hi, everyone, welcome to "on the money. why the marx had two of their best days of the year, and where we may go from here. he's not your typical billionaire. the man who wants to save his hometown and why he's putting his money where the heart is. >> the city is coming out of bankruptcy and there's just a bullish feeling. how to find bargains, where to find them, and whether tumbling oil prices will matter if you fly. are they a great retirement tool or something to stay away from? we have the scoop on annuities and whether they're right for you. "on the money" starts right now.

now, becky quick. here's a look at what's making news. the fears of last week for stocks seem to have given way to optimism this week. best days as concerns of europe, falling oil prices and the economy subsided. on thursday all three major indices were up another 1% is the move up was driven in part by earnings. caterpillar beat expectations as about 3m, gm and ford. apple yaw he and yelp all beat expectations while ibm and amazon fell short big time. new home sales rose in september to a seasonally adjusted rate of $467,000, that is above economist estimates, and the highest annual pace since july of 2008 standpoint. you'll be able to contribute more to your 401(k) next year. the irs is expanding the limit to $18,000 a year.

if you're over 50, the additional catch-up contribution will be increased to $6,000 from $5,500. stocks have moved from a state affair to a state of euphor euphoria. is it deserved and what does it mean for your money? joining us is rebecca passer source and bessemer, and joe lavorgna. thank you both for being here. what happened over the last week? 4 rebecca, none of them seem to have gone away, yet our perception seems to have changed. >> i think we've gotten better valuations. things get cheaper, but probably even more importantly we've gotten quite a few data points both on earnings and economic data to just reinforce the idea we're not falling off a cliff. there's no sense of equities doing a real sell-off after what we have already seen unless there's a risk we're heading into a global recession.

we've seen u.s. jobless claims, mortgage refinancing, mortgage applications, consumer confidence, the list goes on suggesting that the u.s. is still doing quite well, europe is sloeing, but it's priced in. >> joe, what about you? >> i'm still very bullish. there's a lot of good data. even consumer sentiment last week, still low historically but edged higher. it shows you that households aren't worried about what's happening for their economic situations. so to me everything looks pretty decent. growth could be 4% for q3, so no, nothing has really changed. >> maybe or mentality may be the only thing that has shifted. consumer mentality, investor mentality, ebola was front and center. one of the huge things that sparked the sell-off. ebola is still here. we still know about new cases coming up, but was there a point, joe, where you had to put that into your models?

>> a little bit. we did some experience back in the 200s with the avian flu, which i think was more scary. there were a lot more travel restrictions, but i think what started the rally was fear of the fed hikes, which caused credit markets to deleverage a bit, causing the dollar to rise sharply -- further sharply. that in turn caused energy to weaken and we sea -- the market got nervous all of a sudden, and we did have some weaker data out of europe and asia. the if the economy is grows at 3%-plus in the back half of the year, that's sen pretty positive. good for profits, good for the economy, good for households. ebola has probably been overstated, but important. do you expect them to go ahead and officially end qe? what do you expect them to say? >> they're going to end qe. if they don't and they extend

it, that's a bad signal, because it will be telling us they're worried about these other things. so they're going to end the program, stay worried about the global economy, stay worried about geopolitics. until that unemployment rate moves closer to 5 and until core inflation expectations move up a bit, they'll be nervous nelys about everything. so -- they're going to reinforce the facts that they stay low, and it should be a nonevent. >> rebecca, do you agree with that? do you think there's still a fed put? >> the financial markets even if they can't admit publicly that they're looking at them, it is one factor they are going to look at. how are finance conditions moving? are they tightening? loosening? i think the week happy we'll see qe end on schedule, but we will probably see a mixed message. labor markets are improving, slowly by surely, and inflation expectations have come down a bit. i think janet yellen is probably

more focused on the inflation side. we can afford to have the jobs improve as long as it's not creating wage pressure, which so far are fairly tame. >> midterm elections are coming out. how does it play out? does it impact stocks? >> i think it did. i think it does matter, though it's interesting how different the word is now from two years ago where every bim in the s&p you could attribute to something around the election. i think it does still matter. the consensus is looking for the republican party to take some seats in the senate, and i think in that environment at the margin, we probably have a relatively better chance of getting some trade policy through. which would be positive for global growth. i think that probably either way we have more likely-led of immigration reform going through, and we could see keystone go through. those are net positives for the economy. with our budget deficit at $2.8% of gdp, that's an amazing

improvement over the last few years. i think we could see next year in actual fiscal stimulus. >> let's take about earnings season. a few dow components had spec tack lir misses. what do you expect for the rest of the season. >> why guess is that continues. those companies that have been weaker in part due to the global economy. i tell people that the u.s. economy is relatively closed. only 13% of gdp is exports. those companies exposed to the domestic economic look to be in great shape. >> thank you both for being here. >> thanks. up next we are "on the money." what's a billion when you're trying to save a city. dan gilbert's quest to reinvent detroit. and later planning to take off this, what plunging oil prices mean for the cost of plane tickets and other things you need to know before you buy.

right now as we head to a break, a look at how the stock market ended the week. ameriprise asked people a simple question: in retirement, will you outlive your money? uhhh. no, that can't happen. that's the thing, you don't know how long it has to last. everyone has retirement questions. so ameriprise created the exclusive.. confident retirement approach. now you and your ameripise advisor can get the real answers you need. well, knowing gives you confidence. start building your confident retirement today.

