competition in the u.s. in the last year we have come out with a new strategy. we've done a lot of consumer research. occupy a lot of street thousands of pieces of research with consumers, and this has led us to a conclusion the going forward in the u.s. we are a beverage to go company. that means people are on the move, people want to move around very quickly. brew, which had a spectacular third quarter. it is the biggest launch we've had. so we feel very good about being a beverage company. in certain international markets, we are opening stuff up. we are very excited about that business. we signed up with a group that looks to open 250 dunkin' donuts and 70 baskin-robbins. we are excited about that market, it's on the cusp of eating a strong developing

market. being a strong developing market. we do have some donut competition around the world. i think you have to come back to the fact that globally, the number one seller of donuts anywhere in the world is dunki'' donuts. matt: you mention the cold pressed coffee and i know you've recently done a partnership as well with coca-cola. how do you see your coffee evolution? you've moved away from drip coffee and more into espresso and customized drinks. >> i wouldn't say we moved away from it. original blend coffee is still a significant part of our revenue. young people like two things, which we are the market leader in iced coffee, and we enhanced our coffee range

with the introduction of cold brew. we brought in more espresso-based drinks. millenials like espresso-based drinks and maki otto -- ma cciato. -- macchiato. they also like iced coffee. we are not going away from drip coffee, but the opportunity and espresso-based drinks and iced coffee is spectacular and is growing. matt: probably because you can pack so much sugar into those iced coffees and espresso-based drinks. i like the ice cream. baskin-robbins seems to be a brand weighing a bit here in the u.s. what's the story with ice cream and donut sales? for old guys like me, millenials aren't into that waistline additive food?

we allow our consumers to decide what they want to add themselves? that's a way to put the responsibility on the individual. baskin-robbins had a decline of .9%. over two years, 6.6%. this is a business which five years ago had declining comps nad store -- and nstore count. we are excited about the future of baskin internationally and domestically. the message is donuts, coffee, and ice cream. they are all going north. another quick check on time warner sales, they have shot up on this bloomberg news report that senior executives there along with those at at&t

met in recent weeks to discuss business strategies including a possible merger. these talks are still informal. the share price is moving quite a bit with time warner up by better than 5%. we will speak with the reporter who broke the news in just a moment to read -- moment. this is bloomberg. ♪

scarlet: senior executives at at&t and time warner had been meeting to discuss a possible merger. our reporter joins us with more. this is a big one. time warner would be the takeover target and at&t the buyers here. time warner had rejected an

offer from 21st century fox not so long ago. >> that's right. late 2014, it was. your understanding is correct. this is exceptionally preliminary. the nature of the discussion between the companies has been much more relationship building, executives meeting one another. in those talks the idea of a potential merger has been great. matt: i love to pull up comp charts. it's a great measuring stick to look at all company's. return, i'vetotalthe got time warner here in white. telethon in yellow, and the s&p has a benchmark in orange. at&t has underperformed the s&p 500 over the past few years. time warner has outperformed the s&p. what at&t has on its site is

absolute size, a $240 billion company versus a $56 billion company. >> slightly larger. it can afford to take these big .ets to move into new areas stevenson has been on the front foot about this. he said he needs to take a company into doing media and content. this is a logical fit thing for them to be looking at and a direction that they want to go in, some of their big rivals have already gone. there's a lot of logical reasons why they would be interested. they also have the all-out scale to pursue these kinds of things. scarlet: verizon buying yahoo's web apps. this is a flavor of the moment for all of these very like a raisin,

at&t, -- verizon, at&t, to pivot into the content and the pipes. they want to move into the content having the full sweep. scarlet: would it be overpaying at this point? there is such a premium put on content producers. warner owner of hbo. that's their like a raisin, at&t, -- moneymaking. that is what they do. matt: it's also a heck of a lot bigger business then yahoo!. and maybe even less than that, because they are now contesting whether or not the price of yahoo! is correct. netflix, which is another potential asset in this space, is very expensive. anything you buy that will get this much access this quickly will be expensive. at&t is still going to do this in a way that moves the needle. there is no point in them

picking up a couple of billion dollars here and there. matt: the f a strain offers a wealth of information on the bloomberg. i just graphed time warner's adjusted and that don. and then the forecasts are in the sort of shady areas. we are looking at forecast fiscal year, $9 billion. what kind of multiple do you think companies are putting on this kind of asset? >> it would go at a full price. clearly there has been other interests in this. they have come into this before, offered 85 bucks a share. time warner said that wasn't enough. their stock is held up very well, just looking at where they are trading now. i think this would be a fully priced asset. it's a good asset with a growth story.

