the good news is that the american economy is growing. not so good news is that apparently so is inflation. and the fed may finally get stuck. we'll tell you why. we may be stuck with fewer jobs if the fiscal cliff is not fixed. a new report has some startling figures on how many jobs may have already been lost. plus, the very latest on the mega storm, sandy, and a new website that is going right after the real estate business, mandy. hello, everybody. happy friday. a better than expected gdp report helping to lift market sentiment out of an early funk. but nonetheless, both the dow and the s&p 500 are headed for their fourth weekly loss out of six. and both are also appearing to be headed for their first losing month since may with three trading days left in october to make up deficits of 2% or more. the nasdaq is headed for a

third straight weekly loss and carries an october loss of nearly 4.5%. brian? mandy, thank you. a sign of hopium? perhaps. gdp coming in stronger than expected but there is always more to the headline number. let's find out what that is. steve leisman joining us now. one thing i am concerned about is the price index, being about 30% more than expected. is inflation a worry? >> i think it is something to watch but it is not a concern right now. we had a 2.8% number on the inflati inflation, the gdp deflator which is the number they use for inflation to reduce total top-line or nominal growth by. but when you dig a little deeper into that number, brian, it doesn't cause particular concern because the core remains contained. here's -- this is the contributions to change. this is your hopium chart. this is a different way to look at gdp. this is how we got to 2%. look at that chart. 1.42 percentage points of the two comes from the consumer. look at business investment and

inventories taking off a quarter point. housing showing up in the macro economy, trade taking off and government a big number. a lot of that is defense spending. it's been down for three straight quarters. if we look at inflation though, it's the next chart. maybe we have -- there it is! 2.83% on the deflator. pce, that's just personal consumption expenditures deflator, 1.8. the core actually fell. we're watching it. it is higher than it should be but we're watching it right now. >> at what point -- when do you think it is going to become a problem then? steve? >> what we're watching is for the dynamic that higher energy prices show up. what should happen is that 1.8 pce number is what the fed follows and the core pce. that should come off with this spike in oil prices coming off. >> first thing is all of you viewers out there, i want you to do this. give yourself a pat on the back. 1.42% coming from consumer spending. that is you spending more helping the economy. uncle sam is proud.

>> at least 50% me alone. >> half-way there. second thing though, defense. .7. unsustainable especially if we get sequestration. >> that's a very good point. no doubt that defense is going to come off. it had been down for three straight quarters. government is not going to contribute 0.7% of that 2% again. however, what could happen is, if we were to get a resolution in the fiscal cliff -- i say conditional future, "if" we were -- you might see this business investment number tick up so they could offset a little bit. >> let's bring someone else into this conversation. just how big of a threat is inflation? andy brenner, head of international fixed income and national alliance securities capital markets group. what a title, sir! what a topic. how do you think about inflation right now? how much of a threat is it? >> i think it is actually pretty major threat. one of the things steve mentions is you have a 2.8% deflator, but the reality is 10-year nodes are only yielding 1. % right now. you have negative real rates of return. >> and you'll be happy about it, andy.

>> right. everywhere i look it is amazing to me, things are going up left and right. sure, gas and groceries. but people say x gas and groceries. but you still have to buy gas and groceries. i looked at metro north where i commute from, they're going up 8.8% next year. everywhere i look there is inflation. i got to tell you a second thing. that corporate spreads are at a very low level. look at corning today. a single-a credit. it is going to come out with a five-year at 1.5% yield. where's the value? i'm very concerned about inflation. i'm very concerned about the low rates and i'm very concerned about negative real returns. >> andy, i get all kinds of negative e-mail every time i argue that there is no inflation. folks, i see it, i read it, thanks very much. >> you drive, you commute, you eat, i think. >> all i would tell you is the following two things. one is that, i do not have -- have not seen a price indicator that picks up the overall inflation that you're talking about. remember what we are talking about is a rise in the aggregate

price level. not specific increases but the aggregate price level. if you look at numbers, it points to quiescent inflation. two, the markets that bid and pay for inflation are not concerned about what you are talking about. >> well, obviously with 10-years yield ing 1.76% today, they're not factoring in but i think it is going to be a problem and i think it is going to be a problem next year, in the very near future. i think the fed will have to backtrack from some of their 2015 low interest rate scenarios. even housing prices are going up. they're a little mixed right now but they're actually showing improvement. i think inflation is a much bigger problem than people believe. i think the next bubble is going to be in corporate bonds and high-yield bond some time next year. >> you're on record, andy

