>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. the credit crunch. where did all the liquidity go? renaissance on the factory floor, made in the usa making a comeback. >> a match made in music heaven. apple is partnering with shazaam and it's 100 million active users. we will be speaking to their ceo. i am stephanie ruhle. >> i am scarlet fu. erik schatzker is out. this is what happens when you're out for two days and you spend the time speaking to the world's greatest hedge managers. natural -- national talkshow host dave. >> we just made that up, didn't we?

>> tom keene did not give you a gift? let's get to some news. are the top global stores making business around the world. another sign the labor market is getting stronger. your americans filed for jobless benefits than at any time in the past 14 years. a worldwide airbag recall is getting bigger. nissan is the latest manufacturer to join in. they are recalling a quarter million airbags linked to deaths. seven point 8 million vehicles have been recalled in the u.s. for faulty airbags in the last two years. the airbags were made by a japanese manufacturer and earlier, gm said that it had put its issues behind it. the issue being faced by the industry is something that we

addressed earlier this year when we first encountered the issue, and then looked across all of our products. while it is more widespread in the industry, we believe we have the issue fundamentally under control based on the actions we took this year. >> gm has recalled 30 million vehicles this year he cause of a variety of reasons. new report says manufacturing in europe unexpectedly grew this month. german factories picked up steam after last month and unemployment in spain fell to the lowest level since 2011. mohamed el-erian talked about what the european central bank must do next. only way the ecb can get economic outcomes is by getting the euro to weaken. i think they are trying to do that but i cannot stay there. story andro and yen we are looking at more dollar strength. >> the ecb began buying covered

bonds to fight off inflation. the chairman of uk's biggest supermarket chain is stepping down. tesco said profits were overstated by $420 million. more than half of that coming from this year. the new ceo says he cannot provide any guidance on full-year profits. mark zuckerberg tells students in china that he is hiring, and he did it in mandarin. he spoke to students at a university and is a member of the advisory board school of management. he says he wants to hire their best engineers. facebook has been blocked in china since 2009. >> you know what else mark zuckerberg is? really fit. >> figure out all the things that he has been doing managing and running facebook.

working on his chinese, working out. >> i cannot believe how fit he is. that is why he is not wearing a hoodie. good for you. now for something a little more important. breaking news. freddie mac just reported that the average 30-year mortgage rate fell to a two-year low last 3.92%. that could provide a boost to the housing market especially after the announcement last week from fannie and freddie that they would make it easier for banks to lend to customers. here is what we need to talk about. is this a positive or negative? are we feeling remnants of 2005, 2006? fannie and freddie are loosening standards, mortgage rates are lower. will this be a slippery slope for people not qualified to buy to goat certain prices, out there, because it is part of the american dream, but not if you can afford it.

thanks, 2008. >> even if they loosen up, they would have to loosen by a lot. >> but is the first step to getting back to a bad place? >> we will have to see. >> let's talk to our next guest about it. he knows the fixed income market. it is an especially big story this month, credit. nearlyity is gripping every asset class and mike buchanan knows it well. he is the head of credit and weston asset management. let's start with this change in mortgage rates. do you think this is going to cause a boom in the housing market, people running out and buying houses, which should make the economy look better? >> i think we are a long ways of having another boom in real estate. it will help the economy in general. the u.s. is on pretty strong

footing and certainly any boost no, we are not, worried about an overinflated housing market at all. >> you feel like the economy is in a good place. how do you account for what happened in the market last week? >> it was spectacular what happened last week. volatility and rates, it was a fear of global growth and maybe a reassessment of that. at weston, we have been in the 3% range for a while. the market is reassessing and getting back to that level. >> some are calling what happened last week a flash crashing yields. would that be a fair way to describe it, especially when we saw equities breaching those loans? >> i would not call it a flash crash, but certainly some volatility that we have not seen in a while. what we may have overlooked a -- -- rate were very topical

but the volatility and credit was equally spectacular. certainly, we took advantage of that. >> are you concerned at all in credit when the market is hit with that kind of volatility? liquidity drives up. the street ishen not making markets and you need to make a move? >> the issue of liquidity is very topical right now. in some ways, it is a little overdone. clearly, elevated risk management, increased regulation has caused dealers to operate with less capital to commit to corporate inventory. that brings out one of the logical buyers and sellers in toes of stress, but you have remember, there are still a lot of buyers and sellers or credit. you end up finding these different valuation points may be a lot quicker. the ride is not as smooth, but ultimately, trading is working,

we are finding the execution doable. maybe more volatility, but we are using that to ever advantage. -- our advantage. >> you spoke with carl icahn yesterday. he made some remarks about the credit conference -- markets. >> hope will you were watching, but just in case, take a look. he sees a bubble in your house. >> it is a no-brainer, long-term, the high-yield market is in a bubble. when it will burst -- and it will cost you money while you are waiting. >> he think there is a bubble in high-yield. what do you think? someone like carl icahn speaks about a market, it is wise to pay attention. that being said, we do not see a bubble at all. fundamentals, whether you are talking about interest-rate coverage, leverage, free cash flow generation, default rates, all

of this is supported for credit. the trajectory seems to be going the right way. then you contrast that with valuations which we measure on a spread over treasuries basis. we are still cheap to historical averages. you put those together, we see opportunity. we do not see a bubble. . did watch that i thought it was a fantastic interview. howid talk a little about this is maybe four or five years out. obviously, a lot can change over the next four or five years, but for our investors and clients, we believe there is a lot of opportunity in that time span. >> he says he is also using credit default swaps to position himself for the eventual popping of the bubble. if that is the case, if people are using synthetics, doesn't that add to the possibility of damage being done when something goes off the tracks? >> i don't think derivatives are