the chief executive of time warner, he has indicated that he would -- scarlet: i can't help but compare what happened with time warner and aol in 2000 at the top of the dot-com bubble. that deal to go through, and it was terrible for both sides. they had to divest themselves of aol. what kind of reaction did you get from other people when you spoke to them about this? has becomener-aol synonymous with all that was wrong in the previous big merger. let's hope we are not at that point. people think this makes a lot of sense. at least at&t moving more in this direction has been written about. dave -- they've talked publicly about their desire to expand here. it's not as wild as something

like a well/time warner. -- aol/time warner. scarlet: thank you so much. matt: congratulations. i'm sure you want to get back to the m&a desk. we will continue to monitor the story. we are awaiting earnings from tech names. microsoft -- well, paypal is not bad either. remember windows? don't write it off just yet. we'll show you why.

scarlet: "what'd you miss?" microsoft will be reporting earnings after the bell. growth is certainly still coming through in its legacy business, windows or office. it is delivering the last quarter or two. what you see is the orange bar, the commercial pc related

growth. for the firsttive time in seven quarters. the consumer business has done even better. bill belichick notwithstanding. he had to buy a new one. this growth may be fleeting. we also heard from intel during this earnings season that the whole pc year end demand could be lackluster. you might see a drop off their. for now those legacy businesses are developing. att: lisa abramowicz wrote story for bloomberg gadfly that i just cannot get out of my head. here's one of the charts she included in her story. this is based on blackrock saying they estimate investors are holding trillions of dollars in cash. get your head around how much cash, $50 trillion is.

these bars here show you the total gdp of these countries. that doesn't even add up to the $50 trillion in cash that investors -- that blackrock says investors are holding. the market close is up next. we are down across the board. four minutes to go. stay with us for that. this is bloomberg. ♪ . . .

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scarlet: we are moments away from the closing bell. "what'd you miss?" --markets were broadly steady as they digested comments from marquis o-dog eight -- mario draghi. i am scarlet fu. matt: i am matt miller. welcome to all our viewers tuning in live around the world on twitter. you can watch closing bell coverage on twitter every weekday from 4:00 to 5:00 eastern. scarlet: we begin with our market minute. u.s. stocks closed lower, although it was a marginal decline. you still have eight out of 11 major groups on the decline, with telecom the biggest la ggards. matt: take a look at the imap. you can see the industry groups

broken down. 11 out of 10 are declining, but there is some green on the screen here. health care is a gainer. you can see individual pockets, semiconductors, semi conductor equipment gaining. individual pockets of financials, like banks, diversify financials gaining. consumer discretionary. media is up. that is obviously the time warner move. consumer staples, retailing. take a look at some stocks on the move. let's just say, time warner is one of the big gainers today after that scoop was broken. you can see telephone moving down. here you see at&t down almost 2%. time warner up almost 5%, not the 8% pop we saw initially. ebay with a forecast that disappointed the market with its earnings report yesterday. american express with earnings that pleased investors. those stocks going the other direction. scarlet: mixed day when it comes to earnings and we have m&a news to contend with.

in the bond market everyone was fixated on what the european central bank data, or in this case didn't do -- did, or in this case didn't do. 30 year yields coming down a little bit after mario draghi downplayed the concept of more quantitative easing, to taper or extend it. if you look at the bund, the five-day intraday chart, bunds have been rising for four straight days after the ecb punt. the yield is still positive, actually just barely positive if you go out couple decimal points, but certainly off the high of 10 basis points on monday. in currencies, the euro was in focus because of the ecb meeting today, declining. the actual rate announcement, no change, did not have an impact as you can see, but it initially spiked and then quickly gave up again. now the lowest since june 24 a day after the brexit vote. matt: mario draghi, in a sense

he disappointed the market by not giving details about what he was doing with qe, so they kind of freaked out at first, but the market does expect, and 73% of economists we surveyed do expect quantitative easing, the ecb quantitative easing program to be extended through its march deadline, and as a result you see the currency weakness. scarlet: that will happen probably in december during their next meeting. gaining for real the fourth day. the central bank cut rates for the first time in four years. they did sound a hawkish tone. tone. the lira making big swings, a little changed here, but did make big swings after the central bank unexpectedly kept rates on hold rather than cutting as many expected. the aussie dollar snapping a six-day gain. jobs,was surprise drop in leading to speculation the reserve bank of australia will cut rates. scarlet: it is always confusing

with the currency pairs, because there you are showing dollar weakness against the real. scarlet: in the aussie dollar, you are looking at the aussie falling versus the u.s. dollar. matt: let's take a look at commodities. a little easier to read these charts. all you have to year is a dollar price against the underlying commodity. crude coming down after comments from russia about whether or not it will boost production. it says it could boost production. nigeria cutting prices for its crude, and as a result of uti coming down, 50.43. brent was down as well. corn and cotton, big drops today. soft commodities all down, and metals down as well, so a negative day for commodities. scarlet: those are today's market minutes. we want to bring in our bloomberg intelligence senior analyst, who covers microsoft. we are waiting for microsoft earnings any minute now. microsoft reorganized its