brenner, bubbling corporate bond. it is a national show. >> actually, an international show. people around the world. >> that's right. we have heard a lot about the impact of the fiscal cliff on the economy, but a new report puts a sobering number on it. 6 million. that's how many jobs will be lost if we go over the cliff. that is according to the national association of manufacturers. the group goes on to say that if congress does not act, the unemployment rate could spike above 11% and the washington post reporting today that fears over the fiscal cliff may have already wiped out nearly 1 million jobs. already, folks, this year alone. let's take a look at what's happening with regards to the weather because the entire east coast is on edge right now. we are waiting to see exactly where and when hurricane sandy will hit. so let's bring in the president and ceo of generac.

he's on the phone now. what are you seeing in terms of demand for your product now? >> demand is really just off the charts right now. as you would expect in a major event like this, the big focus that we have is shipping our products that we have in our warehouses and in other parts of the country to the east coast as fast as we can. >> i'm actually hearing from people around me that they're having difficulty finding generators. they go to stores and they're currently sold out. do you have enough supply to meet the expected demand, sir? >> well, whenever you get an event of this magnitude if this does develop into the kind of storm that they are talking about, unfortunately, there just probably won't be enough product for all the people that are going to lose power. but certainly it is why we keep telling people that you've got to plan ahead for these types of events and there have been so many of them over the last 14 months that in particular on the east coast, it is -- we think that a permanently installed home stand-by generator is the absolute necessity for people out there. >> aaron, what's the return rate on generators? oh, i didn't need it. oh within only used it once. send it back. >> it is surprisingly low. we really do get very few

returns on these products. they're great products. people don't know when the next event is going to happen so often times they'll tuck it away in their garage or somewhere else waiting for the next time they got to pull it out and use it. >> how do you manage your business when supply/demand is so all over the place? >> it is difficult. we're very focused on growing the baseline demand for these products. again, these permanently installed systems that run off of natural gas, that sit outside your home waiting for an outage to happen. we're working very hard to get people to make that a permanent part of their homes going forward. but it's difficult. there's no question that you have a business like this, it has to be somewhat reactionary. we have a very flexible workforce and a very flexible operating structure. that makes us able to react quickly whether we do need to be reacting. >> another complaint that we sometimes hear is i had my generator in place and it broke down just when i really needed it. are your products getting better? is technology getting better in this area? >> technology has come a long way in the last ten years.

these products are -- just like any appliance in your home, the technology is improved dramatically and these products are no different, mandy. >> aaron, thank you very much for joining us. let's get to the weather channel's mike seidel for the meteorologic side of the equation. he's currently in florida. >> the sun is breaking through the overcast. that doesn't mean we won't have a few more squalls, but certainly the damage has been done to the beach here. i'm down to the low water level. next high tide coming up in about five hours. as i walk up this hill, we've lost five to six feet of beach. then you see in the foreground the wind blowing the sand. we're guesting wind erosion and beach erosion. both were expected. now the rain has not been an issue down here because we haven't had a steady rainfall. there are no flood watches in effect. this is all pulling away. the storm is now going off to the north and now at 7 miles per hour as of the top of the hour, the latest update at 2:00 eastern is now a minimal 75-mile-an-hour hurricane. there's the satellite loop.

you can see the swirl. it doesn't look that perfect right now. but what's going to happen is the jet stream's going to dive down and over the weekend and early next week we're going to have basically a nor'easter, a hurricane inside a nor'easter. there's that track. now the storm will come in somewhere between virginia and new york city some time monday or tuesday. now inland the issues don't change a whole lot wherever the storm comes in because it is going to be a giant wind storm and it's going to blow for a couple of days. a lot of power outages. where it comes onshore north of that center, the beaches are going to be ripped. we're talking about major beach erosion, coastal flooding and then structural damage. that's potentially what we're looking at. but again a good story on the generators and the other question is how this will impact the markets on monday, if not monday, tuesday. >> mike, i want to ask you a quick question about sort of what you do. right? because everybody -- listen, there is a cynicism about out.