a bad thing. we are traditionally more of a cash buyer, but we have been able to use the derivatives market, in particular, options on cdx as great liquid hedging vehicles. we are not overly worried we are getting to excessive levels on derivatives. if anything, it is helping overall liquidity. the issues that has exacerbated the market in 2008 is that many investors enter the credit market because they wanted yield, everything felt safe, and when market started to freeze up, they realized, i cannot be in here. given where rates have been, many investors have moved back into that market. as things get volatile, does that pose a problem for you, in terms of how it is to execute? >> i think there has been some new entrants to the credit markets and we have had a few shakeups. you go back to the tapered

tantrum in 2013. you had an abrupt move in rates and you had a lot of investors reassessing whether they wanted to be in fixed income in general. of aad kind of a flush out lot of retail investors in certain categories like high-yield and bank loans. i also think, again, when you get those opportunities, when you get full backs in the market, what we have been noticing at western is that institutional buyers come in looking for opportunity, looking for more compelling yields with the strong fundamental environment that i mentioned, and they tend to be a support for that kind of movement. forf you are looking opportunity, what are you avoiding, where do you not want to go anywhere near? >> i think one area within credit that we have been underweight and continue to be is technology.

we think that is a great equity story, but at western we are always looking for stable, consistent, predictable cash flows. we want to get our coupons, we want to be paid back at maturity. when you have the volatility of steerlow, it makes us clear, at least makes us more cautious. the technology sector is an area where we have been underweight. i also think duration -- if you do not need to take excess duration, if you can get your yield and not take a lot of interest-rate risk, that is pretty appealing. bank loans look pretty good right now, short dated high-yield look good. >> i want to go back to technology. credit analyst dig deeper into a balance sheet then analysts. what do you find in these companies that perhaps the equity guys are not focused on is much?

as much? >> we have a problem with the shot. as a woman who loves the credit markets, basically you are giving a shout out to the credit research analysts. scarlet fu said that credit analyst do a lot more work, dig in deeper. if you did not notice that, i wanted to replay that for you. >> when it comes to cash flow and balance sheets, that has always been accepted. when you are an equity investor, you are looking at a lot of things that others don't need to look at. 2008, manyo back to were forced out of the market, they sold into the negativity. if you actually held on through 2008, cap your positions, you would have had an extra ordinary year. the problem is, in times of volatility, that is not an option.

but if you have options, this could end up being a positive. the issue is if you are a hedge fund and you have to mark to market, if you face redemptions or have skittish investors, it is a different story. this might be a good time to be real money. michael buchanan, the head of .ixed income we lost him at the end. that means we will have to have him back. group.fight over the company going bananas over chiquita. >> it is better in the usa thomas says manufacturers who are bringing work back from overseas.

>> the latest development in the battle for bananas, a brazilian group has raised its offer for chiquita, this time for $14.50 a share. why are bananas such a hot commodity these days? julie hyman is with us to explain. why are they so interested in chiquita? company thate controls a third of the orange juice industry. safra is another resilient family. they are an investor in this deal as well. they have teamed up in order to make these offers for chiquita. the reason they want this is diversification. the orange juice business is not so good these days, so you are looking to get into something else beyond orange juice. although they have made no commentary on this front, this

would be the first time in chiquita's 150-year history that one of the companies is owned by a latin american company or family. the reason that -- >> ireland is known for its bananas? from a historical perspective, western banana companies have had a difficult history, there have been instances of teaming up with dictators in the past, abuses of the unions, banana farms. read gabriel garcia marquez, you remember the fight between the banana companies and the unions. it would be interesting to see a

latin american owner. >> chiquita is still trading below that $14.50. beany of these have to dependent on one going through for the other to happen? and fight already agreed to the deal in march. it would only not happen if cutrale and safra succeeded in their quest to take them over. fyfeestingly, chiquita and es was a true merger in terms of a true merger, but since all of this has gone on, chiquita has gotten more leverage and their shareholders would now own 60% of the combined entity. fyffes, thereand would be some cost cutting that they could do, but in addition, as we see market share of these

big for banana companies, , del monte,yffes otherta, and dole, companies selling those bananas into the marketplace, the margins have gotten squeezed. and chiquita end up succeeding, potentially they could have some more negotiating power and pricing power. i am not a lover of bananas but i'm told you have a fun fact about something that i do love, hedge funds. .72 management, steve:, filed today and said that they had but 3.5% of to kita. there are some other funds in there as well, but that one caught my eye. facts, banana is

the largest group traded crop in the world. not a banana tree. >> it is an herb. >> do you like bananas? >> i love them. >> i love them. >> we eat a lot of them in my house. >> i love reese's peanut butter cups. "market makers" will be back in a moment. we have a rally in equities. we will tell you all about it. ♪

>> it is 26 minutes past the

hour and that means it is time to go on the markets. gains of over 1% for the three major benchmarks. the dow industrial gaining 227 points. caterpillar making 13% of the average increase because of a higher full-year forecast because of construction sales in north america. all those concerns about weakness in overseas markets rebuffed for the moment because of north america. moving onto treasuries, jobless claims came down to a 14-year low. the 10-year, 2.2%. k is not here, so one has to be the doom of gloom. yelp shares are plummeting after a disappointing earnings report. the company forecast sales short of estimates. it did post a second quarterly profit but it was a tiny one. $3.6 million.

these are there only two profitable quarters. in, only twothat profitable quarters in its three-year history as a public company. they sent customers posted 5.3 million reviews in the third quarter, half coming from mobile devices, but who cares if you are not making any money. ♪

