>> live from bloomberg headquarters in new york, this is "market makers." america decides -- what will congress look like the next two years? we will see what i republican-controlled senate would needs -- would mean. apple pay and a bunch of retailers. after they it's all found new momentum was smart phones and tablets and we will talk with the ceo mindy grossman. welcome to "market makers." >> we are in today for eric and stephanie.

you are just singing and dancing to taylor swift. >> "shake it off." it's so catchy. >i will play it during the show. >> let's get you the top global business stories of the morning. the big prize in today's midterm election is who will end up in control of the senate. republicans need to pick up six seats to recapture the chamber. calls it agton post" near certainty. >> we know that this election will send a clear-cut message that the republican way is the way we will create jobs in this country. house,rama about the republicans are expected to add to their majority and you can watch it unfold right here on bloomberg television. our election coverage begins at 5 p.m. eastern with a special edition of "with all due respect her cup we may stay on -- "with and we may stay

on all night long. >more money was being spent on average ties them. we heard from the alibaba vice-chairman and what he was asked if the company intends to grow through acquisition. >> we always want to add more users and more user engagement. any acquisition that helps us create that, we are very interested in. 50%hares of alibaba are up since the company's ipo on september. looking at oil, it is now falling to a three-year low. the price of west texas intermediate is dropping below $76 per barrel before bouncing back. the saudi arabia's cut the price of the oil they sell to u.s. customers and oil is down more than 20% this year. u.s.ing of lows, the budget deficit is at its lowest point.

at the end of september, it was billion was over 800 dollars. downeficit will shrink it according to the congressional budget office before starting to grow again in 2016. tinderfounder and ceo of is stepping down. a former female executive it used the chief marketing officer of sexual harassment and she said rad ignored her claims and those are the top headlines. >> let's talk about what washington could look like tomorrow and into next year with two d.c. veterans. kent conrad was democratic senator from north dakota and retired in 2013 and judd gregg served as the republican senator for new hampshire for 18 years before retiring in 2011 and both are former chairman of the senate budget committee and both were fairly adept at working across the aisles. gentlemen, thank you for joining us.

have been discussing the possibility of optimism for washington. think aboutt you the comparison to today and 1996. after the previous government shutdown, congress got together and work with resident clinton. is that possible with this congress and senator conrad, let me start with you. >> it's possible. it would certainly be desirable. there are a lot of things we need to get done this country. i think there are places they conserving make progress. immigration reform, tax reform, and the program to rebuild america to focus on infrastructure, both sides support that and i think those are areas that would be ripe for bipartisan cooperation. >> senator greg, what do you think? can i republican senate with ted party peopletea

coming and actually get together and work with the president to govern and lead and get things done this country? >> i think it's actually not possible. i think it's likely that a republican congress will realize that the american people sent them there to get something done. america is very frustrated with the gridlock and ineffectiveness of the government generally. a new congress which is republican based will recognize that it has to participate in the governing process if it's going to win the respect and support of the american people. does theuestion is, president want to participate on the legislative side of the policy activity in washington? he has not done that the last couple of years. if you look at the president, he has to think about legacies.

regulation is a temporary form of governing. hopefully, he can step in and participate in reaching agreement on some issues which senator conrad just outlined which are very durable issues -- very durable issues. republicans trying to set the president from putting together a legacy? >> i don't think that will be the issue. i don't think this will be a congress of retribution. it will be a congress which wants to proceed forward in a number of areas. there'll be significant disagreements especially over obamacare and how is rolled out. there are also places where agreement can be reached. saidxample, senator conrad tax reform, energy policy also and hopefully immigration. we need an immigration policy. thefiscal policy along lines of simpson bowls. >> the budget deficit is shrunk 2009.% of gdp from 10% in

republicans do not want to talk about it why aren't democrats taking a victory lap here? i think sometimes this president does not get the credit he deserves. it would go back to what he walked into, we had a country on the brink of a depression, two intractable wars and our dependence on foreign energy was back, thed if we look deficit is down dramatically as you just indicated, unemployment is down dramatically, deficits are down dramatically, economic growth has resumed. when he stepped in, the economy was actually shrinking at a rate of nine percent. now it is growing at a rate of four percent. it is hard for people to feel good when we live in a world in

which there is so much chaos whether it is isis or ebola or ukraine. we also have the fact that we are recovering from a financial crisis. thatow from past analysis it usually takes 10 years to recover from a financial crisis. we are in the sixth year. it is really remarkable how well we are doing. people don't yet feel it. it's hard to take victory laps on anything when people are not feeling very good about their lives. >> point taken, the disconnect between the falling budget deficit and the unemployment rate falling and the fact that people do not feel this economy has improved for them, that's certainly one big obstacle. what can the said -- the senate budget committee address that economic reality? i actually think they can do what we tried to do. we were almost successful which was to put together a process

for reaching agreement on major deal which puts together a fiscal policy that will put the country on the right track and not allow us to grow at a rate that will burden our children. it ended up being called simpson bowles and is still viable. it controls the deficit and the debt by reducing spending significantly and by fundamentally reforming tax laws to generate more revenues. that's a very doable events in the budget committee can be out on front on that and should be. >> tax reform is one of the bright spots that american voters have to look forward to. at least both sides want to do it. why has congress historically not been able to conquer tax reform? >> [laughter] it's hard. indicated,greg just we were so close with simpson

bowles. that is a good template. congress on a bipartisan basis could pick it up and we could get america back on track. already the deficit is down by 2/3 for what it was of the peaks of good progress has been made. willroblem is is that it start going back up again in 2016 so there is a window of opportunity to get back on track. the way to do it is fundamental tax reform. we could actually lower tax rates and get more revenue if we clean up some of the garbage out of the tax system. it is unbelievable that people can send their money offshore and avoid paying taxes in this country. we know in the cayman islands there is a little place called udland house that is home to thousands of companies in a five-story building. they are not doing business out of that building other than monkey business.