every storm seems to be overhyped, it, thankfully, comes in less than expected. what's the reality of this storm? how severe really is it? >> reporter: well, the thing is, we have to put our faith in the models. the european and the american model. a lot of calculations, a lot of data go into those models. and sometimes they're wrong. but when you have both of a primary global forecast models saying we're going to have a very powerful storm coming in somewhere in the northeastern mid-atlantic three or four days from now, you have to buy into this at this point. the other thing is we don't see how we can avoid it. we're also an unprecedented territory. you look at all the tropical cyclone tracks for 1900. they all go out to sea except one. hurricane hazel. that went in through north carolina and west of washington. we've never seen a tropical system come in from the west, let alone in august, but how about in late october. so this is unprecedented. we've never seen this before but the models are putting us in

that place monday and tuesday. we'll see how it all turns out as we roll through the afternoon. >> it certainly pays to be prepared regardless. better safe than sorry. thank you very much, mike. we'll talk more about the market impact he mentioned in a second. in the meantime, every minute counts when we are trashging ttrashg i track being the storm. we will check back in on the weather.

welcome back to "street

signs." we're just getting video in of a new york man being arrested by federal authorities earlier this morning by the buffalo postal police. there you can see him in that shot there. what he was arrested for was a previous lawsuit claiming that he owned a big percentage -- 50% or greater -- of facebook. now facebook denied those claims, claiming that had he doctored documents and actually committed fraud. and this arrest we are told is in relation to that lawsuit. the arrest happening just this morning. mandy and brian, back to you. in the meantime, a big reason for the better than expected gdp number that we were talking about a moment ago was the uptick in housing. few things boosting consumer confidence and spending more than an increase in their home values. but, that's the big news from last quarter. so what's going on now in the real estate sector? that could be different. for a look at the current situation, let's go straight to cnbc's diana olick. what's the lowdown? >> reporter: mandy, housing is

really starting to pay back after drain being the economy for the past five or six years. construction, remodeling and rising home prices all contributing to this. home prices up 2.6% in august from a year ago, according to a new report today from lender processing services. they've come back 4.6% from the beginning of this year but have to give a little perspective -- they're still down 23% from the june 2006 peak. now that gain in home equity is bringing buyers back, especially to the home builders. new home sales in september up 5.7% from august and up 27% from a year ago. supplies are still very low despite big gains in new orders from the likes of pulte, meritage and ryland. that has builders beefing up construction which fuels the economy, of course. housing starts rising quickly, but again more prospective builders are at about half the volume of historical norms. one of the reasons builders are getting so much attention is a drop in distressed homes for

sale. foreclosures and short sales. they fell to a record low 38.6% of home sales in september, based on a three-month average according to campbell inside mortgage finance. that's down from the near record high 48.7% in february of this year. now we have to give the warnings ahead -- pending home sales. that signed contract for existing homes were unchanged in september with realtors warning of a possible fall slowdown. and more applications tanked. 12% last week on rising interest rates. and on that note, the american action forum, which is a right-leaning think tank, put out a report today saying that new regulations coming in 2013 could lower mortgage volume by 20%. there is a lot more of this on the blog, realtycheck.cnbc.com. stay patched in, diana. you may want to listen to this. for years many people have tried to break into the real estate industry model of 5% to 6%

commission. for years, every new entrant on the discount side has failed. but there is a new entrant now and it is on the web, called real direct. it will list your house for $3.95 a month. joining us, the ceo of realdirect.com. welcome to the program. how will you succeed where so many others have failed? >> well, we work within the system. while there have been for sale by owner services before and discount brokerages, we know that they don't work for a specific reason. they exist outside of the network of real estate brokers. we are a licensed broker but we're using the power of big data to allow people to get information that an individual may never have had before and also be able to distribute their listing to every possible buyer that's looking for real estate. >> how do you make your money? >> we make our money in a few different ways. we charge a monthly fee of $395. it is paid by credit card. it is really easy. we'll work with people on a commission basis. if they prefer to work on a

success basis, it is really up to them. >> it's always been you can't get in the mls. the realty industry, they've got a pretty powerful lobby and a pretty tight control over what they do. how hard has it been for you so far? >> you know, i think there's a recognition in the industry that things are going to change. it's taken a little bit of time for that to happen, but at the same time, we're not looking to put realtors out of business. i think there is an understanding that there's a need for an experienced person to help with the process, and sometimes you're going to get that experience and that information from a broker who's walking around with you. other times you might get it online. but it is still necessary. i think if anyone could appreciate that, i think it is the people at cnbc who saw what happened in the financial services industry and saw that -- the e-trades of the world didn't necessarily crip many the brokerage industry, it

