>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> wave of the future. democrats get swamped by a republican sunotsunami. >> and the fed's inflation -- president richard fisher wants to raise rates sooner rather than later. we will hear from him in a bloomberg exclusive. >> crude under $80 a barrel. what does this mean for the energy industry? weight will sit down with t

boone pickens, another bloomberg exclusive. welcome to "market makers." i am stephanie ruhle p or >> and i am matt miller in for erik schatzker today. >> you know why he is not here? today is the 41st birthday of matt miller. happy birthday, big boy. >> thank you very much. after what i can only describe as a blood bath last night for the democrats, republicans won just about every disputed race in the country, capturing the u.s. senate in the process. president obama will hold a news conference about what this means administration. let's go to white house correspondent phil mattingly in washington, d.c. >> the president is pretty clear right about what occurred last night at what that means going forward for his agenda is a couple of things.

i think you're going to hear some conciliatory remarks saying he wants to bring republicans to the table, he wants to find issues they can work on, but he also wants to have a delicate balance to her he will say he will keep moving forward on executive actions, obviously immigration being top among those. that will not make republicans happy. it will be interesting to see his posture, his tone today could set the tone for what we are going to see over the next couple of months. >> does president obama need to make a change in the white house go? all of the criticism about how insular it is, is all of the way to get over this to change staff? >> there is going to be a change in the staff side of things. it will not be a mass firing or even a high profile hiri ng. he has a very tightknit team that has grown a smaller over the last couple of years as people have started to depart. you have seen a couple of top advisers, dan pfeiffer, another

top senior adviser, likely headed to the door that has been with him since the campaign. who did he bring in to replace those folks/ it is a big question. the president likes his team. for new blood to break into the white house has been very difficult over the last few years. >> we have heard mitch mcconnell saying he is capable of making good decisions and making good relationships with the white house. the you think that is a possibility? to a badnd of got off starboard the president called mitch mcconnell and mitch mcconnell was not available to speak with him. a message. mitch mcconnell and all of the republican leaders and democrats will be at the white house on friday for a meeting. there's a pathway here for the white house and mitch mcconnell to actually get to the table and work. do remember the fiscal impact in 2011 and 2012, it was mitch mcconnell and vice president joe biden who struck a deal that kind of kept the u.s. from falling off a cliff. there is a bridge there to work with. that said, there is not a lot of

trust on the republican side of things for whatever the white house is working on. how those bridges are built over the next couple of months will be crucial to see if anything gets done, even the low hanging fruit where both sides agree there is places for agreement requires i will believe it when i see it. >> i was struggling to get the word compromise what it slipped my mind. >> phil, thank you so much. more with our bloomberg politics analyst, johnson knew new and michael fellman, a democratic strategist who served in the clinton white house and founder of global park group down in d.c. good morning. what do you make of last night? >> it was awesome. i certainly would not use the term bloodbath. these are elections per to you poor your name on the ballot, you have to be aware someone is going to win and someone is going to lose. dynamics were good for

republicans, for the president very unpopular. he could not even campaign in 90% of the country. that is really problematic. it was a little surprising that republicans won top leaderships in maryland, in massachusetts, bluethey won tough states like illinois, which michigan -- >> what does it mean for chris christie? >> it does not really change the dynamics that he is thinking about running for president. all of his strengths and weaknesses of not change last night nor for any other potential candidate. looking last night in the context and how it helped or did not help the presidential candidate, that is a bit of a reach. we still have 4, 5, 6 months for things to settle out, see where the republican party is sort of trending, and who rises to the occasion before you can say whether someone's president shall aspirations will help or hurt. >> was a problem with the

administration? did the president's staff not allow him to campaign enough? staffers wasreid's publicly saying that the administration really screwed this up. that.aw the finger-pointing, which is inevitable, the process over which staff will get fired. they were debating last night that this would be a wave. when virginia is as close as it is in north carolina, which democrats were very awesome sit about, goes the other way, something is happening in the electorate bigger than any one race. having said that, i do not think the people around the country who voted, a lot of them a protester saying we need to shake up the white house staff or you guys go back to your corners and continue to slug it out. what they are saying is we are tired that washington is broken, we want to see things get done. i think they are expecting both parties today, the president for sure but also new republican leadership to come out and figure out what can we get done because by the way we are into

another election cycle already, and if we go go back to our corners and start fighting 2016 again, i do not think that will make the american people -- >> here is a little insight as well. if harry reid's staff was really calling around, talking about this being the president's fault, that is because his staff are afraid for their jobs because the size of the loss that they think there might be a leadership challenge. that is unfortunately the kind of thing reporting we are talking about. it was not president obama's staff's fault. it was about policies, the president said his policies were on the ballot and in many ways they were. and we talked about the strength of a lot of the republican and at its. pound for pound, the republican candidates were just a little stronger than the democrat candidates. >> senator, mitch mcconnell saying that he can compromise is not convincing. i do not think of the republican

party as one that is very conciliatory. it is really a party of no. >> if you look back on his record, mitch mcconnell has been involved in brokering more legislative deals than most members of the senate -- >> what do you think we will see, mize is on? -- what do you think we will see compromises on? >> the easy opportunities are energy, he could easily do a bipartisan bill that approves keystone -- >> the president is not want to approve keystone, does he? >> 65% of the country does, so don't say compromise and it's 80 presidents not support keystone. that is compromise. you called mcconnell and he could not come to the phone, that was an incredible night for mitch mcconnell p or he is thanking his supporters and making his speech. it did not surprise me if he literally could not come to the

phone at the very moment the president calls, so you leave that out. as you tell your reporter today, you're going to talk what executive actions on immigration the day after the election -- if the president does that, he is really foolish, absolutely foolish. >> michael, you were part of the clinton white house. when we saw the white house and congress were together, do you see from your experience any possible place where we can see compromise today and possibly working together? >> by the way, i were to the clinton white house of 480 years and there were plenty of times when both sides when i working together, but i agree with john -- there are places we can make progress. there is low hanging fruit out there, things people agree on, more ebola funding and cyber security. what is important on friday when that leadership team gets together, they are not at each other's throats and in each staking ars and political terrain. by the way, i think we have a narrow window and it is possible that success and progress, you will bring about more of that.