there is a tremendous opportunity to clean up the tax code, get more revenue without a tax increase and to reform the entitlements which have to be done. i think that would engender a lot of confidence in the country if on a bipartisan basis congress and the president could act. >> those are some hot button issues but thank you so much for your time. former senators kent conrad and judd gregg. all day and all night here on bloomberg television for our election coverage. the polls will close and we will start the bloomberg politics all miter. allill guide you through the big races starting at 7:00 p.m. eastern and go throughout the evening. definitely stay with us for that. that will be after you vote. >> and before "surveillance:" begins.

coming up, we are just getting started. he has apple pay in his crosshairs and we will meet the guy who has powerful backers in the mobile payments business. >> it's not just television, the company you probably called home shopping network has gone digital. we'll talk to the ceo mindy grossman about the way she is reaching her customers. ♪

>> whether it's apple pay, square were others there is a revolution going on in how we use our money. thousands of people are in las vegas to examine that issue at the money 20/20 conference. erik schatzker, take it away. i am with the ceo of the merchant customer exchange which is a coalition of retailers trying to take control of mobile payments with currentc.

will be a competitor to apple pay but also to google wallet and other digital wallets. good morning. >> thank you, nice to be here. >> good to have you. let's make it clear -- what is the problem? why is it the retailers don't want to let customers pay however they want? togetherrchants came three years ago to create a solution for consumers that would bring more value to consumers. they focused on may the commitment to one another that they would focus on building currency as their first priority a miss with their doing. abouttc is more than payments, it brings value in terms overseas, coupons, offers to consumers when the shop and they pay. it's more than just about payments. it's an ecosystem that will require sex -- several successful players and currentc

intensity one of those. >> but consumers are pretty happy paying with whatever happens to be in their pocket. they're happy paying with cash if they choose or credit or debit. they are happy paying if they are iphone users and decide to turn on apple pay. the list goes on. case that to improve the experience for the consumer but the consumer is not really asking for a new experience, it is he? >> there is not a problem for consumers and payments. there is no consumer problem. >> there's a problem for merchants with payments. >> but there is a real problem with consumers getting more value out of the shopping experience. if you have to fumble for coupons or loyalty cards, you don't know whether you are getting the credit and value from the consumer's -- that the merchants want to give you. for us, it's about bringing value together and more than payments. that's what we're focused on. consumers want more value they

also want to be able to use this on all sorts of phones, not just one phone. , it'sur solution available to virtually every american consumer, over 92% can use our solution. >> when? 2015 and we have launched with some merchants we are quietly launching. we're ready to go nationwide middle of next year. is that january, february, march? >> our competitors would like to know the exact date and for the sake of our conversation, i will not real the -- reveal the exact day. but middle of next year, many of our merchants will be launched nationwide. >>?what you think of apple pay so far >> apple is a great company. i was inspired by apple as an entrepreneur 30 years ago. they're one of the world's most admired companies but they're not the only ones that can innovate. retailers innovate and if you look at what is happening in the

mobile commerce space, i think hats have to go up to starbucks who has been the inspiration for many of us. the merchant combines payments and loyalty at the point-of-sale. apple is a great company and we admire them. >> apple has made a success of near field to medications combining it with the biometric sensor and fingerprint. are you sticking with these qr codes? weeks since two apple pay launched. we will see how that story plays out. i will presume it to be successful. starbucks has been on the market five years with qr codes and we can do more than payments. you can bring loyalty together with payment. viable ande a compelling way to go to market. we are technology agnostic. it's about solving consumer problems, not about whether you choose qr codes or otherwise.

>> if you turn on nfc, that means people could use apple pay. >> that's right. >> explained the exclusivity provision to me. doesn't mean that eventually retailers will be able to accept other forms of mobile payment? >> it is something the merchants agree to themselves when they formed mcx. it was an agreement that we will stick together and focus money and time and effort to build a compelling consumer solution. beis short-lived and it will gone in a matter of months, not years. >> what is that mean? -- what does that mean? by middle of next year? >> your arithmetic is about right. >> so that means the merchants can decide which one they want to use? >> from my perspective, we when

in the marketplace by having an affirmative value proposition. >> it's like a six-month window. >> it's a short window, yes. >> what happens if a merchant chooses to break ranks now? >> it's their choice. if they do, we still welcome them and consider them part of mcx but we will not put our priority to get them launched now. merchantscus on the that have kept the commitment. >> it's really just you end up at the bottom of the list, not a matter of fines or penalties? >> that's correct. it has been reported that we would find merchants or could -- or customers and that's preposterous. you cannot build a great business by finding customers. i would never consider such a thing. that would be backwards. there are no fines. >> thank you so much and it's a pleasure staying with you at 20/20.

people frame it as a battle but it's a battle for the future of the mobile payment. >> thank you so much. we will see you again in about 15 minutes when we hear from the man at mastercard in charge of new forms of payment. "market makers" will be back in two minutes. ♪

>> it's time for bloomberg to go "on the markets." the real action is in the commodity market. crude oil is tumbling 2.3% lower , below $77 per barrel. this comes after saudi arabia cut prices for experts to u.s. customers. there a surprise because

had been speculation that it would reduce output. of the oil guys we have on have said it will not go this low. and yet it has. it was great to hear mark fibers say this is aber reflection of the global economy. equity,ook at one discovery communications cutting its full-year revenue forecast. that is brought the stock down about nine percent. apparently, there's also some honey boo-boo action? >> apparently, it is taking a right down. i have not seen it but it's not just that but also of both sons of guns." it is kind of the overweight american family? >> that part of it but i have not watched it. it's not available anymore. >> i will google it.

coming up, holidays on hsn and we will get an idea of what is hot and not from the ceo, mindy grossman. ♪

>> welcome to "market makers." vegas so hen las has adopted west coast casual. >> everyone thinks this is the way to go but frankly, it looks like he got off the flight and they misplaced his luggage. when you are at work, shouldn't you wear a tie? >> matt miller still wears a tie. about it at eric the money 20/20 conference in las vegas. none of the people he has interviewed is wearing a tie.