evolved. >> am i ceorrect that as an incentive, you give -- >> we have a buyer service that also uses data in a way that makes the process streamlined, it is a great -- it's almost fun. if you can look at a process that's historically been so difficult to be fun. >> who solves the conflicts, doug? >> the conflicts -- we still have agents on the buy side but we can streamline it because we're working on an internet platform and collaborating with them online, we can do this process, we can get them through the process faster and we're going to save them money. we can pass some of the savings that we're going to have because of the efficiencies back to the consumer. that's where our discount applies. >> indeed, everybody wants to save money. thank you so much for joining us. yesterday we told you about the record ad spending in the race for the white house. coming up, we'll talk to one guy who is benefiting big time from all that cash. here's today's "return on

retirement." it's national save for retirement week, and millions of americans need to do just that. so says the employee benefit research institute. their projection model found that 44% of boomers and gen-xors will not have enough for retirement. just how big is the total retirement income deficit for both generations? the answer when we return. i've been a superintendent for 30 some years at many different park service units across the united states. the only time i've ever had a break is when i was on maternity leave. i have retired from doing this one thing that i loved. now, i'm going to be able to have the time to explore something different. it's like another chapter.

$4.3 trillion, according to the employee benefit research institute. for more on retirement, go to retirement.cnbc.com. fund-raising for the presidential race has now surpass 2d billion. political ad spending speeding towards $1 billion of that. more than $175 million has been spent in ohio alone, and that obviously is a really big boost to some. let's bring in somebody who's benefiting from that, dan bradley, president and general

manager of wcmh, the nbc affiliate in columbus. is this the highest you've seen in years past? >> well, we know we're always going to see a lot of spending here in ohio but this year has certainly been a record breaker for the books. we started the year out thinking the whole political market for columns would be $40 million, $45 million. now it looks like it will finish up somewhere closer to $60 million, $65 million. >> have ad rates been going up as well? >> yeah. the rates obviously when you have this much demand, the very first thing that happens is that the rates just shoot skyward. we're looking at demand greater than 50%. 50% greater than what we saw in 2008. >> we're not going to say this is a bad thing. this is a cash cow for

television. is it a bad thing necessarily? >> well, no. it's a very good thing. i mean most investors now look at local television as -- more on a two-year sishgle th cycle single year cycle. you have to average it out over the course of two years. but there's no better way to reach a broad audience with your messaging than local television. you want to get a message out, you want to hit a lot of people with it, local tv is the place to go. >> yeah. well said, dan. we know there's about ten people that are undecided at this point. do you get a lot of calls saying, hey, enough with the ads, knock it off? >> you know, i think people here get accustomed to it. to a certain extent, there may be some immunity to all that messaging. we've seen the polling change in the last couple weeks, so between the debates and the commercial messaging that goes along with it, i think it still has an impact. our own internal polling that we do here at television station shows that as early or as late

as just this week, 6% of the electorate are still undecided. >> it is evenly matched in terms of democrats and republicans in terms of how much they are spending? do you sense an urgency among any particular party to get their spending out there in terms of their ad spending? >> well, early on, as far as pure candidate spending goes, i think the obama camp was spending a little bit heavier than the romney camp. but here in the homestretch here the last four to six weeks, i think it's pretty evenly split between them. obviously one of the biggest benefactors -- or one of the biggest factors in the demand has been all of the third party -- all the third party money. that's really had the impact of driving the rates sky high because those third parties pay at the very top of the card if they want to see their spots run. >> thank you very much for joining us. dan bradley, wcmh. apple is falling below $600 for the first time since july.

how worried should apple investors be? maybe is it creating an opportunity? and -- >> coming up, mega yachts as far ars the eye can see. we'll tell you what it costs to actually operate one of these boats for an entire year. you won't believe the dollar figures. that's coming up next on "street signs." [ male announcer ] this is steve. he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade.