♪ can a billion dollar bet reinhaven't america's most struggling city? detroit native dan gilbert has mored money buying and investing in bankrupt detroit. for more on that on what it means for the future, we're joined by chairman and owner of the cleveland cavaliers dan gilbert. thanks for being here. >> great to be here, becky. you say detroit is on the upswing, invested 1.3 billion. i think crowd gyred of the city of detroit, you own more

property than anybody else. what makes you so sure about this bed? >> i haven't checked the rankings, but we've made a significant investment, but we have the luxury of a high employee count in our companies, and the investments into detroit venture start-up businesses. so we have about 12,500 full-time people which is a hedge against just going into, let's say, a detroit and investing in real estate. having said that, now that the ground work has been done, the city itself is coming out of bankruptcy and there's a bullish feelings. the costs are lower we have an educated work force, and the more of the younger people to the urban core, detroit is -- >> is this a brupt for other urban cities? is this something about innovation. >> if they're billing owners or even public or whatever they may be, you can not only do great

things for an urban core by moving there and by moving your employee base there, but you're also going to be a better business. i mean, it is -- it's hard to measure with spreadsheets and all of that, but i can tell you our business would not be the business we are spread among several buildings in a suburban area that are four, five mails, we're in a campus-like setting, there's an energy in an urban core you just don't get anywhere else. >> have government officials hipped or hindered the progress? >> certainly now this new administration that took over in january, and governor snyder, actually, who is now running for reelection, you haven't had that sort of one/two punch maybe in the history of michigan, where it's a democratic mayor and republican governor, but they're both on the same page as far as changing the right kinds of things that need to be changed, and making it, you know, open for business. now having said that there's still a bit of the old guard

involved. you still have sort of irritating daily challenges that shouldn't be there. >> for a long time regulations have been something that are kind of a pet peeve for you? over-regulation. >> yeah, over-regulation. i think sometimes things are well intended and the old broad brush is taken out. i've always said that cities and government officials too take the oath that doctors take, which is first, do no harm. right? >> let's talk about the american dream. the biggest part has always been owning a home. you know up close and personal what is happening with home buying, because of quicken loans. >> yeah. >> what are you seeing in terms of new people buying homes? >> we for sure have seen and all the numbers show a significant increase from the bottom here. so the bottom of 2009-ish, and now having said that, the mill lennial, this generation, i don't know exactly what the ages are now, but primarily in the 20s, we are seeing, you know

later marriages, delaying kids, we're seeing a significant amount of student debt that they have taken out, so when you have a generation that now sort of lives through the mind scar of 207, '08, '09, and all of a sudden coming into the game with more debt on the student loan side than any previous generation, even more in some cases, there's a bit of a hesitancy to get into a mortgage which they are now viewing, because of what happened as sort of mortgage debt and not a guaranteed lock that the asset they're buying today will maintain its price. now that's ironic, because home prices are at really lows, compared to, you know, a period of time from where they were and historically low interest rates. >> let's talk about basketball. >> sure. october 30th, you have a new season, you have brought lebron james home. can you win a championship? can you build a team? >> we're certainly poised to

compete for one. i learned mea lessons a few years about about making predictions or guarantees, anything stupid like that. but i can tell you we stay healthy we should be right there competing for it. it's been 51 years that the city of cleveland hasn't won a championship. i can think of nothing that would motivate me and my partners and everybody better to deliver that to them. that's clearly. goal. >> dan, thank you so much for your time. >> thank you, always a pleasure. up next on "on the money" the most wonderful time of the year, unless you are traveling. how to be on the move without losing your cool this holiday season. and a guaranteed return with regular income, but they come with a big warning. what you need to know about annuities before you buy.

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well, believe it or not the holiday travel season is around the corner. what consumers can expect when budgeting time and money is amy farley. it's great to see you. >> thanks for having me on. >> we got the earnings from the major airlines this week, all incredibly strong thanks in large part for the dropping oil price that is we have seen. but at the same time a lot of these airlines came out and approved $4 round-trip fare hikes, which makes you start to wonder what happens here. what does that mean for consumers if the oil prices are not getting passed on?