business is not long ago, so it has been hard to figure out which part of the business is related to the consumer side, the corporate side, versus the cloud. >> the way that they organize the business, how the ceo looks at the business, he looks at everything that is productivity-related, everything cloud-related, and everything computing-related on the pc side. that is how they have mixed some things together. it also helps them to insulate, as they are moving products to the cloud, it gives them a little buffer to play around with it. matt: what does the trend look like? has microsoft been doing better in the cloud than its competitors? anurag: certainly. one of the things that microsoft talked about recently. it is a two horse race now, between them and amazon. matt: and this is satya nadella, the ceo, this is his wheelhouse. anurag: absolutely, which is one of the reasons microsoft has been making this transition for

some time, and doing relatively well. scarlet: let's get you microsoft results, which just crossed the bloomberg. first quarter earnings per share of $.50. on an adjusted basis,, $.76 a share and analysts were looking for $.68, so that's better than the highest estimate from the analysts we have surveyed. in terms of revenue, first quarter adjusted revenue of $22.3 billion, also better than what analysts when looking for, anticipating $21.7 billion, so that 22.3 billion is at the high end of what analysts were looking for, so a beat on the bottom line and the top line. more personal computing, that's one of the business lines. the revenue for the quarter was $9.29 billion. analysts with him for $8.9 million, so a beat. intelligence crowd -- intelligent cloud, the consensus estimate was just over 6.1 he $5 billion. anurag, i have been looking at these headlines. first quarter total unearned revenue. is that bookings they can expect

to read the benefits of later on? anurag: yes. i am no surprise by the personal computing once, which we discussed -- ones, which we discussed before the earnings came out. that is an area, pc's are still declining, don't get us wrong, but the pace of decline has improved, and it will be interesting to see what they talk about, how the partners are pricing the products coming into the holiday season, and that will be a big driver for the next quarter and the quarter after. scarlet: what happened to the surface? anurag: it is doing very well, actually. scarlet: is it more personal computing? anurag: more personal computing. it is a much more expensive device than the sub-$500, $500 pc, so you get a bump in that as well, even though you might be shipping less units. but your average price is very high. matt: phil belichick is not happy with the microsoft -- bill belichick is not happy with the

mica subsurface. he broke one on the sideline, because he says it's not reliable. anurag: the results show otherwise, i would think. scarlet: i think he gets angry a lot. another headline, microsoft sees closing the linton deal by the second quarter of 2017 -- linkedin deal by the second quarter of 2017. ? the thing -- anurag: the thing is, they have said they will that linkedin run as an independent unit, and the numbers will run into one of their divisions, the productivity division that they have, just because that ties in very well with their cloud enterprise products. matt: let me break paypal, because those earnings came out as well. first off, i will give you the stock, which is down in the after-hours because paypal's adjusted forecast for 2016 eps trails the midpoint of that, trails the street's estimates. paypal gives its forecast a lot of times in a range. for example, full-year eps of

$1.48 to $1.50, and the street is looking for $1.50, so the midpoint of their forecast is $1.49 and that slightly trails what the street's estimate was. to be fair to paypal, it is higher range. they previously said $1.47 to $1.50. i need a whiteboard to go through all of this. in any case, the outlook is disappointing. third-quarter revenue beat, $2.67 billion, in the street was looking for $2.65 billion. and as far as third-quarter eps, adjusted pro forma number, but it was $.35 and the street was looking for $.35, so they didn't really beat in the third-quarter profit. they did in revenue, and they didn't impress as far as their outlook is concerned for the full year, so you can see the shares moving down a little over 3% right now. scarlet: to mention, since we are looking after the trade, microsoft shares are moving

higher in extended trading. we mentioned how the company beat on the bottom line and the top line. anurag rana here with us from bloomberg intelligence. first quarter capex, $2.16 billion, and analysts were looking for spending of $1.84 billion. what is my croissants spending on? anurag: this is one of the most important things. to grow in the cloud business, you have to invest in a lot more data centers. this is one of the reasons why if you look at microsoft's expenditures, it has gone up quite a bit, but that is paying off right now. i think it is much higher than much higher than the last quarter, 108%. matt: so intelligent cloud is a good business for them. we were talking about windows as well. obviously it is linked to their personal computer sales very strongly, and it is a business and a consumer product. is windows still a big revenue generator? do people get excited about windows? anurag: yes. investors should, because from a

profit point of view those are cash cows. operating system, windows, the office suite, those are the two products that allow microsoft to be creative, to go out and make new acquisitions, to try all these new products, because those are the anchors around which the transformation of the company is being done. scarlet: anurag rana, thank you for the instant analysis. great to have you on set as we break down these microsoft numbers. for more information from bloomberg intelligence go to bi-go on bloomberg. matt: so much in the after-hours. at hammond and his team at -- ed hammond and his team at bloomberg news broke that senior executives at at&t and senior executives at time warner meet in recent weeks to discuss strategies,ness including a possible takeover of time warner by at&t, so as a result you have a big boost in time warner shares. ups is the close, you saw