so let's get started. >> the key to that meeting on friday, it really is listening. you tell it to your five-year-old. >> i guess i am sickened by the spirit are they going to listen? >> it is incumbent. the president has a little more weight on him to come in and out of that discretion saying listening to the republican leadership, they obviously had a good night on tuesday. try to get a sense of what they want to a comp list. in a way, they know what the president wants to a comp list. we know what these policies are. now he can say i have listened to them about what they want to accomplish. that is different than saying i met with them and i told them here are the things i want to do. >> we have to leave it there. how confident do you feel that there will be listening on friday? [laughter] >> i defer to my colleague from new hampshire. it is tough. it is a toxic environment. >> we elected these people to

run our country. >> i am more confident this morning than i was last night . i heard from the president in the white house this morning. executivers me -- action on amnesty -- if they are talking about that to the media today, how crazy. breakare going to take a because during the commercial matt and i are going to say the pledge of allegiance. we know why we vote, because we want progress and we believe in america, and we hope our new leaders do as well. thank you both so much. >> when we come back, we are going to talk energy on this program to we're going to talk to t boone pickens in a bloomberg exclusive. ♪

>> of the biggest story in the market this fall has been the plunging price of oil, below $80 a barrel for the first time in four years, and we may not have hit bottom yet. t boone pickens is

the founder and ceo of bp p or he joins us from dallas. thank you so much for joining us. kick it off with last night's election results. what do you think this republican win means for this country's energy policy? i have not seen a lot out of the republicans, but they are talking energy last night, all of him it is energy. you are going to have to address the keystone pipeline, which the president has ignored, and you have got export of crude, has to be addressed also. you have got the strategic petroleum reserve, the spr. that has got to be looked at. there are so many energy things just sitting there that have not even been discussed. they are big deals. there is no question about it. liquefiedot lng, natural gas is an issue, too. but let meff to do,

comments about this. i have been around a long time, and i voted -- i never voted for president or anybody but a republican, but if you go back and look, every time a guy is elected, it is because of the president just before him. reagan would not have been elected unless you had quarter. -- carter. then as he went forward, here now you are going to have another, in 20, you are going to have a change, but obama has up, obviously, he has set it up for republicans to really do something big. they have got it wave, but concerns i have, they have got to deliver now. they cannot just go in there, in, and not accomplish something. i feel so fortunate at my age to be around to see all of this happen. >> you mentioned obama has basically ignored keystone pipeline.

are ind to us 65% of us support of it, so can we ignore it any longer? >> no, you can't ignore it! but i can tell you i was in toronto a week ago. i was in calgary the week before, and the canadians are getting tired of waiting around for us to do something. that has been on obama's desk six years. it is time to make a decision. listen, i used to live in canada in the 1960's. i know the canadians, they are a smart people, but when i decide to do something, they are going to do it. if that pipeline is not want to come through the united states, they are going to take it east and that oil is gone p or we do not have a chance at it. it is a great opportunity now, put together canada, the united states, and mexico, and then we do not need oil from anyplace else. you have got it appeared you are taking care of the national security for the united states with that kind of an alignment, and the canadians and mexicans

would be more than happy to make the deal. saysone, senator sununu you oh him a dollar on the bed of the price of oil and what do you think about the drop of the price of oil low $80 a barrel? what with the keystone pipeline deal do for the price of oil? >> the keystone pipeline will not have anything to do with the price of oil. you have got the situation now, you have more oil than you have demand. consequently the price comes down. where did the oil come from? it came from the united states. the industry in the united antes is down -- has done unbelievable job for who? not america. they have done a good job for themselves, but america is also one of the winter spirit we have increased oil production in the united states, and there are other places, small places around the world that have done the same, but the united states is over supplies the -- is the

one that has oversupplied the world with oil pure 92 million euros of oil produced every day in the world. we use 20% of it, 18 million barrels. we are still in for about half of the oil that we use, but more than half of the half that we mexico ands from canada are we have cut opec down from 7 million barrels a day to barrels a day or we need to get rid of opec. opec is the problem p or when you are buying the opec oil out of the mideast, you are point to be paying the terrorists, too, because they pay the terrorists a ransom. get out of opec oil. >> how low do you think the price of oil can go? about oils.k andare talking about brent, the arab basket crude is priced off of brent's north seed, then

you have west texas intermediate, which is our national price here in the united states, and it is about four dollars cheaper now than brent is. i am going to answer your question. that today you are selling oil in the permian basin $72 per your for selling oil in the balkan up in north dakota for $69 a barrel. you are selling brent north sea at $82 a barrel. how much lower can you go? i do not think you will go down to $70, but you can get down in the 70's. you have a very important opec meeting coming up this month. i think on the 27th of november. you will find out there if they will cut the supply to

get price up, but advice to the industry in united states -- you have drilled so many wells, you have been so efficient that you have more oil than we need right now, and consequently the price has come down. >> do you believe that the declining price of oil could start to create geopolitical instability? our economyustain with oil prices dropping and dropping? or is the answer -- who cares? >> yeah, that is right. gets thehe consumer payoff with the oil price. natural gas prices have been, you know, low for god knows how long now because we over drilled, got too much natural gas. you have kind of done the same thing for oil. i think the oil guys are going to be smarter, they will slow down on the drilling

and let demand, but we counted on demand being up. give it a chance. this has only been going on for 30 days, so the world had not changed. we will see how it comes out because opec has got to have a better price for oil than $80 a barrel. let me ask you about natural gas. you say it is too low here, but the last week we've seen a 20% jump in the price of natural gas. do you think that is the cold snap or do you think it is a sustainable trend? >> i think it is weather. natural gas is a weather commodity, and they are talking really cold here in the next two weeks, three weeks, and we had a very cold winter last year. the weather patterns are setting up for that, and whether you can

do it on not. thatatural gas is so cheap 20% increase, yes, it helps the producers. it does not hurt the consumer. that is all good. i do not know whether to hold or not. with weather the problem oklahoma state as well? they have had a rough season this year. >> no. have a? they? i have not kept up with -- no. we have got a situation over offense can do anything, went 14 quarters without a touchdown. i don't know what the problem is they have not called me in for any advice, i know that. >> stephanie is pulling me back to business. i will just say that oklahoma state is six right now, 5-4, so not a good season. as the cowboys.

