>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. for a wild ride. market volatility is the rule of the day, so you better be strapped in. >> blue trip -- blue-chip robert econolodge they get hotels betting on non-gaming activities to draw in the crowds. we will hear from the co of the cosmopolitan hotel. >> and a bedtime story, the new ceo of cerda, if he has his way, you'll never look at your mattress the same way again. >> good morning, everyone. i'm erik schatzker. >> and i'm stephanie ruhle. do you have a certain amount wrist? >> i don't. >> i don't either. mattress?have aserta

>> i don't. but i don't either. at -- >> jpmorgan had surprised increase in fixed income trading. jpmorgan did set aside one billion dollars for future expenses, and the bank is spending more money on cyber security and regulatory issues was up earlier on bloomberg surveillance, andrew albertson mess is no reason to discount jpmorgan. >> we are watching the movie too fast. this is a slow economy. it's been a slow recovery. everything is falling in place in terms of bank land. we've got the loan cycle picking up, broadening as it should. the first thing i look on the morgan release is loan growth, and it's 7%. that's not shabby. >> meantime, jamie dimon is back after spending eight weeks being treated for throat cancer. he said he plans to resume international travel.

and citigroup, the nation's third-largest profit beat estimates. city announced plans to get out inconsumer banking, mostly small ones like el salvador and guam. in the meantime, the most viable bank by market cap, wells fargo, reported earnings that nailed estimates. wells fargo boosted its share of u.s. home loans. everybody says they are increasing market share. more signs of trouble for europe's biggest economy, germany. growth outlook and investor confidence fell to the lowest level in two years. germany lowered estimates for next year's growth for next year. and exportsutput hit five-year loads -- five year lows. and here's something we have not seen in a month.

north korea's leader, pictures were taken of him walking with a cane. abouthas been speculation his health, or maybe he had been ousted in some kind of to. the south korean newspaper says he was hospitalized after surgery on both of his ankles. and maybe the network executives who spent all that money on the nfl are having a bunch of second thoughts because a bunch of zombies just beat pro football. for than 17 million viewers sunday's season premiere of walking dead, the most ever. zombies had more viewers than nbc's sunday night nfl game. score that as a victory for original programming. >> do you watch "walking dead"? >> no. >> too scary for me. >> you know i don't watch that much tv. >> yes, but maybe you watch that. so watch "game of thrones,"

you do have an appetite for the absurd. >> maybe. >> onto something else crazy, crazy market action. but the dowp today, has raised all of its gains for the year. oil prices are plunging. rent crude and west checks -- brent crude and wes checks recorddia are both in low territory. take a look, at their lowest level in 16 months. we are bringing the band back together. a lot of my old homeboys really do understand these markets. joining us, chief investment strategies -- strategist, and the head of trading at tcw group. first.to go farther rob, let's start with you. what do you make of this market? >> i think we've had a very large move. short were long ball and the market, it's time to sit back and wait for a rally.

>> jerry, how about you? >> i think there is a lot of opportunity that has been created. we still see more downside in the credit market. >> such short answers from the remote guests. you've trained them. goinghink there is a lot on here. the biggest story that started this is the normalization of the interest rate policy and what has taken over as the global growth slowdown. the global growth slowdown is giving too much credit from a u.s. perspective. we've had a risk off move-in equity markets and a flight to quality in treasuries. i think the flight to quality has pretty much played out. butrt in much played out, -- >> pretty much laid out. the move in equities doesn't scare you? we've had all year long, and

men -- >> for many times over the past five years we've had bond gaining value and equities gaining value at the same time. >> that is a function of a quantitative easing stop printing money and flooding markets with the quiddity -- with liquidity. now we are in a transition time. the change is where in the interest rate environment you hold your risk. -- you hold your interest rates the hedge to is the referral you. ofsharad, what do you think the ten-year deck of >> i think the ten-year treasury at 2.12, or 2.50 is still the cheapest. japanese investors are buying treasuries. s are buyingestor treasuries. and if you're in the modern market, you cannot buy anymore.

this is where fixed income investors around the world have to come. >> jerry echo -- jerry? >> it's an interesting question, because the real question is, as the fed begins to normalize policy and we start to see the fed pull away and rates begin to rise, what does that mean? does that mean you've removed the false signals in the marketplace? and potentially, you've removed the stimulus to the economy, and maybe you see rates move a little lower, ironically. we've already seen that. what the markets are telling you, and i think jeff alluded to it, and we are seeing it in price action, is that we've already seen moves lower in commodities. it started with the coal sector and moved onto retail. you've seen broad-based selling in energy in particular, and big parts of the credit markets are energy. we could talk about that a little bit. whats you think about signals the market is sending

you, there are deflationary signals being sent into the marketplace. and that ultimately may not mean that rates move interiorly higher. >> jerry, you set a moment ago that the volatility and the selloff has created a bunch of opportunity. what kind of opportunity specifically? >> think about where the pain is most acutely felt. you always want to start looking at opportunity. you begin to look in the energy space. in particular, you want to look at companies and parts of that marketplace that are least to a move lower. we look at credit in general. if you see the credit markets move lower in general together, when you see the markets move and you see high quality bonds move down by five to 10 point, we think those are interesting times.

we look to add some exposure to credit. >> do you agree? follow-up on what jerry talked about, high-yield markets have moved a lot. we got very negative on the high-yield market earlier this year when high-yield was not very high yield. the yield was 4.83. spreads are low. we got out for a brief moment of to about 6.50 and right now we are at about 6.20. but what is happening high-yield demand has actually outpaced every other credit market. part of it is because of liquidity. part of it is because of the retail exposure. the high-yield market here has actually improved. we upgraded our ranking to reflect that from underweight to neutral. obviously, we still have some crosscurrents going forward. hraab, are you positive on high-yield?

