a look at the markets. dow and s&p are holding in positive territory. trying for a fifth week of gains and also "fast money" with melissa. >> the one stock inversely with the price of oil, cst brands. watch it tonight. meantime -- >> good luck braving the weather. >> thank you. "closing bell" is up next. welcome to yet the closing bell" on a monday. i'm kelly evans on new york stock exchange. >> i'm bill griffith. markets holding up reasonably well, kind of. japan's economy in recession. the final hour of trading with the very latest and then there's jpmorgan who's saying that out with a note saying that the u.s. stock market is overvalued where the european market may be undervalued. they're -- they like one. they don't like the other.

coming up, big ackman losing the bid of allergen and over $2 billion on the deal. that's why the ceo said he's still suing for the back room tactics and valiant hear what was said and if there's moves to close that loophole to engineer a scenario in the first place where he won no matter the outcome. >> fascinating story. i mean, just outwitted everybody on that one. was it ethical? elon musk warned here that robots may turn on humans. he said it with a straight face. now, he says it could happen this decade. and by my calculation we have about five years left in this decade. we'll tell you why elon is moving up the timetable and look at how real the threat of robots to hubls really is. >> yeah. the story -- yeah.

strange times. okay. look, the dow up 16. s&p up 2. the nasdaq is a little bit negative and fascinating about the period as they say never short a dull market or what have you, we're climbing to newer and newer highs all the while actual volatility in the market at multi-year, sometimes multi-decade lows. >> later we are talking to a group of college students who won a trading competition in one month. they doubled their money. it was unbelievable. in four weeks. but what a four weeks that was. let's get to the closing bell exchange. anthony chan. mark ibel. david malpas. and so does rick santelli in chicago. david, what about the global economy right now? i mean, when we think about the central bank policies going on, you know, they're going in opposite directions and

especially now with japan and the problems that they're having right now. how do you assess where the opportunities are right now? >> hi, bill. well, i think that world nominal gdp, that means just in dollar terms, when's the world doing, it is slowing down and puts downward pressure on earnings and that's putting some kind of a temporary peak on equities. the reason for that is central banks have not really added money to the world economy. when you look at credit growth, whether in the u.s., europe or in japan, it's been slow and that's -- >> right. >> that's disinflation ary. when you look at world dollar gdp, looks to me like it's less in 2015 than it was in 2014. about 77 trillion. >> wow. wow. i mean, that's a huge deal in a global economy. used to be the rule of thumb is anything below 2.5% is a global recession practically. anthony, do you agree with that

prognosis? >> i think david is right. credit growth is slow and why today mario draghi says he wants credit growth going again. looking at private sector lending to businesses in europe it's still down 2% but again what's mario draghi saying? safing to continue to put as many steroids in that pipeline as possible and, in fact, not even ruling out the possibility of doing sovereign -- and buying cover-up bonds, private bonds and mortgage-backed securities and almost no limit of what he plan to do if he doesn't see credit growth moving faster. david is right. we'll see more credit growth in the months ahead and japan. we know what's happening there. we know a lot more credit growth will happen. >> rick, this sounds like dollar bulls are still in control right now. how could the dollar go down in this environment? >> no.

i mean, it's going to be tough for the dollar to go down. concerning japan, europe and the uk. so the weakness of those currencies, of course, on a relative value trade make the dollar look good. for credit, everybody's correct. there's a major faux pas. central banks can use the test tubes to create credit but how it's used is going to be a completely different question. it's a horse of a different color and i think they're limited as to what they do in that arena and should they try to fine tune their pencil into how the credit that's created gets put to use, the unintended consequences move up exponentially. japan down. if you look at the last 12 months, both of the categories of gdp, 6 out of 12 are negative numbers. this doesn't really fare well for the whole form of central banking and, indeed, david malpass is spot on. global dynamidynamics, less for.

i don't care how we stack up relative to others and the economic grading category. less is not better. >> but, david, are you blaming the quantitative easing approach that shinzo abe is taking in japan or still the ramification of the sales tax hike at work? >> i don't think qe is working. if you look in the u.s., the median income levels for americans going down and down and down. because the central bank is channelling the credit toward bigness, toward the government and big corporations. that just doesn't create jobs. so turning to japan, we have a perfect test tube. they have bought a huge amount of bonds and their economy is going slower and slower. >> meanwhile, diane, this week hearing from retailers. earnings, gasoline prices coming down. is that a boost to the bottom line? what are you expecting? >> i don't think she should

underestimate the impact of lower gas prices. i think it is key not only for the economy as a whole but in particular for retailers and lower and middle class incomes where gas is such a big component. it wouldn't be surprising to see dramatic increases in retail as everybody heads to the pump and discovers they have more dollars to spend. if you look at friday's consumer confidence data, what we see is biggest increases happening in lower and middle income families and one of the things that's really interesting is number one place to do the spending is in food establish. s. they want to eat and get to the restaurants so we have a lot of companies reporting now. likely to be a really good week. >> i don't know if there's truth to the rumor they conducted that consumer confidence survey at gas stations. >> that would do it. diane, as a follow-up to david's point, do you agree with him that balance sheet expansion by the u.s. central bank hasn't worked? >> i think david hit on a really good point and there's a sutd l

point that we need to focus on. one of the statements was, look, he sees lower earnings. that could be true unless, of course, we start to have acquisitions for earnings. right? we are starting to see a lot of transactions where large companies are acquiring small companies that have wonderful earnings. so in the past, we have seen vertical integration. strategic mergers. we might to start to see large companies paying a premium for small and mid cap companies with wonderful, robust, steady earnings and could change the earnings picture and then in the interim lead to m & an activity of now and first half. before the first hike. >> mark, let's bring you into the conversation here. where do you see investment opportunities right now? >> i think what we learned today from japan and i think the announcement of draghi just as important as japan. non-u.s. story is a qe monetary

story. similar to what we were a few years ago. our story becomes much more about growing at 3% and can we justify our market valuations earnings getting better? we think there's cheaper values outside of the u.s. within the u.s., i would agree with diane. with that gas tax. strong dollar into christmas looks good and managers are overweight health care and financials. >> david, i want to go back to you on this paint, as well. it feels like the sharplidy veer gent outcomes in the europe and u.s. speak to how well monetary policy worked contrary to europe and has hardly expanded the balance sheet at all. >> i don't think that's the causal effect. europe has these huge structural problems, meaning, you know, the governments are just gigantic, the tax rates are very high and so they're growing slowly. but it's not because of what the

central bank is doing, but other factors. in the u.s., our growth is stayed way low. this is a horrible recovery by normal standards. i agreed with diane that you might find some financial engineering by big companies so the current environment is great for wall street. it's great for washington, d.c. but it's been very bad for median income and for wages. >> anthony, i know you have been the big bull on the economy here in the united states. what about the impact of lower gasoline prices? are we over estimating the impact that it could have on retail earnings? >> i don't think so. i have a model the look at november consumer confidence as the best leading indicator of what holiday sales are. remember what diane said. look at consumer confidence. if you look at november's preliminary reading, the highest since november of 2006. and back then, i remember that chain store sales or the general merchandise component of the

retail sales november and december up 4.5% year over year basis. if you look at the current readings, they're pointing to holiday sales of 3.5%. that compares to .9% last year. remember that if you continue to hold these gasoline prices at these levels, that's adding close to $100 billion to households purchasing pockets on an analyzed basis. this is going to boost retail sales activity during the holiday sales season. >> you know, anthony, just a follow-up question as well as people try to figure 0 the impact of japan in recession, what are the two different outcomes of a japan mired in recession relative to one beginning to grow again as any of these various policies perhaps work? >> i think that the data speaks for itself. one of the things i noticed of japanese data, with the preliminary number, just like us, it has a lot of information that's missing.