>> what does this mean for shield drilling -- shale drilling? >> let's back up years ago. today you have 400 rigs running on natural gas, and at that time you had 500 running on oil. they switched over to oil because they were selling $100 oil, and now we have 1500 rigs running on oil, 400 on natural gas, so what is going to happen? oil is -- you are going to slow down on oil at $70 a barrel. that is what you are looking at today in the permian basin. i wonderght, boone, what you think then -- is the future -- we talked about oil, natural gas, a lot of people had is just dying a slow death right now. what do you think about the future of coal? it is important for a lot of workers in the east, midwest

east, i think of it as a midwest. >> you remember what i am for, i want to get on our own resources and get off opec oil. it is that simple. i think with the republicans in here, they may decide that is a good idea, and coal is one of our resources. 40% of your power generation comes off coal. i don't want to see that shut down. they have cleaned up coal. coal is fine. inare the cleanest nation the world are we still have these environmentalists screaming, hollering shut down coal, shut down oil and what else. 70% of that is transportation fuel, and i've asked one of the alists, ok, say you shut down fossil fuels and we do not use them for transportation. what is the solution?

and this guy told me, he is a real guy, too, he told me he said look, you turn it over to the government, and their research will tell us what fuel to use. how to you like that answer? >> it is not a very good one. >> how do you like that answer? you turn it over to the government and the government tells you what to use? that seems to make no sense. >> it is a ridiculous answer but kind of a habit that it will guy, too. whoo, it is tom steyers it was. he is there, he is awarded to the democrats, he is important to the liberals, he has his own ideas, he is putting his money up and he should be allowed to talk. i just don't agree with him is the point here you will use fossil fuels were the next 100 years. >> who would you like to see as our next president? >> i am too old. >> that is not true.

give us an answer. >> i don't know. let's see how it unfolds. >> all right, thank you so much for joining us. >> wait a minute, i going to tell you something if you give me 1 -- ♪

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. what is welcome back to "market makers." iamb stephanie ruhle, joined by the birthday boy himself. >> matt miller in for erik schatzker today. it is not an exciting number. it is an odd number. >> 41. you are an auto guy. -- odd guy. we have a special guest, richard fisher with the federal reserve inc. of dallas. push for an interest-rate hike sooner rather than later. let's bring in our own economics

editor michael mckee. michael, why don't you kick it off? first of all, great haircut. >> thank you. you look great yourself. >> i look old! >> you guys are good friends, you stick together. >> smart texans. >> i am not going to ask you when you finish the taper. aboutve got to be happy that. but everybody wants to know -- what from here you go next meeting, do you get rid of the considerable time frame or to you leave markets wondering? >> we just issued a statement, and i can only speak for myself, i would never speak for anybody else at the table, but i think term considerable time he or diane not just saying that because someone won an election. >> not the joni ernst way. >> no. we did what was important, which is the very last part of that. it is important to me and the people at the table.

we made a conditional on the state of the economy, making it very clear that if things move sooner than we expected, we would have to exit earlier or lift off earlier, and if it on the other hand took longer, then we would have to delay it. economic contingent, and to me that is important. >> what does considerable period even mean? >> that is a very of question that i and others have asked, but now it means less if it means anything before. >> doesn't mean six month after the end of qe? >> i think the key point is it depends on how the economy develops going forward. are we moving toward our target? that we made very clear as a group -- >> what is the target? percented to be 6.5 unemployment, then 7% was when the taper was going to end. >> people do not really get

where the fed is aiming. >> the direction is important and right now the direction is positive, now we have intermediate target of 2% for price inflation as measured by the pce, personal consumption expenditure. right now we are running less than that. by the way, the dow trimming is the most important -- >> in the global galaxy. >> in the universe. >> it is running at 6.5%, and it has four months. it is very flat. we think of 2% as asymmetrical target, so we might run for a while a little over or under it. you just interviewed t boone over energies. that does not bother me as a voter one bit. if we were seeing it come from demand, which we are not seeing in the united states, then i would be concerned. then you have deflationary spending, and we

are not seeing back and we see unemployment go down to 5.9% or it will was see -- down to 5.9%. ourn dallas have seen it in district where we got down to 5.2%, where we are now. workers have more leverage for you go from 6% to 5%, they have more leverage. most companies set wages and benefits and salaries annually, so there is a lack to the process. we will have to keep monitoring this. >> is there a specific number in my mind? >> no. >> is there is is a thick indicator? are we looking at part-time workers? >> we just released a paper that made it clear that the unemployment rate itself was the single best indicator. it is a blunt instrument and we have a whole makes that we like andook at at the fy annc,

chair yellen has encouraged us to do so. so far as blunt as it is, the key indicator is the unemployment rate. the kansas city fed has been looking and analyzing the quick ratio. more people willing to quit their jobs are demanding higher wage rates when they moved to the other job, so that is something that tells you about the pressures building in the economy. this is a judgment told business. i wish we could give you a formula, but this is unfortunately tapping economics. in the end, central banking is judgments and not specific formula. >> but the fact that the markets are so closely observing the communication and the judgment -- does that mean that the markets are simply far too addicted to qe? >> i think we have given the markets too much ritalin, got them too hyped up -- how is that for a modern term? but yes.

part of that is because we are the only people who act in washington to we get things done. the fiscal policy has been -- speaking about being neutered, it does not work. maybe that will change and hopefully it will change because if you are budgeting as a woman, either a large or medium-sized corporation, public or private, you are trying to figure out the tax rate beyond, and you have no idea what is federal spending going to be? no idea. regulations you are being swamped. who is the only act in town who gets the anything done and tells people what to do? the federal reserve, so yes i can tell why the markets key off of a spirit first of all, you don't fight the fed, that is the ancient adage, but secondly we are the only actors who actually act. >> don't fight the fed -- the market has not been looking at the true economy. they are so focused on quantitative easing and as long as the focus are open, they are going on the market. >> i do not disagree with you.