>> i think in a high-yield market you had a large shakeout in july and august and now you are seeing the same thing happening in equities in september and october. the week has shaken out. the deal has gone well, but again, if the high-yield were to rally, i would be selling rallies. , you set a moment ago, sit back and wait for the rally. echoong will it take obviously can equity have a bit of a bounce this morning. is the market putting in a bottom, or is there still some choppiness to come? >> if you look at the market and that the largest as -- hedge fund equity holdings, they are down significantly more than the market. a lot of what you are seeing is hedge fund liquidations, you know, portfolios that are designed to be down 2% that are

down 5% or 8%, and they are getting liquidated. see --at happens and you you have seen that over the last five days or so, the indicators that we follow are a stream lay low levels. the lowest levels in two years. that suggests to me that we will get a rally very shortly, you know, weeks and days. >> you think we will see any hedge funds the forced to close up shop this year? not a question i'm willing to answer. >> not willing? hold on, you may know the answer, but not willing to answer. i just want to make sure. >> something along those lines. >> there you go, just to clear it up. >> i will bring us back to our earlier question. something that shahraab talked about and your roll over at tcw, obviously we see it from our

perspective, but i want your perspective. on high-yield, what is going on in terms of equity in the market? how muchhas -- liquidity has this market move been affected by it? >> it's been a very interesting question and one we spent a lot of time on. the short answer is, the markets are probably as ill-equipped -- ill liquid as they have been an anti--- in a long time. -- the short answer is, the markets are probably more ill-equipped than they have been enough long time. how do you increase liquidity in the marketplace? is a dark pulled, some kind of -- dark pools, some kind of sure liquidity? maybe the answer is that has driven high-yield, and in particular, may be lower rated credit to a place where the buyer is nowhere near the levels where they exist today. -- youfect example is

could have all of the exchange is in the world and if a company filed for bankruptcy, there would be no big between recovery value and par. it is really talking about -- part of this is a conversation about investor preference and where the marginal buyer comes in. that should be as much of the conversation as how we introduce new forms of liquidity into the marketplace. maybe it is really a function of the policy that has been pursued and the prices have been a result of that policy. >> jerry, shahraab, jeff, hold it tight. we will take a quick commercial break. >> it's been such a good conversation, guys, we will have you back after the commercial. >> indeed, we shall. also, have you ever thought of your mattress as a social hub? >> not me. >> i cannot imagine what that might be. >> gross. rta will beof se along to share his ideas on

this. ♪

>> you cannot not cover the markets, given everything happening in the past few days. blackrock chief strategist jeffrey rosenberg is here, and and sureso --codzil rob -- shahraab as well. just before the break, jerry was saying that the move in the quiddity makes him nervous about bere distressed credit would in the shared environment. do you share that concern? >> i agree with jerry. i think it's the first time we are seeing markets in high-yield that are trading with this volatility. with the dodd-frank rules fully in effect. what that means is the backstop bid that the banks used to

provide, the liquidity that the banks used to provide, if completely gone -- is completely gone from the markets. many are trying to get through the same door. the dodd-frank rules means that volatility has been amplified multiple times. >> take it back to 2008, the street had the ability to be the backstop. but at the end of the day, wall street was so long that they were desperately trying to sell. are they really trying to help us recover in a bad situation? or is it just a crowded trade that everyone is trying to sell? >> i think this gets to the point of minute ago about the dodd-frank rules. the other side of the argument is that you've taken a big holder -- you know, were wall street banks really providing liquidity or propping up trade for themselves? then's more the latter, the provision of liquidity as i have to sell my bonds first before i deal with your bonds. we'll agree this is a different

environment. >> is it more disorderly? >> we don't know. we've had some structural changes and you haven't had a real challenge to the market. -- maybe wete ago can bring him back in and get answers. how much of a move have you seen real activity on? >> jerry? >> that is a good question. the short answer is, we've not seen a lot of selling. to date, if you think about following retail flows, the real answer is high-yield fund --agers real allocate reallocate as flows come through. we have not seen significant outflows in the past one to two weeks. that is when the most significant price action has occurred. obviously, the day to day basis, flows are negative. but we have not seen that yet. you see a further deterioration in prices and then you have not

seen further volume going through. and then now, you started to see materially, but at lower prices. >> you are a long-term investor. what does it mean for your business that hedge funds are completely paralyzed year? is that a positive? is we lookedanswer to take advantage of the dislocations in the marketplace. when those dislocations present themselves, we get excited and more aggressive in the marketplace. and we look to take advantage of those dislocations. whether that be hedge funds less active, as you see marginal buyers move away and risk premiums expand, that is an for loan only managers. >> jeff, you come from a big highside shop, the biggest there is. is that the prevailing view,

