"market makers." happy halloween, i'm erik schatzker. straight to get business. i can talk about the children's holiday. top business stories of the morning. u.s. stock in record territory today. it is crazy. the dow and s&p have been above their all-time closing high's. investors getting a boost from japan central bank. the bank of japan unexpectedly increase the amount of money it is pumping into the system. that sent stocks jumping in japan and europe for the really moved over to the u.s. isnwhile, the japanese yen getting hammered, falling to its lowest level in on the seven years. earlier here, we heard from legend or hedge fund titan. >> i think it is a deliberate effort of the japanese to keep in their currency. look, the governments all over the world are trying to cheapen their currency and cheapen bonds. i'm in, we have a bubble now developing because we have forced bonds to almost no yield. >> cheapen their currency. we will hear more from chilean oil, the -- julian price of crude tumbles. exxon unexpectedly boosted earnings to the third quarter. the world's largest oil company found falling oil companies made it cheaper to refine petroleum-based fuels. refining gains more than made up for less profit from oil and natural gas production. over a chevron, the couple he posted its first increase in third-quarter profits in over three years. walmart wants to get a jump on the competition before the holiday shopping season begins. this blows my mind. tomorrow the world's largest retailer will cut their prices of a planitems, part to end six to record as of stagnant sales in the u.s. walmart may also match prices from online retailers if the customer asks. in pro basketball, someone forgot to tell the new york knicks that the night belonged to lebron james. king james had a poor shooting night, and made 8 turnovers and the makes beat the cleveland cavaliers 95-90. it was lebron's first game since returning to his hometown last summer. he spoke to reporters after the game. >> i just try to stay focus and maintain -- as much as i could. it was a special night not only for myself, but everybody. i'm glad it was great, but am also glad it was over. ,> king james needs to focus well, just one game, we won't count him out. it is is great that he lost that game to the new york knicks. moving on, let's talk about markets. >> it has been in october to remember. v-shapedook at this one-month s&p. prettyber 15, we were close to correction territory. today, both the dow and s&p 500 are trading at record highs. it is almost impossible to believe. you can thank the bank of japan thepushing the ball over touchdown line. that is just today. pouring in more students into the economy, is expanding the japanese monetary base to 80 trillion yen. >> today is october 31. where everyone has to mark their books. a few weeks ago -- >> it was grim. >> hedge funds were pouring out of those crowded trades. guys and to real money everyone was saying, we're going to sit back. we have long-term money. we felt comfortable buying. i remember speaking and say, really? you are buying right now? if you are, you're sitting like the cheshire cat. those who are superlong going into that volatile moment went, sold out of the positions and the viewers are sitting on a mountain of cash right now. ? >> a lotoing to do of those hedge funds were in energy traits. and as energy traits continue to be very punishing. been trading below 80 bucks a barrel this morning. you probably heard about that goldman sachs report that came out a few days ago predicting because, be it in part of oversupply, will drop $70 a barrel but the end of the second quarter of 2015. bearish a medium turn view that they have pulled forward dramatically. >> it seems there many investors who are sitting more in cash and they were even long-term investors definitely lined up, so sitting on a bunch of cash out of the market is so high, what are they going to do? dip act thather we're not going to set one. he is going to say, "you can't predict that, stephanie." hot as the market is right now with all of those investors sitting in cash, we're going to get a correction? >> did you feel that in september? nobody did. >> you got me. >> the question is, how much volatility are we going to experience? we had this extraordinary first volatility in the middle of october, early to mid-october. it is really, really falling down. stephanie's getting serious. hang on a second. >> let's get serious. doesn't it amaze you when investors one-day care about europe, the next day they don't. if you like to ask ago we were saying, the u.s. economy stronger and then, forget the u.s. economy, look at europe, china. two weeks later, why aren't we still looking at europe? reason, yesterday, first reading on third-quarter gdp, 3.5%. economists on average were looking for 3%. in the second quarter gdp reading provides 4.6%. two quarters, those two quarters of growth, 4.6% cluster .5%, the fastest fork u.s. economy. fastest for, the growing u.s. economy. >> globally, we're not doing well enough. why are we ignoring that? >> they be the u.s. economy will get a push to the global economy. maybe? we'll take a quick break. >> when conversations are going favor, we need to take a break. >> a slippery slope for oil. you like it when gas prices drop, don't you? half artist will have to go down for the big producers start saying "mercy." >> the one and only julian robertson talk to bloomberg about the market bubble and a whole lot more. you know when my bloomberg makes a cameo on the set, it is a big deal. >> you are watching "market makers." schatzker with stephanie ruhle. $79 oil. in the words of larry fink, a gigantic tax cut for americans, but for oil and gas companies, a gigantic headache. $70 a barrel, some or production doesn't make sense anymore. who are the winners and losers in a world of $70 oil? that is the question for our roundtable. the owner and cofounder of cressotti capital management which invests an oil companies. the chairman of p true partners, oil and gas industry with us from the great state of texas. good morning, gentlemen. i guess we should probably throw it to you first, tom. 70 dollars oil doesn't seem so they new longer because bulls are capitulating. goldman sachs, pretty optimistic forecast earlier this week, saying, actually, we were wrong, and we think the oil could drop to $70 of the middle of 2015. you advise oil and gas companies. what do they do in the situation? remember,hing to prices tend to both on the upside and downside. the surprise in what has happened in the