we made the rich richer and the quick quicker. i think this is very important to her dido not care who it is at the table -- we work for the american people. markets will come and go. i have strong views about this because i was a market operator. markets are manic depressive, so right now there is a great mania fed by cheap and abundant money. someday there will be a correction or some adjustments in the junk bond market, which is very richly priced right now, and our job is not to react to corrections and monetary fluctuations, excuse me, financial fluctuations are to our job is to focus on the real economy. are we growing, are we keeping the prices under control? >> we saw a serious drop in equities a couple of weeks ago, jim bullard and came out and gave mike an interview in washington, d.c. saying maybe --

>> everybody was hugging each other. >> when it was clear we were not going to extend quantitative easing. it was a house as if the fed sent him out to their in order to calm markets which were pacified by the end of the day. >> first of all, president bullard speaks for himself, i speak for myself to nobody sends me to interview you and nobody sends mr. bulleard to make a comment. we are independent. i cannot speak for president bullard, but no one sent me to this interview. nobody sent him to get that interview or to we speak for ourselves. i will let you make whatever judgments, but he is a smart guy. >> when you say the fed works for american people, in job title -- without a doubt. in terms of actual actions, it has felt like it is working for the markets. >> at the same time, there has been a pickup in economic activity. the sign is positive it is moving in the right direction. we have been growing, and the pace of growth has been increasing.

there is a better bounce to our economy, more jobs have been created. i would like to take full credit for that, but -- >> we will let you. you are here. >> i like that. the point is we are necessary but not sufficient. we need to have a fiscal partner -- we fill the gas tank with liquidity. it is brimming over. i oftehigh octane fuel is dirt cheap. who is going to and send people to use it? congress ofrities, the united states and the president appeared i want them to get their act together and then we can be more like texas or the rest of the nation where we take advantage of cheap and abundant money with minimal interference from our state governments, with a pro-business environment. jobs have been created like crazy. >> is that going to happen? we have a republican senate -- >> i have no idea. election, it seems we got excited, but we put old, rancid wine in new bottles.

>> we have a bunch of new bottles. >> let's hope. >> don't forget you have to work with the executive as well. >> let's hope the fiscal authorities do their job so it is no longer dependent on the monetary at all we want to be onlydentists, people you have to go to in extreme pain. >> or doing an interview. >> i wonder why you think of dentists that way. i think you are supposed to go every six months. >> how many cocktail parties do you want to invite dentists to? i wish we were less visible, but unfortunately the spotlight is on us because we get things done it hopefully that disap ates. >> we want to see more positive legislation out of washington. we want to see republicans and democrats their work together. we have issues, one of them coming from texas, right, in politicians that want to be more confrontational.

is that really a good way forward? >> first, there is nothing new there. a solid when we were democratic states, we had henry manonzales, you are a young of 41, see you have no idea who i'm talking about. they were populists-driven democrats and by the way they were fed haters. nothing has changed. abouteople feel strongly the central bank and want to go back to the constitution and give congress coinage as it is called p are here is a congress i cannot even get its own legit together -- do you want them running the central bank? we have some very thoughtful people, congressman hensley is a texan, for example, and i understand they want to understand the boundaries. i cannot think they want to take away our independence, and that is where the metal will come out. there will probably be some changes. i do not know what they are. most people realize that if you m the power of the

central bank directly, then they would put the country in jeopardy. >> there is a faction it wants to audit your monetary policy -- >> we are audited by everybody. >> of course you are. >> we would end up playing to the cameras, which is what congress does, and it would be a disaster. , here is what he said recently about the fed -- the federal reserve needs to be audited and reform to prevent mrs. yellen from using the enormous power of the fed to aid and to a bet the allies of big government. there is a faction that really wants to force you to use a monetary policy rule, things like that. are you worried now that the republicans are in the senate and have a bigger majority in the house that these bills go forward? all, i'mof uncomfortable when they tell us what to do, so i hesitate to

comment on what they are going to do p are i think there are many different arguments that are being put forward, whether it is in the senate, senator shelby or whether it is in the bute under the committee, obviously we work for the american people are given our license by the congress of the united states. i hope they will be responsible in terms of limiting the amount they wish to interfere with our independence. i --e way, jim bullard and we are not even federal employees. we do not work for the government. this is the beauty of the system -- >> do people realize that? >> no. this is the beauty of the system and president wilson set up 100 years ago. speaking of birthdays. it works. the first two banks of the unite states lasted for 20 years each. they fail. andrew jackson closed down the second one bureau had eight decades of turmoil. it resulted in one of the

biggest panics of all time here at one man control the monetary system, jpmorgan, and that is when others stepped forward and president wilson created the federal reserve system. i really think it is very dangerous to tamper with an institution -- yes, we can be updated and tweaked, but we have lasted 100 years and i have think we have done a very good job. >> fascinating stuff. we are going to give you here. take a quick commercial break. michael mckee is going to stay with us, stephanie of course for my birthday will sit right next to me and we will be back in two minutes time. ♪

>> welcome back to "market makers." we have a few more moments with richard fisher and the. why don't you start? >> let's get back to fed monetary policy.

you are on record saying you would like it sooner than later. forecast would call for it in the spring. are you more concerned about the possibility of letting it go too long as zero or raising rates and then having to go back the other way if the economy falters? thee do not want to do latter because that would undermine confidence and there are arguments for waiting, so we see things exactly where they are, the whites of the eyes, so to speak. i used on cutting -- duck hunting. if you want to a-game allard, you do not shoot worthy duck is presently. we can shoot for our inflation target right on spot. history has proven that every time the fed has done that, it has been had to tighten and drives us into a recession, so monetary policy operates at a lag. at a zero interest rate bound, and we are not sure what the lag is. therefore i want to anticipate.