so i would not be surprised the numbers are biassed higher. yes, it's recession but pay attention to what they're doing. i agree with rick. not to say we're sanctioning or saying quantitative easing is good but it does boost economic growth and that's why the central bankers are talking about work out there to structural reforms at the same time. and by the way, david is right saying this is a miserable recovery. so far, we have grown on average a little over 2% and the normal recovery is 4.5% go. to europe. >> you agree to him. >> go to europe saying 2.3% is bad. to them it's good. it's not as good as it could be and we're still at a pretty nice looking house in a bad looking neighborhood. >> all relative. thanks all for joining us. appreciate your thoughts. >> thanks, guys. by the way, over the weekend, paid $2.69. >> i saw the picture. not -- not the case in my neck of the woods. certainly better than the recent

past, though. so, too, here for the markets. dow up 18. s&p's up a couple of points. 2041. doesn't seem exciting with a point or two every day and the typical forecast coming into this year was for a year end target of 2014 just like the calendar year. well above that despite the volatility. >> wasn't that adam parker that made that forecast? >> a couple of different guys did, yeah. sometimes you win when you lose. hedge fund titan bill ackman making $2.25 million from $66 billion buyout. that despite ackman's work to take over allergen that failed. the pros discuss how he made all that money and if what he did is legal. that's the thorny question right now. td ameritrade ceo talking with us and if gains lie ahead in the new year.

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welcome back. pharmaceutical drug maker actavist announcing to acquire allergen for $60 billion. valiant teamed up with bill ackman to acquire the company raising eyebrows because he had taken a stake in allergen but not in valiant. follow that? >> i'm with you. allergen ceo this morning along with activist ceo. here's what they had to say. >> of course, the goal of any activist investor as you so ably stated is maximize value. that goal presumably is achieved and this is a sideline. our litigation on the inside trading suit continues. >> it continues? >> it continues. >> why? >> at the end of the day i personally am quite disturbed of the shareholders that sold the stock in the period not knowing that there was a bid coming from

the other side so i think we have a fiduciary obligation the protect those interests. >> let's talk about that. more re action. mark, did bill ackman do something illegal? >> absolutely not. i think they should be sending him a thank you note. >> do you agree? >> on the legal side -- >> did he do anything unethical? >> okay, look. the question is really important question. i would not have sold the stock if i'd known that deal was going on. right? i mean, if ackman bought -- i if know that he bought 10% position and side deal to make an offer for the company as a seller and owner, i wouldn't have done that. so there's material non-public information that would have influenced my decision. i think that is a violation of the -- but i'll defer. it doesn't pass my sniff test.

>> counselor? >> may not pass the sniff test but it's legal. right? as we talk about a lot, material non-public information is basis for a lot of what goes on in the markets and doesn't mean it's illegal insider trading. there's a distinction. the information, alleged information that rises to a violation has to to have been received in violation of a duty. bill ackman had no duty to disclose his own information but the deal with valiant and he did. the law's very clear on this. >> what point, you know, at what point, because you and i are silting on the floor of the new york stock exchange where if you and i say we do a deal and give each other the words and agreement on the floor of the exchange, that's a deal. right? >> that's true. >> so they had an understanding. right? why isn't that a deal? >> they had an understanding but the law is clear on this. and the 2nd circuit case law here in new york most extensive and looked at by the california federal court in connection with the case brought by allergen and

until we have an inked deal, we have no duty to disclose. it's not material non-public inside information if it's my information. if to take to that the most logical extension, you would have no activist investing going on. >> but the sellers that sold in the quiet period are looking up and saying look at the money. they should be selling -- sending thank you notes and the money they made and the people that didn't know -- >> the quiet period some sort of problem here? >> yeah. >> i don't think it is. >> whose responsibility is it then to talk about another deal coming up? >> responsibility of the issuer. right? so ackman as a private activist hedge fund other than the 13d obligation filings i believe they met and lawyered to the nth degree. >> michael, isn't this a case of bill ackman outsmarted everybody else? >> yes. >> yeah, i think that's probably what it is and it doesn't feel good and doesn't feel right and when we hear about these sort of

things on wall street as investors, we begin to feel icky. i mean, we begin to say we don't trust the system and the big guys doing and getting away with things like in this and mom and pop can't play on this turf. >> just again to try to put it in context, what do you think carl icahn would have done differently in bill ackman's shoes in this deal? >> i think he's more conservative than bill ackman is in terms of taking stuff to the mat as it were to get a deal done. everyone made money here. bill ackman's conduct made money for his investors of mom and pop, the pension funds, the firefighters, the teachers invested with persian square made a ton of money. $2.3 billion, $2.4 billion estimated. allergen shareholders. >> not those that sold. >> they didn't lose money per se. they just didn't make more. >> that's right.

not everybody can win on every trade in this industry. >> having -- >> i hate that. >> having said that this, though, mark, do you suspect that there will be somebody to -- a regulator type or even a legal type to come along and want to legislate something? >> does allergen have a case any. >> i think they have no case. to say, oh no, we're good, sends the wrong message. i think the case fails. i said it august 1st on the show when it was announced that the lawsuit was filed. i think the regulators are going to look to see the california district court does and i think ultimately going to turn down and rule against allergen. >> if you need a proxy, a beard, somebody else to represent you, it says -- it does send the wrong message there, right? that valiant needed ackman because had valiant made the

purchases, it would have tell the graphed major signals. it's a position in another public company. but if you have a hedge fund manager do it for you and a deal with him on the side, acquire the 10% position under the radar. i mean, go back to your point. i think it was just brilliant, bill. i would hope my kids wouldn't do this. >> sums up a lot of behavior. >> back to my question, though. okay. you don't think under current law allergen has a case. do you think a regulator -- what do you think they would come up with to try to prohibit this from happening again? >> bill, they would need to extend the scope of what is currently under federal law illegal insider trading. >> broader the definition? >> precisely. the facts aren't there and litigated. the 2nd circuit ruled on this multiple times. what happened here is not de nova as we say. it just happens to be high

profile. >> if we have a deal, we have a deal. >> we have a deal. >> if we have a deal, you can bank on it. this guy is one of the -- >> that was great stuff. >> worthy lawyers. >> gentlemen -- >> both sides. appreciate it so much. >> thank you so much. good to see you both. we're heading toward the close with 35 minutes left in the trading session. another one of those days. not a lot of volatility. dow up 18 points and boy do we have a volatility in the month of october. >> guess what. that was actually some pretty good news for some savvy traders. td ameritrade ceo speaking with us exclusively about the market and joined by the winner of the td college sink or swim and tripling their investments in a month. yes, it was that month. >> yes, it was. good timing. also coming up, facebook reportedly going head to head with linkedin. google and microsoft on their business turf. we'll have details on what facebook is developing and how