>> welcome back to "market makers." i'm scarlet fu. and erik schatzker is on assignment. probably in canada, right? >> yes. >> outsourcing is out at least when it comes to manufacturing. executives are bringing jobs back from china. one out of five already say they are doing it and more than half say they are going do it so looks like made in the u.s.a. is coming back. senior partner and managing

director at the boston conal sulting group. welcome back to "market makers." ow much of it is because our -- because of our energy production? >> well, it's making it easier for u.s. companies to compete. >> so the tepid wage gains we keep talking about is working in manufacturers favor right now? >> yes. and we're seeing them make changes adding 7% capacity in the u.s. for u.s. consumption over the next three years and looking at taking down the amount they are manufacturing in china. >> putting it in to context, how many companies are doing this? how many jobs are being created? >> well, there's really no statistics that are there. we know of at least three companies doing this already and we know there's going to be a whole lot more than that. >> we also talk about the

access to a skilled workforce here. w450 two companies and the government do to make sure this is not a limited resource and that it's something we can continue growing? >> well, far lot of jobs there are not. >> such as? >> welders and things going on with natural gas and the oil boom, so that's causing a bit of a problem. but for the most part the u.s. is pretty snuft skills so that's why we are not seeing massive increase in wages at the time. >> did we always have the skills but the costs were just not attractive to china? >> no. i don't think our labor base has become all that more skilled but we just focused more on what's going on in the rest of the world. but for the most part the u.s. has a pretty good skill base but if we don't continue to educate and train people which ising? government and businesses need to help with, then we won't have that skilled workforce but

for the next three or four years we are in relatively good shape but beyond that we have to make sure we have that skilled workforce to keep the country growing. >> one reason why you say we haven't seen a massive wage increase is because? >> because we have people with enough work. >> just because there's so many people that can do the job, why pay them more? >> it's economics. what we see is every time there's a skills gap you will see wages rise rapidly. why? because there's a free market and people have to pay for what they do. >> sir martin who headed up w.p.p. the big advertising company said 3-d presenting in general is a big reason why the u.s. has this manufacturing advantage over other countries. do you agree with that? >> well, at this time 3-d presenting is still a very small percentage of what's going on in manufacturing.

boeing is using it on its manufacturing line in the 787 factories. but it's still not a major thing. >> it's not something we do upscale yet? >> well, it's probably scaled for the world at this time but still a very small scale so 3-d presenting over time should be very important. >> what do you make of the fact that workers wages aren't rising at time when corporate profits are at record levels? are you saying it's a free market so you don't have to give them my more money? >> but it doesn't take time to ever for c.e.o.'s to say look at what the bottom line was this year, tacking on $5 to my bonus so what about the rest of the workforce? >> well, it's been a rough recession. almost a depression in many ways so therefore people are a little more nervous about

asking for wage increases. this will change as the economy gets better and we start to see the 3 percent of 4% more growth rate and the workers will start to get more money. >> in thement to u.s. looks more attractive for u.s. companies brazil is looking like the least attractive place. >> yes, unfortunately brazil has a bit of a problem. you can see the problem when you go between argentina and brazil. if you are carrying anything an electronic device, they will tariff you 300 or 400 times unless you can prove you bought anytime brazil or that you're not a brazilian citizen, they will put a tariff on you because it's causing stagnation in productivity.

but actually substantial wage increase. so it's a real issue. >> that is something to consider. so obviously brazil is out as a place for companies to manufacture or for the u.s. market. the u.s. is also beating out mexico as well when it looks to manufacturing in the u.s. mexico does have certain advantages, though. >> yes. but for the first time we're seeing them have the manufacturing advantage and they are saying we're going to start making more in the united states. >> so we started with oil. if oil prices keep sinking lower, how does that change for companies? it has to do something at some point. >> if you're an oil driller, but if you're a manufacturer, the energy costs go down. >> so double down in the u.s.? >> that's what i think a lot of people are starting to do. >> thank you so much. >> always greet get your insights. anyone bullish on the u.s. economy hope you watch that or

replay on bloomberg thank you from the boston consulting group. when we return, showdown in brazil as we were just talking about voters will decide do they stay with the current president or elect a more business friendly candidate? we take a look and see how they are doing off of this news. more on that when we return. ♪

>> more than 100 million brazilians head to the poll to vote for the new president. a runoff between dilma rousseff and aecio neves. the winner will be head of the

olympics which is a cash bo nancea for big construction companies. it allows the companies to basically fund the campaigns themselves. >> winning the bid for the 2016 olympics, was something all brazilians celebrated. but winning the construction bid to build the olympics infrastructure is proving not good -- profitable for a small number of construction companies. >> we are moving from a very complicated phase. >> mario cruz lopez is the man responsible for the new olympic village. >> is that a lot of pressure? >> a lot of pressure. hoping specializes in high-pressure projects. >> the company is latin america's biggest builder and has partnered with a local developer to build these condominiums.

during the olympic games 18,000 athletes will stay here then six months later they intend to sell these 3500 apartments to wealthy rio families forasmuch as $800,000 each. >> you have a lot of people buying these kinds of apartments. this was possible to make a private business here. >> but privately-owned says they rely on public noun build everything from roads to oil platforms and sports arenas. >> the celebration will take place behind me in the stadium which cost about half a billion to renovate and much of that money went to the contractor but at a company generating $40 billion in annual renew these high-profile projects may be more about generating positive p.r. than a good project. >> digging the new subway lines

flooge pushed up the company's profits. >> how important is it when it comes to infrastructure? >> important. they are mainly builders for the state for different levels of the state. >> the firms like the brazilian state they have become a highly-valued customer and consequently they have become a valuable tulle. tool. for every construction plan pent they won up to 39 ntracts when they backed the candidate that succeeded. according to this election's most recent figures which are almost seven weeks out of date odebrecht has donated 3.3

million in u.s. dollars total to both elections. >> if they are twin election they love to continue to invest in infrastructure and the game with the builders want to be different. >> soaring public costs and spending on world cup stadiums sparked popular protests before the economy started to dip into recession. and since economic growth will hardly get faster, higher, stronger here anytime soon, this weekend's winning presidential candidate may ponder more privately-financed projects in the hope they prove a bit more popular. >> there you are. giving us the latest. election this weekend. talk to us a moment about campaign finance. it's exploded here in the u.s. what's it like in brazil? >> similar down there. you've got a huge surge of money coming into politics and what's interesting is the