what jerry is saying echo -- what jerry is saying? that those with the money will step in at a certain point and it sounds like it will be a bit of a buffet. if nobody is changing the market between a last -- between where it last traded and where it is trading down -- >> the issue with wall street is how quickly you can ramp up your balance street. what gave wall street the ability to be a buffer in volatile times is they had an accordion balance sheet. if they wanted to expand it, he could to -- they could do it literally on the wire. what has changed now is that it is a slower process. we cannot go out tomorrow in the markets the same way wall street can. we have to raise funds. there is a longer time window in between these volatile times. how the nextw market will look as you go through the credit cycle. it will be much more volatile. of thoseve the absence accordion balance sheet.

there will be demand, but the --ce cap may take longer pricing gap may take longer to fill in. >> you need to pick your trades carefully, wisely. what if you had blackrock style capital under management and a lot of latitude, what would you do? i think the biggest opportunities right now are the hedge fund favor stocks -- favored stocks that have come withoutjust a few weeks a big change in fundamentals. >> like what? >> american airlines is a perfect example. the stock has fallen from 43 dollars to $28. art of that is on fears of ebola. -- part of that is on fears of ebola. but also because oil has fallen and it's their biggest cost. the stock is down materially, and you know why. because the stock was a hedge

fund hotel. >> derailment, we thank all of you for joining us. shahraab him on --ahman, jeffrey katzenberg right here in new york city, and jerry cudzil. >> what a treat. alumni -- two are anotherlumni and basically my first client. coming up, we have not seen low prices like this in two years. we will find out why. ♪

>> coming up, a cosmic comeback. the biggest hotel that went from bust to boom, or they want us to think that.

and it's not counting on gamblers to be different. plus, you don't need a fancy kitchen to be the social hub of your home. your mattress will work just as well. how? find out when we talk to the company's president next. ♪

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> you're watching "market makers." we have gotten off to a great start this morning, a great conversation. our panel giving us a guide to the future, they think things are going pretty steady. >> they were not brimming with confidence either way. >> it is a hard market to call. in the meantime there are a few harder work to call, and oil is

on a slippery slope you could look at west texas intermediate, it entered a bear market last week. the same drivers that pushed it down are once again at work today. conceive the imax crude is at $84.20 a barrel. ymex crude is at $84.20 a barrel. >> and fall more than 20% entering a bear market last week how oftenk to check spreads fall more than 20%, and you might be surprised to find it is rather often. it has tumbled quite rapidly, and the reasons all seem to be variations on a three. europe, whether it is the group or gracerging,

going into default, these factors come in over and over again. not exactly new news. we have enough weight on it, but these factors are well known. the fundamental reasons are not the drivers here for oil price decline. it is really a supply issue. there is a supply demand imbalance. you have north american oil production of your libya resuming production, and iraq sustaining production, which keeps the price down. case, itt were the should have been a more gradual decline in oil. there is no question that oil prices were declining, but for the past several days they have followed off of a cliff. >> that is not new news. but the stronger dollar has added fuel to the fire. there's a lot of bickering within opec. prices, in order

to gain market share. i was just looking through some notes, and a couple of analyst are saying that maybe the tide will turn for oil. morgan stanley actually says that crude demand start to rise in the fourth quarter of this year. we last leg of this the client is not as much fundamental, because it is old news, but the rapid acceleration of the dollar. deeper,dig a little they see positive signs in the physical market as well. bank of america merrill lynch also says that saudi arabia is letting oil prices drop because it could reduce the possibility that u.s. companies will continue to frack for shale. feasible fore as companies to continue to do that. it will also weaken iran. and russia.

speaking of russia, i looked at another note that was taking a look at the ramification of oil's price decline. they needed to be $92 to $93 a barrel. $100.eard heard >> there are variations on this. currently $80, and could drop even more if it continues to slide. there is some context for you. it is something that people are looking at, but they do not think it will continue to drop, it is all about whether it will bottom out at these levels or continue to bump along before it takes a turn up. >> thank you. crudeymex on $84. >> coming up, meet the resort

ceo who is betting hcan make money with non-gambling activities. ♪

>> welcome back. in a long and winding road for the cosmopolitan hotel out in vegas. its original developer defaulted on a loan from deutsche bank, who then took over construction of a nearly $4 billion project. it opened in late 2010,

blackstone bought it this past may for only $1.7 billion. on non-gambling revenue, that many of its rivals to the topme grossing nightclub. theked the ceo about strategy to stand out from all of the others who were established in vegas up and down the strip. when we put together the brand and sets out, we set out with the lofty goals which were to create and to las vegas that would not otherwise havp pen. those who, defectors, said vegas was not for me. we stood out of a sea of sameness, taking a point of view that we were not trying to be something for everybody. on socialirst ad was media, and said it is not for