last month is that it happened in october and not in june or july. now we're dealing with the possibility of an overshoot. what the companies do is they focus on the core of the court. their very best prospects. -- their very best prospects. sort it out. for most of the companies that players, theree is still economics at $70. not to say it is automatic we will get there, but if we do, this is still a different kind of downside test then we went through in 2008 and 2009. it is more healthy. it is more understandable. it is driven by some geopolitical factors that have to deal with, and that makes it a bit of a challenge for them, but not one that is out of the zone of manageability, in my view. >> what do you think? >> i mostly agree with tom. >> i like to disagree part. >> the only part i disagree, i don't think you'll go whole lot lower. i think we have too much oil in the united states and soon, all around the world. having said that, we have an economic growth story here in the u.s. that i think will catch fire in europe and the emerging markets. that will pick up the slack. >> tom, i'm going to share with everyone him and i'm not sure you can see it, but i know you seen this chart before, a chart of wti, brent versus natural gas priced in barrels of oil equivalent. i know you know with this chart shows. it suggests there is a disconnect here. for years and years and years, up until about the financial crisis, oil and gas treated more or less in lost that when you priced gas in barrels of oil equivalent. on that same basis, wti is at gas is at $25. how long can a situation persist without some kind of correction on either side? >> will cover the notion of convergence is a good point. i think there will be some opportunity for convergence, that it does take time. gas doesn't have the same utility as oil in transportation, for example, and absent that, there's always going to be a differential. , high oile degree prices should pull natural gas .rices up some and as we see gas play a bigger role in the directly or indirectly in transportation, thereby through the electric vehicle, then you could get some degree of convergence. but that is measured in half decades or decades, not this year or next year will stop that said, there are other factors. the big factor that will probably create some convergence will start about a year from now when we export natural gas from sabine pass and the houston ship channel and it starts to grow thereafter. >> i think that is right. i live in a new york city apartment and we just paid half $1 million in our building to change from oil to natural gas. the payback is less than five years. to convergence is happening. if you put coal on that same chart, you would see cold drop so much as power plants move from caol to natural gas. -- coal to natural gas. tom is right, that is on the way. fracking has changed the entire equation both of that chart, our political, economic -- >> and you don't have it overseas. >> direct. if you do that chart in europe, he would be on top of oil. >> the good news is, we have a tenfold plus expansion in the gas resource availability. on the oil side in north america, a fourfold expansion. that is good, but the gas availability looking out over the balance of the first half of this century is likely to be very, very positive for the north american economy and the u.s., in particular. >> let's just pause it for a moment. the goma sex scenario is right, $70 a barrel -- goldman sachs and arial is right, $70 a barrel by 2015. what tom said, with the notion overtime, half decades, we will see further pressure on oil because of the availability of cheap gas here in the u.s. and big lng exports, we won't see for some time, yet to come, what does that mean for the winners and losers? that is what i am trying to understand. , who is at aenario debate edge and a deep disadvantage. goldman sachs has finally come around to the view that tom and i have had for a couple of years. what i was at the big winners are folks that use oil and gas. >> airlines? >> airlines. everybody is worried about ebola. low oil prices, $10 lower air prices -- oil prices for a 's is huge gain. -- for american airlines is a huge gain. longer-term, the united states geopolitically will gain from being a gas exporter may be a crude oil exporter. >> tom? >> in addition, the supply availability, reliability of gas supply these are petrochemical business will continue to really prosper in a way that was unimaginable as recently as a decade ago. we can look out to 2040, 2050 with the u.s. being in a dominant position, i think, in the petrochemical industry. it was looked at as a sunset industry in the early part of the last decade. >> plus, autos and aluminum, manufacturing renaissance is an offshoot of this. >> thank you so much. great to see you here. i said tom was from houston, i am wrong, you're in denver. thank you for joining "market makers." >> we will be back in a moment. we're looking at today's record-breaking day on wall street with the one, the only threw from jefferies. ♪ >> time to get back to the market. u.s. equities are back at record highs just days after a lot of investors were freaking out about a possible correction. let's take a look back at a very spooky month. on the phone from los angeles come the chief market strategist at jefferies. david, we heard your deep in getting your makeup done for halloween, so you cannot join us live. what do you make of these markets? you.ppy halloween to it is great to talk to you guys. i wish i was on camera with you. your lay to be here in office. i think the markets are exhibiting a lot of the behavior we talked about last time when i was on the show. 18 pointrading below 70, 18 .50. we talked about communication errors at the fed. i think those are still an issue. i think the fed will have a lot of trouble communicating his next steps. you also have this divergence and policy that we talked about. that came through here with a very aggressive and i think , maneuver by many the bank of japan. this is not a central bank that is known for big surprises. it is not a central bank known for taking aggressive steps. only at the end of 2012 in the beginning of 2013 did we see material changes in the way japan was operating. it is largely worked, but people were getting frustrated with the timing of all of this. and they have come through again with a very aggressive and powerful move. this is a very large economy in a very wealthy economy, an economy where the portfolio balance effects from these types of qb exercises can be very