i am alix steel. joe: and i am joe weisenthal. alix steel we are closing ahead of the weekend. joe: but the question is, "what'd you miss?". number, all eyes are now on december. joe: and borrowing from peter to pay paul, why buybacks may be over. charts that have look at whether the comeback is an even. ♪ alix: of course we begin with markets, this is ho-hum when you look at the index levels, because we are mixed. index movements are not that big. scarlet: within the sector, that is when you see stories coming together. financial leading gains. they are giving the profit margin a much-needed boost.

utilities are getting crushed, down by more than 3%. and a noticeable reaction and treasuries for the big tumble in price, that means higher yields, hide -- rising to some highs, the highest and 4.5 years. joe: the other thing, the 10 year is rallying even further, so people thinking this may be a sign, the short-term rates really fed sensitive, the others economically sensitive, so you saw this two-year yield and a really strong pop in 10 year yields, suggesting that the jobs report could have a rethink on the economy. alix: well, the non-reaction of --, you would think this job number two months ago, you would've seen markets go bananas. we do not see this. not only was it up, it ended down, under 15. that strikes me as a very interesting.

does that mean markets are ok now, feeling good about it, because it came with strong data. or is it not registering it yet? joe: it does seem like markets across the board are digesting this rate hike and they are chill with it. scarlet: and a deeper look at what the yield mean, i want to take a deep dive into the bloomberg terminal. alix: take a look at the two-year versus the unemployment rate, this line is the unemployment rate at about 5% and yellow is the two-year yields, .288%. last time we saw this unemployment rate this low, we actually had two-year yields at 2.6%. that was a really staggering thing, so that cap is unbelievably wide. back toot going to snap 2.6%, there is a lot of room to make up. joe: compared to this cycle, the ,ates and where the data was

where this really stand out. i want to dive into my terminal, this is something you might have this,, you should know and also piece of data, the latest look at consumer credit. a report out monthly, this is september consumer credit, this is looking at a revolving consumer credit, credit cards, people buying stuff. scarlet: the good credit. joe: zoom in, you can see this is almost a 5% rising in terms of year over year growth with credit card usage, this is buying power, this is a good sign, the consumer accelerating. alix: what if you cannot pay it back? joe: this is what the country is built on, spending and borrowing. so, the cycle is up. alix: i am looking at u.k. inflation. alcohol, energy,

tobacco, the blue line is cpi falling by a 10th of a percent. and other cpi is rising, this is the red line. this is what mark carney is focused on, this is what he told bloomberg editor in chief -- when they spoke. >> when we look at it, because of this inflation, it shows up through core inflation. scarlet: this is important because his predecessor did not like -- inflation. it was not an accurate reflection, he said. joe: a similar dynamic here in terms of core being far faster. scarlet: make sure to tune in tonight for that conversation with mark carney, that is going to be at 8:00 p.m. eastern time. alix: blockbuster jobs report following a two-month low, we also saw with growth acceleration and unemployment

falling to a seven-year low. jonathan is joining us now. what at this point could stand in the way of a rate hike? >> i think something has to go terribly wrong in order for the fed not to move. and you said, the most important thing, the vicks is lower. the 10 year bond yield is higher. shrugging this off and when the fed hinted in october that they were contemplating a move in december, the market jumped 110 basis points, they want higher rates, the job report says the economy justifies it and the market response is positive when it happens, i think. joe: it seems like stocks are basically accepting that rate hikes are coming. -- let's say, we get

strong inflation data and wage numbers keep picking up, how would the market react to the impression that the fed cannot be so low? >> what the market take it, yeah. but if you said to me right now, looking at commodities, looking at inflation data from before, the u.k. or the u.s., there is still some disinflation out there, if you said we were 2.1%, that is one thing. inflation readings are in the mid-ones come in so i think that the fed and marketplace would love a little more inflation, because companies have pricing power. i am not saying get carried away, but we are a very big distance from problematic inflation. julie: -- scarlet: the bond market really saw an outside reaction, is it fair to say that it is catching up with the equity market, when it comes to accepting a rate

