls, you look at the aggregate polling, multiple polls shows two way versus four way race, hillary is hurt more than trump is hurt. Her lead shrinks. Youre totally right on that. In terms of the trust and shes got to get these bernie people who are feeling violated by what the dnc did and get them into her camp. Theyre already out to pasture on trump. Theyre never coming to trump. It is not about the bernie people. Read the wall street journal story, a very good essay, you talk millennials, theyre a lot like the rest of us. Their biggest concern is the economy. Which this kid puts out and also they prefer free markets to a government managed economy, probably because they dont trust government, like the rest of us, which leads me to this important segue. Trump tonight in addition to being low key and contrite, i believe, he has got to do issues, michelle, and then the number one issue is the economy. Thats his issue. He has a good, if i do say so myself, a good tax cutting plan. It is a prosperity plan. It is jfk and ronald reagan. It is bill clinton. Hes got to get that out. Hes got to say that if only he would mention it. You sound like an adult and thats what millennials want. Donnell tru donald trump is not an adult. You have your opinions. Thats a cheap shot, but ill let it go. You cant im sorry. You cant millennials hes running for president. This is more than millennials. I know plenty of millennials voting for trump, carrie. My point is not millennials now. It is everybody. The economy is the number one issue. By twice any other issue including health care and terrorism. Trump has a tax cut plan, if i were he, i would say to her, youre taking your tax hikes are taking money out of peoples pockets. Thats a recession plan. My tax cuts are putting money into peoples pockets. Thats a prosperity plan. The difference is stark. It is probably the single biggest contrast i might add in the whole debate. The economy is number one. Growth. Hes got to put himself in the tradition of the democrat, jfk and the republican reagan and the Democrat Bill clinton. Thats his winning ticket. He never emphasizes this stuff enough. If he does, he still has a chance, even though i have my doubts. I agree. Good to see you, thank you, larry. Thank you, carrie. Michelle, well see you later on. Watch cnbcs special coverage of the president ial debate, 9 00 p. M. Eastern time is had that kicks off. Is new England Patriots coach Bill Belichicks temper bad for microsoft . It just might be. Were going to tell you how. An interview coming up as good as gold, Goldman Sachs Ceo Lloyd Blankfein will join us. Stay with us. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive at the Marine Mammal center, the environment is everything. We want to do our very best for each and every animal, and we want to operate a sustainable facility. And pg e has been a partner helping us to achieve that. Weve helped the Marine Mammal center go solar, install electric vehicle charging stations, and become more energy efficient. Pg e has allowed us to be the most Sustainable Organization we can be. Any time you help a customer, its a really good feeling. Its especially so when its a customer thats doing such good and important work for the environment. Together, were building a better california. New England Patriots coach Bill Belichick has officially given up on the Microsoft Surface tablet. Oh. Look at that. Few weeks ago, his team lost to the bills, theres that, belichick seen on camera throwing the surface down. Yesterday, he said his team will not be using them anymore. He says theyre not dependable. He cant take it. So hes going to stick with printed pictures. Old school. Hes not a millennial. Keep in mind, microsoft paid the nfl 400 million to use the surfaces for five years. The company says lots of other teams and players have nothing but positive to say about the surface. Belichick probably not happy they were losing and then lost. But didnt like the surface. Got to wonder if hes a technologically savvy kind of guy. Pulling him into the modern age and frustrated with it. Maybe, thats like falls into the old people cant use technology. Maybe youre trying to coach a Football Game and youre trying to deal with technology, but all you want to do is call plays and youre, like, hey, can someone hit control alt delete for me here . Frustrating, especially when youre losing. Winning. Right. On to the nfl, this year also dealing with the decline in tv ratings. Julia boorstin has an update and look at how the baseball playoffs are performing. Julia . Thats right, melissa, with people watching more political news and various other factors including week matchups and lack of star talent, sports are suffering. In week six, average nfl ratings fell 15 . Bringing season to date ratings down 12 in the key 18 to 49yearold demographic. In guggenheim analyst Michael Morris points out certain baseball playoff games have fared far worse. He says baseball has seen a core decline in popularity, though the nfl hasnt necessarily. Moore saying both mlb and nfl are suffering losses of the casual fans. Dont count out traditional tv, though. All four broadcast networks have at least one hit new primetime