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experienced fund managers could triple the value of the portfolio in four weeks. right? that goes without saying but it was done a few students at the university of north texas, latest winners of the td ameritrade think or swim college challenge. in one month's time, the go mean green team at the university grew $500,000, this was virtual money, right? yeah. not real. >> too bad. >> took $500 thousand dolla,000 into $1.5 million. >> let's see how they made their mark. the captain and the man behind the trade, ceo of td ameritrade. one lucky bet? >> several you could say. it was a lot of learning process, ups and downs. let me thank my teammates. special thanks to dylan, marcus,

ervel at unt, especially the student investment team. >> well done, mason. fred, you know, the time frame was fortuitous. it was in october. we all know how much volatility there was. if you have a time trying to trade stocks to make some money, that was the time to do it. >> yeah. we picked a perfect time. it was earnings season which was picked deliberately and other volatility on top and turned out to be a perfect time for a trading competition. >> surprises come out of it as far as you're concerned as to the kind of behavior you saw? >> i think they learned very quick through the sort of kids learn today through games and experiences and they learned quick. they started trading stocks primarily. 55% stocks, 45% options and then all the way back into options, 80%. they were trading what our clients trade. >> yeah. mason, talk about that.

i mean, were you guys nimble with your trading or did you just happen to buy the stokts that went up a lot in that time period? >> you could say a little bit of both. we took a quantitytive derivative approach focusing on weeklies. we definitely looked and did the research and analyzed the companies, projected the q-3 earnings. certainly, there's a llt of opportunities to look at. towards the latter of the competition with republicans taking back into the senate, you could certainly look into other types of stocks that weren't doing so well such as oil and there left some opportunities, definitely a learning curve throughout and so definitely changed the strategy day-to-day of how to look at the earnings and how -- >> mason, were you guys using options here as indicated? >> absolutely. this was primarily doing everything from calls, naked calls, naked puts. you could do long to do a few weeks 0er the short.

you could get come placated and through butterflies, hedge your risk if you like. >> fred, what do you think? what do you think when you hear all this? >> you know, it's -- it goes to show you, i mean, some people talk about young people today. they're pretty darn good. very sophisticated. >> your surveys shown a great number of his age group aren't interested in stocks. they see saving as the way to retirement. not investing in stock. >> yeah. but i thought it's no different than we were at this age. >> that's true. >> gen-xors. 15 to 20 years old. they can't see it through to the stock market. they're worried about getting through school and saving for school and once they get into it and they learn through it, you know, they're very interested. you heard the language there. i mean i have heard the terms. i couldn't explain them all but we have people that can. >> mason, what about your generation where most of you

aren't interested in stocks and want to save, put it in some safe instrument and not try to take a risk in the stock market. what do you say to your fellow brethren? >> well, if you want to take a chance into your investment, check out unt. more specifically, talking about my generation, down here at unt and the student investment group, we teach long-term value stock and minimizing it. and so you could take that approach but if i want to reach out directly to the general y across the nation, i mean, market's due to crash sometime. look for the future, buy low, sell high. that's the most basic principle to give somebody. >> before we go, how long have you been investing? >> what time is it? >> four weeks. >> no. >> it's not always like this, mason. let me tell you. good start, buddy. >> thank you. >> that was great. i'm curious. do you think you guys would have done as well -- i mean, we ran

at cnbc a portfolio contest like this back in the '90s and i was always asking the winners, do you think you would have done as well if it's real money? >> absolutely not. this is basically the equivalent of going to vegas and throwing money out there. throwing it on fliers and definitely a lot of risk and if this was a lot of -- real money, it would be a lot more emotion involved which certainly with virtual money there is emotion involved and calculate your risk much more so and so that's when you'd move into stocks instead of options if you want to be a player and a great opportunity for people of my generation, very good way to set yourself up for retirement. >> congratulations to the folks at university of north texas. i have to do a shout out to number two team. >> cal state university fullerton. i'm a proud product of the university system out there. i went to north ridge and fullerton is a nearby school there and they did themselves proud, too, fred. up 124%. >> and suffolk university in

boston third. >> yeah. tons of fun. >> good to see you, buddy. may your next four weeks of investing be as successful. >> thank you very much. check out unt. we have a good program. a lot of people to help you. >> working off the scholarship right now. earning it there. >> fred, good to see you. thank you. >> nice to see you. >> appreciate everybody's time. >> 25 minutes to go here into the close. dow holding on to a gain of 17 as we keep an eye on the nasdaq, well. trading to the down side. the s&p roughly flat about 2041. >> been investing for four weeks. that's great stuff. all right. faceoff in the office. facebook, according to the financial times, reportedly developing a new at-work platform to take on linkedin among others and should they be concerned about that? stock's down 5% today. we'll talk about it coming up today.

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welcome back. overall markets moving big here and stocks are. kate rogers looking at the names for us. kate? >> let's begin with dreamworks. trading down about 14% right now. hasbro, the stock up over 4%.

tyson foods gaining ground after reporting better than expected fourth quarter earnings. saying it was the second consecutive year of record sales and earnings and currently up over 5.5%. and celldex soaring on the brain tumor drug had improved survival in patients without the disease worsening. trading up near 30% and we'll send with denbury resources. the independent oil and natural gas company announcing the plan to reduce the capital spending by 50% to 550 million in 2015. citing the recent decline in oil prices. trading down over 10,000 now. back the you, bill. >> all right. kate, thank you. i wonder if may jon has bought any of those stocks? get his advice on all of that. we'll take a break. we have about 20 minutes left in the trading session with the dow up 21 points. s&p up 2.

nasdaq down. elon musk commenting that machines could turn on humans inside of five years and first sounded it here on "closing bell" back in june. >> i'd like to just keep an eye on artificial intelligence. i think there's potentially a dangerous outcome there. >> if musk is worried, should we all be worried? >> i am now. >> talking about this one coming up. also, with facebook reportedly looking to muscle in to linkedin's turf, we want the know if you think facebook is a direct threat to linkedin. stock is down 5% today. cast your vote. we'll bat this topic around when kelly and i come back right after this. take on the challenge of trading options and futures...