increase? >> you mentioned the most important thing, it is not what the stock market did, but if you look at the pieces, it reacted substantially. financials told you rates are going up and we are happy about it. utilities, other things sensitive, rates are going up and dividend paying stocks will have a hard time. technology did what it should do, we don't care about interest rate, but yet those areas sensitive to a stronger dollar, so industrials, materials, energy, they sold up. the market is realigning itself around this, so it was a larger reaction. alix: in terms of earnings, we are looking at the worst quarter -- 2009.e since 10 to what does that do for margins and the ability to grow revenue? >> a couple of things, first

when you look at earnings numbers, we are looking at in theng down 50-60% energy sector, so that overwhelms the underlying trend. what is the market doing in general, excluding energy for a second, you are looking at close to 7% earnings. you are 100% right, we have a revenue problem and that is not an energy problem. what companies are realizing is you go to the board and to say revenue is this, you want half the normal pay. and you are going to deliver 2-4% eps on that, you start looking for your ceo. you have every incentive to find ways of saving money, that is pushing wages, but it also doing other things, buying back shares. you talked about that before. so i think you will see this as an imperative to deliver margin in a low revenue world.

joe: a way to gauge the strength of earnings, how many companies -- what was the story for the season? >> this is amazing, companies beat by 4.7%, with the exception of a couple of quarters right out of the recession, this is about -- this is a grand slam in earnings. was on zero of that revenue, hundred percent was on margins and a lot of investors are struggling. alix: looking ahead, we'll get that on retail sales. scarlet: and result from retailers, how can -- how critical will that be? >> i am not sure. obviously, from the fed perspective, the job report trumps everything else. this is a big number.

i think that you can have a strong consumer and still have weak retail sales, people are spending money on other things, maybe spending money on rent, but also on media and on other things, so cars, in fact you could have a weaker retail sales number and still have a healthy consumer. it will confuse people, but that is what you're getting. alix: fair enough. thank you. coming up, the october jobs that the market is back, we will have numbers you cannot miss. ♪

alix: we'll get right to mark with first word news. >> president obama says he is rejecting transcanada's keystone pipeline because he does not believe it serves national interest. the decision and seven years of debate on a product that has strained relations between the u.s. and canada, the collapse of crude prices has led to lower gas prices, is also weakening the argument for the a billion-dollar project. agency reports investigators say the analysis of the black boxes and crash site to just the possibly of an attack on the russian jet that went down last weekend. both black boxes reportedly stopped working suddenly, which could indicate an explosive decompression. all 224 people aboard were killed. the u.s. homeland security

department has announced a new series of efforts aimed at international airports, the security moves come in the wake of the crash of the russian jet liner last weekend. jeh johnson says the new security efforts will focus on commercial flights, bound for the united hates from certain overseas airports. he did not say which airports will be affected. u.s. and british officials think that the airplane may have been blown up by a bomb and britain has grounded flights to and from the area. russia also said they will suspend flights to egypt until security there is improved. first newsook at the right now, you can get more on these stories 24 hours a day at bloomberg.com. back to you. forlet: it was a huge day the labor economy, 270,000 jobs added and unemployment sliding to 5% and earnings rising 2.5%.

we are digging beneath headline numbers, what did you find? >> the big bang thing we were looking at, especially in terms of the fed, what are the headline numbers? what is headline job creation, what will wage growth be, we have every single thing picked up, it was a great report from the fed perspective and that is what they needed to be able to support moving, potentially raising rates starting in december. joe: you did digging and you innd that there is a big -- the wage market, explain not only the strong month but also some of the week data that we saw. the chart you are looking at right now, tell us about it. >> we had an uptick in a way to growth, we have been waiting for that for a long time.