show this year. So people are still watching television. When it comes to the male demographic, focused on sports, they may be more distracted by politics. So well have to see what happens to ratings once the election is over. Melissa . Julia, thank you. Julia boorstin. Chip, smokes and drill bits. Coming up in the good, the bad and the uglugly. A big day for oil, a big spike on lower than expected inventory numbers. Oil highest level in more than a year. Well have the close soon. Power lunch will be right back. Face. No one speed. No one way of driving on each and every road. But there is one car that can conquer them all, the mercedesbenz cclass. Five driving modes let you customize the steering, shift points, and suspension to fit the mood youre in. And the road youre on. The 2016 cclass. Lease the c300 for 369 a month at your local mercedesbenz dealer. Welcome back to power lunch. Im for the good, the bad and the ugly in todays trade. Lets hit the good first. Halliburton number two posting a surprise profit thanks to recent cost cutting. That stock has seen a nice 5. 25 pop. On to the bad, Reynolds American falling 3 . The Tobacco Company missing quarterly estimates. The ceo also announcing her departure, that takes place after this year. It is an ugly day for intel, slightly disappointing revenue guidance for the Fourth Quarter. That stock had been running up before it is down by 6 . Thank you. Leaked email sent to colin powell showed what Company Sales force. Com might have been looking at for a potential deal. Remember, powell is on the board. And some of the stocks mentioned in the leak are on the move today in a big way. Look at pega systems, tableau, service now, hub spot, all up. Pega systems up 8. 5 . Others we did not have time to mention. One stock not on the list, however, twitter. Twitter, all this talk about this slide presentation, melissa, that was leaked, from a few months ago, twitter not doesnt mean much, but not on the list. Got to wonder what got it on to the list and pretty short order in just a couple of months after that. Decline in the stock price. Two big interviews coming up in the next half hour of power lunch. Steve case will join us. Aing abouty, Lloyd Blankfein, the Goldman Sachs ceo, first got to get to the Closing Price for oil on a big day. Oil hitting its highest level in more than a year. Where will it close . Well, guess what, well find out coming up. Hey dad. Hey sweetie, how was your first week . Long. Itll get better. Im at the edward jones office, like sue suggested. Thanks for doing this, dad. So i thought it might be time to talk about a financial strategy. laughing you mean pay him back . Knowing your future is about more than just you. So lets Start Talking about your longterm goals. Multiplied by 13,000 financial advisors. Its a big deal. And its how edward jones makes sense of investing. Whats going on here . Im val, the orange money retirement squirrel from voya. Were putting away acorns. You know, to show the importance of saving for the future. So youre sort of like a Spokes Person . More of a spokes metaphor. Get organized at voya. Com. Lets check on shares of tesla, just off of the intraday highs here. It had hit 206. 66, up by 2. 5 . A Product Announcement is expected at 5 00 p. M. California time followed by 30 minutes of q a. 90 minutes now until the closing bell. The dow and the s p 500 are higher, but the nasdaq has turned into the red. Big move in the price of oil today, though, getting its highest level in more than a year. The price of crude oil doing pretty well. Lets get to Jackie Deangelis live at the nymex. Yeah, it is actually tracking for its best day since september. Were seeing about a 3 pop in crude oil prices. Four reasons here, the inventory drawdown, positive, chinese gdp data, the oil minister saying the downturn is coming to an end. We broke through the technical resistance. That momentum usually drives us higher. Wti november contract will roll at the close tomorrow. So there is more interest in december right now, which crossed the 52 mark at its session high today. Back to you. Thank you very much, Jackie Deangelis. Vanity fair bringing together titans of technology, business, media and the arts for the third annual new establishment summit in San Francisco. Joining us from the event is jon fortt who is sitting down with steve case. Take it away. All right, thanks. Steve, thanks for joining us. Want to cut to the chase. Three weeks ago you put out this oped endorsing Hillary Clinton, somewhat reluctantly, because you say you dont like to get involved in politics, what is the reaction been . Generally positive. Some people appreciate it, some people didnt. But generally people i think appreciated the fact i felt this was a pivotal election and as you say i tried to stay out of politics for the last three decades, focus on policy, Work Together in a bipartisan way. I thought in this particular instance it made sense to step forward, because on the issues of innovation, technology, job creation, things were talking about here at this vanity fair conference, Hillary Clinton put forth a detailed plan in terms of policy framework and donald trump hasnt. Just talked