>> i just need to roll the way my guest role. evan mclachlan from mastercard is not wearing a tie so why should i? i feel quite comfortable. good morning. >> good morning. >> you are the chief emerging payments officer at mastercard which is an interesting title. you have been experimenting with payment technology for some time. >> absolutely. >> what have you learned? >> one of the most important things for us as we look forward -- consumers are moving their lies to connect to -- their lives to connected devices. it's how we interact with each other and entertain ourselves and also changing how we transact. >> every device you have will be a commerce device. we are building the capability to allow you to take advantage of that. >> what kinds of things have you exterminated with? a we just announced yesterday company we are working with back

and take a look at your ekg and use it for payment security. one of our big goals is to make sure that everything we do in moving to digital can be as or more secure than anything we can do in the physical world. >> is that the future? people seem quite comfortable with the fingerprint sensor on the iphone and there are other biometric technologies like scanners that read your eyes, your voice. you guys of experiments with that and facial recognition. is that a combination of all those technologies? >> there will not be one winner. it is a combination of all of that. what we need to know is that you are you and you've authorize that transaction. anything which can do that credibly, we can take advantage of to make it more secure. whether it is a physical biometric coming off of you with

more information about your shopping patterns in who you are, all of those we used to make the system more secure. >> what does the mobile payment look like five years from now? >> i think mobile payment will not necessarily simply be on your smart phone. as you look out a few years, when you've got mobile, you did not throw out your pc. you bought a tablet a few years later. as we look at connected homes and cars, what we are seeing is a greater disaggregation of all the places you will shop and buy and mastercard will be incorporated into all of that. >> do you believe in the prospects of the persistent identity idea that you can walk around and things will happen? you will walk out of a store with an item in your knapsack and you will pay for it without even thinking? >> those things are up to the consumer. one thing we absolutely recognizes there is a moment of truth. people want to know this is what i am getting, this is how much

it costs, and i have enabled that to happen. there are many theories as we can put around that but it's very important for people to know they are in control of their finances and control of their lives. >> was the biggest obstacle? consumer adoption or merchant adoption? >> i think the simple answer is it is building it's better. cars were great today. for a consumer, it is not can i do this thing, it's is this better? where we see things like contactless payments and being able to a faster and having the enhanced security is better so consumers are using it. the shopping experiences are better so consumers will use those. that's where you will see adoption happen, not re-creating what we had before when we can provide shopping experiences that are better. ago, we had ans interview and his fight is not really with apple.

fight is with card companies and the banks that issue those cards. are you sympathetic to what the merchants backingmcx want which is control over the customer relationship? arell the merchants at mcx our customers, two. i want to have the right to use and pay any way i choose. i want to have a great expert in shopping in the store so i think walgreens has a right. they say if you want to shop and buy with me, i will make as many avenues as possible available to user you can have those better experiences in my store. >> m doescx has a hope with having see?does mcx >> known as deciding what to do but we need to give them the options and they will choose what works best for them. >> one of the most important decisions apple made is choosing to work with the established infrastructure, with the second mastercard, american express and the banks.

was there ever a moment that apple considered building its own network? >> i think that is the story of apple pay. you have one of the most technologically accomplished companies out there. they knew the best way to serve their customers was to use and that worker credibly well and integrate with the accounts that they have. because it is what their customers want to, that's where they went with it. >> good having you here, thank you very much. ed mclachlan is a chief emerging payments officer for mastercard. he is on the forefront of payment technology which is one of the biggest things happening in this event in las vegas. >> thanks very much. we will be back with you later in the program. eric has an exclusive with two men betting big on bitcoin is the future of money and you will recognize them as the winkle evoss twinnkl brothers. >> they have moved on from

facebook and we will get their perspective on bitcoin. created the impetus for change in that industry. any chance we will see a bricks and mortar store for hsn? grossmansk ceo mindy coming up on "market makers." ♪

>> it has been 37 years since the home shopping network change the way people shop and lately it has been pushing out of television interdigital. it reported earnings that beat analyst estimates posting at 13% growth in online sales. it is also raising his dividend by 40%. here with us is hsn ceo mindy grossman. let's start with the results you just posted. in the digital age but there were questions early on whether that would happen. what do you need to do to catch up with your bigger rival qvc? >> we have seen sales growth

accelerator medically from even second quarter at six percent to 7.5% in the third quarter. at a lot of the strategies we have deployed around customer analytics using in situ create meeting is a big investment and digital assets like mobile and it's important this unique combination of programming and exclusive products and entertainment is what is driving the growth. >> if i'm not mistaken, this company started taking orders in a furniture store over dial-up telephones 37 years ago? >> it actually started as a radio station which is funnier. what's interesting is i like to say we are dirty seven-year-old governor that has never been more relevant -- we are a 37-year-old company. how we can tell the stories on different platforms is what's important. we are broadcast in hd and what we see now and over the top

content which is everything from tivo to our partnership with you sione.ision --univi is being available or anyone wants to shop. >> you create these moments and storytelling. -- in storytelling. how do you convince people to keep watching but also make purchases rather than sit back and be a catch potato and not execute? of using combination engagement to inspire people to want to buy that product. that is in essence the combination of impulse and storytelling. we do it in an entertaining way. 10-12, there is a dj and a gospel choir and a runway. >> as long as she is there, that's all i care about. day, wee end of the

want the customer to get the product home. that is the proposition we have. we have to marry authentic storytelling to great products and those great stories. it's a combination of all of those things. what we see is digitally people are looking at the adjustable content. this year we have had an increase of 170% on video created content we are doing and how we distribute that content more broadly. in addition to the live shows, tyra banks did clips which we are distributing more broadly. even the live show needs to be digestible content. >> and miniature sized. what is the story as you gear up for holiday shopping? our underlying message on hsn is gift happy. it is about creating experiences, unique products in every category we have.