$3.75. at&t shares down a little at the close. in the after-hours, you see some big moves in microsoft and paypal shares after their earnings, so paypal down after missing a bit, and microsoft shares down just a smidgen as well after their earnings report is released. this is bloomberg. ♪

mark: let's get to first word news. donald is mocking his much-criticized comment at last night's presidential debate that he might not accept the results of next month's election. trump kicked off a rally in ohio

by saying he would "like to promise and pledge to all of my voters and to all of the people of the united states that i will totally accept the results of this great and historic presidential election," but he added, "if i win." mr. trump: of course i would accept a clear election result, but i would also reserve my right to contest or file a legal challenge in the case of a questionable result. mark: trump continues to raise concerns about the integrity of the election, despite a lack of evidence of widespread voter fraud across the country. a judge has ordered virginia voter registration to be reopened and extended to friday at midnight. the state's deadline originally was monday, but the online system crashed, preventing an unknown number of voters from getting on the rolls. president obama is promoting his health care overhaul. he says that never in u.s. history has the uninsured rate

been lower than it is today. the president told a crowd at miami-dade college that the law has worked, but he added, that doesn't mean it's perfect, no law is. the next affordable care act enrollment period begins november 1. big u.s. airlines often praise efforts to curb delays and make flight schedules more reliable, but most of the monthly stats carriers report do not include regional operations, almost half of u.s. domestic air routes. that changes next year. the u.s. will require performance data on flights from a half dozen regional airlines. the aim is to make monthly performance of major carriers reflect how well their regional operations perform. global news 24 hours a day, powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. scarlet, back to you. scarlet: "what'd you miss?" -- mario draghi spent today trying to give as little information as

possible about one of the most important questions in global monetary policy, whether his central bank will extend, adjust, or wind down the program to buy $80 million of debt a month. he did drop one hint at a press conference in frankfurt. "an abrupt end is unlikely. a sudden stop is not present in anybody's mind." here with us to determine how investors will position themselves for the next steps, bob fitch, global strategist at pierpont securities, and mark chandler. thank you so much for joining us today. bob, let me start with you. the ecb claims they did not discuss anything about the qe program. is it credible to you, that that didn't even come up? bob: i feel like i'm in the harry potter movie, he whose name may not be spoken. i feel this was the topic that was not allowed to be mentioned at the meeting, and i feel draghi's statement was pretty well thought out, thinking -- is

saying qe was not discussed at the meeting today. doesn't mean they will not discuss it in the media -- immediate future. i personally think they don't have the ammunition to move forward. i don't think they want to admit that yet. germany, austria, and other central banks don't want to deal with more qe. when they started the program, they stated one of their jackets was to get their balance sheet back up to its previous peak, in the summer of 2012, and it is above the previous peak, so i they, like the bundesbank, say enough is enough, we signed on for this period of time, we have gotten the balance sheet back to it previous -- it's previous -- its previous peak, and let's move on. there's no consensus really developing about what to do. >> i think that there's no doubt in my mind the ecb will extend this program. draghi said two things.

one, there is still downside risk on growth, and inflation is still not on an upward trajectory. the ecb is all about monetary policy. all about inflation. the balance sheet, i fully agree, they had a lot of goals and the balance sheet was one of them, but the reason it was not discussed, the reason i think we can take druggie at face value is that there is no -- draghi at face value is that there is no need to discuss it. they need the new forecast, which will not be ready until december. in december we will see there will be an agreement. it might not be everybody, but a solid majority wanting to extend qe beyond march because, unlike the federal reserve, the ecb is far from their objectives. matt: i think they would not discuss it because they know that they are going to extend anyway. they don't even expect 1.6% inflation until 2018, meaning they will not get even close to their goal until 2019, and that forecast was based on additional monetary stimulus, beyond what we are looking at now. so, they have to extend, right?

from their perspective? because they think that this is the kind of thing that works. does it? bob: i think draghi wants to extend. i'm not sure the others do. as draghi has said many times, it is time for fiscal policy, time for structural reform, and i think there is a solid core on the ecb governing council that basically says, by continuing to do this, at least at this pace, they are enabling bad policies on the structural side, enabling bad policies on the fiscal side, and it is time to stop enabling. and i think the people who will object are going to use this balance sheet size as their reason for saying, enough has been done. i don't think -- matt: are those people going to have german last names? bob: i would think so. i don't think they are going to stop abruptly, but the idea of tapering, continuing to move forward that may be cutting the pace of purchases, i think that is in the cards. i just don't think they want to mention it now, because they are worried about the market reaction.