this chart shows sort of the number of hours worked multiplied by the earnings per hour multiplied by people working, so this is a good chart. issues -- it shows three industries have accounted for the numbers we have seen, this is construction, this is health and education services and professional and business services, that is the blue line. the other line you can see is trending down, that is the other industries making up the labor market. those industries contain external facing sectors, the ones you expect to sort of get hit harder by overseas growth, that sort of thing. fromwe see is the numbers today that were so great, they are driven by construction, health and professional and business services, these domestic facing sectors. these are the ones that came in

september, a bad report, but then surged in october. those are the ones that have been accounting for the while jobs reports over the last couple of months, as our -- as the ones external facing has been more steady, even lust -- last month. alix: does that mean we have to ignore the numbers? >> not ignore them, looking at an expression of strength in the domestic economy, something that september jobs report casts out on, because why would we have this big drop in construction, in wage growth, that thing, that was a fluke. those have been more volatile than most other industry numbers, so we will have to see if that is repeated next month, or another big drop. the other thing, we have another --s report before the next

so we had a terrible report in intember, a good one october, it will be interesting for november, the final data that the fed will have going into that meeting. alix: we are looking at hathaway earnings, this is earlier than expected. what do you see? >> stock price trades are at a large number, so earnings per share is sizable. third quarter earnings per share -- two and $59. so that is higher than expected. scarlet: the third quarter does include a holding gain of $4.4 billion, so the net profit is at $9.43 billion. billion, so $251.3 overall analysts were looking for a drop in earnings, and we

did get that, because of roads and northern. some say that as much as 20% of pressureofit is seen and we are looking at week writing results. joe: we're back here with bloomberg news and right before the break, you are talking about there is a jobs report before the december fed decision, so what would it take, how bad would have to be for there not to be a hike? ,> pretty bad, given the trend and officials have been emphasizing the conduct of process-- can look of and we are getting down to another statistic, the headline unemployment rate, that was only a 5% today. the other thing, there is a theory that the natural rate of unemployment could be much none of the for-4%,

fed officials buy into that. they all have projections for the natural rate of unemployment. i think the lowest is 4.6%, but that is only one of the people on the committee, said they are all tightly in this 5% range. so at this point, even charlotte evans, one of the most -- officials, says the market has already met conditions for fed liftoff. joe: it would take a complete disaster. alix: looking at market expectations, it still seems like the fed is more hawkish than the market, so does the revised plans?t mrs. --not only how we think probabilities for a december rise, but even more so we have seen a bigger move in that sort of tightening that will be

prices for 2016. this one and done we were talking about, that seems like it has completely disappeared from the market. people are pricing things a lot faster for next year. joe: how much does that change today, in terms of 2016 rate expectations? >> it was maybe 66 basis points today itning and then is much different, a pretty sizable move. come inside the terminal, you can see what it was like today versus after the fed meetings, so that green line is the implied policy curve and the yellow was after the september meeting, see you can see the change in implied policy is how quickly it changed and how the rate is on the curve. thet makes you wonder about one and done notion, that was

something we had win probability of the first hike was so low and now it is moving up, more so than just the first hike. it throws that idea into question. alix: awesome stuff. thank you so much matt. scarlet: coming up, is there a risk when it comes to the fed's plan. we will talk about the next. ♪

scarlet: "what'd you miss?" -- a december rate increase looks likely, but when the fed actually begins liftoff, will they commit to a shallow path? joined by phone with

connor, this looks like a go for liftoff if you look at market reaction, the cti number would indicate that we have been in place or set of four increases, is that a proper way of looking at it? >> yes, looking at cpi energy, one problem investors have had this year is -- with the following energy and the rise of the value, you have conflicting sources, where the triple third is -- is dragging inflation in we have also seen inflation and auto sales. investors are trying to figure out as of the tradable sector diminishes, what inflation looks like in 2016. joe: one of the main drivers has been the fall of energy and the crash and oil, but eventually that will wash off, things will