in the last quarter, we have growth in almost every single category of business we have. we have to tell stories but it's the products they take home at the end of the day. we have engagement and generosity and her platforms have been growing and we launched our spin to win game. it's a reason the customer has to come to us every day and then the trust factor. we had growth in every customer segment and an increase spent in every customer segment. >> you are in this role now -- the stock has been on a tear ever since you have been at hsn. before you came to work here, you were working for ralph lauren back in the day. what have you taken from your past experiences to help you in this business? i feel there was a benefit

from coming from so many immersive brands that really are storytellers. andike, it is inspiration innovation and with ralph, it's the promise of this beautiful life. that was my take away and the reason i joined the company was you now have this incredible get intoto be able to the dna of brands and bring stories to life. the second thing i took was the importance of culture. if you know our businesses and anyone that comes to visit us, it's a mission. some times somebody says it's a cult but i take that as a compliment. it means everyone is aligned around a single vision for what we want to do. we think our accelerated growth is ahead of us. >> in terms of your mission, is it also to include digital payments? our goal is to be as frictionless to the customer as possible.

that's what any business, any retailer today has to do. you want to be ubiquitous and for chinless -- you basically want to make it easier for the customer to transact with you. we are currently working on our touchscreen. i think the apple pay plan is summer in the first quarter to be able to launch. paypal has been an important part of our business, our private label credit card, anything we can do. the more options the better. we have to make it convenient and fast and save our consumer time. >> you're also vice-chairman of the national retail federation. >> yes. >> if you step back and look at the american consumer broadly, what do you expect for this holiday season? for --nrs forecasted 4.5% which is not different from what visa came out with and

that's accelerated growth in digital that we will see. buteel there is confidence there is a lot of things vying for the consumer's attention including technology. >> we will talk about vying for their attention in a minute that we will keep you with us. we will take a quick break and come back and talk about a store that has found a new way to bring you back in. ♪

>> we talk about e-commerce but 90% of shopping a still done in physical stores. that's why retailers are testing of new tools to keep customers coming back. olivia sterns reports on one of those new technologies, beacon, the contract he was you shop -- contract you while you shop. -- that can track you while you shop.

>> this is home to urban outfitters concept store, the company's testing ground for the hottest new thing in retail. g-8.lcome to space nine >> it is called beacon, low-energy devices that post messages to your phone. >> you can explore what we have now. >> as you make your way through the store, the can can send you alerts and guidance based on your location. i have a skinny boyfriend. a little racy, not for work. i can wear this. >> the range can be specified to notify shoppers in designated areas like the fitting room. i think we have a winner. >> shoppers are encouraged to be social. >> it is instagram-were the. worthy.re the-

thatid you think technology makes sense for who the urban shopper is? >> we know that they are already on their phone. we have welcome messages which can be anything from this is your store and here is what is a sale thatan have we can push and we can do that and push in-store events. >> i walk in the store and get a message that says ponchos, 50% off and there is a band playing tonight? >> exactly. >> in-store technology has caught on fast. the number installed in u.s. stores is specter to go from nil to over 3 million and three years. big-name chains are testing them out and among top 100 retailers, 85% could be using beacons by 2016. -- whenthey sent a push we send a post message, we say 70% aggregated engagement rate.

genericompare that to push messaging which we see at 12% engagement rate. mobile advertising is even lower. >> was the conversion rate from those people who open a notification into sales? a we are targeting transaction between 30-35%. mindy grossman is still with us. creepy to meed until i saw what they are doing with these beacons. we want to talk to you about it because it is another piece of technology that brings the customer experience and makes it more personal. >> exactly, heavy use, data and technology that creates meaning that's customization and personalization and relevant messaging and a better experience. it is knowing your customer and working backwards to what makes sense.

what makes sense to the urban outfitters customer may be different and what makes sense for macy's. today is anyappen kind of physical environment has to create an experience. that's why i get crazy when people ask if physical stores are going away. create yourself as a destination across the platforms and make it a place that people want to go to and social interaction is still a function of shopping. >> any plans on hsn to expand into brick-and-mortar? you will not see a brick and mortar hsn in saint pete's but with ourorking other e-commerce friends. they are not necessarily going to be stores. they have to be unique, personal experiences that are relevant to that customer is. >> you have ballard and a couple

of others. >> travel smith and others. >> i was looking on the website and you've got a halloween thing before? roads is our fastest growing business. they had halloween haven which was successful. we really have a great business there. hsn.com? very interesting stuff. >> yes, it will give you the overview of where you can shop for anything you could possibly want. >> good plug, thank you very much, mindy grossman. we are approaching 56 minutes past the hour. >> which means it's time to go "on the markets."