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cme group: how the world advances. welcome back. facebook reportedly developing an at-work network to post challenge most notely to linkedin and allows employees to communicate with colleagues and create and edit documents. >> shares down sharply today. down 4-plus percent and investors concerned about the newses. should they be? joining us more with their reaction, reporter who broke the story in the financial times,

anna cushler and then lance ulanoff. we want to know if you think facebook is a direct threat to linkedin. do you agree? the selloff today, seems to be the case. go to cnbc.com/vote. hannah, good job on breaking this story. >> thank you. >> what did you find? describe it. called facebook at work. >> yep. it looks like it's coming in early part of next year. and it is both a way of linkedin replacement to network with other professionals outside of your company and then a kind of slack or chatter replacement internally and a place to create documents which could challenge microsoft and google. >> is this an other app or profile to create or let you change settings? >> facebook realizes you can't keep the professional profile

with the silly pictures and making an effort to keep them separate and i imagine in mobile a separate app and might be sort of separate settings and section on desktop. >> i keep my cat videos over here and i put my documents over there. >> how will i find your cat videos? >> don't worry. you can find them. >> we don't have anything else to talk about. >> is this a viable threat to linkedin? >> i think that's a big leap but it's an absolute must for facebook. how many times have you talked to somebody in another company, did you see it on facebook? i'm sorry. my company blocks facebook. facebook can't afford to be blocked on a single screen. it has to be everywhere. and business is a critical part of its sort of overall strategy sigh this also just a compliment to linkedin and the strategy and have recruiters pay for the information they want, have us willing and able and wanting to put out there that pertinent information and people just across silicone valley saying we need this business? >> i think it's a business that

everybody's interested in. with linkedin, it is more of networking. facebook work is about getting work done. clearly this is a tool, yammer, link, you know, all of these things that tried to solve, tried to break the byob social networking habit that began with aol instant messaging ten years ago and fighting against now and everybody's on social networking. they need to have -- facebook needs to them using it for work. >> i think facebook stands a chance with the immense audience of 1.35 billion users every month. so much more than linkedin and really easy to use. and it will often almost certainly be free. and that's huge. if you're a small company, why not take the free option over paying, you know, for office 3.65? >> and showed that they have convert people, 500 million into using a new app pretty quickly. >> pushing it them. >> you say work and enterprise.

enterprise doesn't trust and they won't have a trust level out of gate with privacy. they want things to protect the business so have that information, have the documents sitting on this brand new somewhat unknown network is a little birth scary. google has a lot -- google apps if you're using that and in business, that's separate from your google drive, the things you're using personally so i think facebook will have to convince business that it's right if the enterprise. >> would you use the facebook tools as you hear them described? >> i think it's way too soon to tell. i like to keep the facebook world separate from everything else and my business world. >> i'll show that we're asking the viewers to weigh in and the unscientific vote so far as you can see on the screen there, 56% roughly feel that this is a tlelt to linkedin. last i heard you got no comment of facebook on this one, right? they're not showing their hand.

>> no, no. i mean, you wouldn't if you were them but i think it probably is a threat to linkedin and a much more widespread there. i do think they have to solve the privacy issue and why you have seen facebook get more and more sort of conscious about privacy. they introduced the dinosaur and guides us around the settings and mark zuckerberg said we have a completely different culture in the company of privacy. >> a dinosaur and not something you see in the tech world. thank you so much. hannah and lance to talk about facebook at work and may be seeing more of. >> there's the vote official now. 58% of our viewers weighing in feeling that it is a direct threat to linkedin. i have not converted over to facebook messenger. should i? >> nor i. >> you haven't either? lance says you should do it? all right. it's safe? >> of course. >> okay. a lot of people message me on facebook. they have no idea why i don't respond anymore. >> are you trying to say it's

not because you don't like them? >> 13 minutes left in the trading session. do i look like a people person? >> s&p up and the nasdaq weighed down by linkedin. >> crude oil, crisis stuck in reverse. all systems go for oil and gas deals which have hit record levels this year. jeff cox has a special report on that when we come back on "closing bell." i sure hope so. with healthcare costs, who knows. umm... 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. start building your confident retirement today.

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welcome back. certainly lower oil prices have been great for consumers but a concern for some investors. however, recent data suggests it's boosting dealmaking in the oil and gas space right now. >> cnbc.com's jeff cox joining us with more. >> good afternoon. record breaking year for energy deals continued with halliburton's acquisition of baker hughes and valued in cash and stock at $34.9 billion and translates to $78.62 a share. but in a larger sense, this feeds what's a voracious climate for deals in the energy sector

totals $368 billion so far in 2014, the highest year to date total since they began keeping records in the 1970s and double the level of last year at this time. that's also a record. so while as you say we hear talk about the lower gas prices taking a bite out of energy stocks and business investment, they haven't obtained a ravenous deal for energy deals in the sector. >> that's for sure. good story. >> we know that's one of the reasons, as well, people have been looking at this space. bottom feeding and saying maybe i'll get a takeover bid. >> a break and come back with the closing countdown and the dow up 14 right now. after the bell earnings, urban outfitters encollusive information on the best hedge fund managers right now. stay tuned. all that coming up after the close. i have a cold

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welcome back. art cashin came by, like $500 million to sell on the close but we're watching the dow move higher here. we're up a whopping 10 points right now and the s&p is up a fraction. let me talk about the earnings tonight. this is a big week for retail stocks to be reporting earnings. we have urban outfitters reporting after the bell and

then agilent technology and both stocks trading lower right now. kenny is with us and bob. we were talking about the lack of volatility in the market right now. >> we were -- you were talking about the bell and i can see it, it's starting to flip to the buy side. just slightly. not big. and looking at the s&p, broke out of the range. 2040. you know, it's been a quiet day today. the market is still trying to -- >> what is the market waiting for? the month of october was incredibly volatile. >> right. >> month of november has just flat lined. okay? >> i think the rest of the year is going to flat line unless you get -- i'm surprised. the news out of japan didn't create more noise today. >> should have. you know why? they believe that abe is all in. he is not going to recant on the stimulus package and the program and they believe it's all in and further in.

>> they have to believe the ecb will come in, too. >> mario draghi is talking about that. >> he has to step up and do something. listen, italy's in recession. greece is out. italy's not doing so well. europe is muddling along. >> draghi said today we'll do, again, we'll take unconventional measures if needed and buying government bonds and reiterated that position today. he's made it clear. >> that's why you are not getting more of a reaction here. >> it is frustrating. nobody's making any money. >> hello. >> hear it in the voice. you can tell. but sideways consolidation from the technical point of view, it's not a bad thing. >> it is good that it's consolidating. allowing the fundamentals to catch up. >> 75% of the s&p above the 200-day moving average. that's close to the historical norms. moving sideways, the more quiet consolidated the market gets and

works. >> you wireally, you won't get of -- >> what could happen, you have a fed meeting to go. you still have this opec meeting coming up at the end of this month. right? >> right. >> what about oil and impact on the equity market? there was a time in the last few years where oil and stocks were moving in tandem. is that changing now? >> i get the sense it is but i think low oil is good for the global economy. i'm not one of the people that thinks it a's huge negative. negative for energy companies aenl great for shipping, transports, autos, airlines. right? for the consumers. >> so much for baker hughes and halliburton good for oil service stocks. think that would have stimulated interest? >> seeing more of that? >> consolidation. >> they have to have a higher oil. all the oil service names are killed today, the shale plays are killed today. baker hughes and halliburton didn't ignite anything.