aggressive. i think this is kind of game changing stuff. i think it will add additional volatility to the market because the fed is going one way, you have the ecb next week, which might have to step up and do something like the bank of japan did, and figuring out where global liquidity conditions lie as the fed is going in one direction and the two other larger central banks in the world are going another direction, is when to be pretty hard work for investors. but overall, the commitment is to a reflation area outcome. that is something we all caps keep our eye on. >> does this mean you like haruhiko kuroda more than janet yellen? talking about janet's jell-o shots, as her exciting way to distribute stimulus, i think we have to come up with some sort of sake drink for mr. kuroda. i was working on that commentary this morning. david, i'm looking forward to that. you are saying the ecb is going to have to follow the bank of japan was something similar. what could possibly be similar to what the boj is doing? draghi's hands are more tight. >> you had the legendary julian robertson on the show. he was making the point is really is a kind of currency a growth battle, more portly, and there is no sort of pride in having a strong currency in these types of markets. people are fighting for the limited amount of growth that's out there and fighting the deflationary forces that are definitely within the global economy. i think this just puts additional pressure on mario draghi. he is a difficult choice. the bank of japan, amazingly enough, has so many pools. these guys triple the amount of equities they're going to buy. the triple the amount of real estate investment trust they're going to buy. these are things -- numbers were big. they went from -- it doesn't even come close to what they're talking about at the gpif. these that purchase easily. it certainly cannot happen in the fed. what japan is doing is super aggressive when it comes to monetary policy. tools over the ecb are limited by all of the treaty structure and financing of government debt. we hear about the potential for qe with government bonds. they talk about buying corporate bonds. they're going to have to come up with something pretty clever because the last thing they need is a very, very weak yen going into 2015, stealing their exports. >> david, it took six months for , what isve,'s resolve going happen next? >> i think we will see a continuation of the inflation data coming out stronger. we will see the portfolio balance effects kick in with real estate prices and equity prices rising. we will see those animal spirits, which have been question japan for 20 years -- >> we have to leave it there. david zervos of jefferies. ♪ this is "market makers." >> you are watching "market makers." i am at schatzker. >> i'm stephanie ruhle. julian robertson is investing icon and most people would say one hell of a guy. doesn't give many interviews, but he did come on bloomberg surveillance this morning with the one and only tom keene. also a hell of a guy. here he is talking about his bullish bet on the far east. >> the golden place for hedge funds to be is in asia. asiave two hedge funds in -- well, three, actually, but two and of all of our 30 hedge funds, they are 1, 2 in terms of performance. in excess of 20% this year. have a great field to play in. >> here to tell us why asia is the place to be for hedge funds is the one and only tom keene. nice orange. >> thank you. , but going to go with elsa it didn't work out. a costume for so right now in new york city for $3200. >> it is sick. i was a the ratio is 40 14 elsa. it was great to see julian robertson. today,n to get him here it brings us back to asia. it gets us to the immovable forces that are the central banks and underscores the optimism we heard from him on asia. >> optimism on asia, but has concerns. he said is is not a good idea long-term for countries to be fighting the currency war. >> he is greatly concerned that what we're doing right now is not in the textbooks he studied. it is not in the textbooks i studied. there were textbooks that were classic, stephanie. this is not classical economics. this is an ad hoc strategy against deflation defined growth. i am yet to find a single person this morning that says this will work. >> if julian robertson says we're off the grid, does that mean he is going to remain invested in all of these funds? >> that is the money question right now and the answer is, he says, there is a bond bubble from the central banks and there is an equity bubble, but he is in equities. you have to be in the game. he made it very clear he likes apple. talks and google. >> and google. i think you put google at a higher level than apple. fully passed to be the top high-tech managers out there. what you might not think of julian robertson as a tech guy, he is an extraordinary -- >> i was transfixed. he told you if we were living in the 1960's or 1970's, google or apple to be trading at double or triple -- >> anybody else like golden gate -- colgate, palmolive. there's the perception on many people that we're this huge distortion with the yen and gold cratering today, and within all that, you still have to be in the game, which is easy for smart guys like him to say, but you wonder about our viewers, were there going, my head is spinning. what do i do monday? really. the percentage of people's head look at gold alone. proxy said don't play the stock market, play the currency market. that is what he said the opportunity is at. 111 to 112,int of which ought to be at 114 -- >> talking about the canadian dollar. >> you wonder about the canadian economy. .