the s&p 500 and the dow and the nasdaq are lower by 1/3 of one percent. oil is at a three-year low. saudi arabia cut the price of oil exports to the united states and therefore cats -- there are forecasts from sprint and others. >> into the election night. it is like by on the rumor and sell on the news but the other way around. >> stocks tend to rise after midterm elections as well as during the entire year of midterm elections. >> we will take a quick break and stay with us. ♪

>> wall street is watching. what a republican takeover of the senate means for the financial industry. what half the gop agenda. >> alibaba still booming. it meets estimates as a public company and mobile spending stores. they not even mention -- have doubled down on bitcoin. >> that wasn't a book on the

social network. welcome. i am matt miller. >> we will check in with eric throughout the day. >> erik schatzker. first off, the bulletin. the top global business stories. if you believe the polls, republicans are on the verge of controlling all of congress. republicans are a near certainty to pick up what they need to retake the senate. the former senate majority congressout having controlled by one party and the white house and shall by the other. >> you can get things done when you have a divided government. .ou have an opportunity the same was true when george bush was president in 2000-2001. he had a democratic congress and a past significant tax reform

legislation. >> you could watch it all unfold here on bloomberg television. at election coverage begins 5:00 p.m. eastern. we then stay on all night long with the 7:00 p.m. all nighter. burger king is the fast food chain where americans are loving it. a sales growth beat estimates thanks in part to new menu items. mcdonald's says its u.s. sales are of -- have fallen. enough of last month's turmoil in the markets, we will tell you someone who did not -- david i and went. -- david einhorn. investments have lasted longer so he could pick up more.

his reinsurance company. einhorn says the reinsurance portfolio was down almost 4% in third quarter. pictures of him as a poker player. jpmorgan is facing a criminal investigation into its criminal exchange. $43 billionating for a possible settlement area banks have done pretty much the same thing. >> we are looking for another quarter. for big banks. wall street. kim is here with us for that perspective, the executive managing director at renaissance macro research, who oversees and

joins us in new york. before we get to specific issues, what sort of route will it be tonight? >> that may be an understatement. probably a margin for the top site for republicans in the senate. >> enough for them to put together a mandate in which -- a mandate? >> probably not a mandate but enough for them to control the agenda in the house and senate and to present difficult choices when it comes to the house. >> what about tea party rebels? they read havoc in the house. they stopped the government from functioning for 16 days last year. readw seems they want to the same havoc in the senate. it is almost like having a third party take that power away from the winner. >> speaker boehner must feel like a third-party. my sense is the apex of the tea party strength in the fourth quarter of 2013 probably limits their reach.

the brand of the republican party was hurt meaningfully in a shutdown organized either tea party there it unlikely that you and have mitch mcconnell speaker to allow that to happen again so close to the presidential election. >> no question that john boehner's sticker ship is in jeopardy. what power will be wielded among the members of the house? to see the final tally, but speaker boehner's handling of his caucus in the last four years as a mini great position to manage it well going forward in the next two years. i do not see an incredible challenge to speaker boehner. senator mcconnell has done a great job as a strategist for his caucus. >> he still has to do with ted cruz, who spoke with the washington post over the weekend and says he wants to see a much more confrontational senate and the congress. >> my sense is you will have a

confrontational could -- confrontational tone without a doubt. i think senator cruz is among the tea party members who probably reached their apex in 2013 and my sense is mcconnell will be able to manage the production of the senate without that trouble. >> he has an evangelical look. his career in politics ends, one of those big ten churches. >> let's get to some of the specific issues. survey done by pew research not long ago that shows just how disengaged americans are in the midterm elections. they cited other issues he more important than midterms, for instance ebola. service problems even write higher than midterms for a lot of voters. these are issues people care about and yet their issues, send

the government seems incapable of confronting or dealing with. is the last point that is compelling. americans care about security and the economy. inally, they will dominate elections because of lingering effects and ongoing wars in the middle east. turnout in the midterm elections is in the mid-40's. it is not the ball people want to attend, so it is not surprising they're caught offguard by things that pop up out of nowhere like ebola. if congress will have more power to deal with these things. the reason americans are concerned about the islamic state is because the terrorist group power has been left unchecked for so long. you see congress is a lot more active about it earlier than the president. how powerful is congress in

these international disputes? >> congress can talk all they want but until the president commits troops or a strategy, it is difficult to score and. on that issue, certainly, the u.s. and the g 15 have done a decent job coordinating a response. risk players will not affect markets in the near term given that coordination. >> in terms of immigration and health care, areas in which the two sides might be able to most compromise, what would it eat? >> there will be two issues there it certainly energy. there is demand to update energy policy, not just the cause of sideways drilling and shale .eposits, but particularly oil

also, there is a chance trade deals will get done. transpacific and transatlantic investment partnership with europe, our biggest partner. after that, few and far between. there is a chance of something related to fiscal policy. i do not expect default in the next two years, but they might agree on extending tax rates more permanently as opposed to just annually. >> that is interesting. i would think tax reform is like the railing the gravy chain. they do not want to do it because it takes money out of creating loopholes. >> that is right. they will deal with issues not to agree on, popular on both sides of the isle. the administration will push to extend some stimulus programs that help work lower income

americans. not have a problem going out more money. it is going in the op. cit. direction congress finds so difficult. >> use the click top in both parties regularly. what are they saying that parties do not say aloud. >> do not expect either party to do anything that would sully the record for eventual nominees. in a little bit of contrast to us to the death to what the senator said earlier, in 2001, passing the large tax bill was bipartisan but we had a very popular president coming into his first year. that will not be the case in the next few years. during clinton fox's election, the biggest consent -- biggest contention washed and had in 1998. i think these parties are gearing up for 2016.