it is a difference of opinion. i view the economy's progression a little bit faster than others at the table. you said at the table and argue it in a nice and civil way and then make a decision. it will really depend, but i would be very careful about waiting until we have already achieved our targets and then raisingo rein in by interest rates because every time this has been done in the history of the fed, to my knowledge, then we force a recession. so soon after the dramatic injury we just had, i do not think that will be good. >> seemingly crisis in 2008? >> yes. >> are you convinced in both of your hats that the exit strategy will work? >> i hope that it works. i expect people to work very hard to make it work. again, we will have to pass a very large camel through the eye of a very thin needle to make it work, but i can tell you how gore -- and i do not like that distinction anymore because we

are all working toward the same goal, which is to try to get this done in the least disruptive way possible that benefits the real economy to the greatest degree. if there is any risk about this, i will not be there. [laughter] >> you are retiring. can i ask you about the targets you are using? duck hunting analogy. i cannot wait until the season opens up paul singer says he thinks real inflation is about 1% higher than the targets you are using. 500%, unemployment is at but the participation rate is at a 35-year low. problems with the target that worries me you will not hit any duck. >> i am always amazed some of these great investors have these conspiracy theories about the fed or that we are working and abetting with the treasury and so on. all i can tell you is i have sat at that table for 10 years under three different leaders your

alan greenspan, ben bernanke, and janet yellen -- >> who is your fave? >> it is not a matter of having faves. he are all rowing in t same direction. our job is to be cool, calm, collected, and just get it done. you have got 19 ernest people, to use a bushism, doing their level best to get it right, and you cannot do better than that. i am on the committee. he is richer than i am -- i don't care -- but the point is we are doing our earnest best and i am sort of tired of these people taking potshots at the fed. good people doing the best they can to do it right, and so far i would say we have done it well. >> exit polls show 70% of the voters yesterday said they still feel the economy is in bad shape and 78% are worried about what is going to happen next year.

are the american people misinformed about the economy, or are they right to be so concerned? >> the data shows, forgive me for doing this, if texas were to secede from the union statistically, not for real, and if you went back 13 years or 14 sears, the two middle income will see job destruction. we have been creating jobs and all four quartiles. if you take it out of texas, you will find people what obviously you call middle class i would call middle income quartiles. they cannot be a happy group because they have seen job destruction. why? because fiscal policy has not worked. they need to same monetary policy in texas as the unites states, so something has to change, and i can understand there is a satisfaction, but i will say we pull better than the congress did. >> that is not saying much about.

that is a low bar. >> thank you so much. it has been a real pleasure having you. >> happy birthday. >> thank you so much. >> you are watching "market makers" right here on bloomberg television. ♪

>> we respect the integrity of the inquiry and we will not respond until the inquiry is over. >> not going to comment, that was john desimone of herbalife. this is a company bill ackman went over after -- when after over two and half years ago. he was taking a bath up until secently because he had the leg of carl icahn, george soros, and

others against him. and down 5% today, down 21% yesterday, dark things are coming this year for herbalife. ♪ . .

>> live from bloomberg world headquarters in new york, this is "market makers" with erik shatzker and stephanie ruhle. >> no excuses for republicans now. they are in control of both houses of congress. we will see what's likely to happen. will the hot seat -- we put you behind the wheel of the car that just won the world's most famous race. and they'll take manhattan -- bridge retailer top shop opens up a flagship store on fifth avenue. what did secret weapon? beyoncé. we will be speaking to the chain's founder.

>> good morning. >> will come to the second hour could talkmakers." i about beyoncé all our. we need to get you the top business stories of the morning. toocrats will cut today inconvenient truth -- they got wiped out in midterm elections from the senate to the house to governors races across the country. republicans scored a number of impressive victories come in the biggest was in the senate. the gop picked up more than six seats they need to gain control. one of last night's biggest winner was mitch mcconnell of kentucky. he is likely to be the next senate majority leader. >> just because we have a two-party system doesn't mean we have to be in perpetual conflict. i think i have shown that to be true at critical times in the past. me ae the president gives chance to show it again. >> president obama has already

reached out to congress. he wants to meet with leaders of both parties on friday. paul ryan says his party is willing to work with the president, but only up to a point. >> i think we should put bills on his desk he should sign and move our principles of the right direction. and if there are certain issues we are so opposite on, we should define ourselves with our actions and pass bills he very well may veto. >> we will beginning the president's reaction in a few hours. he will be holding a press conference at the white house. here onwatch that live bloomberg beginning at 2:50 eastern time. and the labor market is on track for its best performance in 15 years. companies add more workers in october that the previous month. withovernment comes out the october jobs report on friday.

meanwhile, service industries sustained a faster pace of expansion last month. the nonmanufacturing index they'll slightly but still indicates the u.s. is overcoming a global slowdown. industries include construction and agriculture and make up 90% of the overall economy. >> time to look at the new balance of power in washington. --ve got to capitol hill's to capitol hill veterans joining us. gentlemen, welcome to "market makers." let me start with you and ask what this election means for the administration, what kind of tone are we going to hear out of the president this afternoon? tothe president is going have to face several pieces of legislation and decide whether he's going to lead or veto.

or pass. the new republican congress, the senate and the house will have the opportunity if they can hold together to put some legislation on the president's desk and move the country forward. if the president chooses to go along, we could have a pretty productive two years. if he chooses to veto, all of our expectations in washington will be that washington is still a town of gridlock. >> i think we have a real opportunity here. democrats had a bad night, but i think we have the opportunity for the leadership of both parties to understand the message of the election which is that people want things to happen in washington and they want things to happen that matter to them. hopefully the president's tone is that he will reach out to the republicans and the republicans will match that and they will try to get things done. -- has't you daunted by

at last night's election made it clear what's get some work done? >> i think that's right. if you weren't as grunfeld in this election, then you are just angry. the last two years have been a snoozer in terms of productivity in d.c. everyone is ready to get to work. you saw paul ryan talking about budgets and tax reform. we arepublicans think going to tackle immigration or telecommunications reform. people woke up this morning thinking they were going to roll up their sleeves, thinking we are going to do some real work. >> i can't imagine president obama coming out and saying they've got a mandate, we've lost and i'm going to start making some compromises. time when mitch