>> airlines el very happy to be making money. they're not going to be passing on the lower fuel prices to consumer. in facts orb its and expedia found fares are up over last year. so expect to pay more. >> you think those fair hikes will stick. what does that tell us about demand? >> there's a lot of demand. airlines cut back xaes a couple years ago, now their flights are flying fuller, making more money off each flight. i expect the trend to continue. >> if you want to travel either over thanksgiving or christmas when should you buy your tickets? yesterday? >> you should buy right now. airfares only rise at this point, especially if you're going to destinations that are warm weather or popular destinations. so definitely look at getting tickets right now. >> what about if you're looking to try to plan ahead to try to survive the hassle just in terms

of how much chaos, in terms of travel insurance or signing up for the tsa precheck? >> touch sa precheck is basically an airplane essential right now. it used to be available only for frequent flyers with airline loyalty programs, now it's available to anybody. they have airplane enrollment centers in major cities, so it's very easy to get into precheck. all you need is proof of citizen ship. it's $85. definitely worst it to speed you through the airport. trip insurance is also trip. if you go to -- or there's a new product call air care, which really simplifies the process. set dollar amounts, and interruptions, and it's a great thing especially if you're traveling over the winter holidays. we saw huge storms that disrupted travel. >> we always complain about traveling. is this year going to be better? worse? if i'm a consumer, how will i feel?

>> you will feel like you are sitting close to the person next to you on the plane. and you are also going to have more people on the road likely because gas prices are lower. >> ah, yes, we love the sharing over the holidays. amy, thanks for joining us. >> thanks for having me on. up next, the news ahead. and to make sure you don't outlive your money. we'll have the ins and outs of annuities. hi! hi, buddy! anncr: that's why the wifi and free hot breakfast are something to smile about. and good reasons to book now. feel the hamptonality

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guests, go to our website otm.cnbc.com. here are the stories coming up. earnings seasons continue chevron and exxon, twitter and facebook and starbucks. on tuesday the latest report on durable goods orders. wednesday the fed ends its two-day meeting, thursday the gdp report will be out. it's the broadest measure of the health of the economy. on friday we'll be getting the latest on personal income and spending in the u.s., and plus trick or treat. halloween is friday, october 31st. this week the treasury department issued new guidelines to expand the use of income annuities inside 401(k) plans to provide income for rye tires, but what exactly is it and is it right for you? sharon epperson joins us with the pros and cons. >> the treasury wands to expand

the options available to include deferred income annuities, specifically in target date funds. annuities may by attractive to some, because you can build the savings tax-deferred and most important to many investors, generate a steady stream of income. if they want more in guaranteed income, an annuity may make sense. they need to evaluate how much they have had in guarantee income. >> annuity is basically an insurance policy, an investment that pays someone a fixed amount of money each year. the contract says the insurance company will invest your promise and probable to make you a regular income in exchange you're paying the insurance company a specific amount of money either love sum or a series of payments. >> they're not all created equally? >> they are not. there are immediate annuities, which means you have a lump sum and then you've paid in that lump sum, you're going to get a

lump sum when you take it in about 30 days. the size depending on your age and the amount of the lump sum payment and what the terms of the c then there's the deferred annuity. that's what the treasury is talking about. you put in money over time or a lump-sim payment, and then you're going to get money out, either over time in a lump sum at the retirement point. >> how risky are some of these investments or low risk? >> there are different times of immediate and deferred. there are of coursed fixed annuities which gives you a fixed rate of return. they're variable annuities, based on some type of investments. and then they're indexed annuities based on an index and they're capped at a certain rate of return which, with this market environment is pretty low rate of return. >> when you start looking at all of these annuities, i have to admit sometimes they've gotten a bad rap. sometimes people say it's not worth of cost of what you're putting into it. >> it's the fees. the fees are what many people

are looking at saying this might not be right. the fees could be as much as 3% other higher, you're looking at management fees, surrender charges. that's if you don't fulfill the terms of the contract and you want to break that contract, you have to pay up. i want more of my money right now? >> exactly. that's going to cost you something. that's something you want to look at as well. this is a contract. like many insurance type products it's good for some people and not right for others. >> i would guess that socially we have seen fewer companies offering pensions. that was a pension. is this right for somebody who wants a situation? >> that's exactly what we're going back to. it's interesting that the treasury has made this announcement in a jittery month. people are unsure if they will outlive the money. here is a potential option. it's something to think about, but also something that now investors could buy on their

own. if you're buying it on your own, you need to think about am i near retirement? do i need this income stream in the next few years? if the answer is yes, maybe a portion of your portfolio can be put in an annuity. if you haven't maxed out all your investment options, do that first, and if you don't have liquid cash valuable and you're going to need that now and in retirement, then don't tie it up in an annuity. >> thank you for the guy. >> sure. my pleasure. that's the show for today. i'm becky quick. thank you for joining mess. next week, interested in starting your business? what you need to know to get the ball rolling. each week keep it right here. we're "on the money." have a great weekend.

>> narrator: in this episode of "american greed"... marc dreier... high-powered lawyer... >> "you can smell the money, and that's why the clients come here." >> narrator: ...bon vivant... >> when marc stepped into a party, marc was there to party. >> narrator: ...con man. >> you have a guy who's actually pretending to be other people. >> narrator: he steals more than $700 million from hedge funds... >> they were vast pots of money with billions and millions, you know, overflowing the sides. >> narrator: ...because that's where the money is. >> this was a man who had always felt deeply empowered, that this type of success was his birthright because he was so smart.