at 40,000 foot level. For me, it was more about the Economic Growth, innovation side of the equation. I know there are concerns around temperament and judgment and character around trump. I share some of those concerns, but for me the focus was on who is going to move the country forward who will make sure we remain the most entrepreneurial nation. I thought Hillary Clinton would be the right choice. The focus of your book the third wave is on how the next wave of the internet is going to get even closer to our daily lives, things we do every day, disruption, a big idea here. It seems like part of what were dealing with in this election cycle is the impact of maybe first and second wave disruption, echoing through this backlash against globalization. How are we going to handle the third wave politically if were having this much trouble at this point with the previous waves . The first wave is getting everybody connected. The second wave is about software apps, Silicon Valley at the epicenter. The third wave will be integrating the internet in more seamless ways. But not just going to happen in Silicon Valley, all around the country and promoting more entrepreneurialship. We have to keep leaning in the future, figure out what the Jobs Industries of the future are, we cant go backwards. So much of what donald trump is talking about is bringing back those jobs that have left manufacturing jobs that a lot of people certainly here in Silicon Valley say, well, forget about that, thats not going to happen. How do you articulate this regional entrepreneurship in a way that gives hope to folks who dont have an engineering degree in places like albuquerque, which i know is one of your totally understand. I understand some of the trump support. There are a lot of people angry, frustrated, feel like they have been left behind. Theyre fearful of the future. But i dont think you can move backwards. I dont think you can put up walls, i dont think the jobs that are lost are going to come back. You got to lead the future, got to figure out what the next industries are. 200 years ago, over 90 of us were working on farms. Now it is 2 . We figured it out in the industrial revolution, the digital revolution, new kinds of jobs. Cant just be the entrepreneurs in Silicon Valley, has to be all over the country. Youre seeing great entrepreneurship, Great Companies attacking food and agriculture, attacking water, attacking energy, transportation, not just about the software now. It is how it really impacts our lives, changes health care, change education, change food, change transportation, energy, we have to level the Playing Field so everybody, everywhere, has that shot at the american dream. And not just talking about it, putting 100,000 into each of those places. Steve case, thank you for joining us on cnbc. Thank you. Brian, back to you. John, and steve, thank you. Shares of Goldman Sachs having a pretty nice run recently. In fact, our 5 in the last month coming up on power lunch, a huge interview you cannot afford to miss. Lloyd blankfein sitting down with our own david faber, wide ranging interview. Also, somehow, everybody but melissa and i is in the pacific time zone on cnbc. Back after this. Lets get to a huge guest. We go to santa barbara, california, where david faber is standing by with Lloyd Blankfein and cnbc exclusive interview. David, take it away. Thank you very much, melissa. We are joined by mr. Blankfein, nice to have you here, nice to be here with you, i guess i should say. Good it see you, thank you for coming. Goldman reported earnings yesterday, Morgan Stanley reported today, last week jpmorgan, bank of america, citi, all of them pretty good. The stock price reaction has been rather muted. Are you a bit surprised that investors havent been a little more enthusiastic . I think relative to the low bar that has been set over the last few years, because of the cat they need to accumulate cap on all of these we havent hasnt been the growthiest time, the results were good, no doubt about it, but good relative to the low bar of the last few years. But for our stock, which converges on book value, having handled the last quarter double digit growth, that was a good sign. We have been that way for the last five years. Except for the first couple of quarters. So the question in everybodys mind, the first two quarters, an aberration, or was it the was it a sign of a bad trend and so i think there is some relief and in connection with that relief the stock did go up. Our stock went up, you know, to my mind, significantly. Wasnt bad. I dont mean to say at the same time, you far exceeded expectations. Granted they are perhaps lower than they might otherwise be. And book value, 181. 25. We sit here in the stock is 175 and change. Not too far from it. Is there going to be a day where you see a multiple to book value as opposed to below it, not just for you, but the rest of the sector or are those days over . First of all, there is a cycle to everything. So the answer is, yes. And my expectations are that firstly, on two measures, one, the notion of having to have a double digit return to be the to that being your cost of capital is a little bit odd. It is. A little bit odd. You did have the 11. 