> sure >> against off of what the central banks are doing. >> you covered other topics. another part of the interview you talk about politics and asked him about an advertisement he helped pay for against north carolina's incumbent senator kay hagan. >> can you use it in a sentence? >> kay hagan was the deciding vote for obama care. >> hagan. o-b-a-m-a. >> close enough. cook's you donate a crossroads and paid for this ad. did you get your money's worth? >> well, i can be sure of that, but if we did, i'm delighted i contributed to it. >> it was a pretty funny ad. >> the one about castration of pigs. i have never castrated a pig, have you? >> not literally. but that is funny right there. >> seriously, mr. robertson is a huge supporter of mitt romney. very disappointed a lot of his republican politics. we asked some pointed questions about the pac's and he was a little ambivalent about where this is going. he admitted he is not sure it is good for all of america. >> he said it may be going too far and also said, well, the other side may be going too far with unions and organizing labor. at the end of the day, maybe it is ok because those things balance themselves out. >> yes, because he said the unions do it. the universal problem is, more money is compiled so even if julian robertson phenomenally disagrees with that, he is one of the guys with the deep pockets doing it. >> he is tough on wednesday , withthe midterms election coverage, it will be totally twisted. i spoke to john today and looking forward to that. heilemann said wednesday morning, it all starts in again. they all knock on mr. robertson store where they are looking for indigo like this -- are, he will. >> he is pretty specific. >> he said he did get behind chris christie. >> that was a little more in fun. did you believe chris christie this weekend? clearly the video of the week. >> i cannot believe how good he looks. we sat with one of the biggest philanthropists and the city of new jersey and we said, what you think of when we say chris christie? band surgery. >> she thought he said lap dance. be amazing to see how people settle up into this weekend. >> they are and settled. think about all of the investors that pulled out of the market and when into cash a week and half ago. seconds?ave 20 smartest thing this money, john herman off a conference call in tokyo, with mitsubishi, if you take our fort wayne dollar balance sheet and equated to $4t they're doing -- trillion balance sheet and equated to what they're doing, you get a $13 billion balance sheet. balancehow massive the sheet in japan is. stunning. he was on the phone with tokyo getting briefed by his bank mitsubishi. what we saw today was in 30 years, one of five days. stunning. totally stunning. --tom keene >> he is stuck on the data screen. >> stephanie is trying to give him a kiss. , thank you for joining us. the one and only tom keene and julian robertson. comeback, betting on brazil. should the real election of dilma rousseff give you second thoughts? ♪ >> they want is a dilma rousseff victory would be bad for brazil, and the stock index is down about our team percent. results currency has weakened by 10% against the dollar. they were right. these markets are pricing in four more years of populism by purchasing power parity. all of that bearishness usually means investors are missing a few gems hiding in plain sight. the portfolio manager first all -- for small caps with us. welcome back. last time you were here, we were talking about india. that is a situation that makes a lot of sense to people. dilma isally believes going to reform brazil. they know what they've seen the past four years. they think i know what they're going to get for the next four years. what you see. >> i guess they the picture being a little different. first of all, her election victory was very slim, about 3%. usually presidential elections in brazil are huge blowouts. i think she will face pressure for labor, pension, taxes. the market, small caps are trading at a five-year low. i think a lot of this stuff is prized in. the expectations for left of center presidential victors are always very low. often, investors are surprised on the upside. we saw this with peru. holdings in international smaller cavities fun are doing fine under hollande >> are you saying she doesn't have to employ extra in her reform, expectations are so low she just has to move a little bit? >> that is part of the answer. the moves are already slightly positive. a bit two dayses ago. you have very depressed margins and depressed multiples in those stocks. you could have a scenario where over the next four years for second term, and she probably was to go out with a better legacy than her first term when the stock market lost one quarter of its value. the market does better than investors are expecting for either because of her or despite her. this. me ask you what would you .2, signposted brazil that people may be missing, give them a sense of where brazil is at? >> we recently put out a way paper. -- a white paper and i called it the new brazil. brazil has changed a whole lot. i have been visiting the country for 20 years now. i just went on my seventh visit. years, 15% of the population on that basis has moved from poverty to the middle class. a livered,young household debt is around 19% of gbp versus 87% in the u.s. target penetration is about one/40 of what it is in the u.s.. you have structurally a different brazil than what investors were used to wear it was debt default, hyperinflation, high claimant. they've record low unemployment now. that is not going to continue unless there is investment and you're not going to get investment lets you get some reform. talks how can they have record low and implement given how bad >> how cangekko -- they have record low unemployment given how bad things are? >> there's a social safety net which helps. ofis a quasi-socialist type approach to governance. certainly effective exporters. record low unemployment. you don't have such a great labor -- >> get specific. >> what do you like? >> in terms of stocks, was international, cap for weber -- capture weber, the leading producer of grain silos. this is a play on brazil's powerhouse stature as an agricultural leading producer of soybeans and corn, etc. you can google pictures of trucks waiting to deliver their port.ns and corn to the these lines good 20 miles long because they don't have enough storage. >> what is the number two pick? clearing andset trade settlements. this is an a cyclical growth business that is been growing like a weed. it provides very reliable annuity-like revenue streams. play on fixedarge incomes. it doesn't matter how the stock market is -- does. >> and three? >> not as heralded as other aspects of brazil because people think of it as a commodities exporter and are actually ranked most oflly, mostly -- their experts or manufactured products, not commodities. brazil has a low penetration rate of cars. 250 cars per 1000 versus about 800 for the u.s. they are the world's only fully integrated piston manufacturer cofounded by couple of german brothers in the 1920's. the comp to has a long history and very nice cash conversion. or 7% dividendls deals. just a high-quality business. >> david, very persuasive case for brazil. >> thank you. nadel of royce funds. >> warmly only come back, not all the great investors been hours in their labs. -- when we come back, not all the great investors been hours in their labs. she is only seven years old. >> it