supreme court is looking as to whether there should be restrictions on corporate donations but there's really no limit on how much these wealthy construction firms can throw at candidates, parties, small municipal elections and in fact the municipal elections saw a huge wave of money. >> in terms of air time while they are campaigning, how much more does the incumbent get? >> up until the first round based on the five delegations now in the runoff it's split between the two main candidates. they have 10 minutes of free tv time every night, and we're going to be looking at that every night. that's so significant you can't go around shaking everybody's hands. >> that number you gave in your report was stunning one real brings you 13 real estate of contracts. that's a great return there. to what extent are brazil

voters aware of this issue and does it have an effect? >> increasingly more so. in the last 12-15 months there's been protests that the construction firms now you're seeing on that equivalent, there are comedians making skits about how easy it is to win a political competition. and in terms of the election the incumbent has faced a lot of criticism for corruption. >> that's why they are so negative on others. >> yes. >> thank you so much for joining us with the latest and we will join -- see you tomorrow for more on that. >> and i'm guessing monday. he is not going away anytime soon. coming up, how do you pay the bills when you give the product away for free? we will be asking the c.e.o. of

the music service sha saddam. >> do you use it? >> i do. >> i don't think i've ever used it. >> i use it in sirpe chic stores that are styled well. ♪

>> welcome back to market marblet i'm stephanie rule with scarlet fu. how does win of the most popular apps get away with not charging. i had a chance to sit down with sha saddam's c.e.o. >> well, shazam is very popular. it's been downloaded over 500 million times and if not the highest-rated app one of the highest-rated apps and we're thrilled with letting people use it for free because when they like music they go on to buy it. we have ads within the content

and then an exciting new business is shazam enabling other things. tv ads, retail environments. movie theaters. >> who are you taking ad dollars away from, traditional radio? >> no. today we're primarily participate in programt atic display so as things are shifting to mobile, we're part of the beneficiary of that. >> you're partner with apple. people say there's never a partnership with apple. you simply walk in the house and they take all the goods. >> we self about 10% of all music directly through the app and a lot of that is for itunes. we were also integrated into ios 8 and you can now shazam through siry so we were excited to bring that market into

apple. >> siry can basically answer anything. ly need shazam? >> i thought about that. and when you shazam through siry it's there and applicable and you can always shazam to get more. so we think it will be great through siri and when they want the full experience and want to get the lyrics and artist, they will come through the app. >> in a perfect world i will have a facial recognition shazam. how far away is it? >> everything we do today is done through the microphone and using the microphone or luetooth threw dr. through ibeacons, but sunday there probably will be facial rec nation some day. but not some time soon.

>> do you know the most shazam artists? >> right now the number one global artist is megan trainor, "all about that bass". >> what's the biggest challenge? >> the scale. we love being a startup that moves really fast so how can we continue to be one of the world's most popular top 20 apps? being able to identify music? and how do we expand it? going into these different verticals? and we're about to launch shazam for radio and retail. how can we go across these various verticals and continue to have consumers love us as much as they do now. >> from yahoo to shazam. the robin hood conference is all about best ideas.

i asked tony is there one product out there that you can point to and say i wish that was mine? people went to elon musk in tesla and is there anybody to you that you saiden man, i wish i did that. >> one that pops in any mind is the thing shazam stheast great is you push a button and uber is a lot like that and i love the fact that you don't have to call somebody and you can just type in the address instead of having the whole conversation and you don't have to pay at the end so the easy of use of uber is phenomenal i think. >> is there a product you wish you invented? i agree with him. uber. >> uber is something everyone would use day in and day out. i have to think about that one. but what i find interesting is you were using shazam as a verb.

you can shazam things. >> i want a badge i get to wear in new york when it rains that ays i ride taxis and use yuber when it doesn't rain and that should give me priority status because there's nothing worse in new york city when it rains and you cannot get a cab or because everyone wants one that day. >> i want priority status. i use this transportation rain or shine. >> develop it. >> in the meantime it's approaching 56 past the hour which means it's time for bloomberg to go on the markets and we have schemes in the equity markets. advances of at least one well not 1.5. but 1.4%. we're getting closer. caterpillar a big winner in today's trade. up as much as 5.5%. the biggest gain since january of this year raising profit forecasts because of north american construction. so china may not be doing so great as far as the

macrofundamentals fwurks u.s. is picking up the slack. >> and we were talking about uber because i write a lot of yubers but also look tat trrk supply company. today raymond james raised it to a strong buy after it beat earningsest mats and boosted its forecast. it's the best performer in the s&p 500 today, you go tractor supply. >> some of the other agricultural companies are rising, agco so giving a lift -- l these equipment make makers. >> market marblet will be back. applications for jobless benefits are at a 14-year low. we will be speaking with the secretary of labor, thomas perez. ♪

>> this is "market makers" with erik schatzker and stephanie rule. >> the goals are back. stocks on a run today. the dollar is rising too. there are new signs that economies are doing better around the world. >> the giant who will control your tv set. that's what critics say we will have if comcast is allowed to take over time warner cable. >> and the man behind bieber fever. he discovered justin bieber before he was a big hit. let's discuss scooter brawn.

>> i'm stephanie rule. >> and i'm scarlet fu. >> in for erik schatzker. flying high. united, american and southwest and alaska all reported quarterly earnings that beat analystsest mats but a damper things by forecasting a decline in ridership. boosted s from trading credit suisse. revenue from six-income trading rose 37% but on the other hand profits fell on credit suisse's units. we talked about the impact of volatility. >> i think from some points of view it profits some of our businesses. it's good for some of the trading businesses and good for the macrobusiness so for some

points of view, it's good but if you get too much volatility that impacts people's longer-term true and confidence and clearly that's not so good. -- ugen plans to speed up to improv leverage ratio. >> hitting a 16-month low the average rate for a fixed 30-year mortgage down slightly from a week ago according to freddie mac. the lower rates have the re-financing business soaring. and it's the battle of the billionaires. richard branson's virgin mobile is launching going head-to-head with a mobile phone carrier, the two are said to be able to compete and remain friends. we will remain friends and will compete in the daytime, and that will be of great benefit.