2 return on equity. We did. Were thrilled about it. Im proud in the context that we were in. But the expectation of the market for a 10 return is the cost of capital was there when the risk free rate of interest was 5 . And today when the rate is 0, it is the same 10 , when we have more than double the capital and so consequently much less risky. But on the revenue side, this hasnt been exactly the strongest tailwind that anybody can have. Still living in a relatively low growth market, almost all the businesses that we had have correlate with growth. We finance people who do transactions, people do transactions when they have confidence, when deals get financed, they create securities, securities create trading and we havent been in the growthiest part of the curve. If youre asking me will we ever get back there ill get you that, will we ever get back there . Absolutely. You were on squawk box, you said this is not the most confident moment. Were only eight months later or whatever it is. But are we more confident now than we were then . I think we are. The market has improved. The markets have improved for these companies. And not where i would expect them to be when good results and when growth and higher pace of growth is established. But were directionally heading toward that. Do you ever, though, outrun the impact of the financial crisis . By that, i dont mean financially, i mean in the broader zeitgeist, first of all, and generally as a result of the regulations that have accrued as a result of the crisis itself. No, no, sure, there are cycles to these things. Sometimes they take so long. You feel like, gosh, these things are permanent. Helps to step away and look back. Great depression at one point. We had a lot of regulation. It was alo long time ago, we h time for we had had time for memories to dim, for regulation to get adjusted, for it to go too far in the wrong direction, and recover and get into a much more severe direction. And those cycles have taken place. If you ask me, is this the end of all cycles and is this moment frozen, no, and by the way, i said the same thing when we were at the when the pendulum was in the other direction, and things seemed to be very, very frothy. I certainly reminded everybody at work and anybody else who asked me the question, i said, this is not going to last multiple to book . We have been public for 17 years, i remember our multiple to book was four. Four. Deals were getting done. Four. Well never get back to four times. Never let me tell you, it is as much a vanity to Say Something will never happen again as it is to say im sure this will happen. Okay. So was i just being vain . It is i think youre vain in the sense of, you know, making a it is hard to it is hard to prove while were sitting here, i wouldnt make that bet with you. Okay. You guys are doing some Different Things recently. Youre taking retail deposits. You started very recently an online lending platform called marcus. I wondered about the name. It is Marcus Goldman i guess. You like the name . Call me sentimental, but Marcus Goldman. It is a retail name. I think it is a nice name. Has some meaning in the firm. Okay. Fair enough. But why are you doing all of this . This is Goldman Sachs. Retail deposits, loans of 30,000 or less to help people consolidate their credit card debt. Look, the retail these things are separate. The retail deposit was an opportunity for us. You had general election general electric, in the process of debanking, shedding its online platform, and at the same time, were always looking for ways of diversifying our financing. We werent hunting for it, wouldnt have created it, but at the moment they were selling, it seemed like a good idea for us to acquire it. As an alternative source of funding for a firm that is otherwise for the most part a wholesale funder. Thats separate. We did it it made a lot of sense for us. As far as the lending platform that were doing, look, our growth is going to come from a variety of things. This lending business is not huge in the context of our range of activity. Understood and a apparently made your first loan only yesterday, i think. Harvey schwartz said on the call. From little acorns, right. But on the whole, there is our growth is going to come from a recovery in the markets in which were already prominent. Like i said, confidence comes back, people do deals, we finance them, we coinvest with them. So thats really we manage peoples money and risky assets when risky assets are rising. And so thats where most of our growth will come up. Second order is doing what we do in markets where were already prominent, in new emerging markets. So china grows, and latin america grows, and Eastern Europe grows. And thats a market that is also slow in this period during the financial crisis and aftermath and recession. Those markets have slowed down. So were obviously invested in those places, people associate us with china and with bricks and those markets have been relatively slow. Thats a source of growth. Were not just sitting around singing kumbaya wayiiting for markets to come back. Were also doing other things that we can do. And in the context