sounds like my sons are underperforming again. ♪ >> welcome back to "market makers." i'm stephanie ruhle. >> i am erik schatzker. if you were to look at financial markets today, you might be stunned to find out the s&p 500 is trading at a record high. it is on its way to a record high close after a month in which we saw an almost 10% correction in u.s. stocks, a bear market effectively and oil. >> look at the one-month. there we go. an absolute dip, a drop, collapse two weeks ago. and we are climbing have her -- higher than we ever have before. thing about it is this. if you are looking at the stock i could, it feels like nothing happened over the past three weeks. if you look at the bond market, it might feel to you like nothing has happened in the past three weeks. if you look at the oil market, a whole lot has happened. that you have gained 15 pounds, lost half your hair, and you may have lost quite a few investors. we have to move on. we have a very, very special guest. ge is on a mission to find the best and brightest kids in the united states. the newest kidded mentors made their debut last night on "ge fallon inventions." one of those is seven year old ellie from ohio, inventor of ellie's jellies. welcome. >> thank you. >> tell us about your business, my girl. >> well, you just take off the lid -- >> what is in their? >> peanut butter, and this is jelly. >> how did you come up with this idea? ripping my kept bread with knives. >> you saw d odrick run your house and said, how about this? >> the pressure is on. this might not work. if it doesn't, yikes. >> i will eat the sandwich either way. >> do you like a lot of peanut butter? >> i don't care. >> you just twisted and out comes the jelly and peanut butter. >> it really works. when did you develop this? >> last year when we did invention conventions. >> you have three little brothers at home. how old you have to be to know how to do this? school, we do it inc. and garden -- in kindergarten to fifth grade. >> what do people say about this? tell me. >> i don't know. >> do you -- >> i have a twitter. >> you have a twitter account? >> yes. >> can people buy these? >> we're not quite selling them yet, but we're trying to make them. >> how did you make it the first time? >> well, we went to cvs. my mom took a knife and took this off and took out all of the deodorant and cleaned it all out. and filledned it out it with whatever peanut butter you had at home? >> yeah. >> it probably doesn't work with chunky. >> we took peanut butter and it in there. this is great jelly. >> is science your favorite in school? >> math and science. >> that is the best thing i've ever heard. >> do you have any idea what you want to be when you get older? >> i think i want to be a teacher or a professional soccer player. >> a professional soccer playing teacher who is great at sign 10 math. >> and great inventor. >> what are you going to be for halloween tonight? princess kate of england. >> you know she's having a baby. very cool. ellie congratulations. how was it on jimmy fallon last night? >> it was good. >> as good as this? >> yeah. >> which was better, going on jimmy fallon or with erik and i. >> i don't know. >> one more time. which did you like better, jimmy fallon or me and erik. >> i don't know. >> well, congratulations. absolutely awesome. .e's winner, ellie's jellies good luck with this. it is approaching 56 past the hour. >> have a look at starbucks. this stock is falling, almost 2% sales trailing estimates for starbucks blames competition for breakfast food and rinks. i guess something is working at dunkin' donuts. or mcdonald's, perhaps. starbucks has been trying out new products to draw in customers later in the day. if it's working, it ain't working just enough just yet. >> we will be back in just a moment. ♪ >> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. rally on wall street. setting stock market records. bank ofdit to japan. ads, its the best of was the worst of ads. welcome to market makers, i'm stephanie ruhle. quicktime erik schatzker. we are going to begin this hour -- >> that seven-year-old invention, an amazing. did it make you feel like a loser? u.s. tro three times you was better, being on jimmy fallon, or being here. the sky is the limit for this kid. just do not mix up your in a butter canister with your deodorant canister. the bulletin from around the world. it may be a day for the record books the u.s. stocks are trading a new territory. have traded above their all-time closing highs. next her getting a boost from japan's central bank. unexpectedly increasing the amount of money and is pumping into the economic system. stocks are surging in japan, and they are also jumping in europe if he really has -- jumping in europe. the rally moving overseas to the united states. we heard from the hedge fund legend himself, julia roberts. >> and is not just th japan. overary authorities all the world are each trying to cheapen their own current day. it is a race to cheapen currencies everywhere. i am not sure that is the best thing to do in the long run. >> robinson says that asia is the golden place for hedge funds to be right now. consumer confidence and america has not been this high in more than seven years beginnin. job market and cheaper gasoline are boosting american spirits. shares of starbucks are dropping today. the world's largest chain of coffee shops posted quarterly revenues that missed analyst estimates. starbucks is easy increased competition from the donald's and dunkin' donuts among others. new foodintroducing entries to attract customers later in the day. fears ofhe premiums have not come true. competition could be the cause. 