>> that should have kind of -- >> one hour on thursday. >> right. >> what about the retailers? gasoline is one component but the fact that gasoline prices have come down, there's this prevailing wisdom that retailers will benefit of that and report better earnings this week. >> i think they will. listen, they started with the pre-pre-holiday sales. they have the preview, presale. that's true. people are seeing a benefit of lower gas prices. >> walmart at an all-time high right now and will be one of the ben fishes of christmastime. >> i wish the wage growth was better. that is the problem with retail. a guy's still going to go out and buy stuff. i think lower gas prices marginally is effective and helpful for low-end people. wage growth is the big problem, why retailers aren't doing that well right now. >> they're doing all right. walmart at the highs, right? the one to worry about are high-end ones that aren't participating yet. >> all right. good to see you.

let you finish the trading. bob, see you later. thank you. going out with modest gains. nasdaq on the downside. stay tuned right now. we have the earnings. on the second hour of "the closing bell." with kelly evans and company. see you tomorrow. thank you, bill. welcome to "the closing bell," everybody. i'm kelly evans. another quiet session and not quiet for the s&p 500. going out at 2041 while the dow jones adds 13 for its part up to 17,650. the nasdaq weaker today and talked about components weighing on that index and off about 17 retreating to 4671 for its part and i shall hesitate no more and get to it with today's panel. david zerbis with michelle

caruso kb and along with fast money trader guy adami. welcome, one and all. >> yo! >> david, you were talking about volatility, set to increase. october panned out the way you called it. what happens now? now it's been so, so, so quiet. >> it has. and, you know, i think you have flushed a lot of really bad positions and probably qui healthy. i'm excited about that. i'm excited about the idea we stay with a risk-on theme into the end of the year. it was never an idea to risk the theme but an idea there was going to be communication mishaps of the fed and a market priced for a bit more perfection than probably there is in the world. >> you guys surprised we held up reasonably well after japan off 3% and people making heads and tails of the economy? >> a shocker of a number. missed it by such a wide margin. then, again, japan's not moved for 20 years and ultimately, i mean, it would be nice not to have the head wind.

that was an economy to get better. peter farr wrote. we printed the money and got a lousy recession? raises questions of monetary policy theory in the world right now. >> david, you agree? we'll get peter farr in the program in little bit. >> what benefited the stock market is what that's done is help out the u.s. market is pushed out all these rate hike expectations by the fed. going back to, say, you know, mid-september when we first started that corrective activity, market was pricing in the fed starting to go in the early part of 2015. now it's been pushed up and going to 2016 and the principle reason for the market the fed and now taken out of play. >> justified? trying to think of what changed since then really in the u.s. gasoline dropped a bunch. but everything else is much stronger. >> well, inflation expectations is very critical to the fed and, yeah, the economy's doing fine. but the fed's already told you that they still think that

there's quite a bit of slack in the labor market. that's unclear how far that's taken out right now. secondarily, not just for the fed and the fact that growth is doing okay. it is the rounds of the bands of uncertainty around that forecast. i think for these guys, all about inflation. they have told anybody willing to listen 2% on core inflation is a floor. not a ceiling and watching core inflation, above 2%, that's a race between watching paint dry and grass grow so that's what the market lost sight of the fed is not sitting in the way of economic growth after missing the great recession. >> where, guy, does that leave investors? time to just kind of go long and sit and wait for this scenario to come, you know, to happen next year? >> hope is not an investment thesis as you know and great to have mcc there. but, you know, to your point, yes, we've sort of puzzled that the u.s. equity market held up

and candidly i don't think anybody should be puzzled because u.s. equity market, any piece of bad news it's shrugged off. the one pushback to mcc is survived 20 years of japan but something has changed now and one of the things i've said is the reckless actions of our central bach bank, of our fed to work in kind and japan acted in kind times about five and i'm pretty convinced that they've now lost total -- they've lost control of their financial markets, buying ek tills, kushs sy, you name it. i don't think that ends particularly well. >> you know, when they announced the big move, when the expansion of quantitative easing and the balance sheet, guy, to me, it read like the last gasp. the last grab. one -- maybe this will work. it reeked of desperation. >> that's why i can't understand why they went ahead with the sales tax hike with all of that.

>> this was a measure to counteract some of the negatives they were thinking would come from the sales tax and clearly this is an economy which needs even more stimulus and we've been at this for 20 years. the japanese have not done qe properly. they never took real interest rates negative. they never did what we did here in the united states. >> you think that's what europe should be doing, correct? >> absolutely. you ask the big difference to david. the big difference is the dollar. the dollar has changed the u.s. outlook, the u.s. changed the whole outlook for accommodation removal in the united states. the fed does not need to move as much as it needed to before. the dollar does heavy lifting for us. good news all around. good news, as well. the stronger dollar feeds into prices and stimulus to those at the bottom end. >> hold that thought, everybody. the market has its eyes on washington, d.c., shaping up to be a huge week and john harwood has some more on what to watch

for. >> we're only two weeks past midterm elections and washington is barrelling twad a confrontation of republicans and democrats. here are the two flash points. one is keystone pipeline. the other is immigration fight. on immigration, president obama's preparing to sign executive order to legalize several million, not sure how many million, illegal immigrants and give them legal status to stay and work here. the question for republicans is, how to counter him. republican leaders will try to temper and avoid, deflect some of the more severe responses of their hard core conservatives like itch peachment or government shutdown or a debt crisis and could be an addition to the legal fight against the president. keystone is more of a straightforward legislative battle. the house passed a bill authorizing keystone. the senate is going to vote tomorrow. but as senator rob portman republican of iowa said it's not

clear they have the 60 votes yet to push that through the senate. >> the votes right now are uncertain. i think we are at 59. we need 60. we'll see. that vote is elusive. i think it will happen eventually. >> rob portman is right. it will happen eventually. perhaps the new congress. president would be likely to veto it then in deference to the administrative review of the aides conducting and then if there's a deal between president obama giving republicans keystone which they want if they give him something else. with all that's going on with immigration and other issues, not clear there's much of an appetite for deal making, kelly. >> john harwood, thank you, for now. dave, are we making the right fiscal moves in this country? we talked about the central bank and this is important part of that. >> well, depends how you define