for thel set up elections. thank you for joining us. >> thank you for having me. stay tuned here all evening and basically throughout the night, for our election coverage. when the polls start to close, we will start the election all nighter or in mark and john will guide you to all of it starting at 7:00 a.m. eastern. if you want to check him out before that, a special edition kicks off at 5:00. 5:00, 6:00, 7:00 throughout the evening there you can leave it tuned here. i am not sure if we will have a hologram of will.i.am mama but it will be good stuff here it >> also, shares of alibaba rising again. we will be back. plus, they are betting big on bitcoin. oner and henry have moved and will join eric with more. ♪

reported a jump in its profits in the first earnings announcement since it went public in september. right now, shares are higher. how long will the magic carpet dried last? emily chang spoke with the company's is vice chairman and cofounder. emily, what did he have to say about alibaba's user growth? >> as far as magic, alibaba not showing any signs of slowing down just yet. still a jump in sales, as well as a jump in conversions to mobile. there actually seeing customers go all the way through and purchase things. they are confident about the ability to monetize the traffic. joe is alibaba's earliest deal maker all the way back to the first softbank investment.

so i was interested in their strategy for making more strategic investments. they are investing in companies like a list and tango, second and third tier is very how does -- make sense? >> we take a very long-term and strategic approach. when you report on us on a one-off basis, a particular investment or acquisition may not make a lot of sense. but when you look at us on a long-term basis, we have a destiny will to take a strategic approach to these types of deals. >> i wonder what he had to say about apple. last week, we have the whole romance between tim cook and jack ma. saying they're open to a marriage. it is interesting. talks about apple being a great

company with a lot of potential for a partnership with alibaba in this way. take a listen. >> apple is a great company. they make great products. they obviously make great mobile devices. and they are selling very well in china. they want to do something in the area of payment with their mobile devices. we, through the ali paid business, have the largest online payment business in china. so, of course, when you think ourselves, there are a lot of areas where we can have discussions. we look forward to having further discussions about potential partnerships. >> interesting to hear both companies being so public about the potential for a partnership. you have to think they more than just like each other. of something could really happen here. >> a really like each other.

>> they really like each other. >> excellent to get the interview there from you. we have got someone else who will comment on this for us. the managing director of the company. what do you think about the outspoken bullishness today? a cheerleader for the company, but interesting nonetheless. early this morning, a revenue growth of 54%. a number of users to over 300 million users within china. 52% growth year-over-year. they grew the growth merchandise value 49% year-over-year. you had a great fourth quarter and that is showing up in the stock movement today. their net income did come in a little light.

stock incentive plans, when you look at those awards, they will -- they were put in at lower levels. management to have a strong incentive to drive the economy. but it hit the bottom line a little bit. for long-term investments such , it is our largest holding at just over 10 percent. $87 per share. a great run. we are the only chinese e-commerce etf. globally, we are the second largest holder of alibaba and etf globally. big believers not only in alibaba, but the sector as a whole. trendsre a lot of macro that benefit not only alibaba, but also other players. did you think about alibaba's acquisition strategy? the company is pursuing second and third tier players rather than the biggest company.

>> they are testing the waters and they started to make smaller deals. remember the founder and ceo of yahoo!, which made a major investment in alibaba in 2005, now sits on the board. he is out and say -- in san francisco where he has a private equity firm. joe and jerry are talking about, what is the strategic game plan. that will show up in the united states as well as emerging markets. we are seeing that leading up to single state next week. the global e-commerce platform struck a number of deals to facilitate transactions on november 11. >> tell everyone what singles they is? holiday, whereer it is basically an excuse to go shopping. >> yes. 11:11.

they're all single. their six is a chinese phrase and it started at eight university a few hours drive up the river from shanghai, where it jarden anti-valentine a and it has turned into by far the largest e-commerce event globally. alibaba did $5.7 billion worth of revenue in a single day. required hundred 50 million orders being processed. next week, 250,000 temporary delivery workers will be hired billion --he $1.1 1.1 billion delivery drivers. it did over twice what cyber money and black friday did over -- online. >> you will be too busy shopping

online on alibaba's platform to think about dinner. >> will we see a lot more americans using alibaba services here at home? is that the idea? >> i think so. i will go online myself to find some deals. certainly, they have not set up logistics like they have done with a number of other countries where they partnered with the national post office to facilitate delivery. they're definitely coming here. even the discussions with apple show the lever of the stage this is coming with. that will be mutually beneficial. what can alibaba do with apple? unless you're's single day, the chinese cell phone makers sold 200,000 cell phones in the first three minutes on alibaba. 200,000 cell phones in three minutes, imagine what they can do with cell phones. >> you will get crazy numbers like that. very quickly. is alibaba do something with apple, does that preclude it

from doing something else? are talking about taiex here? >> i do not think so. there is a lot they want to accomplish in terms of writing cloud computing. i do not see it as one-off. >> thank you. alibaba makes up 10% of his etf. >> interesting stuff. when we come back, we will talk to people who are bullish on the client. a couple of twins sat down with erik schatzker to discuss their etf. ♪

>> coming up, we'll go back to vegas. you what they

think the future of money is. for them, it is a claim. i was not joking when i said they're starting a bitcoin etf. a lot of people are excited about that. eric will surely ask them about it. >> erik schatzker in vegas next. ♪

>> welcome. i am matt miller. >> stefan. are both on assignment today and. is in las vegas attending the money 2020 conference taking place here at thousands of people are gathering to look at all the different ways the walls are changing. a big revolution money is the coin. . talked to two entrepreneurs who have big bets on digital currency. >> yes. it has been a while since we heard from him tyler and cameron.