mcconnell says he's capable of making compromises and has done so in the past, i can't believe that either. it's so hard to imagine the two sides coming together, what is the likelihood? >> i don't think either side got a mandate in this election. i think the republicans won the election but i don't think they ran on an agenda of things they wanted to do. i think members will look at these election results and realize it's going to be a different election and different electorate and they could lose. the way to avoid losing is to actually try to accomplish something. >> i agree. it's not that there were more republicans than democrats in the country yesterday it's that a lot of democrats simply didn't show up. they were not enthusiastic about their candidates and the president's approval hurt a lot of these guys. so if there isn't some productivity in washington over the next two years, both parties will be on the ballot and we will have a presidential election that's going to be wide

open. to judgee are going for themselves whether this is a town that can function or not. think we will see a white house shakeup out of this? >> i don't know the shakeup is necessary. there needs to be a shakeup of attitudes on both sides about trying to get something done. is a't know that that staph problem. i think it's looking election results. some point, we have to see some demonstration that the president cares. he seems to have been checked out for most of the last year and has resigned himself to not working with congress, since he was elected, really, since the affordable care act was passed. we have to see the president demonstrate that he cares at all in order for this to work. if he doesn't care and it doesn't matter -- if he doesn't

care, then it doesn't matter. >> the republicans seem to continually try or at least float the idea of putting some kind of anti-obamacare measures into spending bills and trying to pass them through. our republicans done trying to abolish obamacare? >> probably not. it is a fact of life now and if you talk to republican governors, the medicaid changes that have taken place will be very difficult to undo. the republicans will have to move beyond abolishing obamacare and move to a replacement or reform of health care to make it more affordable without sacrificing the quality that we have seen degraded by obamacare. they will have to find a new to moven in order

beyond the obamacare debate. >> does last night when give the republican party serious momentum going into the presidential race? there was so much negative energy that matt called the republican party are up -- the party of no. does last night election put them in a positive light? >> i think we will have a competitive presidential election in 15 and anybody who doesn't believe that doesn't know what they are talking about. you'll end up with both sides having good candidates and i think we have a competitive two-party systems and we've had wave elections both ways and 16 will be a competitive election for hillary clinton. i think she will run and she will be formidable but the publicans have good candidates. >> does that mean we have had low quality people until now? going to put high

quality people in, what have they been doing? >> that's not what i said. some of thethink republican candidates are not great candidates of stop i think they will come up with a pretty good candidate and when you have been in power for eight years, you have a tough election. i think we have a great candidate and a lot of things on our side in terms of the demographics of the electorate. we do better in presidential years and off years when people vote will stop -- when people vote. thisat is the name of great candidate? >> i'm for hillary clinton. if she runs for president, i believe she will get elected. >> she's going to be hard to beat. there's a lot of excitement in the republican party right now. we won a great midterm victory asterday, but we also have slate of very talented candidates.

it reminded me of 2000 when we had half a dozen or 10 or 12 republican governors that were leading and were executives that were popular and made a run for president. one of them did get elected, governor bush became president bush will stop we have the same dynamic now, a lot of excitement in the party and we have moved andon the tea party dynamic aggregated with our broader party. i think we are set up to do pretty well in 2016. >> give us one name from your party you think we could see on the ballot. it's the most open it's ever been. i remember in 96, we had a wide-open field and until president bush became our nominee, we had a pretty open field. there are a number of governors fromenators and a nominee

last time that is still talking about running in mitt romney. i'm a bush guy. i think jeb bush would be a spectacular choice but we will have a competitive rivalry season and it's going to be a lot of fun and the american people will get a chance to see a retooled and reinvigorated republican party. >> boone pickens said jeb bush as well. no one at you and i heard that. is a lot of clinton and bush t-shirts out there. great conversation. >> we're going to take a quick break and when we come back, our politics managing editors will have live coverage of the president's conference at 2:50 so not when we come back we'll we come back.e >> when we come back, we will time warner's

declaration of independence. what do the latest earnings say about the ceo's strategy to avoid a takeover? >> and you won't find this out yet your local dealership -- this audi at your local dealership. but we took the drive on the other side of the sea. ♪

>> welcome back. i'm stephanie ruhle with my partner for the day, matt miller. time warner, insists -- time warner says they can stay independent. they posted sales and profits that beat estimates, so plenty of investors are wondering whether they should have rejected the takeover offer from rupert murdoch. my guest founded the yes network and is the former president and ceo of at&t broadband. is cost cutting the only way for time warner to boost their share price?

wisdom ins one true the media industry and that is you can never cut costs enough to match a takeout premium. fox offered. they come along once or twice in a company's lifetime. $85 is now the target price for time warner. there's no way to get to 85 absent another takeover premium and there were two warning -- to earnings reports yesterday. fox had a great earnings report yesterday and time warner mostly through cost-cutting, mostly through results. the company is still in play as long as the $85 sits in the minds of shareholders will stop there is a corporate responsibility that says you have to react to these offers

thoughtfully. $85 will stay out there for a long time. >> and why did jeff up-ice react -- why did he react? >> i think management sometimes insulates itself from shareholders. he would not have stayed in control if fox had taken the company over. distressed in this era where we continue to find ceos who act selfishly. >> it doesn't stop. >> am not trying to be pejorative, i'm just saying that we work for shareholders and investors. he had an ethical responsibility to explore it deeply. near's no strategy in the term >> what should he do now? he do to bring this

day forward? not to bring him back to $85 next month, but what should the strategy be? >> maybe the strategy is to find another suitor. ,> he should do but he won't do he should say i aired on behalf of my shareholders and that's all he would have to say which would re-energize the takeover opportunity. >> could we see that happen again? >> i think they were pretty adamant that they were not coming back. aat said, chase is running really an organization that talks and you can never say never. i think what has happened is potential acquirer's are nontraditional. >> like him? apple havefacebook,

the balance sheets. happen is going to there's not going to be a distributor play. integrationertical is over. is one in the traditional distribution community which is maybe verizon wireless. warner, but at time i think it is the new age companies. >> if jeff on his own has that share price hanging out there and through cost-cutting or other growth plan measures can get there and another suitor shows up, could his job the on the line? >> he turned it down with the support of his board and boards don't revisit their air is -- there errors will stop -- their errors. >> could we see a piecemeal