>> and thanks to our partner in mexico, bloomberg tv for that. those are your top stories. >> there you go. well, i'm smiling not because we're on tv, scarlet but because we're on tv together. >> but it's really because i like our next guest. he is a master of timing. stocks are on a roll today, and this is a man who went from being a bear starting july 1st until yesterday when this guy became a bull. miltonburg, c.e.o. and chief investment strategist short on the market until yesterday, calls went up 28.8% for the year. milton, let's go back a bit further. you were bearish from may to june then bullish. went bearish again. you're back on the bull case. make a case for us. >> the russell is down 14%. last year in may i suggested

the russell should decline so many some 30% or more and the russ is the most valued index. it's clear that you can have a bear market in the low cap stock even though the big cap stocks remain flat. o ex remained flat. i think we're only shaffle way through the bear mark and russell but everyal market has a rally. i believe this one will take the russ you will up but not to new highs. the s&p had new high and small caps remaining below the previous highs. >> so you actually still overall feel bearish but you think we're in a bearish pocket? >> overall i think we're in a bull market for the new cap stocks but as far as the typical small cap stock, i think they made the highs earlier in the year. >> so in addition to the smaller caps there r there any

other areas that you're kind of weary of? >> well, i'm weary in general. i believe david stockman is writing that ultimately the stock collapses on us. at this time we're in a bullish move. basically in october we saw major oversold readings. that takes place at tradable bottoms. we saw the s&p 500 trade with 29 titans as much volume to the downside as to the up side and also takes place at the bottoms. we also called to last february. we were not able to call last time but our indicator tells us that the most typical aberrations that take place when the bull move starts is four to seven after a low. today is day circus s&p 500 up and that in itself is a bull signal. that itself is a bull signal

and that's what got us to get fully invested. and we've seen major reversals. for the first four days of this rally after the end of the fourth day rally s&p. the s&p stocks were making new four-day highs. only twice since 1967 did you see four of the seven s&p stocks make four-day highs. so we look at bearish indicators. >> all right. let's break down exactly where to be bullish. let's go names. tesla. >> tesla is a great growth stock. still not accepted by the street. >> what do you mean it's not accepted by the sfleet last week elon musk was called the tomas edison of our generation. serve in love with this guy. >> but they still don't believe you can drive an all-electric car. tesla may be overvalued but until its final high.

the rate to know it's topping is when more of the investing public believe in this story. i've spoken to many and no one believes the tesla story. >> it's because there's a lot of skeptics still out there. >> really? >> does that surprise you? i guess i shouldn't be surprised given you're such a contrarian but blackberry? uses it anymore and the passport today came out with was derided. >> i really thought from a technical basis. most of my clients have big fundamental research shops, so i listed 52 stocks to look at and these stocks should do well technically. you can be a fundamentalist but just to let you know blackberry has outperformed 92% of all stocks in the last four months. >> are you serious?

>> so john she didn't have anything to do with it or he may? >> to me. go prousually we don't like to get into new issues. >> why? >> because they often have a lot of hype and ultimately collapse. >> and go prohas got a lot of hype. >> but since it was on my screen and the basket is a great stock to buy. i believe their fundamentals are high and they have many new great innovation it's. >> but it doesn't have a long trading record. it only went public recently. >> very technical question. most of my models use at least one year of data. it showed up on the screen because of the five-day rates of change over the last three months or six months. that was sufert to get on to my screen but normally my screen would not pick up on a stock that was less than one year of data. >> when a market completely falls out of bed and we end up in the market in a liquidity

freeze, what happens to your screen? your model? it goes haywire? >> not really. ads far it has stock models, it says get ready to buy. we were getting all indication that we should get ready to buy stocks. the s&p 500 was at new 30-day lows and measures of the stock we alter to the rate of change so two of trin that you haven't seen since 2012. >> i'm glad you bring up that. because people were saying we got some volume. >> volume is phenomenal. let me tell you why. last week we saw the highest volume on the new york stock exchange in a five-day basis in over 1 1/2 years. since 1900 most trading takes

place when the five-day lume is high. another evidence that we're at a turning point. when enyou see high volume you want be on the other side of the volume. august 1 1, 19 -- that was the top of the 1987 bull market. when you see a five-day volume high you want to counterthe move. you actually want to move. >> we had a couple days ago and today's up move that gives us the buy signal. the reason we got long yesterday, we got one couple days earlier but we have clients that follow our advice so we went bullish and the advice was to buy the followling day. >> the ability to buy. >> are you focused on the fed in any way next week? >> oh,, the fed is terrible. we shouldn't have a fed. >> see, that's why i like when milton comes on. why do you think the fed is

terrible? >> 13 recessions in 100 years before the fed and seven post year of feds but the total growth before the fed was far greater and believe it or not the amount of dollars in the bank still worth a dollar. in the bank if you had a dollar maybe worth a couple pennies today. the fed hasn't done their job. they are not creating funny money and one way or another whether it's deflation or inflationary at this point there's deflation narrow measures. >> past investors that have been in the market since 2009 would argue otherwise but what i want to know from you since you're a market technical kind of guy, how has it influenced the way you analyze your charts? >> well, i analyze the markets. if the markets act bullishly because of the feds, i don't k that it's because of the feds the market is just acting bullishly.

