he deliver a knock out punch? the kudlow reports covers it all. >> today is one of those days it was hard to get your arms around the good stuff. dominos comes out and the stock is up big. people were focused on city. did anyone mention john on and johnson. i liked it. see you tomorrow. hey larry, big night what are you looking for? >> 50% and stocks had a triple digit gain. all is right with the world. good evening everyone. this is the dud lkudlow report. looking at a live picture.

it will be the main focus of the debate. maybe we'll get answers from obama. maybe he will tell us why he threw hillary clinton and the intelligence group under the bus. will he man up and take responsibility for this? also this evening. city corp. ceo resigns and they all beat. larry, this is the second day we close high on the day. this rally had nothing to do with citigroup. i'll tell you what is behind it in a few moments. round two kicks off.

we are two hours away. the second obama debate comes in the race and also very close to barack obama in the key swing states. this is the town hall format. it has proved tricky in the past. of course the topics are going to range from domestic policy and you can expect talk about the attack in libya that has broiled the raise ice in recent. >> why is the white house letting hillary clinton take the blame? >> i take responsibility.

60,000 people all over the world. the president and the vice president wouldn't be knowledgeable about specific decisions that are made by security professionals. clinton saying the buck stops with her. >> harry truman had it right. the buck stops with the president. >> so will president obama finally step up tonight for the administration's handling of libya? >> listen to this. ultimately the buck stops with me. as president, i have a responsibility to protect our nation and our people. when the system fails, it is my responsibility. >> let's get to my guest tonight. former presidential candidate

himself, howard dean and tennessee republican house member and romney surrogate marcia blackburn. i want to ask you what is going on here. is hillary trying to take the fall for barack obama? i don't understand the dynamic here. >> this is five weeks, we have been five weeks. we don't have the answers. we lost the life of one of our ambassadors. and that is one of the good reasons for our intelligence committee and our government reform. holding hearings and starting to get to the bottom of this and figure out who knew what and when. the intelligence sources, that is the part that baffles me. i have to ask you. you look at this thing. hillary takes the blame. okay fine. >> but basically, my question

is, who invented the cook and bull story that susan rice and others tried to sell that this was all because of a youtube video. that story has never been denied and it could have been -- where did that come from? >> this is pretty disgraceful. five weeks after 9/11 we weren't wondering why george bush wasn't taking responsibility for it. we supported the president. i think you should be ashamed of yourself. excuse me. you can get in on it in a minute. >> no, you are not going to sit there and say things ling this. it is not a right-wing won construction. >> susan rice was clear about

what happened. >> we have dozens that are injured. >> we will do more investigation to find out. i think this president ought to get the same benefit of the doubt. this is almost saying that george bush knew about the attack on the world trade center. >> i'm afraid that i don't agree with my friend howard dean. this is a different situation. it is the cock and bull story. the idea that this was a youtube video and a demonstration when everyone knew. >> here is the thing. we had plenty of indicators that were terror. we had a hole blown in the wall and we knew we had attacks. the libyan government told us to expect this. it was september 11th.

you didn't have a video watching community organizer saying let's go have a rave at the us consulate. we had a detainee get released and then we had been let go and we knew he was running a cell and we knew that al qaeda had been throughout north africa. >> howard dean. >> this is just as silly assaying that al qaeda we knew about al qaeda training in those planes. let's stop attacking our presidents when the united states is under attack. one shred of patriotism would be a nice thing to do. nonsense. >> look, what bothers me about that, is somehow we have a president who still does not acknowledge what happened. if hillary clinton acknowledges it.

>> maybe he would like to find out by listening to the intelligence and maybe. >> so this is a big cover up? >> that is what people are asking. >> there is no leg to this story. >> and in my district in talking to people, they fully feel like this is a cover up. they feel like those employment numbers with 7.8% unemployment were kind of made up. larry, we have lost the life of a u.s. ambassador. we have lost the staff around the world who are trying to figure out and deserve to know what happened with this. we are five weeks out of this. we still do not have answers plenty of indicators were there.

do you think this is going to hurt the president's re-election? >> yes, i do. >> i doubt it very much. i think in the district they weren't going to vote for him anyway. the person who is making stuff up is mitt romney's tax plan that raises taxes on people to give millionaire's a break. >> that is wrong too. >> we took the unemployment numbers. >> that is truly ridiculous. >> i got to tell you. i'm not with you on that one. i think the unemployment situation is bad. howard, i have to tell you, this is different than the original 9/11. he has to come clean on this. he is not making sense on this at all. >> he want to do the right thing for the united states of america. get off this stuff. >> he should man up and accept responsibility for that cock and

bull story. >> that is all it was. >> that is all it ever was and most americans know that. >> no, you know that is different. >> they know it is a serious situation. >> yes, of course it is. >> this is right wing nonsense. >> governor howard dean in joe the concert. >> thank you very much. here is what i want to know. what would you the viewer ask president obama or mitt romney in tonight's debate? please tweet me. we'll have your tweets right after the break and i'll try and answer them. next up markets are up triple digits and the shocker on wall street. don't forget folks free market capitalism still the best path to prosperity.