as you point out, they have since become bitcoin celebrities. that is what they spoke to people about here yesterday. the first thing i want to know, whatever happened to the bitcoin trust. the etf they required -- they had for 13. you are about to hear more about that. >> the different trusts are alive and well. there is miss perception it is somewhat caught in the middle but that is not the case at all. -- etf is a long process. we are dealing with an innovative product, a digital at and that has never been done before. there has been nothing for us to believe our process has gone any slower than any etf. >> when putting the bitcoins

together, what did you think of this as more of? an asset or technology? >> bitcoin trust, we are putting together effectively, it is made to mimic precious metal as much as possible. you take the word bitcoin and put the word go -- golden, and it is the same. it gives investors access to that investment exposure. it does not give people access to the actual asset and it is not an investment in a technology, so to speak. >> to both of you continue to buy bitcoin? >> we have not sold bitcoin. about owningn roughly 1%, but we do not go into any detail other than that. >> any audio knows you guys from phase, people aren't judging you on the basis of bitcoin.

the truth is you invest in a range of startups. >> that is right. we invest in a lot of startups, silken valley and l.a. and new york. we love meeting entrepreneurs and finding them. startups are some of the many investments we look at. it is still early. we have had several exits so far. been of new exits have over the last two years. it is still pretty early to tell. over the next few years, we will see how initial investments worked out and we continue to learn and grow and invest. >> the biggest online so far? non-bitcoin? >> there are a lot of exciting once. , on demand,problem

you call and they come to your house and bundle it up and give you discounts. cargo maddock is another interesting one, basically like uber for shipping. they go from las vegas to another city. they turn empty and can be filled with another shipment. >> capital alone is not a differentiator. many platforms, like one company. many investors can raise $1 million in a matter of a day or less. for several portfolio companies, especially one that started in francisco, we san have given them office space and we purposefully have put -- taken more than we needed in new york so when we expand to new york, we can given infrastructure immediately and

they do not have to worry about angst outside the business. >> to simplify it, we want to be here and we do not have to be doing this, but we love doing this. when they want to get us on the phone and ask questions, we are there. a lot of people we have done deals with. he has become a close friend and i expect -- respect him. when we are looking at a particular deal, it generally is a good one. we enjoy seeing and working with them. always a good signal. probably your usual suspects. people who you can bounce ideas off and are usually really strong signals of the company.

>> you became investors quite early. ever wish you had not started so soon and instead went out and got real jobs took that experience, and took it back in your investing life? >> our job is very real. 24/7 most days and it is nonstop. as soon as you close one deal, you always have to search for the next company out there. is our previous job is athletics. six hours a day of training up at 6:00 a.m., bed by 10:00. in terms of work ethic and goals, i am always trying on that and it gives us a unique perspective. i think that entrepreneurs, a lot of them do not have that and a lot of them are able to bring back to the table. it was every much as real as any other job.

thing that anyone would make you better investors than you are right now? >> it is experienced. we have been doing this for two years. a 10,000 hour kind of thing and i've probably done a lot of hours in those two years, maybe more than i should've. like anything, you grow with time and there is nothing new spin. we're totally open to learning. we will stub our toes and we continue to do so. we will get better. that is where we will go. >> scarlet, cameron, ann tyler. still celebrities in the bitcoin community. the shine has come off bitcoin a little bit, as you know. perhaps not as celebrated as they were a few months ago. >> i like how you asked them if they sometimes feel like just getting a real job. >> it was not as of noxious and facetious a question as you might think.

the reason for that is most of the successful investors i know are people who have adapted experience they gleaned elsewhere, and another industry, or perhaps working with other investors, to their own experience. they went out and got real jobs, learned a few things, and used int knowledge and innovation terms of their investment work. what they're doing is effectively what warren buffett did. few people are able to start from scratch without having anded in another industry make it the way one buffett made it. it is hard. it is hard. >> the key is, you have had -- you have to have had a boss. not that they do not actually work. i am sure they probably sometimes do. six hours a day. >> thank you so much. we will bring you live for more interviews throughout the day right here.

>> coming up, mitch mcconnell has his eye on the prize. the jobless senate majority leader. for now, a tight race reelection. stay with us for more on tuesday night. ♪

>> mitch mcconnell is the candidate with the most riding on election. he could be on the verge of a majority leader if he could win his own race for election. peter cook went to his hometown for a look at the man who could soon be the most powerful republican in the country. >> where is his plan? >> to democrats, mitch mcconnell .s gridlock personified stan aoa way of the obama agenda. >> our top lyrical priority should be to deny president obama a second term. >> to conservatives, he is a sellout, and established republican still withilling to cut deals democrats. >> we're not going to send a

signal to the markets and the that default is an option. >> even his critics concede he become majority leader if republicans can gain a net of six seats in the senate and if he can overcome a serious challenge from a democrat less than half his age. >> he is out of touch, out of ideas, and, will be out of time on november 4. >> helps by hillary and bill -- ton, she is >> mitch, that is not how you pulled a gun. >> naming him for d.c.'s dysfunction. >> 30 year record is gridlock and obstruction and extreme partisanship that has cost this nation. >> a weekend poll put macconnell up nine points even though 49% of voters view him unfavorably. lessdent obama is even popular. his main message is that

kentuckians will benefit from his promotion. >> majority leader sets the country, but to look out for kentucky's interests. one of the basic questions is, who can do the most for kentucky over the next six years? >> theater is with us now. is senator mcconnell going to be a dealmaker in the next senate? after we answer the question of whether he will get there. >> we have got to answer that question first. i saw mitch mcconnell voting and expressing confidence about the day and the outlook for becoming majority leader. an interesting question because this president has two years left in his term. he and mitch mcconnell do not agree a lot but there is some pressure from republicans to show that he can govern. reform, maybe trade issues.

those are some of the areas where there is a possibility for compromise area it is hard to imagine mitch mcconnell and this president cutting too many deals over the next two years. heis the main message that wants to get out there, why you should not vote were crimes? because she voted for president obama? because she know refused to answer that question. is, if oh-ferion alison grimes is a vote for congressional democrats and those policies we have seen over the last six years. she has done everything in her power to distance herself from barack obama. it is one of the reasons she has been competitive in the state that does not have a very favorable view of barack obama. >> thank you very much. you can stay tuned all day all night for bloomberg's election coverage. we will start at 5:00 p.m. with and then adition 6:00, more on the election.