or bearishly. >> you're not making allowances for it either way. >> but what i understand is economics and zero interest policy has done nothing for this economy. interest rates would be at zero percent whether it were or were not for the feds. >> what should the fed do? i get that you don't like them. that's not happening anytime soon so in the corled according to milton. what would you do with the fed? >> the only way to boost the economy is by printing funny money. >> well what does that do for the real economy? >> nothing but older people are forced to buy stocks bands and chasing yields. ultimately it's going to hurt them but the fed just cares about spending rather than saving and they are going to have to get people in the economy to spend and that may not work because the economy is

so saturated with debts. autodebts. my children have college debt. government debt. so saturated creating more doesn't do much anymore so ultimately it's not going to collapse but at this point let's be bullish for the next rally. >> if there's one stock on your list that you would say this, this is where you should be, what would you snick >> long-term? >> long-term. >> tesla. >> loves the tesla. long on tesla and elon musk. thank you for joining us. milton. an absolute treat. milton the founder of md advisors. >> all right. coming up on "market makers" we will talk to one of the law professors trying to stop the comcast-time warner deal. good luck. >> plus, the birth of a superstar. how justin bieber's manager turned him into a one-man industry. ♪

>> there's one big thing standing in the way of comcast taking over time warner cable. regulators. it a deal that would create the highest company -- earlier a law professor sent a letter to regulators urging them to block the deal. one is with us along with our media m&a reporter. i have with us a copy of the letter. all 15 pages of it. you name four issues that you feel the commissioner should consider in blocking this issue. what's the most important one? >> if comcast and time warner get together they will have control of about 1/3 of all homes making it possible to discriminate against companies like netflix and hulu that will reduce competition. >> time warner already controls

my life. it's going to get worse? >> yes. the first thing they tell doctors is don't make a bad situation worse. do no harm. this will make a bad situation worse. we have to think about the things government can do to make this broad band market more competitive. >> have you talked with them? is there any kind of working with them? >> i haven't talked to them because we want to retain our independence. the value of law professors we are in on this is independent. >> nice consideration in the merger right now. i understand regulators have taken a pause in considering it because of some contract disputes. >> can't we just talk about my shirt? >> the distraction. you look good today. >> thank you. >> give us the status. >> it's just chugging along that the point. as any large deal of this size

would. so the 180-day clock has been stopped meaning regulators are taking a long look at this and we reported several weeks ago that regulators are now reaching out to a variety of different companies that may have complaints and giving them what's called the c.i.d. which is more or less a subpoena to say look now is the time you need to tell us what's bothering you and put it in writing so that we can potentially build a case. >> is that why time warner shares are trading so poorly? >> yes. there's definitely regular tori doubt and the time value of money so if the deal is going to be approved in the fourth-quarter the stock will be higher if it's not going to be approved until the second quarter of 2015, it's going to trade down a little bit. >> so maybe fourth quarter, maybe next year, is there still time for chris and his law professors to situation their

season? >> yes, but i think it's still going to go through and i think it would be a surprise to the market if it were flat-out rejected or if the d.o.j. were sued to reject the deal. but i don't think it's a slam dunk exactly. >> short of not going through with the mencher, what could comcast do to address law professor's concerns? >> well, there's a issue of contract neutralty so they could vow not to discriminate against other providers but there's no way to enforce that so they could say they can offer preferential service because it's part of their corporate structure and there's nothing on the books that prevents them from doing that. so i don't think there's behavioral remedies that are going to work. we have backed ourselves into a position. >> we being whom? >> the united states, the government and our markets are

basically beholden to these large capable companies for access to the internet which is an enormously important bit of infrastructure for our economy. >> why do you think that is? are the regulators -- is this similar to financial regulation to where whether it was the regulators -- the companies outsmarting regular sflarets >> well, outbuying them. the regulators spent money in congress getting their point across and there's the merits but this is a tough sell in part because congress is so well-funded by these companies. >> the other thing to your question about why we have come down this road? is because government hassle thought about changing broad band internet status to what would be a utility and the cable companies have fought hard about that. because they spent billions and billions of dollars building these networks across the country, so why not be able to -- exactly.

i don't want to be price fixed on this because we already put in the investment thinking we would get this back. >> hold on. when do we get to a point to where our internet is like our water and electricity because if you ask how does one serve their basic needs? talking about economic development what does facebook and twitter say? it's internet access. >> i think where we are headed is middle ground to where privately held internet companies can offer low-priced service and say at least we're offering this. we're going to give away a poor-quality $10 a month service. the question is when will that service be at a fast enough quality at a low enough price where more less the public can be satisfied. >> and other countries have made it a natural service. and regulators have drawn a line in the sand. in the airline industry it's

three in the wireless carrier it's four. what is the rate number if there is one for the cable industry? >> it's industry-by-industry but more than the regulators think it is. the regulators have allowed them to collapse and what you see in the airline industry is fares skyrocketting and service getting worse and worse and frequent flier miles going away. the obama administration has done a good job of taking care of big business and not consumers. >> how much money they spent in lobbying efforts. just say a number. what do you think it is? >> like a zillion. >> chris and bloomberg's alex sherman. a zillion. >> "market makers" will be back in two. ♪

>> coming up, a sign today that the job market is getting stronger in this country. we need tweeshsfeek tom perez when "market makers" returns.

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. ," welcome to "market makers and i'm stephanie ruhle. >> and i'm scarlet fu. eric is on assignment today. as you can see, we have come off our highs, the dow gaining at one point the biggest gain since december of last year. but we've come back a little bit