i hope we hear some tonight.

welcome back to the kudlow report. we pose a question what would

you ask president obama or governor romney at tonight's debate? one of our viewers asked how can we bring back confidence for the regular guys? >> we did have a big day on wall street. hello bob. this is the second day in the row that we closed on the highs. there was talk out of europe that spain may be near a deal to have them buy their bonds.

margins were on the light side. that hurt them. earnings better than expected but the revenues were on the light side. back to you. let me ask you right at the top. victor pandit out at city. what do you say to on investor that owns city. should they stay with it? >> the company is well positioned. looking at the problems that banks have around the world, this company has fixed it's balance sheet. and while we have a different guy running it.

he did a great job while he was there. just a question. a lot of people were asking this question. would the it be worth more if it were broken up? >> sit a tough question. >> everything they are doing is being questioned. we are going to look at the outstanding record that the company has. both in terms of gee og fi and in terms of the business profile. even though because this bank has badly under performed it's peers in recent years. >> every great turn around opportunity. that is what you would say about

them, if it has a bright future. that is when the huge opportunity in the stock exists. >> let's get back to your own view of the marketplace. >> tell us why. >> i think the u.s. economy has got increasing growth over the next several years. >> we have ample resources. the glass is half empty, you say the unemployment rate is high, but it can be half full as we have many years of growth ahead of us as we put people back to work. the driver is going to be a huge increase in the strength of the housing market. in terms of the higher home building activity. >> pending home sales did well today. >> that is right.

the housing prices did more to hurt the consumer than anything else. housing prices have turned up, but it is widely recognized that they have turned up. >> this is such a key point. if the housing recovery continues, ken, that is going to contribute to employment and incomes and gdp growth. >> i'm saying that natural forces as they do are going to cause the economy to show it's great strength. >> that is what has been missing. in other words instead of growing at 2% we should be growing at 4 or 5. >> it has been missing the whole time. >> what is beautiful about this. we are coming at 700,000 starts.

how fast the housing industry can start building houses. >> what are you buying right now? >> well, i think the money centered banks, because of the negatives that investors worry about offer the best opportunity. they have been establishing more than tens of billions of dollars of reserves for liability for loans that have gone bad. that liability or the losses could be a lot less. there could be a lot of reversal for the banks. >> great stuff. we appreciate you coming on and giving us your best take.

remember when president obama promised millions of jobs because of green energy? >> another company went under and took more jobs with it. the details next on kudlow. anncr: every president inherits challenges. few have faced so many. four years later... our enemies have been brought to justice.

our heroes are coming home. assembly lines are humming again. there are still challenges to meet. children to educate. a middle class to rebuild. but the last thing we should do is turn back now. president obama: i'm barack obama and... i approve this message. one is for a clean, wedomestic energy future that puts us in control. our abundant natural gas is already saving us money, producing cleaner electricity, putting us to work here in america and supporting wind and solar. though all energy development comes with some risk, we're committed to safely and responsibly producing natural gas. it's not a dream. america's natural gas... putting us in control of our energy future, now.

electric car battery maker

filed for bankruptcy today. so what you ask? i'll tell you so what. it is another green energy company that has gotten tax may or money from the obama administration and it has gone belly up. the president's promise of green just hasn't delivered. all right. our own cnbc's jane wells joins us with more. good evening. unlike all the bill yions and grants of the federal government of jobs. no taxpayor money has been used at this facility where i am. this is 110 old chevn oil field which uses the sun's energy field. it is quite an operation. the president had promised five

million green jobbed in a decade. it has 2.7 million green jobs so far. check this out. it has created jobs but most have been temporary ones. most of the jobs are created through the construction. for example, the site you went to solar to steam, had several hundred people on site. during the day-to-day operation it is ten or less. >> this is probably going to come up tonight. when romney brought up the $90 billion, and we'll have to see then how the president responds to that. the city of san jose has committed to 25,000 green jobs within a decade. but the "new york times" said they don't have a 5th of those.

the times points out that a $59 million training program has only netted 715 jobs. that is about $82,000 per job mostly funded by taxpayers. that could hire a bunch of schoolteachers. if you need them out there, i don't know if you need them, but you are not getting the jobs that we expected to get. >> somebody has to look at this under a microscope. >> we appreciate it. you heard it. another failed obama policy. so you next would someone tell me what the growth vision is, does the lack of a vision hurt him in the first debate? it was a mixed bag but no meat we will uncover after this break. the election issues this year. creating jobs, energy policy.