slow down, it will fall away and so what will that do to the inflation outlook once we do not have the year-to-year drop in oil prices? crash in oil started last year, we went from $75 a barrel to -- a barrel and that is the basis for year-to-year measures. every time we have gotten cpi this year, we have what the zero line inflation. but as scarlet mentioned, looking at these more core metrics, things look more former -- more firm, so 2-3 months from now we will see a bigger and better signal. , do youa portfolio man think there is a possibility that vision will surprise and upset the market and therefore put pressure on the fed and their superlow path, what does

that mean for equities? we look at, the real component, that is what is being compensated outside of inflation. --have seen measures like that really track oil over the thatseveral years, so as comes down, it has gone johnson understandably low level. we do not think there is a realistic path for inflation. the real component of interest rate seems fair, it is really the breaking even that does not look great. not so muchoking at the overall interest rates. scarlet: thank you. alix: coming up, china gears up to resume ipo's, we will look at a chart you cannot miss. ♪

scarlet: i am scarlet fu. "what'd you miss?" let's get to mark crumpton. mark: the obama administration has decided to reject s keystone pipeline, ending seven years of debate over a project that ballooned into a contentious issue. : this morninga secretary kerry informed me after extensive outreach and cabinettion with other agencies, the state department has decided that the keystone xl pipeline would not serve the national interests of the united states. backers arepeline's expected to challenge the decision in court, and congress

may try to override the president. the project may get a fresh look in 2017 if a republican wins the white house and invites transcanada to reapply. campaign officials for republican president candidate ben carson have admitted that a central point in his personal story was made up, his application and acceptance into west point. the economy says it has no record of carson applying or ever being admitted to the school. in his book from 1996, "gifted wrote he turned down a full scholarship to west point. fifa president set the latter -- sepp blatter is hospitalized for medical evaluation but his attorney says he is expected to return home shortly. he was suspended for 90 days by fifa's ethics committee after being questioned as part of a swiss investigation into financial mismanagement. aflorida man who landed one-prison aircraft on the lawn of the u.s. capital has agreed to a plea deal. douglas hughes will plead guilty

to operating a gyro copter without a license, a felony charge that carries a potential three years in prison. his attorney will ask the judge for probation. hughes called the stunt an act of civil recipients. and that is a look at our civil disobedience. and that is outlook at the news. from the news desk, i am mark crumpton. let's get a quick recap on how markets close after the blockbuster jobs number. the indexes don't tell you a whole lot. you have to look at the sector breakdown. financials led the way up, gaining about 1% on the prospect of higher interest rate. utilities at the same time that crushed for the biggest kind since february. the dollar surged and treasuries tumbled. this is the highest level in 4.5 years. incredible. joe: wow. also, the other thing is if you look at the 10-year yield, which

is sensitive to the economy, very big jump there. it looks like today's jodhpur or --jobs report at least at the margins change the way people look at the economy. alix: very quiet. the action is where it should be. the other big piece of news that we got today, mark crumpton was just speaking about it, president obama rejected the keystone xl pipeline. what does that mean for the canadian oil world? for that to my dive into the bloomberg terminal. ilgo. this gives you all the differentials you can possibly ask for. right over here in this corner is the canadian oil. the discounted vs. wti, u.s. oil. this is discounted $20 alone wti. -- below wti. aspect is out with a note saying that these rates will even have to be discounted more

in order for people to buy them because they will have to be transparent -- transported more by rail and rail is very expensive. this has the potential to blow up the canadian oil industry because these guys are making less money for the oil they are producing. joe: quite a blow after seven years of trying to get it done. i want to dive into the terminal to look at great expectations for policy rates in the u k we look at this function a lot. market-based measures to apply what the market has been saying about the odds of a rate hike. alix: a bit of a freudian slip, "to guess." joe: exactly. people think of the u.k. will move for a while -- don't think the u.k. woman for a while. yesterdayhat this was before the strong jobs number. 50.8%. we saw the jump-- 15.8%.