sale? tbs,s strengths are tnt, and hbo. timing the magazines, and that was a full bid that deserved to have you think about you canlosed doors never cut your way to a takeout premium. one is an extraordinary once or lifetime event, sometimes never will stop sometimes you get so big that nobody can buy you ever. to pay the is going price for a while. >> what other targets are out there? is it discovery or amc network? interesting story is what happened to vertical integration. for 30 years, distributors owned

some content and content guys owned some distribution. conflict was very rich, but it wasn't war. now in the year of non-vertical integration, it is complete war. it's the distributors trying to hold the cost down and the program is trying to get as much from the distribution community as they can. are noty, amc, scripts in the near-term agenda for any of that. >> some of these companies are trying and very successfully to do distribution and create their own content. i'm thinking of netflix or example. stephanie didn't have netflix until master -- until last week. >> you don't have to get netflix when you look that good. the point is when you say they're going into distribution,

they're moving into the over-the-top digital world will stop the cable wireline and satellite with dish and direct, those forms are immutable. moveare eroding as people from the bundle to over-the-top, which is a generational thing. >> matt and i want to be in the over-the-top world. the managing partner and founder of intermedia partners. >> and a former lemans champion. >> as this audi section comes up. midlife crisisst ever when i won that. >> i hope to have a midlife crisis that great. harley davidson and leather pants. why does beyoncé where a $100 death -- $100 dress from top shop? ♪

>> live from bloomberg world headquarters in new york, this is "market makers" with erik shatzker and stephanie ruhle. >> welcome back. i'm stephanie ruhle. >> i matt miller in for erik schatzker today. >> and because it is matt's birthday, we decided to do the next feature just for him. manufacturer audi is the undisputed champion of the lemans race. it's a race that puts his technology to its limit. but in the u.s., the race is not that well known.

♪ when of thethough 24 hours. cutting-edgewith technology and built out of the audiber, this is r-18 racecar. >> is worth millions and millions of dollars. i'm going to drive it today. i'm in way over my head. ae key to the success is turbo diesel engine and two electric motors working alongside one another. but i'm not allowed to see it and neither are you. this is top-secret stuff. this is the man who runs audi hisrsport and this car is

baby. i'd never even heard of a civilian like me getting a chance to drive a race car like this. >> do people think you are crazy letting journalists drive this priceless car today? >> i think we just trust journalists. >> lemans is the toughest insurance race of its time -- endurance race of its kind. think of the super bowl and the world cup wrapped altogether. a win here means bragging rights for years. americans may be less familiar, but it is a big deal in europe. it's also a testing ground for the latest ethnology. track, a learn the racecar i've never been in, can't even imagine being in and i have the pressure of having a top-tier people watching me do it. i'm feeling slightly nervous.

i'm off. forget about driving a car. this is like piloting a spaceship. there are 40 buttons on the steering wheel. anything i'vean ever driven. at full throttle, it can hit 200 miles an hour. the combustion engine drives the rear wheels while the electric drives its explosive power out of the curves. for audi, this is the future. amazing, i am truly jealous, and it doesn't make me feel any better that jason harper is sitting right next to me. i hate you. i seriously hate this guy. >> i love when bloomberg wins and today with that extraordinary feature, we did.

>> almost nobody in the world has ever got to do this. >> i just tried to be on your side. >> this was a get because racecar drivers don't get an opportunity to drive the car. it's worth millions and billions of dollars, it is super technical and i was terrified. >> how hard was it? veryays think it would be difficult to drive one of these race cars if you don't have the training. >> i spent a lot of time on the track but this is like i may scratch golfer, let's go play with tiger woods. ifwas very intimidating and i wrecked the car, this car is going to a museum after this, so that would be my career epitaph. didn't willly you stop >> no more time to gloat. >> you can see a longer version of that video online. car porn.

since it is my birthday, we are going to continue talking about ceos. speaking with the ceo of audi when we return. ♪

>> now we are going to talk to the man and the driver seat of audi. he joins us here on the set. it's more fun when i get to hang out with you on the track. this time jason got to be on the track. how is important is motorsport to car sales? what is the link of spending millions to race in something like lemans and then selling the burbank?

>> i think it is the very integrity of the brand. most people race to make some noise and the marketing, but we actually draw the technical and the details into our road cars. we go back with led lighting and the quattro -- things that seem crazy on the track are now mainstream. >> you can see a direct improvement in your sales? >> i don't think it's literally monday or the next day, but what are people buying in the luxury segment, a are buying credibility and racing gives you massive credibility. >> it is an extra little kicker. has all-wheele drive and traction control which you find in your normal cars. that car had laser beam lights which were pushing -- which we are pushing the government aggressively to get laser beam lights.

had a tdi engine. does this kind of technology show up on the dealership lot? >> absolutely. let's use tdi. most people said diesel is not going to work in america, that it's fine for the europeans will stop 12% of our total sales are tdi. it gives you all the torque and speed americans love the gives you the fuel efficiency on top. we watched it three years ago and it works quite well. where you will see it heading is where you saw the energy recuperation. that vehicle will have some similar technology. >> that will come out with the quilted seats which is a nice touch. >> a little diamond stitching. >> there was talk of audi

entering into the formula one game. is the formula one crazy season and all sorts of risk fly around. i don't see it. we have been endurance racing for 15 years -- >> and rally racing. >> have dominated in semi-sports that i think it's natural people will ask. >> every season, this madness -- this madness kicks off. we love endurance and the road cars and we love the draw from racing into the real world. .> they also love ski jumping audi is a major alpine sponsor. >> even though lemans is not something americans feel elected to, not so much? cars will sell 1.7 million across the globe. we are the number one luxury brand in europe and china and we are working our way in the you look atstop if the audi enthusiasts, and you need and easiest to drive mass