everyone. kind of freaked some people of because they said how can you turn away people? it is aspirational place to go. in hindsight, you had a 21 year run that was started by the wynn, and iteve think that era ended just before the cosmopolitan open, and the cosmopolitan will be see n as the start of the next era. you have made things too edgy, 220, and it will not last? trajectories superstrong, and accelerating. when we look at our numbers, we lost $25 million in the first year, in the second year we made $50 million, and our trajectory is accelerating. it is resonating with people. it is also currently and

constantly evolving. we are always doing these things. weadded the chelsea, did 80 concerts and boxing in there. there is always something different happening. will stay current because i think we are really in touch with our customers. >> to you run the risk, even as successful as you can become, it is a drop in the bucket given the kind of money that macau brings in? is athink macau phenomenally successful financial market. me, casino market, but we are also not las vegas. growing, ouris market is changing. that i have been there, and particularly in the last two years, the median age of customers has gone from 50 to 44. that is a seismic shift on 40 million visitors. and 40 million is a high

watermark for las vegas. younger,ucation level, higher household income. the mix of our market has changed. it is a hypercompetitive market. there is always money coming into the market, and people are going after what we do. we need to continue to lead the charge and stay current and stay contemporary. i think our owners are committed to doing that. >> how has online gambling been successful for your business where it has been a failure in atlantic and thecity? >> it is a governmental. it is a completely different experience. i do not think online gaming were save us if iwe dying, and i do not think it will save atlantic city. >> can anything save atlantic city? i think they need to focus on creating a destination. >> haven't they been trying to

do that for 50 years? i amdo not know, because not working in atlantic city for it i do not know the market super well, but i certainly watch it from where i sit. you think about gaming, in america there is now 38 jurisdiction where you can gamble. you couldn't drive 90 minutes from anywhere you live in this country and play slots. you're not traveling to las vegas to play slots, or just to gamble. you are doing it because it is part of a great destination for entertainment, for dining, shopping, for some of the greatest hotels in the world. ofess you make those kinds changes in atlantic city, why would you drive from philadelphia is you can gamble closer to home? >> how much does or hurt you that there are 38 jurisdictions where gambling is no legal -- now legal? >> interests changed the structure of our business.

the strip was to give 5% gaming, and 35% gaming. 35%it is 65% non-gaming and gaming. people come to las vegas because they want to go to las vegas is a great destination. support the potential legalization of sports books across america you go right now going to vegas for final four and march madness, those are huge weekends. mostrch madness is the fun, when everybody comes with their group that they would to school with to support. it as an amenity. when you look at the revenues that are driven by sports gaming, and las vegas is 1.7% like that, it is less than 2% of total revenue. less than the total gaming revenue, and that is less than half of the revenue.

it was less than 1% of the revenue. they start having sports gambling in other jurisdictions do i do not the getting city difference to us, quite frankly. people want to come to las vegas because it is a fun place to go, and sports gaming is a part of that whole experience. >> he is selling the whole experience, but when you're putting that much money into artsevolving installations and nightclubs, as to be risky. there, a can win, lose, or bust, they will still play. but if you're going once every two weeks or more often than not, you're going to see it get a little frayed around the edges little faster than if you're going to vegas once a year. everybody wanted to go to the

cosmo last week. but in 2010, i worked at deutsche bank when it was the behemoth. it cost them $4 billion, they doubled down and sold it to blackstone. >> i will find out if it is still the hot place. coming up, the boomerang kid. the one who returns home and ends up sleeping in their old twin sized head. what does that mean for the mattress business? ♪

>> having trouble sleeping with all the money you are losing in the market? we are going to talk about mattresses. cerda international, the american top mattress maker is wanting you to think high tech. isn somebody says to me it time to get more social in your bedroom, i am clearly jumping to the wrong conclusions. >> or the right ones? >> first of all, good morning. thank you for having me. when you look at the betting providingit is about food clothing and shelter. >> you worked in the kitchen appliance industry? >> for 25 years.

and i am able now asserted to be able to fulfill a another basic need and everyone's life, which is a good night sleep, health and wellness. e think what the gidget industry has done is turn it from a place where people peopleto where entertain, and have your friends. the new american kitchen concept is a social hub of the house. i think the betting and betting industry could play a much bigger role as well -- bedding and bedding industry could play much bigger roles. >> how? i can understand how you would bring in your kitchen and your friends. what am i doing with my friends and my bed?

about bringing in your friends. the bedroom as a sanctuary where you want to be away from it all, but they want to read a book a month want to watch tv. or they work on their bed, especially with high density living becoming more and more the norm, and the urbanization here so many millenial's are coming onto the market. -- it becomes a ifce to work and spend time you do not have that space in your other parts of life. to the do you do mattress to innovate, to change, to improve so that you are successful and people begin to think of their bed as a place that they want to spend more time doing the kinds of things you just suggested? last year, cert has

made its way from number three in the market to number one with great innovation. a series before i came in 2011, and they have shown the market that if you've innovation that helps you to manage your body temperature while sleepy, and you get a better night of sleep than you could make a difference in peoples lives. that made cerda truly the number one in the marketplace, and has to a new destiny. it is my job to find out what is the next big thing. -- understand that after five weeks on the job, i have not figured it all out. >> you have to have a plan. >> you slept on it. >> ha ha. >> we have a history of