fiscal moves. i would say a lot of hard li liftilif lifting done of dividends, capital gains, payroll taxes and then the sequestering and nobody likes it and maybe it's a good thing and remember, you know, three, four years ago we were talking about possible debt default and a 10% definite gdp ratio and people handing me in canada, the zimbabwe dollars and now a two handle on did deficit gdp handle and the fiscal moves are structural in nature and about tax reform. >> doesn't look like it's happening. >> not in the next two years and fundamental reform to help the economy grow, tax reform, we haven't had it since mid-'80s. >> what's amazing of immigration, talk to anyone that believes in capitalism, labor, capital and goods, capital and goods, everybody gets. everybody has a seizure over

labor. right? it all stops at the border. it becomes very frustrating and we need immigration reform now. >> do you think it will be easier to go forward? >> always does. anti-immigration sentiment rises in a weak economy. >> same question. what do you think about -- what are the best options here? abandoning the federal reserve trying to do more in terms of corporate tax cuts or the only way? >> i think corporate tax reform would go a long way and some hope for that with the new congress but honestly i don't put a lot of -- i don't have put a lot of goodwill inside fiscal policy. monetary policy does more. heavy lifting. as far as they don't do anything to screw it up then i'm in a good place with letting monetary policy do the job it's already done for us because we didn't get here today to a 5.8% unemployment rate, 200,000 jobs every month, a low -- >> and the congress.

>> an envy of every other country with nancy pelosi and mitch mcconnell get it done for us. >> that's the point of tyler cohen of japan, is it less effective, the monetary policy there. they have an unemployment rate in the 3% range. >> this is not a slap in the face against quantitative easing. it is a slap in the face regarding japan towards abe-nomics. the reality is not bank of japan, monetary policy can achieve so many things. cyclically. not the economy and taking a look at core inflation, close to 0. and now for the sales tax hike, over 1%. not where they want it but not deflating anymore. >> that's true. >> the problem in today's number, capital spending. capital spending deeply negative. and the second quarter. it was negative again in the third quarter. that's something that's 'fekted by the sales tax hike. when's missing in action in japan, the third arrow. part of that was taking

corporate tax rates, we talk about how hard they are in the united states. tax rates in japan, 30%. the plan down to 20. okay in this is pertinent. and then capital spending, which is really the -- they have the declining working age base and they need growth. >> guy -- >> they need that, too. >> they need $-yen at 140. >> before you go, when's your best trade here? >> i think these moves in the energy sector, i think it forces general electric to do something. that comes out of totally left field. >> it does. >> makes total sense, actually. >> i love jeff immelt. i think he's a stud. he watches the network. there's no denying the stock has not performed well for five or six years. i think this forces the hand in some way. keep an eye on ge. >> i like that. thank you for being here. >> later. >> more of guy adami at 5:00 p.m. talking to the chairman of cst brands about how low gas prices are affecting the food

and beverage industry. don't miss that. kate rogers before we go. >> hey, kelly. check out urban outfitters. lower in the after hours after posting weaker than expected third quarter earnings on revenue that matched expectations and that stock trading down over 4%. back to you. >> all right. and we're waiting for the first of the retailers, not the first but a ton more later this week and starting out on a week note there. but moving on, they're the titans of the hedge fund world with bill ackman, carl icahn and david stepper. none of them are ranked above the best. you would be surprised of who's topping the list ahead. also coming up -- >> the path to peace. your extinction. >> next year's new avengers film of a self-aware robot to destroy the human race. that's what elon musk is warning about for sometime now. that's coming up on "the closing bell."

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welcome back. a new report is out on the quarter's best performering hedge fund managers and you will be surprised by the list.

kate kelly joins us with exclusive details. drum roll ploez. >> all right. thank you, kelly. steady conducted reveals the single best stock pickers in 1,000 of a fourth quarter to date basis. the results were interesting and perhaps not what you'd expect. they're for the most part names you wouldn't know like whale rock capital management. a boston hedge fund formered by a tech analyst of alexander sacerdote. presuming that they still hold the same positions now as september 30th which is a key assumption of this survey, it appears that the data storage provider was the best performing stock in the long part folio and alibaba and vipshop were close seconds. the second best performing manager is another boston area of matrix capital founded by a tiger management alumnist and focuses on tech names and

profiting in particular from tableau and linkedin. the third big winner is prk capital's management. they benefits of airline names including alaska and delta. a few caveats to the study and rarely see in realtime what's contributing to the portfolios and how people do with the quarter in progress. >> are you surprised by the names or when's not on the list? >> no. i think the big names, look, it's been a very difficult macro trading environment so i think it doesn't surprise me that the guys doing the best are coming at it from the bottom up. looking at a single stock story, looking -- doing the homework, getting the balance sheet right and the country right and focusing on something that's going to grow and the airline with the energy story, you know, you nailed that with kind of a long dollar trade, as well. >> you can almost hear the pitches by hedge funds for next year raising capital and saying stock selection matters in this environment. >> one thing that's interesting of airline names are two names

that are frequently hedged for oil prices to make sure that they don't pay too much for jet fuel. delta very active, alaska air very active. dy a profile a couple of years ago and hopefully nimble to navigate is waters. >> anything gentlemographic of ? i know investors that don't want to be in new york thinking there's a group think that ends up taking over and go to the same idea meetings, et cetera. maybe not being here is competitive advantage. >> that's very interesting and speaking of group think and not that they share the same stocks they're in the same building in boston. >> a regional group think. >> maybe it's in the water in boston but i would say to your point earlier, i think that the study favors the long-short guys in particular and because you see a better sampling of what they do. third point for example is a great performer in recent years and they're basically multi-strategy, right? they could be in commodities, european stocks, all sorts of fixed income structured products

so you're not seeing that but only the long-only holdings so if you do long only or long-short and doing well on the long side -- >> what about the best known names? icahn and ackman. >> semetric that did the study for us, a list of top 20 and they wait for consistency over one year and three-year period. of that list, the household names were pershing square and they were up 40% year to date. >> wow. >> today as well, doing great on allergen, of course. according to these guys, 30% of the long-only portfolio. another one is starwood valley and known for the cage rattling at oaol and yahoo!. that was a name that rang a bell. >> i wonder a message of occupy

the board room and activist managers are doing so well and seeing the success that they can have by really shaking things up. >> look. i mean, certain corporate -- sort of anti-activists might argue this is a problem but activism benefits stocks in terms of performance over a five or six-year period and on average they show a gain and look for cost cutting and other investor benefits. so it's a sort of a shareholder friendly approach clearly. question is whether it works over the long term. >> we can trust that before we go the data? that is relatively new thing. >> this is brand new for us using their data. i think the caveats to make are significant. assuming they still hold the stocks. we always do that on cnbc locking at who's benefiting from a deal or whatnot and of course some point you sell them. and the other question is how good a proxy are the long-only

holdings? they suggest that there's a very good correlation. like 64% correlation. but that's 36% and multi-strategy, there's a lot to miss. >> that's a nice look in the window of the space. back over to kate rogers far earnings alert. >> check out allergen technologies. missing by a penny. the company's 2015 earnings and revenue guidance a bit like the stock currently trading up about .5%. back the you. >> kate, thank you. that rounds it out for at least urban, agilent and thor andings to start off this monday. federal reserve spending money to stimulate the economy and the next guest says japan's slide into recession proves stimulus doesn't work. peter will lay out the case straight ahead. i see servos shading his head. raiding the staff of three nfl teams of probe of painkiller