77 new insurance plans will be competing for customers next year. thirdnkedin spiked quarter revenue. it is a bright spot in what was a very tough week for social media stocks. week weite down the have seen. here to help us do that is bloomberg west editor at large cory johnson, and paul kedrosky. let's start with you. what do you make of this week? i want to start with facebook. everybody is complaining about the higher expense they may have next year. isn't that a positive when charles sanford says we're going deeper in r&d? >> indeed it is. there was a jpmorgan report earlier out this week that showed that companies that spend on versus buybacks, they have growth of prospects and spend on them. a company with at least three legs to its stool. i think that passes. logict logic is the same that was invoked to explain what is going on at ibm. do investors look at this the same way? >> i do not think so but i think increasingly investors look at is not aay this tech company at all. it is financial engineering to supporting share price. it is a very different story now. ibm has put their money towards your buybacks, to his point about financial engineering. it is a company that sees folly revenues quarter after quarter. they keep saying that the earnings will come, and they never have. evidence they are not going to. there is strength across every possible metric, increasing encouragement, most of the growth are outside of the united states for linkedin. almost every number you look out for the quarter was really positive for this company. and indeed is getting better. quite so when we talk about dick costolo saying he wants user thanh to be better facebook, are we looking at the wrong company? is linkedin the want to watch? have put together some numbers, but i do not know that they've necessarily have to be compared. they use some of the network methodology to you grow the network days, and you can see that in the linkedin members. everyone wants to be connected, like your sake in china right now. but they are very different as nessus. i do not know that they are competing against each other. -- businesses. i do not know that they are competing against each other. linkedin, is for people know what they are getting. they are linking up with coworkers, whether it is for recruitment purposes, hiring, what else, they know what they are getting for it when they join twitter, most people do not know what to expect. so that is still a problem for twitter in terms of driving his or growth. link 10 has figured that out, --tter has not >> p/e will out,din has figured that twitter has not. >> really? you do not think they have? >> i think that that is what they are hoping to find out, the actual experience is nothing like that. this has been the long-standing problem since before dick costolo joined the company. they do not know what to do because what users should i follow, how do i find my family, how do i search by people by their real name? that hurts the getting on board experience. unrests talk about the inside twitter. it is management musical chairs. is that why we're not seeing more productive development? been a stable place to work, whether it is on the technology side or the products between us in constant change in turnover. he expects that after an ipo, or longtime people will leave. that kind of instability does a certainfollowing plan. dick costolo is a very impressive ceo, he knows what he wants at that company, but we're not seeing it aon the product side. said there are lessons there for twitter, are there lessons for facebook as well? so. think the lesson to transparently drive new business but there are no mysteries on how linkedin makes money but i think sometimes facebook is in trouble by being mysterious about how it mines user data. linkedin has straight up said that we are here to help people recruit, and we're probably going to migrate that deeper into regrouping and even some related markets. they are straightforward about it, so people are willing to give them data. it is not the same thing at facebook. >> but do you think that actually less people -- every month, i get more worried about facebook. the amount of information they know about me, where things are showing up on my screen, the amount of ads. but sadly, i still use it. even though we complain about arebook and their agenda, people really changing their behavior in terms of using a geicit? >> if you want to drive it , but this thing is a virus, it is not going away. >> there is all this worry about mom's routing facebook and kids not being on it. but the user numbers show that everyone is on it, and that is how they are so successful. slowinger growth is down, the time that they put on this site are all on the increase. daily active users versus monthly active users, the ad rates, all of those are on the uptick. it.ven the moms are on , steph.like you for dyingto thank you your hair orange for the giants. >> did you really just say that? paul kedrosky, thank you for joining us. --ry we will be talking about more orange hair. meeting a real sensation and sunglasses and haunted houses. ♪ >> we have not even trick-or-treat it yet, and walmart already has its eyes on christmas. 20,000 prices on products to get shoppers into stores early. retail for usvers and she has the details. here is what i do not get. not that walmart is ahead of the game, because all of these doors of these stores are, but how are they going to drop prices? they are so cheap now. >> they have negotiating power to some extent with their suppliers. that should allow them to cut to someo stop extent -- extent. but now there will be more of a hit on margins for these guys. amazon is an aggressive discounter, and the margins are not pretty. >> let's be clear, negative margins. here walmarter wants to go? negative margins? if you look at some of the examples, they're discounting hd tv's by $100 if you're looking at a sony 48 inch tv. it is 100 dollars off. a barbie dream house is being discounted by nearly $30. you're seeing these discounts rollout already. >> did you have a barbie dream house? c i had the ski halet. >> and now the next generation of kids can have it for the low price of $120. it is all about bringing cyber monday. offering deals for 24 hours only on november 2. not the monday after mondayiving, but the after halloween. november 3, pardon me. giving people a reason to come into the store and buy early. hassomething else, is it this savings catcher app. there is a lower price in the surrounding area, you can get that price matched within the store. it is now testing doing online suppleatching and markets. already says that if you're a store manager and you want to match prices online from you have the discretion to do so. that brings in a whole another wave of potential fo. you could be on an episode of super coupo oning. >> we went out and release the first look at toy pricing for the season. cheapest. the if you look at this basket of toys, an average. it is 9.8% cheaper than toys 'r' us. again, pricing online. kmart,.6% cheaper than amazon.n amazon, excluding third-party sellers. amazon has this marketplace business of third-party sellers, and if you take that out, and there is only a 10th of a change, effectively it is the same as walmart. that has to be an issue. but everybody's margins is getting pinched. >> cosco closed for thanksgiving. the gave the employees chance to celebrate the best holiday of the year with their families. >> you are not