scarlet: where is the inflation going to come from, when the ecb gets it? what will be the source? commodities? oil prices? minerals prices? : in the united states, we see high oil prices as deflationary, because the more money you need to fill your gasoline tank, the less money you have to take your family to eat. so i don't think it is a relative increase of one commodity. the ecb sees things differently. they hiked rates because oil prices were $160 a barrel. so it will come from the bottom of eurozone inflation, when deflation is behind us. low inflation might be here for a while, but for the same reason we have low inflation, because we have low growth. we have excess capacity. we have enclosed the output gap -- have not closed the output gap. as the output gap closes overtime, eurozone growth, think about trade growth in the u.s., 1.8%. the eurozone can grow at 1.25%. the problem is low inflation.

the ecb has one mandate, like abraham maslow, if all you have is a hammer, every problem looks like a nail. the ecb has one tool. you can't count on the government to do structural reforms which take a long time to have impact anyway, and there's a lot of structural reforms already taking place. matt: as bob says, a lot of people view them as an enabler, which surely they are at least in some senses. alan recent book about greenspan "the man who knew," one of the things that greenspan thinks is that the massive bank balance sheets, the extension of qe would further that, are going to be behind an uncontrollable snap in inflation later. is that a possibility? bob: i don't think so. i think a lot of what drives global economies overtime are demographics, and i think that the inflation pressures that we saw in the 1970's and 1980's were when the baby boom cohort was moving through their the

relation of things, houses, whatever. savers.we are i thought stan fisher's's speech was great the other day at the economic club of new york. curve, changing the i.s. changing the whole structure of the economy, so we are no longer fighting demand for goods and services, but we do have inflation, inflation of assets prices, because that is what the baby boomers are buying. buying assets. scarlet: we will continue this conversation in a moment. marc chandler and bob sinche, stick with us. we will discuss the election. a quick check of stocks. paypal has turned higher, up 2.7%. on --oft beat sales estimates on sales and profit, up by 5.25%. this is bloomberg. ♪

matt: back with marc chandler and bob sinche. i want to talk quickly with -- about the election. we have a quick chart showing volatility has died down to him was nothing recently. the reason is, everyone it seems thinks this election is decided. we could show it in another way as far as investment, trading during the debate died down to almost nothing. is it over? marc: i think it is just about over. the real thing going on for investors is what happens in the senate. it looks like the democrats have a 63% chance of capturing the senate. and the house of representatives, the democrats need 30 seats and they only have about half of that. what paul ryan is campaigning about is, who is the ranking member of the senate banking committee? bernie sanders.

that is being used as a scare tactic for a lot of people. scarlet: what do you think, bob? is the positioning ahead of the election done, and we are only going to see big moves after the election results? bob: you know, i'm not so sure that if the election passing is what is bringing down volatility. i think it is the passing of the september fomc meeting, and the probability baked in for the december fomc meeting. there has been uncertainty about monetary policy. we passed the september meeting and everybody has discounted a september hike. rate levels have adjusted globally by 40 basis points. we found a new short-term equilibrium in global bond markets, higher than we have been, but not yet ready to start discounting more hikes next year. so i really think that for the fixed income markets, the election is not all that critical. there are some other markets, but certainly this is about that. scarlet: stay with us, marc chandler of brown brothers and

bob sinche of amherst pierpont securities. matt: we will wrap up a little debate we have been having off-camera. what are the baby boomers doing, buying assets are liquidating what they already have? this is bloomberg. ♪

"ark: let's get to "first word news. the latest bloomberg politic poll asked, who should be the face of the republican party nationally in the event of a hillary clinton victory? picked vice 27%, presidential nominee mike pence. ofald trump got 24%, ahead texas senator ted cruz at 19%, house speaker paul ryan at 15%,

and ohio governor john kasich at 10%. if trump wins, clinton has support at 32%, sanders at 31%, elizabeth warren at 21%, followed by tim kaine and martin o'malley. fox news drew the largest audience the last night's third and final debate, 11.3 million viewers. nielsen data showed almost 69 million watched the face to face across 11 cable and broadcast records, bigger than the tv audience for the second debate but smaller than the first, which attracted a record 84 million viewers. president obama is praising hillary clinton's debate performance. the president tweeted, "outstanding 3-3 debate sweep for hillary clinton. nobody has been more prepared to be @potus." the white house is contrasting donald trump's refusal to commit to accepting the presidential results with president obama's andised to follow tradition