innovation. we have shown in the past that we know how to make the world's best mattresses. that is just one part. another part is that we need to understand technology, which data points people want to have in their lives. more and more people measure everything in their life. they measure with wearables. >> how do you turn the mattress into the wearable? , i want theta mattress to give me feedback at how well did i sleep? the mattress would have a pretty good idea. >> we will be looking into sleepations to integrate into the pattern of measuring your life. we do not have a complete ,oderick -- complete product

but as we continue to innovate we will try to understand change.hic and idea we simply build good beds that help people sleep better at the forefront of what we're doing. people spend one third of their life sleeping. i hate shopping for a mattress. there is no clarity in pricing, it is hard to comparison shop. nor to happen is this is ripe for a dose ripped her -- your business is ripe for a disruptor. serta, where we consumers, i think we give people a good indication on how

they could improve their sleep. when you look at what we have done in our novation in the past couple of years, we have made it pretty easy to talk consumers what impact her sleep. -- tell consumers what impacts their sleep. just to add to a stephanie had to say, it is expensive. all of those bricks and mortar locations that we have to go to to try out different beds are expensive. have a shop online and have it delivered to your doorstep option. >> and mattress at the end of the day is all about feel and comfort. you want to lay down in the bed, you want to feel it. that makes a difference. it is not the marketing story, but the way that it feels for sleep. improves your >> i don't want to cut you, but

we have to go. serta.sident of ♪

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> jamie dimon is back. jpmorgan ceo was back on the conference call after missing eight weeks for cancer treatments. >> unfriendly skies, airlines for fallout from the ebola epidemic. the surprising alliance between american express and mcdonald's. >> welcome to "market makers." >> it is 11:00 a.m.

with thestart bulletin, the top business stories of the morning. three major banks, three different running stories. after itis lower posted earnings that officially missed estimates. it warned that it may not last. citigroup, earnings beat estimates. bank also boosted commercial lending and revolving debt like credit cards. and third quarter profit at wells fargo matched estimates. wells did increase its share of foreign markets. of iron company of -- of the parent committee of all of garden really likes the breadsticks.

he agreed in july that he would leave, but last friday activist fight to wanted to replace all of the board. -- won the fight to replace all of the board. comcast is expanding in china so it can cap the country's growing middle class. the country's growing middle class. touristsllion or more visiting beijing every year sets the stage for a wonderful opportunity to share our form of entertainment with people from around the world. universalism competition, disney is opening a new theme park in shanghai. it is hisaid hi

most exciting venture yet. according to a new rutgers poll, 45% of registered voters have an unfavorable view of chris christie, that is a record low. democrats and independents are unhappy with christie over texas and the economy. >> three different learning stories from three different banks. let's dig deeper into the top. a love hate relationship with banks. for a change where not talking about multibillion-dollar settlements with the justice department. a clearer quarter than we have seen for some time with these

banks. what is the biggest take away? a billionl did get here, a billion there. litigation reserves. that was the disappointment at j.p. morgan. you had better revenue, but you have the cost side. the main positive thing is the better trading revenue. you hear the words like strong, but the bottom line is that a destabilizing which is better than we have seen in a few quarters. >> i agree. i think the litigation expense is a bit of noise. i think probably the market is overreacting to this. it as a going to have given that there is a continuation of litigation at expenses at these big banks, because they keep doing things that are not right. their basic business, which is what theoretically these banks should be trading on, their basic business is getting stronger as the economy improves.

>> what the market seems to be trading on its far as citigroup's concern is the 5% increase in fixed income trading revenue. since when is that something to get inside and about -- excited about? >> i think there are two key reasons. when you have been in freefall for the last couple of quarters. when you look at the equity strength, something like 60% up over quarter to quarter, this is where we have a seasonally weaker quarter, so people are excited about that. if you look what has been happening in the trading visit business, has been especially horrible and the foreign exchange market. we hit a record low, back to the 90's. we are up 50% since then. the strongerone of players in that business. >> is the market volatility, should it be making is concerned

that dodd-frank is not being tested yet? the traders cannot catch the falling knife and be a backstop go they can only be an active agent. will that hurt the volatility even more? >> one man's agent is another man's principal client service role. the yuan agent or difference of a when you hold -- are you an agent or a simple when you hold the securities longer than 30 days? >> but now they can't. five years ago -- >> i think that jury's still out. i'm not sure that they cannot pay they will call a client services, and be able to hauold it and show the regulators they're doing it in service of their clients. i do not think that as a result issue by any means. >> really? >> that is my opinion. >> the regulatory environment continues to evolve. i think one of the next steps is going to be what happens with

the election. do we get some changes there? there are a few things with dodd-frank that different industry groups have objected to. the mortgage servicing rights, this has been a major issue that has infected the banks. you have these big trunks of banking business is going to nonbanks, that is what jamie dimon talked about on the call today. what is actually happening when you're pushing risk out of the system? >> did it seem like a different jamie dimon to your? >? >> it seemed like business as usual. >> he sounded different. granted he has come off of eight weeks of cancer treatment, but he sounded conciliatory. he was not objecting. mark harmon in jamie dimon have a history, and fairly famous