of our regulated businesses, the way they are, and being a bank, not a hypothetical, do we want to be a bank, we are a bank. We have the burden the regulatory burdens, capital requirements, restrictions of the bank, the costs of maintaining the bank. We also want to hang some Revenue Opportunities into it. And a big kacategory is more lending. You see it in the context, this marcus vehicle for us is not so much that were going into the consumer business. It is a consumer business. What we are doing is were going into more lending businesses, but lending businesses that make sense to us that play to our strengths, that we think we can risk manage, that arent that risky this plays to your strength. The elements of this Online Service are it is digitally delivered, it is Risk Management as a macro business, because youre not making individual loan decisions based upon the character. The loans are not tailored loans, theyre unsecured loans. So it is just 25,000, 30,000 loans, theyre not secured, so not analysis or contract or specifics. So it is Risk Management kind of on a macro sense. It is ail gore rhythmically determined. So you think of Risk Management, the math aspect of it, the digital delivery, the technology, those play to our strength. Clearly there is a Consumer Experience and this end, but of the elements of that that make one successful in this aspect of the business are a number of the elements that really are that really are core strengths of ours. Now, clearly consumer hasnt been a core strength of ours, we go into that with real determination to get it right. We spent a lot of time prepping for this business. And we think we hired very well outside talent with Consumer Experience. But were not going into this because were targeting consumers, were going into this part of the Consumer Market because were targeting sensible lending opportunities. It does sound as though you think it could become it could become a real business for you . I expect it to be a real business, it could become a big business. Yes. You mentioned a number of times in our conversation the lack of growth, when the markets come back. And im thinking the s p is near an all time high. Right. We havent had had a recession in a very long time. Many would say what are you talking about . The markets have been just fine, lloyd. They have been relatively strong whether it is in high yield or in equity oz or a lot of different areas. Right. And this isnt the worst of market aens and surely not the of markets. Prices are high. We had very, very easy monetary i see the cannonball express is coming by. Yes, something in our room that reads a little bit of history. So we can explain why they have a train going by. Yes, yes. Say the question again. About the growth in the markets and the fact we have had them and you were explaining it is not the best of markets. Not the worst of markets. Starting to quote dickens a little bit. Best of times, the worst of times. It is really it hasnt been, you know, the prices are higher, securities largely because of Monetary Policy has been so supportive, so inflated. It is inflated all assets. There is almost a correlation of one across asset. Thats not a business that you can see the rise of passive versus active. Because people are trading equities almost as a macro yield bearing instrument as opposed to value and individual companies and performances. One of the risks that are inherent in these Interest Rate policy that we have is that assets are being pumped up almost indiscriminately. Thats not a necessarily good market for people like ourselves who do good market for people like myself who do research, who discriminate and yay certain transaction transactions, dont like other transactions. Some of us feel like this isnt a normal period. Since its not normal, it has to normalize, so everybody is waiting for the transition to take place. There is going to be a transition in Monetary Policy. That holds up investment to some extent. People are waiting in the election cycle for corporate and tax revision policy. Do you wait . Is that going to change . There are a number of things that are causing Decision Making to defer on the one hand, and other things about the context of the market that make you not trust the marketclearing price of things. Understood. You mentiod transition. Of course, the one thats going to take place the president , at least, is coming up. That is the election for that transition. I want to read to you a very brief part of a speech from donald trump last week at a rally in west palm beach, florida. He said, quote, weve seen this firsthand in the wikileaks documents where Hillary Clinton meets in secret with certain banks to plot sovereignty in order to enrich these global polici policies, her special interest friends and her donors. What do you think of a comment like that . Well, you know, were in the political season and people saying things that to go out and argue in a rational way some of the things that are being said is a waste of time. If there is some international kabola group, once again im left out of the party. You know what this kind of code refers to. In the context of financial crises or