it is street talk time where we hit some of the day's big, but maybe under the radar stocks. first of all, goodyear tire is really feeling heavy pressure today with the slow global economy theme. seeing a 30% in its third quarter profit as a result. >> you said the story. 30% drop in its profit. stock is down 10%. missed eps by 6 cents a share. sales also fell short, they're blaming economic uncertainty with the cutbacks in dealers, taking in new tire inventories, rough year, down more than 22%. first we were looking at goodyear. let's look at rubber maid. they did report positive earnings. >> the job stuff always tough. i understand that. let's focus on numbers here. newell rubbermaid beat estimates

by 3 cents. revenue fell year over year b. their guidance leaves a possible penny of up side against current estimates. they said they're going to reorganize to try to accelerate growth. decker's also slashing its fourth quarter and full-year outlook. that's also really bringing down the stock. >> this was a nominee for our disaster dujour. >> it was. >> we have a different one. that's coming up. deckers beat eps by 14 cents a share but, sales fell well short of estimates. they lowered their current quarterly guidance. ugg, their biggest brand. those shoes declined despite the fact that tom brady is their male spokesman. not helping them, brady. input costs also rose. so they beat but nobody like the sales numbers. >> see if those sequiny, sparkly uggs will make any difference. eastman chemical is up nearly 50% so far this year.

>> this is a bit odd given the guidance. it beat estimates by 15 cents. revenue rose 25% year over year but the company did say it sees a seasonally slower fourth quarter and that chemical cost will rise going forward. if any of you know why it is up 14%, please twitter her. >> interaction is good. >> stock's up 56%. taser stock really soaring today. >> they beat estimates by 15 cents. it is not just their core taser gun that's selling. that's what they're known, stun guns, this was a hotly shorted stock, real battleground stock for years. they have these cameras that go on glasses for police officers. sales soaring on those. they also had an evidence.com sort of tracking program online. their sales are up. taser up 2.22%.

let's talk apple. bring in our technology reporter, jon fortt. jon, come in here. i mean, you guys were obviously at the ipad conference and all the hoopla there. >> just can't quit you. >> you really can't quit. >> when the $100 million number for ipad sales came out, it was actually a little less than people were maybe hoping for. people started to talk on the street about maybe we're going to see a miss from this quarter. we did get it. right? >> we did. i actually also thought that based on the sales number that they gave, not shipments, that it might be even lower than the 15 1/2 million unit number that some people have taken their numbers down to. indeed, it was 14. >> i'm still -- the "i can't quit you" thing that is rendered me speechless. brokeback earnings. let's move on from there. >> yes. >> you and i talked about a little bit in "fast money halftime report." selling out of one of them is great but we don't know how many they're making.

do we? that's the problem. it sounds great, we're sold out. but if you made five -- >> it is the white ones. >> obviously made more than five. >> we know that they often don't make as many of the white model, whether it's iphones, et cetera. we just want to see those numbers -- those initial numb bernumbers that come out when we see what those pre-orders did. >> will we know? they're tight-lipped. will apple tell us? >> when it is good news, sometimes they like to tell. so this might be one of those times. >> what are people saying with regards to the stock? we're sitting just above $600 right now. are people saying that around this level is a good buying opportunity, or what we heard from apple late yesterday, are they saying that maybe it's got further downside to go? >> people are all over the map depending just how they feel about apple's growth prospects in general. but i think the key here is that what yesterday's numbers showed is that apple is spending more. it's costing apple more to grow market share than people thought. and what they've done is made this huge bet that they can

launch all this stuff, more stuff than they've ever launched in a quarter. it looks to me like it's to block these other guys who are coming in with cheap tablets from getting a foothold in the market. >> they might say we're not cheap, we're inexpensive. >> i use them interchangeably. they like us to say "affordable." >> there you go. >> it is a tim cook move. right? here's an operations guy saying we're going to make a big operations bet that we can push all this new stuff out. it is going to cost us something now but it will pay off later. we'll have to see if it pays off. >> okay. >> jon? i'll see you again at some point, sir. thank you very much. >> not on a mountain. from tiny little ipads to gigantic yachts. they are the ultimate status symbols and they've got the ultimate price tags. you are never going to believe how much it costs just to operate these ships. right? cut a hole in the water and

throw money in. that story when "street signs" returns. believe they should be in charge of their own future. how they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want. ameriprise. the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one. together for your future. ♪

oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today. i mean i know that this is important. well, both are important. let's be clear. they are but this is important too. [ man ] the receivables. [ male announcer ] michelin knows it's better for xerox to help manage their finance processing. so they can focus on keeping the world moving.