we saw the jump after the jobs number and the fed -- when the fed goes, that opens the door to people. when people perceive the fed as being ready to like, everyone else gets the green light. the jobs report, which brought forth expectations of when the fed will hike, also has the effect of bringing forth expectations of one other global central banks will hike. scarlet: they are waiting for janet yellen to move first and they can come in with the follow-up increase trade for my deep dive, i want to look at this announcement from china that it will lift its five-month freeze on ipo's by the end of the year. sorting by trading day, you can see how more than $30 billion of ipo's began trading in june. the government suspended ipos in mid-july and then there is the drop-off. only $5 billion of ideas trading that month -- of ipos trading that month. means that of this

chinese cavities don't need to raise money through debt issuance, which is significant because i know a lot of people are getting concerned about how leverage chinese companies are. maybe they can at least not put more pressure on the balance sheet and start issuing -- selling shares looking to raise money that way. alix: all of this brings us back to what does the job stated you when it comes to the december lift off? are u.s. cavities pushing their borrowing binge before the fed gets a chance to end the zero policy rate? joining us is adrian miller. good to have you. adrian: glad to be here. alix: do you think we are closer ?o ending it faster backup adrian: yes, i think this proves it. for all intents and purposes from this jobs market made it

all but certain, let's we have some real shakeup in international markets --unless we have some real shakeup in international markets. scarlet: when you look get credit spreads particularly -- joe: when you look at credit spreads particularly around the high yields, where next for this? adrian: i think, believe it or not, if we get to the normalization in the commodity sector, which has really been -- the problem with a high-yield sector -- if we get the market to calm down, we could see credit spreads come down from irrespective of the fact that the fed might move. i don't like anybody in the credit markets really believes that the fed will liftoff with any kind of speed. maybe they will slide the channel up a little bit. nobody is expecting any kind of at t with the duration aspect of the credit markets. there is a lot of concern regarding the federal reserve's reaction function.

the chief north american economist of citigroup was with us this week and he asserts that monetary policy reacts more to bond market volatility than stock market volatility. do you see that? adrian: that makes sense because you figure it is the rates and the spreads associated with the rates that dictate funding costs and ultimately, economic activity. the fed is more sensitive to what the bond market has to say, and the direction in which spreads are going. more so than in the equity market. i agree with that assessment. seem to think that yes, december would be a go , but what about the next few rate hikes? i want to look at my terminal 2 -- the stiffening of the rate hike curves. steeper?at curve even

should we retire rates even faster -- reach higher rates even faster? adrian: no, i don't think so. there's nothing to suggest you would expect that kind of ramp up in rates. you saw it from what was coming from the fed's expectations come with a terminal value on whether fed funds would be is nowhere near what we have historically seen. joe: what about supply? you look at the decline in spreads. there resistance and that of what the fed rate hike -- there is this concerned that before the fed rate hike, people will try to borrow a lot. what is the supply picture look like to you? adrian: i think it will be very strongadrian:. you should see another big number. about who willly get ahead and not get ahead with the fed. it is more the big picture of what the economy is doing.

is the m&a cycle going to continue to be hot, which i think it will be. and then as the situation develops an economy improves and the job market improves, you will start seeing a high-yield market, the primary site, begin to pick up. joe: the federally controls the short end of the and they could increase the short end without seeing much of an increase at the longer and or the range where people really borrow. how much to the fed policy rates and the short-term rates really affected the corporate picture? adrian: it affects it so much that depending on what it is talking about, it will direct expectations of growth, and that is what lives the backing of the curve. depending on how well the policy , and a lot of people don't think it is going to do much -- for the most part you will see it continue to go on. more so in the five-to-30 have in your band -- 30-year band.