. for the s&p 500, up high percent and last week closing low. last week closing low. a lot of this is because of earnings. caterpillar is raising its full-year forecast not because of what is going on overseas, but because of north america construction demand. that was a positive, and it's getting more comfortable for the earning story -- with the earning story for the third quarter. are selling off. jobless claims have also come down as well. confirmation of a stronger economy continues. >> is it not amazing? here we are talking about construction, jobless claims, mortgage rates, and talking about this amazing bullish u.s. economy where one week ago we were saying, forget the u.s. economy. there is no such thing as the u.s. economy. at the global economy, or we are worried about china, japan. >> we have not mentioned the ecb, china, or japan yet today. every guest we have spoken to is

all about the u.s. economy. but one week ago that was not the case. >> it's all good. market agrees,he we will forget what we said yesterday. >> it's volatility. in week, we will switch gears. >> rush hour is not just for your commute anymore. more and more, if at the airport to. it's because the airports are using -- the airlines are using what is called peak scheduling, which means more waiting for you and me, but more money for the airlines. about here?talking when i finally get on the plane, when i finally checked all of my kids on and jam my small bag in the overhead compartment some of the doors are closed, we are in our seat command and we are sitting on the runway for 45 minutes? >> you might be. are shoving more

flights into these peak hours, and then the peak hours are followed by lulls throughout the day. what you see when you look at the airline schedule is, in fact, peaks and valleys. they are doing this because they say creates faster connections, faster flight times, and business customers who they are really trying to attract look at convenience over price. but, i'm booking a flight, especially for business, and looking at flight time. then't actually factor in next time i go in that i was on the runway for a while. >> that is a good point. or a scam. morenes will save creates possible itineraries for travel for their travelers. in a perfect world, you have planes landing and taking off almost immediately. you just have to build in the time. >> the but this is not them adding capacity. a urges rearranging capacity. theyhey have shifted -- are just rearranging capacity. >> they have shifted to larger

planes, so they are adding more capacity. they are adding more gates agents and that had -- baggage handlers. traveler looking for a convenience, it's totally worth it. >> this is a revenue play, not a cost-cutting play. >> hold on. are there actually flights that are totally booked? i feel like i have not been on a flight in years that was full. >> maybe you were traveling in these nonpeak hours. theseare more runway that big hug. there are bigger planes, so they can do few reply -- fewer flights. outthey are selling tickets. we seen so much consolidation that there are not a billion planes on the runway. >> very quickly, who is this bad for? >> it's that for the customers in a way. it's actually bad for airport retailers. everyone in such a rush -- in such a rush to make their

flights. but also the delays pile up. >> and the air traffic controllers will be tearing their hair out. thank you so much on the peak scheduling of these airlines. when we -- >> when we come back, labor secretary tom perez post-up the unemployment rate has been falling, but there are still plenty of concerns about the job market. ♪

>> jobless claims in the past month fell to their lowest level in 14 years, yet another sign that the labor market continues to heal. why are so many americans feeling so much pain? that is a good question to the secretary of labor. tom perez is standing by with our chief washington correspondent peter cook. >> i'm joined by secretary perez. good to see you. you heard the numbers about

jobless claims. we have 55 straight months of private sector job growth, as the president points to all the time. we have other signs of improvement in the u.s. economy antenna plummeted below 6%. but so many americans are not feeling like they are part of this recovery. what do you think is the reason for that disconnect and what will you do about it? >> we are moving in the right direction, no doubt. we've never had 55 consecutive months of private sector job growth since we've been keeping record. we are moving in the right direction, but at the same time we have more work to do. we need to pick up the pace of the recovery and the president has put forth a plan involving raising minimum wage, a long-term transportation spending bill, passing conference of immigration reform. he has been using his executive actions to make sure we are practicing what we preach at the executive level with minimum wage for federal contractors. we are using regulatory authority to make sure home health workers and people who work overtime, who work hard and are often exploited can get a

raise. we've got a lot of work to do. i think the key is to make sure we have prosperity. profits are really quite good. but that prosperity is not being shared. and that is the key. rising sure that this tide that we see will lift all of the boats and not simply the yachts. >> let's talk about policy. i want to start with the minimum wage. the president is waging his fight and there seems to be no progress in congress, and even less if the republicans take the senate. it has become a political issue. new jersey governor chris christie recently weighed in on the minimum wage. take a listen to what he had to say at the chamber of commerce here in washington. >> i'm tired of hearing about the minimum wage, i really am. i don't think there is a mother or father sitting around the kitchen table in america saying, you know, if our son or daughter could just make a higher minimum could be of our dreams

realized. is that what parents aspire to for their children? >> i want to get your reaction to that. chris christie is saying we should have more ambitious goals. how do you respond? i immediately think about the conversation i had with the baggage handlers working at newark airport. he only raised they've gotten is when the voters of new jersey raised the minimum wage. the low-wage workers i spoke to in newark, who cannot give a birthday present to their kid when he turned 16 because they don't have enough money, i wish chris christie would spend a little time with low-wage workers. they don't want to be minimum-wage workers. they need a raise and they need a career cap. the head in the sand approach is rather shocking, frankly. when we give people a raise, we stimulate growth. we do what henry ford did 100 years ago when you double the wages of the people on the assembly line. it lifts all boats. that is what the president is trying to do with and among wage, with immigration reform, with transportation spending.

>> there are many people in the business. republicans are making the case that the free market should be driving these changes will suck the federal government should not step in and make these policy changes. -- should be driving these changes. the federal government should not do then make these policy changes. how do you respond? >> as one business owner said to me, tom, the thing i need most right now our customers. look at this recovery. the top 5% -- a place in adjusted spending of the -- inflation-adjusted spending of mostly spending. the other 95%, folks don't have money in their pockets. when you don't have money, you don't spend. businesses don't grow. that is why the majority of businesses actually supports an increase in minimum wage. >> let's talk about what the president will do to try to help american workers. we're talking about the overtime rule that is coming.

how big an impact could this have on american workers? >> when i was growing up and my neighbors were a manager at dairy queen or summit like that, they were in the middle class. today, -- at dairy queen or something like that, they were in the middle class. today, that's not the case. this will potentially help millions of folks who should be in the middle class get back to the middle-class. two million home health workers as of the first of the year as a result of a regulation of the president directed us to do will be eligible for men among wage and overtime protections, which will help them get a better modicum of security. the president is using every tool in his executive arsenal to help people get wage hikes. >> i got to leave it there. thanks very much for your time. back to you guys. hearing a better than top bloomberg guest saying it is

always a pleasure. thank you very much, peter cook. we've got a lot when we return. he's first on the list to comes to true believers. we are excited about this one. we will be speaking to the entertainment guru, the man who discovered justin bieber. ♪