with xerox, you're ready for real ness. i'm bill griffeth. coming up on "closing bell,"

with hurricane sandy barreling down the east coast, we'll look at what stocks could get a storm surge as well. ceos blasting democrats and republicans for the fiscal cliff. how are apple's product shortages affecting qualcomm, one of their largest chip suppliers. the ceo will join us exclusively. see you at the top of the hour from the new york stock exchange. brian? >> bill, thank you very much. let's get a news alert from kayla tausche. >> massachusetts state secretary bill galvin who earlier today disclosed a settlement with citigroup over violations relating to the bank's research analysts, including their involvement in the facebook ipo, is also targeting morgan stanley, goldman sachs and jpmorgan. the three main underwriters in facebook's offering. they've received requested from galvin's office and some banks have been subpoenaed. we couldn't get any further information on the subpoenas but the spokesperson says it is

possible additional sanctions result from these probes. the banks were not immediately available for comment. guys, back to you. a publish report says owners of al gore's current tv are looking to sell the cable station. we sent cnbc's julia boorstin hunting after that story. what did you find, julia? >> reporter: well, mandy, i just spoke to current tv's ceo joel hyatt. he says that he could confirm that the -- the quote that's quoted in this report saying that they've had three inquiries of companies approaching current looking to buy current tv. and he said that they are not interviewing new banks, that they have had a banking relationship with a bank for a while in terms of evaluating these potential -- these inquiries about a potential sale. one thing that's worth keeping in mind, mandy, is that current tv has distribution to about 60 million homes. so the companies that are looking to buy current, it is not because of the brand or because the content on current right now but because of that valuable distribution. we'll continue to watch.

he wouldn't give me any more information on whether he was interested in selling, just said they have received those inquiries by companies interested in buying. put your dreaming cap on, everybody. assume you have an $80 million yacht. right? can you imagine how temperature costs just to run it. 80 million is the purchase price. our wealth reporter robert frank is at the largest mega yacht show in america, down in ft. lauderdale, florida. is that a yacht you are standing on? >> it is, brian. >> good grief! >> especially these super yachts are really the ultimate luxury. you can imagine getting on to the swim deck with a nice cold one after swim being in the mediterranean. but these hyperluxuries come at a hyperprice. let's say you spent $40 million or $60 million on a boat. well, the costs are just beginning. to keep that boat afloat costs mlgs more every year. the biggest costs of owning a

yacht is crew. like these guys. a boat of 200 feet or more could have a crew of 12, 14, even 20 people. at over 100,000 euros per crew member per year, they liked to paid in neurowe in euros, that'n to $2 million a year. these diesels use up to a half million dollars just to fill the tank. insurance could be up to 7.5% of the boat's value. that could be up to $1 million a year. we also have the costs of food, beverages, all that wine andcha flowers. all of which could add up to between $1 million and $3 million a year. brian, that's not just all. if you consider docking fees, boats have to dock, that's $2 a foot. a boat like this, that's $400 a day. you add all those numbers up and it would be about $6 million a

year just to operate the boat. keep in mind, most boat owners spend three to four weeks a year on their boat. it is no wonder the oldest joke in the yachting businesses is that the two greatest days for a yacht owner are the day he buys the boat and the day he sells it. back to you, brian. >> robert, thank you very much. looks like the storm may be putting a little damper on those sales. but money never sleeps or gets wet. nearly 20 years later, a storm cocktail including hurricane sandy could rival or even surpass the perfect storm of 1991. we're going to take a look at what kind of damage the storm could cause here on the east coast. ally bank. why they have a raise your rate cd. tonight our guest, thomas sargent. nobel laureate in economics, and one of the most cited economists in the world. professor sargent, can you tell me what cd rates will be in two years? no.

if he can't, no one can. that's why ally has a raise your rate cd. ally bank. your money needs an ally. ♪ chances are, you're not made of money,

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we're following hurricane sandy for you at this hour. the powerful storm is heading north where it could meet up with some more nasty weather. worst case scenarios peg the potential damage at $1 billion. the weather channel meteorologist todd santos joins us with the track.