escort the president-elect to the capital for inauguration, regardless of who wins. philippine president rodrigo duterte has made his strong this comments yet, signaling a split with the united states. he is in beijing for meetings with chinese president xi jinping. duterte said he wants to break away from the u.s. and shift toward china and russia. the u.s. is the philippines' biggest military ally. global news 24 hours a day, powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. back to you. scarlet: we are back with marc chandler and bob sinche. we are having a vigorous debate about whether americans are saving or spending. it all depends on how you interpret demographics. bob, state your case. bob: i think we are in the middle of the baby boom generation heading toward retirement. and i think that, you know, i am a fan of larry think's the view on this -- larry fink's view on

this, that with interest rates down people have to save more in their 50's and 60's to reach retirement plans, so low interest rates are no longer a stimulus to growth, but in fact are causing people to save more. i think what we have seen over the last five or eight years is that excess liquidity has been channeled into the markets, where there is the most demand coming from the baby boomers, and that is for assets, longer term. 20 years ago they were buying cars, houses, carpeting, things. the problem i have, in a sense, is that the fed wants to look at prices, the rate of change of prices only for goods and services, and they don't look at a broader array of prices. and for a lot of baby boomers who are looking to buy things, the things they would like to buy our financial assets for their future, and they are very, very expensive, which is what mohamed el-erian said earlier today. matt: he was also saying he had 30% cash, and blackrock said

they think investors are holding $50 trillion in cash because they are so worried. what do you think about that? marc: i come from the opposite side. first we have to begin with the key factor for me, the disparity of wealth and income in the u.s. most of these baby boomers don't have enough money in their 401(k). they don't have the money. matt: that is what bob is saying. marc: they don't have enough income to save. that is the problem in america. the problem is not that middle-class people are not saving money. the problem is, there's, so many people who don't even have income to save. the second thing i say, a lot of people, who is buying stock in america? not the baby boomers. it is the companies buying back their own stock, and after that mutual funds, pension funds. who is putting money into pension funds? not guys my age, but people your age, younger people saving a greater percentage than people my age. they are liquidating. . why do we have such a low participation rate in the workforce right now? they are liquidating. look what's happening to the participation rate in the

workforce. it has fallen. why hasn't fallen? some students have gone back to school, but a lot of it is people retiring early for various reasons. getting squeezed out of corporate america. big companies are constantly laying off people. people just do not have the money to save. the other evidence i have for this, the u.s. current account deficit is widening again. the current account deficit is a measure of savings versus investment. we know there has not been a lot of investment, so the deterioration is coming from the savings site. matt: unfortunately, that's all we have time for, because this could go on. maybe we will have the two of you back and continue. brownhandler of bobhers harriman, and sinche of amherst pierpont. scarlet: paypal has turned around and is no higher by almost 4% after it boosted the low end of its full-year earnings forecast. that is one way of interpreting it.

earlier it was declining. microsoft did beat on profit and sales estimates for the quarter that ended, so you see that stock, it has been consistently higher in after-hours trade by better than 5.5%. a quick mention of another mover, a specialty pharma company based in dublin with a market value of $6.6 billion. a huge move, up 47%. its depression drug hit its goal in a late stage trial. matt: that is good news. scarlet: that lifted the stock by 47%. matt: it actually works. let's get more now from the merger we have been focusing on, on the takeover we have been focusing on, at&t possibly looking to take over time warner. alex sherman helped to break the story and joins us from our san francisco office. how far are we along in these talks? alex: pretty early. no banks have been hired yet.

so chalk this up to senior executives talking to figure out the art of the possible here. i think things have been discussed, if it is not a full on acquisition, which would be a very large deal, although for at&t standards certainly not something that would be seen as too large. they bought directv not too long ago, and this is in the same general ballpark as directv. but there are two options here. one of them is a full on acquisition. scarlet: what changed for jeff dicus? rupert murdoch made overtures two years ago, and he did not want to be taken over by that company. he wanted to remain independent. he was steadfast in that. what has changed his mind? alex: part of it might be whatever price is being offered. there might be a chasm that stops this. public wethe ceo of a

traded company. the previous offer was $85 a share, and before our story time warner was trading at $85 a share. that might be one reason. another reason is possibly he felt that at this point he has positioned time warner better than a couple years ago when fox looking at aso baseline price that is a little higher, so maybe he feels he's doing better for shareholders. the third reason could be culture. one of the real reasons that time warner and fox did not get together, from people familiar with the time warner site on it, was that they just felt there was not a cultural fit between the two companies. at&t is a telco company, so you certainly could make an argument that there would be cultural problems here, too, with a legacy phone company buying a giant media company. but then again, we have actually seen this type of thing happen before. just think about comcast buying nbc. that was sort of a legacy cable