spat at the imf meetings a few years ago. and now he is kind of agreeing with him and with the financial stability board. is some consensus, and that is a good thing, we need to be able to have these tw tighter regulations around derivatives, but that is not the jamie dimon that i know. does not necessarily object to regulation and trying to make the system safer. especially with the derivatives trading, i think a lot of banks will agree that we want systemic risk. >> when it comes to changing regulation that will affect the anelka but that is not what they want -- the pnl, that is not what they want. can say is supported, but

you can say i do not think this that law does it. >> i think a diagnosis of cancer would change her view of your mortality quite dramatically and think bigger thoughts. maybe even be more conciliatory. >> not worth getting in a knockdown drag out fight. >> when you're in the throes of it, think it is hard to see that. thousand dollars our lawyers continue to plug away on behalf of these banks. jpmorgan settled with the justice department and other regulators were 20 billion dollars not so long ago. there are many people who think that some of that was payback for the aggressive combat of: that diamond took with tonengton -- combative

that jamie dimon took with washington. dimon's was just jamie combative attitude, inc. of america has paid much more than and thergan chase, leadership there has been hardly combative. >> bank of america bought merrill lynch. not --r stearns alone is >> that was one of the worst acquisitions ever made. they paid $4 million for something that has cost them 50 plus. easily. >> whenever there's a bubble, there is fraud. we had a massive level, ms of bursting of the bubble. and you consider the depth of and breadth of the losses

-- >> you have to think about the next round of losses and negotiations. we know that some of the litigation at j.p. morgan had to do with the foreign exchange investigation. that is as much as they have acknowledged. going to seell volatility, but you have to think about the depth and the breadth of the crisis. he think about become our cup -- about bank of america, and the role in that crisis brady think about . you think about jpmorgan and their role in that crisis. andmoney that they make, proving the harms, and we cangation expect experts that do this. the stories about people losing their homes and not

paying their mortgage, it is a little bit different than i lost this money on the spot because you did not price it correctly. >> these are people who bought home and signed on to mortgages they could not have afforded. this is going to open up a can of worms. >> you are not wrong. lots ofve seen mortgages that people should have never of signed with the names down on the bottom who did not have accurate information about their income, assets, and they signed them anyway. they should never have done that. whether elizabeth warren is right is that they were induced to do that by mean spirited bankers looking to encourage big -- >> to say that those homeowners are complete victims, is that a hard argument to make? on the bottom line, they bought a home that is far bigger than their income.

>> you look at the depth and the breath of a crisis, and it is not just because of one product, one person, or one bank. loans, youade the had the mortgage brokers, we could argue about this all day. at the end of the day, the government will see a loss, and they will want someone to be responsible. thank you very much. terrific chat about the banking industry, and where does it go from here? >> do you want fries with your charge card? the deal between mcdonald's and american express. ♪

>> welcome back.

sizingn express is super their rewards offering. starting next week they can spend the points at select mcdonald's. another move that will expand to more base be on the on 1% -- the customer base beyond the 1%. express? the black car, the ultimate experience teaming up with mcdonald's? >> we want to serve our customers where they go. our customers spent tens of millions of dollars at mcdonald's. and they are an important partner. so we are giving our customers more service where they go, and that is mcdonald's. and giving them the chance use membership rewards points to pay for that. >> commented points would it cost to get a free lunch? i think of spot days, hotels,

airlines, not big macs. >> recently we announced that you could use your points to get ian uber car. uses just another way to your points because that is a brand our consumers align with. chance to use your points every day, or to use cash. is a competitive industry, let's put it that way. this is offense or defense? >> offense. no one else in the marketplace is doing this. what we have learned is with the remember should rewards program -- is with the membership rewards program, the ones who not only earn points but use points, they are our best customers.

we tried to give the membership program redemption. and cardacks interior with people may have -- lack black centurion card, and the image that people have, they may not know that you have products for the 80 4 million on banked americans as well. talk about the efforts to broaden the rants of peel and the challenge of maintaining its the brand's-- appeal, and the challenge of exclusivity.ining its his noseavelers check was not an exclusive business. >> does it still exist? >> it does.

haveu think about where we in as a breadth of exclusivity applies to some of our products, the black card, the platinum card, but we have some sectors were exclusivity is not the driving force. service, you will find that in every product we offer. this announcement with mcdonald's, this is a service for customers who want to eat at mcdonald's. >> is there a risk of random dilution -- brand dilution? >> we are still the number one ranked by a good margin. we saw very strong growth in the brand valuation. we're not seeing it. when we asked some of our premium cardmembers about a prepaid card that we launched in the last year and a half -- >> who is that marketed to?

>> the underserved market. it is folks who do not have an electronic method of payment. we are opening up electronic methods of payment for lots of people. when we ask our traditional customers how they feel about american express, those who are aware of it feel better about american express than those who do not. dealing with the under banked seems to be a community service effort, but you see this as a business opportunity. >> we estimate the underserved group as 70 million people in this country. it is a large market, and with technology today we can scale service. we are basically democratizing service for a group of people who deserve it but have not gotten it.