7:00 p.m., the election all nighter gets kicked off. with bloomberg for that covers. >> coming up, raising the minimum wage, a big issue for certain key states. will the election be a turning point for the issue of minimum wage? we will discuss next. ♪

chris imperva laquon takeover of the senate would pretty much under the president has his efforts to raise the national minimum wage. it does not mean it will not go on and that minimum wage will not go up. michael mckee has been looking into this for us. >> it is interesting. control of the senate may not settle it a lot because it will still be gridlock. if you go down to the state of local level, you will find a lot is happening and that is where the election really matters. let me show you a couple of maps. take a look at the united states , you see where the minimum wage is higher than the federal

minimum wage already. those in blue are the states that equal the minimum wage. down south, a couple have either no wage or are below it. there are four states voting proposals tol raise the minimum wage. arkansas, nebraska, south dakota, and alaska. if they do that, they enjoy 10 vote either toat increase or index the minimum wage this past year. we would end up with 29 states having raised the minimum wage in 2015, even if the federal government does not chain. -- does nothing. >> there is a debate on whether this is good or bad for the economy. this is not settle the debate. >> there is a lot of debate here it it has not been settled in the literature, but this provides a certain opportunity. you have a significant amount of states that have it and states that do not. answers toll the some questions, whether jobs are

created. others say more people would spend -- will spend more money and there will be more jobs created. benefits and ours might be cut by employers that pay more money. others may go up or may go down. companies could raise prices. another possibility. we will see how the american people like that, if they're willing to pay for it. could become more efficient, more computers. a lot of ways this could pay out there and it sets the stage for a big debate over it in the presidential election. >> economists in the can price controls like this? >> yes, there are people -- >> it would fly in the face. in any case, i wonder, president obama's number, it does not seem that high. how many states are there? >> very few. the feeling is in many of these states, you do not have to spend

much money because the cost of living is lower so they are trying it at lower rates first. >> just the minimum wage according to each state's cost-of-living. and whole different complicated mess. the economics editor and the latest on minimum wage. market makers will be back in just a moment. ♪

>> that is it for our second hour.

>> what a pleasure it was. great fun. scarlet, we will continue to cover all of the important stories throughout the rest of the day. scarlet passes only anchor, four hours of television today in the afternoon. will both be at home watching bloomberg's election coverage. it will kick off at 5:00 p.m. eastern. -- a special one-hour edition of "with all due respect." past 7:00 p.m., our all nighter starts. election all nighter, kicking off with john and mark. the hosts. they will be there probably until midnight. at least through midnight. the news that comes across, because that is what drives programming on this network. >> tomorrow, we will continue and do an autopsy of the results. we also have the president,

richard fisher, who has plenty to say. he called qe3 a gift to the rich. a lot of pieces scheduled for this week because janet yellen will also be speaking on friday in paris. her talk focuses on policy action, with primus makes sense. questions as well. >> our producer reminds me to remind viewers they can see all , becausen any device it is 2014, and of course, we are available online. it is no shocker we are available on your phone. you will not be surprised to hear that and see us on your ipad and you can also see us on apple tv. if you have amazon fire, tweet to me. i do not know anyone who has amazon fire. >> bloomberg.com is where you will find us. in any case, keep it here for all of your election coverage past thes 56 minutes

hour. bloomberg television is on the markets and julie hyman has more. i think. it is 2014. i want to point out this is one of the only networks where you will be able to stream your election coverage. something to keep in mind. keep in mind also lets keep a look at the markets and where stocks trade. we are seeing declines across the board in major averages. in particular, we are seeing drops in the nasdaq and the s&p. the dow is holding up a little better. one of the big things dragging on fox today, energy companies in particular. once again. falling saudi arabia is cutting oil prices. a fresh and three-year low. we are seeing disappointing earnings reports way on the markets. just a couple of examples. cores as well is falling in today's session. here to talk more about what is going on and talk today is mike mckee. i know you were recently talking

expectations.bout what will happen with volatility? >> i was talking about this yesterday. a lot of people piling in to -- to track tracks the mix. that is been the case for the last couple of years. it seems like a good trade. when that goes down, you lose money. a volatile situation, especially next year.d on track people are beginning to worry that as an overcrowded trade and people could really get hammered it couldhen it moves, move very quickly. >> uggla this in perspective. as high as 26, and that was at the height of the selling we saw for the s&p 500, around october 15. below 16, even

though it is the second day in a row. some of the options traders i have spoken to in this segment have said they think that was really it, that was really the .eight of volatility >> the way to leverage works, if it goes up a little bit, even if it goes back down, you have an as theyst to pay expand. more and more leverage is filed in. that makes it dangerous as we get closer to the fed rate raising. >> we shall see. thank you so much. more on the markets in 30 minutes. "money clip" is next. ♪

>> welcome to "money clip" i am olivia sterns. here is the rundown. politics, it is election day and fight for the control of senate is still too close to call. in shock, a peak of the future of retail and showing you new technologies to move through stores. talk about a revolution and shopping. alibaba more users to beat estimates. future of the virtual reality is almost here. we talked to the