provider buying an entertainment company. and again, there are arguments there that that is not the greatest cultural fit, either, but that has worked at to be a pretty good investment on comcast's part. matt: you say there still could be a big chasm in the prices both of them think the asset is worth. but what kind of valuations are these type of assets getting? if you look at, for example, multiple or ebitda. are we looking at six times ebitda, eight, 10? alex: think more like 10, 12, that range. it used to be they were lower, but content has been fairly steady, let's say somewhere between the eight to 12 times ebitda range for several years now. it is a pretty consistent business. certainly there are pressures. fewer people are watching cable tv. that is very well known. but time warner's a fairly diversified company. they have warner bros., of course they have hbo, premium

networks, tnt, tvs, your more classic -- tbs, your more classic cable networks. they have a pretty steady amount of cash flow coming in from a number of different sources, which is attractive to at&t, the same reason directv was attracted to at&t. because of you have a steady cash flow, that means you can fund your dividend, which is extremely important to at&t, one of the reasons why directv was such an attractive target to at&t just a couple years ago. scarlet: and glad you mentioned hbo, because that is certainly the crown jewel of time warner's assets. for a while there was talk perhaps of time warner spinning off hbo to fully capture the value of that. do we presume that won't happen now, if it is indeed talking with at&t about some kind of business tie up? alex: talks of that have really stalled out. at this stage, are sources indicate there is no talk of time warner spinning out hbo. basically, time warner feels

like hbo is well-suited within the broader company. and for sure, if at&t does in fact move ahead with an acquisition here, hbo will be one of the reasons why they want to buy that. one thing we should note, they are sure to -- there are sure to be antitrust concerns, just like there were when comcast bought nbc. so if a deal where to go through, you would have to expect somewhat onerous conditions to be put on at&t, to make sure that it makes its content available to all of its paid to the competitors, just like comcast had to do -- pay-tv competitors, just like comcast had to do with nbc. scarlet: alex sherman, thank you so much, and congratulations on that scoop. a quick mention, time warner shares got a big leg higher on that report, closing up 4.7% and higher in after-hours trade, $83.40 a share. matt: coming up on "what'd you miss?" an exclusive interview

with bank of america ceo brian moynihan after a glowing earnings report. we ask him about the bank's equities business, return on investments, and progress is the 2008 financial crisis. this is bloomberg. ♪

" -- bankat'd you miss? of america reported third-quarter results that beat analyst estimates as profits rose on bond trading and cost cuts. ceo brian monahan spoke exclusively with erik schatzker, who asked the chairman if the bank's successful quarter, particularly the fixed-income trading business, can be sustainable for the next year. you have to give me what the market will be like. in the market is plugging along.

we expect to be in a fairly narrow band. looking at five or six years, are trading revenues probably had a low of $2.53 billion and a high of $5 billion. the way they set up that business is to basically make money in any reasonable environment. so this year we have made money in every quarter. we made about our cost of capital. the first quarter was kind of interesting, and we still make good money. so we took a lot of cost structure, a a lot of capital requirements for stuff that wasn't that important, narrowed the business five years ago now. so we made money fairly consistently in that business, between $600 million, $700 million, and $1 billion after taxes, many quarters in a row. erik: did you make a conscious decision to get smaller recently in equities? bank of america look somewhat like an outlier in the equity business. you are getting smaller, the others are getting bigger. bob: on the equities business, it has been interesting. our revenue is about $1 billion

a quarter, more or less. but the heritage of the company was much more of a cash-based equity business, and he has had to move to a more electronics and derivatives based business. we have done a great job repositioning. we are making some money. but when everybody was worried about the fixed-income business, the equity business at bank of america was the business they are working hardest on, because fixed income is fine. erik: does he still need to make cuts? bob: he is expanding -- brian: these businesses are dynamic. it might be macro activities from hedge funds, long-term investors are driving the market. it might be stockpicking, company by company, everything in between. he is driving against that. they are always moving, moving the business. erik: you and i have been doing this business thing for almost seven years, since you became ceo january 1, 2010.

bank of america, it must be said, has made a ton of progress since then. muchnk has cut costs by as . yours is the best returning of the big bank stocks in the last five years, and i know you are proud of that. here's what i would like to know. it has been eight years since the financial crisis. eight years is a long time. still, b of a, for all the progress you made, lags behind rivals in a number of categories that matter to shareholders. revenue growth, return on equity, return on assets, deposit growth, net efficiency ratio. why, after all this time, are you not in a leading position in those categories? brian: i think we are in a leading position. our revenue growth is 3% year-over-year. i don't think many people can match that. our decline was 3%. but that against anybody. that's because we have finally gotten past all the things holding us back. people talk about the mortgage