scarlet: good stuff. adrian miller, thank you so much for joining us. free charts up, the that suggest the markets may have had enough of share buybacks. ♪

alix: i am alix steel. "what'd you miss?" it is time for the bloomberg business/. we have what he tells on berkshire's earnings report. third-quarter profits doubled on an investment in craft times -- kraft heinz. from 4.60 2 billion or

2800 year earlier. operating earnings included investment results that also beat estimates. the united auto workers says it has a tentative contract deal with ford. the agreement came before union members at gm had ratified their own agreement. no details on the ford deal have been released, but it is expected to be similar to the gm deal with auto workers. the contract covers 53,000 workers at 22 plants in the u.s. and lockheed martin talent in the pentagon selection of northrop grumman to build a bomber tell you to as much is it -- valued at as much as $80 billion. boeing and lockheed martin to keep alive their chance to build the first new bomber since the cold war. scarlet: inheritance came up short of expectations. many believe that christy walton fortunet her husband's when he was killed in a plane crash 10 years ago. court document's reveal that

instead of getting $32 billion, she received only $5 billion. charities and their only son were rewarded the rest. and that is your bloomberg business flash. alix: it looks like the market may have had enough of share buybacks. it is no secret that copies have been paying shareholders through generous buybacks, but this may be coming to an end as the credit cycle begins to churn. there is the potential pickup in default rates. this is a great note from citi that came out a week ago talking about what has happened to stocks that have put a lot of money into buybacks, compared to the s&p. those stocks have been rolling over a little bit. you would not have thought that. this has been a record year for buybacks. we're looking at 700 -- accused far.575 billion spent so last year, up 14% from 2013. now investors seem to be wanting some thing different, like a balance sheet -- joe: and as you pointed out

already, the issue is not just the buybacks, but to fund these buybacks, a lot of companies have been going to the debt market and money is cheap and borrow it rather than invested in plants and equipment. you see this huge explosion of leveraged across the investment universe. now there is this concerned that we are in, as they say, late in the credit cycle, to use the cliché that is used over and over again. the fear is that they won't be able to keep doing this anymore and they are stuck with these huge debt loads and stacking stocks -- sacking stocks. scarlet: historically, many that are perceived as credit worthy can easily sell debt to fund the buybacks the question is from that will delete your balance sheet and investors will start pricing that in, and that debt issuance will hurt them more than help them. default rates are starting to creep up. they turned a little bit there and in the past -- the question is how much they will rise and

how quickly. joe: it is a bigger story than the on buybacks. how many business models are going to turn out to have been suspect? one which has its own issues was built on following money and buying companies. even if there were none of these accounting concerns alone, that business model with start to the pressure on there, because of the credit markets -- alix: and you are dealing with, in essence, two different types of companies. one day you cannot -- when would be that you cannot cover your dividends with -- scarlet: energy companies. alix: some of them. but apple, you are buying money because you do not want to repatriate money to fund on your buyback. they have a ton of cash. but there is a distinction to be made within that space. scarlet: absolutely. -- how much of the default you are seeing, that pickup, how much of that will be limited to the energy sector versus spread across other

sectors? you will see an increase elsewhere. alix: it is a great conversation and people always come on nro like, "i like i dividend-paying stocks with buybacks and good balance sheets." in reality combat is that the priority anymore. scarlet: what did warren buffett say? when the tide is going out -- joe: yoe who is swimming naked. scarlet: the housing more, is it uneven? that conversation up next. ♪

joe: i am joe weisenthal. "what'd you miss?" u.s. home prices have been rising at a steady clip. so where are we in a housing recovery? laurie goodman is the director

of the housing finance policy center at the urban institute. thank you so much for joining us. where are we? as the housing market recovered or do we still have a long way to go? laurie: it has recovered in some sense but we still have a long way to go. it is important to realize that delinquency is are elevated. at the same time, one of the consequences of the crisis has been credit availability is very tight. we went from having credit that was way to lose to having a where it is difficult to get a mortgage at the same time. joe: what will change that? it is going toe happen over time. arethe fha and the gse's very aware of the need to expand mortgage credit to those whose credit is a lot less than pristine. the issue is that banks are desperately afraid of buybacks. it is very costly to do delinquent servicing. and the result is that they have put overlays on top of the gse