>> jpmorgan is continuing to deal with the fallout from the hack into its computers, the compromised information of 83 million consumers and small businesses. they are planning to double spending into cyber technology in the next three years. to a firmisk is there like yours of an attack like that? not the firm, but a brand. how do you protect the brand in an age where it is so easily stolen? >> that is an issue, and it is a number of steps that we are taking, like chips in the cards, because trust and security are fundamental to the spread. we released some numbers, we were three basis points fraud right off of our competition. about half of the industry

rates. we started strong. but this is not something you can let up on every minute of the day. we are to ensure we're coming up with the right answers as we move forward. it is an industry challenge. >> thank you for joining us. a pleasure. 17 years with the company. that is impressive. >> that is one more than i have in a bloomberg. -- been at bloomberg. up, and epidemic is planning to ground the profits. ♪

theoming up, it seems that

slightest illness on a plane leads to an ebola alarm. >♪

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> welcome back. ebola headlines have been triggering concerns for travel -- in an that offer 11% decline. as it just been a matter of ebola hysteria? >> anecdotally it does seem to be to some extent. scares that of happened in the united states.

you had a plane yesterday at logan airport, you had a plane in las vegas a few days ago. travelers were initially showing signs that were similar to ebola. also in europe and africa have a lot of travel restrictions. till certain flight patterns that are , andeing taken destinations that are being blocked in the short term. airlines pull back for six straight sessions. we have seen a longer pull back on the airline index that peaked since then we and have seen a decline of 13%. all of that said, the airlines are rebounding with the broader market today. we're seeing a lot of increases

after the big slump. >> what we're seeing happening in oil should be good for the line industry. >> you would think so, but analysts say this not just about the slump in oil prices. one thing behind it is a lack of demand. there is a lack of demand for oil, and that could mean a lack of demand for travel if the global economy is slowing down. as the concern, that we will see that decline in jet fuel prices concurrent with this. >> how does this compare to the sars scare? >> it is not one to one. you're not seeing exactly the

same type of behaviors or the same type of risks. that said, they looked at the trajectory of airline stocks sars epidemic when the first case was discovered in china. these are takers that no longer exist. then it surfaced in the u.s., and we saw a more significant decline in the stock. alert. had a global that was the bottom, as the who started to remove the various travel advisories and health advisories, the stocks came back. so morgan stanley is saying this could be potentially available for a rebound we see the passing of this epidemic, and it does not spread much further. >> a buying opportunity?

potentially. these airline stocks have performed well over the past several years. the peak that i mentioned on september 2 was a multiyear peak. they have been riding the airlines for quite some time. the question is are there other elements at work here? >> thank you. coming up, there is at least one opponent that vladimir putin cannot do much about the falling -- about, the falling price of oil. ♪

>> welcome back. thisollapse of oil prices month is good news for american

consumers, but it could not come for bette worse time vladimir putin or the iranian president. >> we have the collapse in the price of crude, whether it is west texas intermediate, what does that mean? maybe it will go to $2.5 a gallon. people are looking at the price pump, and say it is falling. who is that good for and who is that bad for? it is bad for russia, because pressure accounts for 70% of direct for -- it accounts for 70% of its export on oil revenue . oil,u are lower sales of and actual dollar amounts were that means less tax revenue, which means less hard currency revenue. when you look at who has been playing the oil gained with the

saudi arabians have him out and said that they are seemingly willing to tolerate oil at $80 a barrel. that is not du good for the russia who is backing assad. the saudi's are also backing the nnis in syria. >> i am an american consumer, should i be happy? >> you should be. all of these sanctions and , butric from diplomats what were willie hurt russia is but what will really hurt russia is the decline in oil, and that is what the market is doing. year governmentgovernment

auction that was canceled today. >> is it's all good for the american consumer? on the one hand -- or the american economy, because cheaper gas put more cash into the pocket of the american consumer, and that gives you spending and other areas of the economy. but so much of the economy is predicated on the shale revolution. cheap, it is not worth it to drill those wells any longer. toa lot of them are trying cap the natural gas prices because they are below four dollars. with that constituency is a lot smaller than the constituency to get into their cars and drive to work.

if you're going to figure out how many miles per gallon it cost for you to get to work every week or every month, if you're going to cut your yearly gas bill, which can be quite , and you can cut that 10%, it will be more money in everyone's pocket. many people have been left behind. >> that is disposable income. that will get people shopping. >> more money in their pockets. that is just what is going to happen. vladimir putin is taking it on the chin, and maybe are they are hoping to sell them natural gas to eastern europe, but if they have a warm winter like we are having, maybe they will not make so much money. a after last year we need warm winter. we will see you at 5:30 p.m. for taking stock. pam will be sitting down with one of the most powerful women in the world of fashion. pimm will be sitting down

with one of the most powerful women in the world of fashion. coming up we will tell you the story of the lawyer who took on big oil. ♪