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[ male announcer ] savings worth talking about. state farm. so open an account with schwab. and when a market move affects, say, a cloud computing stock you're holding, we can help you decide what to do. with tools that help you see how market activity is affecting your positions. so when the time comes to decide whether to scale in or scale out... you can make your move, wherever you are. and start working on your next big idea. ♪ welcome back. we begin with our kate rogers again. a quick market flash. >> gopro moving lower. selling 10.4 million shares. the ceo is selling 4 pl of those shares. gopro currently down over 2.5%. back the you. >> all right. under pressure. the u.s. economy starting to pick up steam, though.

the opposite case in japan which is now officially in a recession despite the central bank's aggressive bond buying program. my next guest says that's proof it doesn't work. welcome. >> thanks, kelly. >> controversial take. you're convinced this is a sure sign that quantitative easing doesn't work. >> i think this is qe 10 or 11 for japan. this is not new and seeing it for the first time and saying it doesn't work. we're seven quarters into abe-nomics. 10-year yield from 1% to .5%. the yen from 75 to north of 100. and this is what we get. the economy over those seven quarters in a cumulative measurement is up less than 2%. >> this was just one piece. it's shinzo abe the prime minister trying to use sort of these arrows, one being monetary policy and other arrows. but do you agree, david? >> completely disagree. and largely, i think, you know,

david said it earlier. japan created inflation. for 20 years, they had deflation. if you went to the flank, you put your money, in you brought it back out with a zero interest rate and buying more stuff the next year. they had what we call a positive real interest rate. this is the first time they've actually done what we did here in the united states which is tax people for holding cash. now, we don't yet whether they're going to change the portfolio but we know that the gpif is. and structures are going to do that, as well. >> you say it's working. >> i think it is working amazingly well and for an economy stuck for 20 years doing the wrong thing to expect it to turn the titanic around and turn the whatever ship it is, it was the titanic. now they're lifting it up and filling the holes and sending it out again, i think it's an amazing turnaround story. >> do you grees. >> gree? >> why's the economy down two

quarters in a row by 8%? >> i have an answer for that. they had a sales tax increase. they did the same thing back in -- what was it, 1997? >> okay. that explains the two quarters. but out of the last -- >> first quarter was strong. not negative every single quarter. they had a bad second quarter. and of course, the third quarter was disappointing. let's just say that, you know, part of it is lingering impact of the tax hike. talking about, say, you know, bng of japan, the yen come down a long way. i think depreciating -- >> huge move. >> a bright spot and look at the cup half full, exports actually played a role in terms of contributing activity but let me finish off by saying that the one area -- i don't think it's about the boj per se and about abe-nomics, missing in action is third arrow. >> which is -- >> real corporate -- and capital spending was a disappointment today.

>> peter? >> i want to agree on the third arrow that's missing. with deflation, i'm of the opinion it's a symptom of the disease of little to no growth in japan. it wasn't the disease. higher tax rate impacted the economy. inflation is a tax, too. wasn't just one tax but two. it was the vat tax and higher inflation and a country that's aging. >> they like cash. >> growth was the solution. >> deflation is not the disease. it's just a symptom of the disease. >> i think at least in the central bank circles i traffic in pretty much every central banker says if you take a bunch of debt and mix it with deflation you destroy an economy. i think irving fisher said that in 1933 and ben bernanke wrote about that in his work at princeton and the idea that deflation is right solution for

japan is -- >> he didn't say that. he said it's a symptom. >> but we know that -- growth is wonderful. i can get nominal growth or real growth. i can get nominal growth with a lot of -- >> it's higher -- less real growth with higher inflation. i understand the point. we want to inflate the way out of excessive debt. >> absolutely. >> there's a cost to that. okay? epts in a country that likes to save money, a country that's aging. the aging population doesn't want a higher cost of living and higher inflation is a higher cost of living and same time they're not working, living on zero interest rates and even for those that are working they're getting half of a percent type wage increases. >> only way that david get what is he wants which is capital investment if you make it very costly to sit on cash. only way to do that is create inflation and people take risk like we did here in the united states when our inflation rate started to go up and ben bernanke started to print lots and lots of dollars. everybody said i don't want to hold it.

i'll buy shares of caterpillar stock or some company or buy real estate or maybe commodities. >> wouldn't capital investment come from higher demand? >> you can hope for that but what you start with first is getting the companies first and getting the investor to want to take risk again. nobody's wanted to take risk in japan for 20 years because nikkei or real estate you didn't do anything for years. best investment is cash. destroy that mentality. i think abe and karoda have started to do that and i think they'll continue. >> i think the monetary policy path they have gone on now will destroy the country economically. the third arrow is missing. tried qe for 25 years. what we have not tried is deregulating that country. liberalizing that lay bob force. that's not tried. >> by the way, between '95 and '98 we tried printing money in japan and worked pretty well and

only when we gave up in '98 and dollar-yen from 140 back to 100 and then below. but when we went up to 140, 96 ''97 were the great years. >> that's the whole problem que. only temporary. once it stops -- >> working well here. >> we just pulled forward activity and returns. >> this is a great economy? >> i think our economy looks pretty good right now. 5.8% unemployment rit. >> you're satisfied with growth levels in america? >> i would like -- >> that's a no. >> i would like more. i'll take what i can get after the biggest recession since the great depression. >> we had -- 11% unemployment. okay? >> worst recession. did not completely collapse the financial system. >> '70s sucked. okay? >> interest rates are somewhat normal again.

>> we'll take it right there. i feel like this -- we could take this straight on over to 2008. >> peter, thank you for being here. >> thank you, kelly. >> this discussion clearly needs to be continued. does the stock market have three more years of double digit gains ahead? is the topping the hot list? we'll talk about that next. what are the world's largest oil producers in world. it's coming up.

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billion over the last couple of years. to invest in energy. another 32 billion coming this year. and it's actually getting a return of about 14% measured over the last seven years versus about 9% for other private equity funds so really in-depth piece. readers are also taking aing loo at the madoff recoveries topping $10 billion. putting madoff in a headline, people are sucked into the story. and they're doing it on this one, too. finally, you had kate kelly on the show earlier talking about her look at the whales, the whale watching, and who's doing the real stock picking. that story that she wrote for the website on fire all day day. they're loving this story, a lot, too, kelly. >> it's fascinating. thank you for now. good the see you. one of the world's largest oil companies and a corruption is wrecking havoc in technology visionary elon musk is warning

about the dangers of artificial intelligence saying robots could decide to start killing people in the near future. more about that coming up. 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..