issues, things like that, the operational cost, getting the brand restored. we are doing that, keep driving that. are credit costs are better than the industry. there is room to improve tremendously, but we are now in a position on the other side of that improvement cycle, and you see quarter after quarter, loan growth. are deposit growth was $60 billion, four quarters in a row growing by $50 billion or more, and costs have gone down each quarter. other people's costs are rising because they are getting higher cost deposits. we are very proud of what we have done. the team has done a fantastic job. there is a lot ahead of us, and we are getting it done. erik: how long will it take before you and i have a conversation and i say, wow, bank of america, number one in roe, lowest efficiency ratio, how long will it take? brian: last year our efficiency

ratio was 62. erik: i acknowledge the process, and i'm not trying to be unfair. brian: last year we had 66% down to 64%, and we earn $5 billion after taxes last quarter. return on equity, 10.5% to 11%. we are fine. can we continue to improve? yes. there are financial reasons in this environment that our business model will not earn what it will earn in a different environment, largely driven by the nominal rate structure. as that rises, we will make a lot more money. we have $1 trillion. that provides us a huge stable base, and that will earn a lot more. we will not be any smarter or dumber, we will discern a lot more money, and that is partly because the business is structured to do that. we have core accounts to drive that. that is $50 billion, $60 billion year-over-year growth, four or five quarters in a row and continuing to grow. that puts us in good stead for

the next several hundred years. that is what you are after. responsible growth is it. we don't reach on credit. are credit came down again this quarter. people say it can't get any better. we are down 40 basis points, almost a 39. think about that. in the context of an economy that is not perfect. matt: that was our exclusive interview with bank of america ceo and chairman brian monahan. scarlet: we will take you to miami gardens, florida, where you see president obama stumping for hillary clinton, urging for radians to vote early. he also urged floridians to reject trump's fear mongering, and said the comments trump made in yesterday's debate and of course this morning, this afternoon on election results, how he would honor the results if he won, is not a joking matter. he also added there is no way to rig an the election in a country the size of the united states. we will have more on the presidential race when we return. this is bloomberg. ♪

scarlet: the mic drop heard around the world when donald trump said he might not accept the results of the u.s. election yesterday during his final debate with hillary clinton. today he referenced those remarks in ohio. mr. trump: i would like to promise and pledge to all of my voters and supporters, and to all of the people of the united states, that i will totally accept the results of this great and historic presidential win."on -- if i scarlet: so what does that bode for the future? here's the latest on the battle for the white house.

certainly that was a shocker that he delivered yesterday, when he said he would have to see, the day of the election, to determine whether he would honor the outcome. in terms of responses from the republicans, has there been enough of a shift to dissuade donald trum's clarification today, or was that on his own? >> donald trump has basically doubled down on his previous statement. he will wait to see how close the election is. he will wait to see if there is evidence of fraud. the fact that there are several republicans who have hit back and said, we have to respect the results of our elections, that is part of our democracy, that does not seem to have swayed him. war measure common today, saying if there is no significant amount of fraud, he will accept the results, but it seems that 20 days out from the election, donald trump is doing what he wants to do and not listening to the washington establishment. matt: so nothing has changed in

that case. in that clip, the joking clip will probably get the most play. president obama says it is no joking manner. in a sense, that is clearly true. have you seen anyone watch this clip without laughing in response? toluse: donald trump is definitely a showman. that's one of the reasons he was able to beat 16 other candidates in the republican primaries, gaining so much media attention. part of that has been by being at attaining, and that's what he was doing at that event -- entertaining, and that's what he was doing at that event in ohio, getting a large amount of suspense, and then saying he would accept the results if he wins. i think he's going to use that strategy through election day, to try to make sure he gets as much attention as possible. keep everyone on their toes. that's what he said of the debate last night. that he's going to keep everyone in suspense until he either concedes or wins the election. scarlet: one interesting poll that bloomberg politics conducted was what republican voters, who they would back, who

they would support as the leader of the republican party should donald trump be defeated. name -- it is at the top, but not at the very top. toluse: definitely. we have seen this election have repercussions across the republican party. people like paul ryan, who were seen as the face of the party, the future of the party, are seeing their flags go down, seeing their approval ratings go down as well. and that has been one of the reactions, one of the results of this election, and we will see where things go after november. scarlet: 27% picking mike pence. thank you so much. coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪

scarlet: "what'd you miss?" -- u.s. stocks closing lower, but

marginally closer even as most groups declined. china property prices coming out for september at 9:30 p.m. tonight. matt: and don't miss this, the first e.u. leader summit attended by new british prime minister theresa may. will she do a little negotiations there, even before triggering article 50? scarlet: and we have earnings. ge, mcdonald's, all out b

>> i'm mark halperin and >> i'm boris johnson. with all due respect to donald trump, it is never a good idea to argue with those who by ink or rocket fuel by a barrel. >> used a hashtag send donald to space. i have a rocket company, so the capability is there.

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