distress. Part of the campaign, theres a very big populist element by the way, in the United States and in the world. Look whats going on in brexit and the response and the reaction. Its sometimes hard to know whether the people are leading po the population or whether outright leaders are responding to whats there. Its just a moment in time where its a very extreme moment, and if you want to be a successful politician, you unfortunately your success doesnt come from harnessing and leading this back to a so am i to take it you werent meeting in secret with International Banks and Hillary Clinton to plot the sovereignty . No, we werent doing it. We werent meeting in secret and we certainly werent plotting the destruction. If and when we get an administration, as the polls seem to indicate, that is led by Hillary Clinton, do you believe that people on wall street will be appointed to positions of power again as they were, of course, in the first Clinton Administration . Or is that simply not something thats going to be possible . I think its just going to be its a very tough environment in the first instance. This will also wear out. These cycles have happened before. I think eventually people will have to get things done, will have to have talented people. I dont think people should appoint people because theyre on wall street, but i also wouldnt profile people and say they can never appoint somebody from this industry which employs hundreds and hundreds of thousands of people and where expertise resides. So the answer is i wouldnt kill myself to reserve jobs for people from wall street and i wouldnt exclude very qualified people whose given all the vitriol in this campaign, whether its Hillary Clinton or donald trump, its hard to imagine people like john rubien taking secretary jobs like this. Its happened before and then it recedes. In the first instance, there will be a cost for a key economic job on wall street. Is that cost worth paying . The cost will be very, very high, and in the first instance, maybe not. If you want capability in your government, and you want expertise and you want to get things done, somewhere down the line, if the talent otherwise isnt there, if the experience is lacking and makes you an ineffective leader, the president is going to want to tap into the reserve of people who are qualified or more qualified. Im going to have to study up on all my cycles, lloyd. Finally, you finished a cycle of chemotherapy some time back. Eight months ago, in fact. How is your health . I feel okay. As i said, i said to you off camera, i am feeling great but i have to plot it against my normal decline, so i dont know where those lines converge. But i feel pretty good and probably im cured. Well, thats good. And retirement is no time soon, i would assume. Not unless there is some international kabol who is meeting behind closed doors plotting my destruction. But as far as im concerned, im here. Okay, thats good to hear. Well see if we find out about that in a national kabol. Thank you for being here. Excellent interview, as always. Power lunch will be right back. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Recengrand prix race carsbenz made history when it sold for a record price of just under 30 million. And now, another mercedesbenz makes history selling at just over 30,000. And to think this one actually has a surroundsound stereo. The 2016 cla. Lease the cla250 for 299 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. A source close to me says cbs has done a deal with google to participate in an over the top tv product that they have in the works and others are not far behind. This would be a skinny bundle that would be a broadcast centric product with some cable networks. Google is aiming to launch the product in the First Quarter of next year and could launch even if they cant get all the broadcasters on board. Cbs has no comment. Disney has not yet responded. Check, please. Counting down to the debate. Michelle in vegas, whats your check, please. We were playing the final showdown. Donald trump is behind. Lets see if he can do anything tonight to change that. Weve had lots of revelations since the last debate whether its all the wikileaks, the speeches, the discussions Hillary Clinton had. We heard david talk about them, but also women coming forward accusing donald trump of assault. Maybe well actually get to some issues tonight. We look forward to that full coverage tonight. Cbs chairman weighing in on the ratings slump a short time ago basically saying its everything. He also said about viacom, theyre just about ready to explore. Stocks are spiking over talk about that google over the top network, by the way. Everything you need to know, starting now. Now. Hi, everybody. Welcome to the closing bell. Im kelly evans at the new york stock exchange. And that makes me bill griffeth. Stocks climbing slower higher today. I think i read this would be the first back to back plus days for the dow in like two weeks. Havent been able to do that lately. One hedge funds manager says things are not as bad right now as others might be, saying well bring you those comments briefly. With a rainbow, too, coming up to brighten the sky