>> he is the man who famously discovered her 12-year-old acadian -- canadian, but little old justin bieber and turn him into the pop star he is today. his company is behind some of music's biggest acts, including ariana grande a, and carly rae jepsen. recently, he has been making tv, and uber,m, spotify, and pinterest. clearly, he has a winning strategy.

he spoke to our own emily chang. i know what i'm doing tonight, staying home, watching studio one point know. studio 1.0. that he's ayou love california guy, but i'm pretty sure he's from raonic, connecticut. >> he is from connecticut. son of an orthodontist and a dentist, went to college in out, startedped selling his ideas and promoting parties and then dabbled in music. one day, he stumbled on a youtube video of a 12-year-old kid and that kid was justin bieber. take a listen. >> what happened when you saw the video of justin bieber? >> i saw a 12-year-old kid who had come i think my eight videos at the time. he was singing at a contest at a church. i was consulting for a con on a different artist and i was

watching different videos about artist, telling them what i thought about it. and they were singing every different men's "respect," and i thought it was the same person. when i clicked on it, it was a 12-year-old kid. >> so it was an accident. >> it was. and then i saw another video. when i saw this little canadian kid with so much soul, i knew there was something there. >> you were the very first belieber. you flew his mom and him -- >> illegally, i think. down to live near you. >> i put them in the townhouse around the corner from me so that no one would know they were there. >> did you foot the whole bill? >> yes. they became my family. it's been a rough year watching him, because i really care about him and you don't like to see anyone going through stuff.

but to see him coming out on the other end of that and knowing the plans for the next year and the fact that, you know, he's a kid. i've had to learn that it's ok to let him step on a rake and let it hit him in the face. he's learned from those mistakes and he will be a better man for it. he gets it. he said to me, i went shopping in france and all i wanted to do was walk down the street and shot. mere were 14 cameras around and 200 people surveyed surrounding me. i just came to the fact -- to terms with the fact that this is your life. i'm ok with it and there are blessings that come with this. i think he's become a young man. i'm proud of him. of course, we know he's been arrested a couple of times this year, dangerous driving, charged with assault. but scooter thinks he is ending the near -- nearing the end of this boy face. he says it's really just a gut thing, hearing an artist that

you love. it's like falling in love him and he just follows his gut. >> clearly, he must have a really good one. i just love that he brought justin and his mom in illegally. get that canadian in here. scooter was not the only big interview you have this week. i know you talked to aaron sorkin yesterday. what did he have to say? >> yes, for an upcoming edition of studio 1.0. he let the cat out of the bag when it comes to the biotic. christian bale will be playing steve jobs. >> winning the best actor on the board at a certain age range, and that was chris bale. there is not a frame he's not in, and there is a tremendous amount of language. it's an extremely difficult art. he's going to crush it. >> absolutely awesome. that will be next thursday.

>> i heard leonardo dicaprio dropped out. >> he did. night next thursday the night before halloween. i'm busy. clearly, i will have to dvr. .ut tonight, 8:30 p.m. eastern ♪

>> that does it for "market makers" today.

the big day coming up. -- it's a big day coming up. >> make sure you are wearing your brown shorts and brown top tomorrow. we will also have another kind of uniform, a wnba one. a big day today. >> the markets are on the move right now. >> in a positive way. we will be back in just a moment. move here.lly on the take a look at the stocks and you will see big gains with the dow jones industrial average right now about 250 points, the s&p gaining about 1.4% and the nasdaq up 1.6%. we are looking at an -- at a stark market that is coming back and forgot about last wednesday. we will talk about the vix right now.

up to 10% today. -- it is tumbling up to 10% today. joining me for today's options inside is jim gemelli -- ramell i. let me ask you what you think about the vix and the moves over the past two weeks as compared to today. >> we've seen some pretty interesting moves in underlying equity markets, but the moves that we are seeing in the vix are actually unprecedented. we saw a huge spike in the vix, trading above 31 at its absolute highs, and we've seen the vix fall more than 10% friday, monday, tuesday, and again today. that has never happened, three sessions in a row with moves like that. it has never happened within the history of the vix. it is a great opportunity to put on protection at lower price levels. but what does this say to you about the future? how do you place your bets now

considering what you just said? >> we are seeing the dow moved back above some technical key levels today. what investors have to ask themselves are -- is this new buyers coming into the market, or a massive short covering after it had moved lower at very thin volume? after we get earnings, we will have an answer to that question a bit better. we've seen industrials do very well. caterpillar and 3m both beating their estimated revenues, and etf today moving higher. ibmsome of the others like and coca-cola are putting a big misses. >> how do you play caterpillar? >> there's a lot of room to the upside for caterpillar. about-week highs are $111. it has quite a bit of room to run to the upside. this is a really good quarter, better-than-expected numbers. they blew this quarter out of the water.

a lot of people have been short the stock on negativity surrounding global growth. it will be really hard to take a short position. >> and the news is already out, pandora is not the case. coming out with earnings after the bell. what do you have on pandora? >> pandora is a terrible performer willie look at the historical records. it sold off seven of the eight quarters. no matter what happens, investors don't seem to be impressed ever by the results they report quarter over quarter. i'm looking for a short target. the options market is around two dollars 25 cents. he gives me a downside target just below $21 for tomorrow's close. i will be looking at the 22-21 put spread for tomorrow. i will be looking to make $70 per one lot, better than two to one if the trend holds up. >> thank you. we are on the market again in 30 minutes. a big rally going on.

"money clip" is up next. ♪

>> welcome to "money clip" we read tied together the best stories in business news. credit suisse more than doubled its profits, but the ceo warns volatility is a double-edged sword. politics, the biggest builders know how to win contracts. contribute to the campaigns of the politicians who award those contracts. we tracked down critical oil that mysteriously disappears in the gulf of mexico. and in sports cometh the world series, but nobody is hi