we've got mary thompson as well with how businesses are preparing. todd, let's begin with you. what do we know so far? what's the very latest? >> well, hey there, mandy. as of the 2:00 p.m. update from the national hurricane center this doesn't look that daunting to folks used to dealing with hurricanes. 75-mile-per-hour sustained winds, moving north at 7 miles per hour. it does have some dry air wrapped in to it. the thing is the system is likely to grow in both size and size of the wind field, meaning that a lot of people will be dealing with the wind all along the eastern seaboard, even actually toward atlanta, georgia could see 30 to 40-mile-per-hour gusts. bigger numbers will be along the coasts. some of the waves as high as 28 feet off to the east of cape canaveral. winds out of the north-northeast. ft. pierce at 22 miles an hour, gusting into the mid 30s. the system itself is likely to take that turn out towards the east a little bit further before kind of hooking that s-turn back into the northeast. this is a look at the currents with the storm. quick look at the forecast track. notice hurricane center keeping

that as a category 1 storm as it bends off toward the east, they'll still be though that radius of tropical storm winds. 39 miles per hour to 73 miles per hour that will be reaching towards the coastline. right now those winds already extend outside of the center of the storm about 275 miles. that is expected to get larger. that's why as we get in through monday morning, you see where this system is, pointing towards the mid-atlantic coastline, even if this system is well to the -- say the western edge of that track, the northern edge, new york city and long island, would still be dealing with some of the bigger wind impacts from this. folks seem to be ready and prepared for a storm, easily capable of producing hurricane force gusts especially along the coastline. that latter half of the track -- >> todd, what you're saying about winds, is it likely this will turn more into a wind event as opposed to a rain event? in other words, the biggest fear here is power outages as opposed to flooding. >> yes. i mean there will be a opposed flooding. >> this will be a chance for heavy rainfall but the wind

potential with the storm and the sheer size of the wind field affecting 50 million people and especially carolina and northward the power outage potential is substantial, especially for areas seeing gusts well over 60 miles per hour. let's bring in mary thompson. you're watching potential problems businesses could face. >> the billion word is already being thrown around when you refer to how many damage sandy could cause but it's still too soon to tell. the firms insuring businesses and homeownersing well reserved for a multibillion dollar storm as there are no major weather events to cover this year. how many homes could be impacted? that's hard to tell not knowing exactly where it might make landfall. but 377,000 homes valued at more than $86 billion are in the path of a storm surge from a category

2 hurricane. retailers from walmart to lowe's to super valu, sending supplies and tools to stores along the coast monitoring the storm and deploying response teams close by to help the storms get up and running once the storm passes by. also building on lessons from hurricane irene, the category 1 causing long-term power outages and $4.3 billion in damages. more social media to contact customers this time around and calling in reinforcement earlier. there are leaves on the tree and that could impact the power lines that run above them. >> you were talking about the insurance potential impact here. i know bob earlier on was saying some of the companies with exposure like travelers -- >> aig, all state, yes, all the usual suspects there, we put a board of them up. >> it's a shame if we weren't so broke we could bury the power

lines like every other developed nation but we're too broke. how does hurricane sandy impact your prices at the gas pump? >> let's ask our cnbc contractor here. >> we're seeing a spike in diesel fuel and gas prices as we anticipated the refine capacity on the east coast will get impacted. it was just being talked about, this won't be a major storm in terms of being a category 2 or 3 where insfra trukt tour will get impacted but if we lose power or get flooded out, that will disrupt shipments and supplies and we import a lot of fuel into the east coast to that too. >> we just had the weather guy on. i don't want to go after them, right, we're colleagues, but i'm looking at the national oceanic forecast and we're looking at 10 inches of rain in the mid-atlantic. don't the refineries gets flooded?

>> i think the weather channel guys have been through it all so they don't see it like we do. irene last year, there are bridges out left and right still if you go north -- >> they flee when the dow goes down and if it rains, we flee. >> to them, they are ready to jump out the window. >> there's the potential for lost production but at the same time i would imagine people are staying home hunkering down and not driving cars so gasoline will drop. is that a counterweight there? >> that's the offset. you'll see arush to the pumps now as the news gets out but then everybody will cocoon and watch this thing play out, mostly on cnbc. >> you think there's a potential for spike in gasoline prices. >> yes, inventories are very tight. we can't afford to lose a refinery for a day or a week or two. we have no room for error.

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