popularity, they love lemans. >> how about the l.a. auto show coming up? >> i think the most exciting thing is we have a new head of design who has been on board since february. he will give his interpretation of where the future of audi design is having. we will have a concept car and you will see lot of interface technology and future designs where we are heading. >> i'm going to bring us all down for a minute and ask about recalls. we saw a new recall 4.nouncements today on the a- i'm starting to look for a car that hasn't been recalled. what kind of effect does this have on consumers when every car has had some kind of issue this year? >> i think it's important to put perspective, especially on the airbag issue. cars and it's purely a

software issue. it is about a 20 minute re-program. we notified the government and when you have these staggeringly complex vehicles taking a risk on new technology, i think it is to be expected. the question is does the company do the right thing? >> in terms of enthusiasm, what does teslas due to your business? enough abouty their technology. >> i think you are right and what tesla has done is to very smart things. put good energy and enthusiasm behind alternative vehicles will stop everyone is going to have to sell at some point. i want there to be excitement around electric vehicles. the second thing they have done is they have made electric vehicles sexy and cool. a lot of people look for these euros small cars and they built

a good robert car there. i view them as a competitor and we will have to match them. >> i like my cars to be driven by explosions in the cylinders. car. is a hybrid it was amazing and that's the car that one because it is efficient and fast will stop we can have it all and i think that is exciting. >> thank you both. we will be back with more market makers. when we return, it is the british fashion innovation. the ceo of top shop tells him how beyoncé will expand his chain's footprint. it's not just about kate moss anymore. ♪

>> i say it almost everyday, i wish there was a commercial camera on this show.

out for a friends birthday in a couple of weeks. >> we are going from audi to top shop. they are opening a 40,000 square foot flagship show on fifth avenue today just formats birthday. what's bring in olivia sterns. she got a sneak peek of the store with a billionaire retailer who built the british chain into a global empire. how the on say is going to propel the takeover. >> did you choose beyoncé for a partnership? >> the first conversation with them talking to us. we want to build a wrapper brand and see how we can build a proper brand with staying power and proper distribution channels. >> why is it important for the business to be separate and not a collaboration like you did with kate moss? >> i think those types of

collaborations are you short-term, fine. this is a sector that is interesting and growing. weare are wearing athletic leisure wise and going to the gym and dancing and going to different laces. i think it's got a much broader use now. i don't know if you can find anybody better. one of the most exciting things with beyoncé is the online capability of the type of content i hope we can produce, workout, dance, jim, music, there's a lot of pieces to get the customer is engaged and i think that will be very exciting. i ask what is the outlook for that business? >> we have not made the first samples yet.

19 million instagram followers -- we've got a shop, right? >> i don't even want to bring olivia on now. shouldn't you be wearing a sequined unitard? when, asn as they go soon as i can get my hands, i will be wearing one on market makers will stop >> are they going to make a sequined unitard? >> when was the last time you shop?o top >> i lived in london for three years and i've never been there. >> you own multiple pairs of leather pants. when you asked why you would not do a similar collaboration to kate moss -- it's the on say. she would simply demand too much. it's going to be a separate business, separate offices, it is a 50/50 partnership.

businessall about the of beyoncé. house with heron mom and it's going to be much, much eager. hear very interested to that george phillips, who is walking around with a 1990's nokia phone, i'm not even sure he knows how to e-mail. the statistics of instagram and twitter followers. he's very tuned in to her viral marketing power. but she's got it. >> has she? >> is she still a thing? everything in the box to the left. that's the last thing i heard about beyoncé. >> he knows about single ladies.

>> but a ring on it. >> stephanie ruhle spends her weekends and leggings. >> i never wear jeans anymore unless i'm doing a cowgirl thing. me onnk you for joining my birthday, ladies. >> we will be back with more. ♪

>> in just a few minutes, pimm fox will give you a fantastic

wrapup of last night's big win for the republican party. the bloomberg team will be providing expert analysis from those results will stop -- willand the bloomberg team be providing expert analysis from those results. for now, it is 56 minutes past the hour which means bloomberg tv is taking you on the market. the s&p climbing to record highs as republicans won control of the senate for the first time in eight years. a stronger than expected read on adp employment change, raising expectations before the big jobs report on friday. joining me now for today's options insight is the equity derivatives strategist at baycrest tartars. we should start with the vix. what kind of indication do you

see that volatility, the growth scare we saw in october they have subsided? >> we are pretty much neutral. the market has gone through multiple hurdles, ebola and last night with the elections, i think now we are waiting for the ecb, so ready much in neutral territory. we see some big moves on the downside and the upside. discussion goes high and stocks are moving because there are winners and losers. >> the correlation was pretty high after the meeting last week will stop one stock we are watching closely is apple. investors will not get access to the dividend payout. what kind of activity do you see? >> i see it totally dominating

apple's trading, but it's mostly a dividend play. callsare 500 strike expiring in january which have been listing for a long time. callsare plenty in those and they are trading at parity. there is no where for the puts will stop massive trading happening and the message to our viewers here is if you are long those calls and feeling good about having made all that money, exercised those calls and if you don't exercise them because you don't have the cash, the thing is to get out of those calls and you would be able to buy them cheaper tomorrow. >> you have a trade for us on nvidia.

>> the graphics processor. my trade is i want to buy a call calendar in the name. calls to buy the january and sell the strike calls. before themax loss november expiration. because i amthis long-term bullish but near-term neutral to slightly bearish. 25%.tock is already around it's a technical reason than they report news tomorrow and they are gaining market share. there is plenty of positives around the stock when it comes and bige and gaming pcs analytics.

there are a lot of positives for the stock in the company, but at the same time, given the run up the stock, i am not willing to be fully bullish on the stock. theuld like to sell expensive near-term options and and hopenuary 22 calls the holiday season brings some ph to the stock. >> it might be better to revisit it as a fundamental play in january. we're back on the markets in 30 minutes. ♪

>> you are watching bloomberg television. this is a special election 2014 wrapup edition. i'm pimm fox. republicans take control of the senate. of the get a recap results and the look forward to the policy and economic effects of this big shift in washington. we have john heilemann. it is their world series. we will get their insight and analysis in a few moments. plus, johnson and