american, you cannot call thanks giving the best holiday of the year. today, halloween is. followed by fourth of july. >> what is your favorite holiday? >> i'm with erik. anything that involves eating. candidates will do almost anything to win your vote. ♪ >> 2.2 million. that is how many political ads americans have had to endure this year. of thate tag for all era time is more than $1 billion according to the wesleyan media project. peter cook has been trolling through 2.2 million ads in search of the most memorable ones. >> 2.2 million advertisements? number of spots that have aired just in the federal races. that does not even include the local ads for county commissioner. you add that up, you get to 3 million political ads it's the startof 2013 -- since the of 2013. here's the one that probably has grabbed the most attention so far. it is the ad that introduced joni ernst to the republican senate candidate. >> i am joni ernst grade i drew . pigs on atrating farm. when i get to washington, i will know how to cut pork. >> it has generated a lot of interest in her campaign. orthat was legitimate, center? satire? >> legitimate. she now has the chance to be the next senator from iowa. she is the in the with -- no and neck with bruce,. . i thought that was an ad busting on a honky-tonk. >> remember it is iowa. >> i like that one. i think there is some honesty. i want to know what you have next. >> kentucky senate race. this is where the secretary of state is taking on mitch mcconnell. a memorable spot from the campaign, she is trying to do everything she can to distance herself from president obama. >> i am not barack obama, i disagree with him. and mitch, that is not how you hold a gun. >> and add that played well in kentucky, and grabbed national attention. that was the primary goal of that ad. >> does she have a shot at knocking out mitch mcconnell? >> she does. it is close. the polls show it. but it is going to be difficult for her to unseat mitch mcconnell, and everyone knew that from the start. >> give us one more, please. >> i'm going to give you the one that did not work well. this is wendy davis running for governor in texas. she ran against grade average gregis paralyzed -- > abbott, who was paralyzed. she was criticized for the use of the wheelchair imagery. in the minds of a lot of people, it was an act of desperation. >> what is the first word that comes to mind? >> disgusting, depressing, tasteless. the candidates are responding to what people want. that is what i'm upset about. >> but it did not work. the somebody thought this was a good idea, that scares me. this was a negative campaign ad. ♪ >> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. welcome back. high technology and high finance are coming to gether in las vegas. showcase for the latest in financial technology in cyber security. will not surprise you that it will be a hot topic. thell be there talking to experts. before this trip, i went to talk to the leaders and biometrics. the science of measuring teachers and functions of the -- features and functions of the human body to establish your identity. innovative startups are popping up around the world, solving the security problem with oil metrics. -- with biometrics. i discovered that the blood vessels in the whites of your eye are as unique as the fingertips. ex and actually takes infrared light and an infrared camera which phones do not have. >> i enter my name. done. caught the attention of samsung and wells fargo. crackey're using that to two markets were security is paramount. >> there is a breach every day. and mobile banking. 5.5 billion people will use isometric authentication on mobile and wearable devices and mastercard has been experimenting with biometrics as well, and recently tested in a half or 14,000 e-commerce transactions. this toronto-based startup has developed a wristband. bionym that may be the most secure ever. phoneget heaven unlock a -- we could have it unlock a phone. >> imagine how seamless life if all you had to do was strap on your wrist band. >> would you give up your password for that? >> it is amazing. and scary. >> of course it is scary. there is a problem, and it is called spoofing. it is effectively fooling the device into believing you are you one of the somebody else. know it sounds crazy -- to myre getting close favorite movie from 2013. of yourans the whites eye to look for the blood , that is why it works better after a hard night at the bar. and it makes you wonder, what about minority report? is that possible? of course not. because we take the eyes out of the body, you lose the blood supply. these are things that people have to think about men may have written about it on their blog and in the case of the wristband, is it possible that somebody can create a fake heartbeat? >> when we come back from the break it, new york's most expensive costumes. au will want to know what $3000 costume looks like. ♪ >> on to houses exist in hormuz, but what about real life -- haunted houses exist in horror movies, but what about real life? e have an associate broker to talk about it. how many haunted houses or past life houses have you sold? >> dozens. they take quite a bit of time. it is a fun aspect of the business. >> how do they come to you? two people in california know you are the haunted house lady? >> people seem to find me. sold was byuse i accident. people know who i am and what i do. they find me. i do not have to go. >> you have to disclose this? what does it mean to say it is a past life home? >> stigmatized homes. when there is an active haunting. a murder or suicide or some sort hases gruesome death occurred. anything that will do you value that home is considered stigmatized. thatu just said something piqued my curiosity. do you believe that homes could be haunted? >> absolutely. i grew up in a haunted home. >> what does that mean? >> ghost. you can walk into a home a lot of times and feel the energy. times, you could actually see apparitions and things that do not make sense. >> and they have to trade at a discount? >> no. my home that i sell, i do not discount everything that i do not have to, i live in the state of california. if i properly marketed and the vision it to the buyer, -- and position it to the buyer, there is no discount. there are a lot of people who want to have a ghost, it is great dinner conversation. there are also people who actively seek these out, who are bizarre themselves. >> what do you have on the market now that his past life or haunted? property right now is a 9000 square foot near the california