and fha credit boxes, and you have to get them to give them enough comfort that they will eliminate those -- joe: you talk about eliminating overlays and loosening standards and immediately people think that we will go back to the subprime days of 2004 and 2005. do we run that risk? laurie: no, we're such a long way from that point. we went from a situation where credit was way, way too loose to a situation where credit is way, way too tight. if you think of 2001 as sort of representing a sort of reasonable set of credit standards, we're taking less than half the credit risk we were taking in 2001. we just have no tolerance whatsoever. joe: let's talk about that specifically. the market -- to what extent does the market prepared to take on default risk, for currently taking on default risk in this pricing? laurie: i think the market is repaired to take on a lot more risk than it is actually taking on. it is giving lenders comfort that when they think they have

sold the risk to the gse's or fha, they have sold them as. -- sold the risk. joe: and another thing we are seeing in housing is bifurcation between multifamily units and sale family units. there is a surgeon multifamily and single family has been eh. will that turnaround, and what will it take for single family to come roaring back? laurie: yeah, i think, basically, houses nationwide are still below the peak. it is much more costly to build than it was before. you are having a situation where it is not cost effective to build the number of single-family units we need to build, and it -- and when action matters is single-family servers is multifamily together versus households versus new household formation. single family and multifamily together are running well, well below household creation.

joe: just based on demographics and the creation of new households, we got to build a lot more. laurie: we got to build a lot more homes. a new household needs a home. it doesn't matter if it is a mentor home or owner-occupied home. our projection is that the homeownership rate continues to fall, based into the demographics. joe: why? laurie: well, first, you have got a population that is increasingly minority, 77% of new households between 2010 and 2020 are going to be minority. 88% between 2020 and 2030. the great recession obviously lowered homeownership rates. starting from the lower base. you have the fact that credit is extremely tight. real wages have been absolutely flat and declining in the critical 25-34-year-old age group. student loan debt for those who have not finished college. and finally, the fact that there

has been a very, very subtle change in attitudes towards homeownership. for my generation, homeownership was a store of value. children'sen'-- my generation cannot think of it that way. joe: is there anything congress can do to improve the housing market? laurie: i think, yes, there are things congress can do. there is nothing congress will do. joe: great stuff. thank you for joining us. laurie goodman of the urban institute. we will be right back. ♪

scarlet: i am scarlet fu. "what'd you miss?" don't miss this -- we have a big week for retail. a lot of retailers coming out with their earnings. kicks off on wednesday.

and then we get the big sales numbers for the month of october, critical as we head into the most important season for retailers, the end of the year holiday season. have alreadyp 500 reported. this is the last component of the market overall that needs to give us what they are looking at for the year ahead. alix: clearly, as you point out, people are spending on the credit cards. what we will beat -- what i will be doing tomorrow while you are sleeping and doing research, i will be ratings a result of china's foreign reserve balance. the estimates are for it to come in at 3.4 chilean dollars, down $3.4$3.4 trillion -- trillion. does the emerging markets selling foreign reserve assets equally to quantitative tightening? that is what i am paying attention to. looksomething else to forward to internationally come on monday we get export-import data from germany.

of europe,the engine as everyone knows, but it has been sputtering a little bit lately. exports are expected to grow 2% in september. we will see if that holds up and if it is a reflection of not just their economy but partners in the

mark: i mark halperin. john: i'm john heilemann. with all respect to ben carson who is having trouble remembering the west point conversation. come on, dude. it is not brain surgery. happy military academy appreciation day. in our big camp regimen tonight, keystone exercises. rubio reflexes and debate state gymnastics. forget the pyramid, forget the belt buckle stabbing thing. is in troubleson in an area you should noss