>> if you were up at 3:30 a.m. jpmorgan'sg, you saw third-quarter results come out more than three hours ahead of schedule. the reason, human error. that is what we are being told by a spokesman of the nasdaq. initially it seemed as though this was computer error, but the truth behind every computer is that there is a human behind it. >> someone pushed a button. ,> or did not test something remember what happened at knight capital? that was much greater and more

pliable medical and an early deep in morgan's earnings release -- and problematic than an early jpmorgan's earnings release. get intoater the, they a conference call with reporters and investors. he did not go according to script today. moving on from jpmorgan, this is a much bigger deal. againstlawyer goes up one of the biggest oil companies in the world. he probably should have one. texacoas evidence that was polluting the rain forest. and givend've settled

millions of dollars to the victims. that is not what happened. a lesson foris everyone. it like to go back in time to start with the spoiling of the ecuadorian rain forest? there is this $19 billion judgment against chevron in an ecuadorian court that went nowhere. >> you can go and look at what exists in the rain forest today, which i did. because it has been litigated for 21 years there are mountains , describing in first-person accounts what transpired beginning in the 1960's. there are memoranda from within texaco where the company asking if are

they should line the waist opens with concrete, asking how much it would cost, and saying we should skip it. out of that kind of casual corporate decision can come a court judgment decades later fourth $19 billion -- worth $19 billion. when those were decisions were made, those people were long gone. , and the company has been long gone. nole chevron said we take responsibility for this, unfortunately they are left holding the bag. >> i want everyone to buy this book.

sordid details for themselves. why you're are here is to tell us about the lessons that lie in this tale. >> two decades of legal warfare. mosto could have preempted , if not all of this problem, by simply conducting itself in a more responsible way initially. prostrate and victim in all of this, it looked the other way. and actually became a worse polluter than texaco had ever been. weight. say that one more time. >> texaco was kicked out of ecuador in the early 1990's. their own national company took over the same oil fields, and over the years it became every bit as a bad polluter as they

had been in the 70's and 80's, if not worse. it is now much harder to sort out. and the final lesson is the crusading lawyer is going to ride in on his white horse, he has to follow the rules. he has to use the tools of the legal system, not robin hood. is together hard, empirical evidence, and make a legal case. >> and is hard not to walk away from this talk, coming to the conclusion that he could have, and should have conducted himself very differently. >> that is the conclusion of a federal judge sitting in central that his who ruled lawsuit over time evil from evolved into a racketeering conspiracy. turned the tables,

and it is them who hold the upper hand. they never pay a dime of those billions of dollars. >> what could happen to him? >> he could be disbarred if this finding is upheld. it is very unusual for a lawyer to be found to be a racketeer and continue to front this law. but he is appealing, and we will see what happens. >> is there anything to be drawn between what happened in this case, and what is unfolding now in the wake of the blowout? are much moret important than any similarity. he do have two environmental disasters, and two international multi-oil companies. the bp difference is disaster unfolded in real-time on television. this case unfolded in the

1960's, 1970's, and 1980's it in the remote rain forest and is clouded with ambiguity. >> such an interesting story. last book,joyed his you must i lost the jungle -- ."y "law of the jungle ♪

>> it was great to be here, a great tuesday on "market makers ." >> tomorrow we will tell you why

sports programming has become huge for the largest spanish language network here in america. joining us will be the ceo of univision. >> it is 56 minutes past the hour, which means you are on the markets. we send you to the newsroom. after the worst three-day selloff, stocks are rebounding after investors react to a batch of earnings this morning. joining me today for option entight is the investm advisor. surpassed that 20 mark toward the end of the last week. what is going on? > we are seeing a pickup

across the board. as we areing on seeing a back off and the fix vix. the -- in the the fed is basically going to be out of the market at the end of the month, and that has changed the landscape and that is why you're seeing an increase in expected volatility. >> you have a trade for us on the spine. what is your strategy you g? >> there is still going to be further weakness in the market. three weeks ago i talked about the potential of protecting against a down move by buying this spread. have is a chance it may picked up in the market, and we should back up a little further. i'm looking at selling the 180, 184 november two hundred trade

against that long spread -- to counter trade against that long spread. there is also a stock that you're watching, advanced micro devices. trading at close to a 50 week low. what kind of options activity are we seeing? >> right now you're just seeing across the board in the chip sector that we have severe weakness. with a shiftg out in the ceo just a couple of weeks ago. they're going into earnings on thursday. you see tremendous activity in 2.5 put right now. we're also seeing activity in january where you see the three dollar put being initiated there. does that mean better news

for stock markets, or do we need to think psychologically about that? reallys too short to lean too much from that. the bottom line is that we're seeing the market now moving at 1.5% per day. it will apply on a thumbnail basis. ix is expecting what is taking place, and you see them make fairly sizable moves that will release anxiety as we move toward the election. >> anything else that could be impacting markets? >> basically, the fact that the fed is not there, and the news is making more impacts. you're seeing the geopolitical concerns filtering into the market a little bit more. >> thank you. ♪

," welcome to "money clip where we tie together the best stories, interviews, and business news. it's hard out there to be a bank from low rates to falling housing demand -- there is pain and some of the latest earnings. around the world in hong kong, talk about pain. police breaking down the barricades. protesters hold their ground, however. companies from apple to google to linkedin will be saying goodbye to a airy coveted tax break. today's wild card -- talking about