oregon border. it is rumored to be designed had twothe 1930's, and funeral parlors, and the second floor was a furniture store. back then the furniture makers would build the caskets. she came in and designed the top two levels. there is a lot of activity. actually died in his cornflakes on the fourth floor. over $2 million, and the seller is turning it into a bed and breakfast. and when that is done it is going to go up in price. >> what if people do not want a haunted home, but like wenzhou for sale. do you have a consulting service? -- like what you have for sale? do you call in an exorcism? it is whatever makes the potential buyer comfortable. if they have religious convictions, we can call in a priest, a rabbi, a pastor, what if they need to feel better. if they are still doubtful, they could testdrive the home. we will set them up for a couple of nights. you and your family can be there for several nights, and if you feel good, buy it, and if it is creepy, move on. >> have you experienced creepy things in any of these homes? >> yes. listing i had, which i did not know at the time which was haunted i saw an apparition on the stairway. i saw a ghost on the stairway. i was doing paperwork during an movemente, there was in the stairway, and i finally looked and it was a cylindrical apparition on the stairway. and i asked the seller, and they said oh yes, we have ghosts. >> freaky. there is a buyer and seller for everything. >> it is just a matter of the price. placeing up, the where money is no object. ♪ >> will come back. -- welcome back. the average american will spend $80 on halloween costumes this year. heavyweights, new york celebrities, big-city socialites will spend thousands of dollars to glam it up for the egg day. i decided to shop like the 1% in manhattan's most iconic costume shop. all bedsheets do not cut it anymore. americans will spend $2.6 billion on costumes this year. biggestth the pockets will come here. abracadabra three floors of halloween men thi adness. >> this corner is for kids. the rest is for adults. line, has its own makeup a magic shop, and eight weeks the line -- a wig salon. the whigs cost up to $250. the real money makers are handmade costumes. i would like you to pick o something for me to try. we need more material than this. i'm in daytime tv, not primetime. >> he was right, i could not handle it. also customs were -- elssa costumes sold in the first day. but this one is handmade. $3000. maleficent. more $3600. i have to try this on. well, well. >> $3600. talk about a hallmark holiday. to when you were a kid. a bedsheet with a couple of holes, a witches hat. at abracadabra there is a bankruptcy lawyer who during the holiday season volunteers as an employee. there are thousands. stores, and unlike open allracadabra is year long. ,hanks to the different cons there is a reason to dress up every day. >> i like to be creative, and is costume for me. if our passionate about it and i wanted to achieve a certain look without a prepackaged here it is. i might spend a fair amount of money. , ii do not like to go gory like to go topical, scary and cute. kris jenner and bruce jenner. bruce turned 65, and i got to match. look at the makeup job. perry. brand, katy mexican inspiration. you do not have to spend $1 million to get into the costume spirit. >> stephanie ruhle loves dressing up. >> if you go to a cocktail party do you really want to say wired your kids go to school? you want to ask about the costume. >> next week we will be in vegas. see you from there. ♪ >> it is 56 minutes past the which means bloomberg television is on the markets. wall street closing of the week with a bang. freshf japan's surprise stimulus package. joining me for today's options inside is an advisor at equity th investments. the bank of japan giving a treat to the market. >> they did and just put the pedal to the metal, they put it to the floor board. >> how high are we going to go? how thingsto see play out at these new highs. it is interesting to look, we see the market at these levels indexe the volatility pushing. i think there are a couple of reasons why we're seeing that. the fed no longer offering the backstop that was in place. volatility, running around 17%. the expectations are below what the market is realizing. there's a different there as well -- divergence of their as well. we are seeing these volatile moves as we rollout of october and move into november. typically november-december has been a very good time of year to be long on the markets. if we see some more positive news, that could stimulate and shoot us to a new high as we close out the year. that just to imagine one week ago we sell volatility half of war it is that now. i'm curious about jobs. nexthey going to affect market trading if we get a good report? are seeing the market trying to make sense of all of these moving parts. they are rolling into a time where they will have to contend with the fed not being in the marketplace. nice jobs number, consumer confidence coming back. the trends are in place, so the fed has said we are done for now. we will see an increase in volatility expectations, awesomely coupled with moving higher -- possibly coupled with moving higher. watching go pro. ishares are surging right now, best performance in more than three months. beating estimates of both the top and bottom line and higher profit margins. >> a lot of action around that any strike and we are looking at expiration today. if you go out into november, you're still seeing the 80 strike being the most popular strike of the trade. the fact that you can see them moving from the sport into the lifestyle sector of the next couple of quarters, it is a possibility for to push into new highs. >> good time for go pro investors. how are you applying some all caps? -- small caps? >> they have out performed so many other averages. so i'm looking at the december 117-121 call spread. gives you the opportunity to capture the reward and pushed over the highs -- push toward the highs. >> thank you. all of this on the bank of japan injecting a little more stimulus , surprising investors. we are back in 30 minutes. ♪ >> welcome to "money clip." i'm olivia sterns. here is the rundown. julia and sees a bubble. just another regular morning on "bloomberg surveillance." will run james returned to cleveland with the loss of the mix? -- nicks? in politics, it is the final weekend of the campaign season and the airwaves are flooded with ads, good, bad, and some pretty ugly. why horror flicks never die.

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