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♪ the fight of the night gets underway. obama versus romney. >> in about half an hour -- no,

in about an hour and a half president obama and mitt romney are going to square off and debate number two. >> the town hall format makes it somewhat more dimensional. they are going to be posing the questions that have been selected by the moderator. what we have seen in the past is that we have the ability of the candidates to get up and move around. it doesn't always work out the way they want. al gore tried to do that.

for example, the way to do it right. look for bill clinton in what he did in 1992, the elder george bush. when he got a question from an audience member about how he had been impictured acted by the na debt. the president walking directly toward that woman, feeling her pain, empathizing with what was going on in her life and relating that with her experiencing, if you can show that, and both mitt romney and barack obama have the potential to do that, one of them will come out ahead of that. romney did very, very well in

denver and he is not quite there yet and this is another opportunity for him to close and overcome that debt. >> all right. thank you for helping us out now. which candidate has the better both vision for the economy? here now is lia malika henderson. romney surrogate ed kinard and keith mccullough. what zoo you want to hear tonight? >> well, first i want to get to a strong dollar that we haven't had. i want to hear something that inspires a small business

community. we have been going through the paces of the last four years of a dollar that has been devalued and oil is up 160% straight up and to the right. >> let me put a little heat on you, keith. who is going to give the message that you want? who? >> they have different opinion ones. >> i have not heard a pro growth message in the last six years. >> ed, let me go to you. does your man mitt romney have a pro growth vision? >> absolutely. if you raise spending $1 trillion a year as we have since 2007, that puts great increases on everyone. that reduces jobs and slows

growth. so the only solution here is to cut spending and try to avoid the tax increases that the deficit arefleffecaffects. >> a lot of people felt that one of the problems for barack obama was that he didn't have a forward looking message on the economy. do you think that barack obama will have a growth vision? i think that is the plan. you are right. a lot of democrats complain that barack obama lacked the vision thing in his debate. but people haven't seen what he would do in terms of job creation. i think the blueprint was the jobs act that was proposed. they didn't get much support

from senate democrats but suslook at staffing off the layoffs and so that is what he will try to lay out tonight in terms of a more forward looking vision. he will make the case that he was given a bad hand but that the economy is slowly going back to where it s you talk to voters they are not sold on either message. they want more details and do s >> i disagree with that. romney, knocked obama out in the first round. there is a pro growth message and it doesn't start with government jobs. it starts with confidence and it starts with some kind of pro growth tax policy that is friendly to corporate america.

we have the same tax rate as japan. it need to come down and there is plenty to do and romney, if he delivers it again, he may be out cold. >> i think he may have the more detailed growth plan. but regarding the jobs plan, which sounds like a lot what he did in 2009, you know, my motto here is if it was going to work it would have already worked. maybe that is why they didn't want to go down that road. it will be more spending for teachers or whatever. that stuff never works. it is about $250 billion in tax breaks from businesses. there are some economists who could argue that the program did create some jobs.

this is his vision. what is that mis. >> i think it is hard to mathe spending increases employment. there is a dial back that offsets that increase. you see that in qe 2 and qe 3. if you got an increase from government spending it would be the most robust economy in the world. >> if you go to government spending, if that is the answer tonight, obama is going to have more issues in time magazine. at the end of the day the capitalists in the country create the jobs. if you have the confidence to spend and a tax rate that puts more money in their pockets, that is different than what bush did. more of anything you have seen

from bernanke and geithner, if that is what obama rolls with tonight, good night. >> look at the polls so far, it is a pretty even match. in terms of who people think is on the economy. this idea that it is just about small businesses i think you find with average working americans, that isn't a message that is resonating so far. >> i love capitalism. >> that is my code word. >> the uneducated people of the world may not understand what free market capitalism does. if he does more of that people will go back to the promise that redagan and clinton had and i think that is not too confusing for people to figure out. >> nia, can i ask you a

question? >> sure. >> hang on. >> in the last debate. mitt romney surprised people by talking about reaching across the aisle to make a deal whether it is tax reform or fiscal cliff or whatever. he said you have had your chance and you didn't do it. you know romney is going to make the case again. do you think president obama will try to make that case also? >> i think he will try to make that case that he has found republicans unwilling to compromise. i think what he will also try to do is that they see a mitt romney who is trying to pivot to the center. i think on issues around the economy and issues around social issues like women's health and issues like that, they will try to paint mitt romney as more

like paul ryan and like the tea party. >> how can the president possibly make the case that he has been a successful leader of a bipartisan process. mitt romney did it in massachusetts and he did it every day in business when the only thing that matters is results and you have to come up with compromises and making a choice that gets something done. you can't blame the other side. >> the bob woodward book says that. i don't know if people have read the book. thank you very much for helping us tonight. thank you. keith mccullough. thank you very much. the race is virtually tied. the average has it at 47% each. the question is who made spoil the race.

it could be my next guest gary johnson. he has been forced off the stage and he will be on my stage next up. [ horn honks ]

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we have specific viewers tweeting us. how much dough will it cost the american taxpayor and we have a celebrity tweeting you. lady gaga. this is an important election. a lot of celebrities using this time to tweet how high the stakes are in this election. i think she is right this is an important time. >> thank you very much. now, could a third party candidate play spoiler this november? today's poll shows romney leading obama.

gary johnson, first of all, you are ahead of 2%. you are saying other polls have you higher. when my name is included it is as high as 6%. ppp for example. a poll in ohio has me in 11%. in the state of ohio, yeah. tell me if i got this right. the elders of the debate rules say you have to have 15% in the national polls and therefore you don't qualify. is that their argument? they have no desire to see a third party on stage.

i would be talking about eliminating income tax. zero corporate tax tens of millions of jobs get created. i would like to see you up on the stage. years ago ross perot twice was on the stage. why did they let him on the stage and keeping you off the stage? >> i think the presidential debate commission was established after perot to prevent a perot from being on the stage again. >> they are debating on who is going to spend more money on medicare. we have to slash medicare spending. it is a benefit that you and i are paying $30 into. we are paying in $30,000 and

getting $100,000 into. what is your biggest disagreement with governor romney? >> he says that balancing the budget is important but we should increase the spending for the military? >> what would you do to medicare? >> i would devolve medicare and medicaid spending to the states 43%. i believe that if the federal government would have blocked and done away with the strings and mandate that is i would have over scene the delivery of health care to the poor. >> would you have linked the

dollar to gold? >> i have some signed it but leave that to a competing currency formula. reagan established that commission. >> it is in the party platform. >> i would like to see it. >> thank you very much. >> i'm sorry. they are keeping you off the stage. truly. up next. what makes the main stream media think that romney is going to do better tonight? whays he is going to have this great come back? >> on the other side of the break we are goi out how hard he has been training for this.

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welcome back to the kudlow

report. an hour from now the president and mitt romney will debate and we will have that life right here on cnbc. mitt romney might have another big surprise for him. let's talk. we welcome and thank you for coming on. he is tanned rested and ready. what makes anybody think that he isn't going to do it again to obama? >> i think he will. he improved so vastly as a debater and he came ready for it on october third when he woke up that morning he was losing this race.

president obama completely under estimated him. romney is expected to do very well. i don't think so. he is coming down on his knees. as aicle your says, he has been in heavy training. second of all, the point i want to make, he gives lectures. what is intmpta is who i in

the corner with the rockie romney. forhe past few days, en inbelmont, massachusetts. and the key strategy is this. romney is boeing to do point by point go right at the president. he will go right at the president's record. with numbers and facts and figures the way he did in the lastebates that right? >> that is right. remember in the first debate the president was overwhelmed by how romney brought the data. he is going to try to stick to the facts and go right at the president. and make his case. >> i don't know that president is not going to come with his own facts? i'm sure he will be full of data

and ready to attack him. >> but romney larry, isn't obama under so much pressure tonight? president the president had such a flat debate. he is going to have to show so much aggression. >> i was going to ask ab about the joe biden disease. >> it is not like him his problem is being too cool and too calm. if he gets too aggressive and he looks like he is snarling. it could come off as ugly and be a mistake. that is what romney did. he looked into the camera and he was the reasonable alternative. this is 80 voters.

they are from nassau county. so the president, if he comes with the class warfare. he is going to have to be cautious on the class warfare. we'll find out if i'm right or wrong or i'll feel out of my mind. i think the non committed voters on october 16th don't like either of these guys. they have a hard case to make. >> i think you will see the fighter in romney. >> i think there is an issue here. >> i think romney will be the fighter. i think he is an underrated politician all the way. i think he has a message problem and no one knows how he is going to solve the economy. i think that is one of the biggest reasons he got clobbered in the debate.

he was surging in the battleground polls. he was in a solid lead. somehow he was able to pick romney apart and surge ahead in the polls. >> right. but the president is in a tough spot. he hasn't been challenged. >> thank you very much. thank you for watching. the fighters are going to be in the ring shortly. cnbc coverage of the debate continues. we will be here for the special event right after the break. those surprising little things she does

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