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up about 2%. back did you. >> loving the buybacks. thank you, kate. >> petrobras in a heap of trouble and doesn't have to do with the plunging price of oil. michelle has more. >> horrendous scandal. good, old-fashioned latin american scandal. when the tide goes out, you figure out who's naked. so they arrested a couple of people on friday. always a bad sign. they raided the corporate offices. and the company also said on friday that they don't know when they can report earnings. impossible to know. >> it's funny. those headlines that hit the tape in the show even and people trying to figure out what was going on. >> going to put out numbers in mid-december and they acknowledge the allegations they don't know the value of some of the assets. the fraud is so big and involves money laundering and calling it the car wash. in brazil. today they came out and said, oh, and by the way, the oil production targets for the year, not making those either.

and remember, this is a company with $170 billion in debt. right? they have to spend so much money to get so far offshore and the deep water and just like batista, not bringing up as much as they thought. >> they haven't met a production target in years and before the scandal, their production growth rates going down. they near a country still riddled with political uncertainty. you know, a weakening -- >> can brazil bail them out? if they have $170 billion in debt? >> certainly change the regulatory nature of the pricing if they want to. that's the one thing that i think institutional investors might look at. plus the fact that after -- i mean, the stock is down, what? >> 30% in a month. >> yeah. >> wow. >> almost even more than that since -- >> yep. >> in the past three months. like 40% and trades, looking for a deep, deep value but, of course, with a wide confidence interval, trades at --

>> not that wide. >> a five multiple. >> wow. >> trades south of where the russian stock market trades. >> exactly. dave srks this going to provoke a macro response? a way to use the currency or the fiscal bank or something to prop up petrobras? >> i presume they could and i presume the people not the most loved are shareholders. >> oh no. >> it strikes me. >> -- hosed for sure. >> bondholders. but i think it's a dicey one. all of the particularly em associated with oil and energy and mining, it's in a heap of hurt. i don't see that changing any time soon. >> a key takeaway, times are good, everybody looks past all of the risks. but whenever you near one of these countries where there's doubtful rule of law, you know it's loaded with corruption, you have not to be paid a much higher expected return to bear the risk that can come about. we see it right now. look at when's happening in mexico.

ditto. right? these are countries that still have a long way. the emerging markets have emerged. not so fast. >> yeah. does this especially after the re-election of the president there provoke -- have we heard public comments or trying to -- >> protests that she should leave. remember, the previous job was chairman of petrobras and would have been around for the allegations talked about. been highly interventionist in the company. and now we're waiting to see how far up the chain does it go? arrested a former director of engineering, et cetera. >> isn't brazil already in recession? >> oh yeah. >> weakened dramatically an their inflation numbers gone up and weakened like that, talking about structural issues before but you have major supply side impediments and growth rate down, inflation to the high end of the central bank range. >> this is where qe doesn't work because basically you can't use qe when you have these inflation problems and no growth. >> great point. >> emerging markets -- >> great point. >> it's venezuela. >> yeah.

>> ultimately the currency takes the brunt of it. nfl team doctors illegally providing players with painkillers? federal agents raided three teams on sunday and what may be more trouble for the nfl ahead. also coming up -- >> i think there's potentially a dangerous outcome there and we need to -- >> dangerous? >> potentially, yes. >> how so? >> there have been movies about this like "terminator." >> elon musk sounding the warning here in june on "closing bell" and now saying robots could make their own decisions to kill humans by the end of this decade. that terrifying scenario also ahead.

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it is another potential black eye for the nfl. "the washington post" first reporting that federal dug agents conducted surprise inspections of three teams on sunday, the san francisco 49ers, seattle seahawks and tampa bay buccaneers as part of a probe of prescription painkiller abuse. the investigation is focused on team doctors questioned and searched because the players themselves wanted this done. joining us with details is sally jenkins, a sports columnist for "the washington post" and co-author of this story.

welcome. so glad you got the details on this. people were shocked and especially surprised the hear the players themselves seem to have been behind this. >> well, what we know is that the investigation, the dea investigation, triggered by a lawsuit filed by former players in may about 1,300 former players alleging all kinds of fast and loose practices with heavy narcotic painkillers in the nfl. >> do you know how heavy we're talking? >> well, i mean, some of the things they describe are painkillers being passed out on team airplanes after games, alcohol consumed, that was one allegation contained in the suit that the dea is looking at. trainers who are not authorized by law to dispense medication handing out pills. unlabeled medication, stacking of medications and so on and so forth. >> if this is the case, individual liability, team liability, nfl liability? >> well, that's an interesting question. the players, the former plarl who is have filed the suit say it's a league-wise issue. the league says it's very much dependent on individual teams

and individual physicians and so on and so forth. >> did the players feel pressured to take the drugs? >> our reporting shows, yes. we did a survey of 500 former nfl players last year as part of a series of medical practices and we showed that at least 1 in 4 reported taking medication they felt uncomfortable taking. >> by the way, i played division 3 college sports very -- nothing like this. but even then it was -- extremely common, i mean, you always -- the old line about playing sports getting older is playing injured. you're always injured. you always have trouble. and basically, the only way to get on the field is sort of patched together and stitched together and hours in the hot tub and various things and prescription or nonprescription pills to help overcome the pain. >> the dea's interest is there's a difference of treetding injuries and masking injuries and excessive prescription practices by physicians. doesn't matter what the players

want. if they want 10 ambien. as a physician, by law, you're not supposed to give them what they want. you're supposed to give them what's prescribed. >> what would that do to the game? >> right. >> the nfl might look an intere question. the nfl might look very different. the interest is the nfl creating a culture in which players are becoming addicted to painkillers. >> plus by having them play ball when they shouldn't play ball they will be playing through pain is one thing but really playing when your body is telling you shouldn't be playing is why the average career span of an nfl player is almost down to five years. >> but when you put all of this together, the lawsuits related to early on set parkinsons, this issue, football cannot possibly look the same in five or ten years can it? >> there's a growing question of public health issue with the nfl. should children be playing tackle football? there are some neurologists who

say not before the age of 14. there's a real spike, nfl players are much, much, much more prone to get neurological disease and brain disease according to the latest research. it's a health issue for the players but also potentially a public health issue. >> how long before we know the results of what happened on sunday? >> our understanding is that the dea has been investigating four to five months shortly after this lawsuit was filed. we're told that they're somewhere in the middle of the investigation, we know they're not close to the beginning and we don't believe they're close to the end. however the fact that they did do the surprise inspections tells you they had some things to go on. they don't do this if they had nothing. >> should we expect this to become more common in the weeks ahead. >> our information is its one step in the course of a broader investigation. >> wow, you do wonder at some point if everything adds up to discourage advertisers. this is the biggest part of the whole nfl. we're coming up on the super bowl time of year and just how

much of an elephant in the room is it or not. >> at the same time, i don't doubt there will always be people that want to play the game as is and would accept all of the trade offs. the question is do they know the trade offs going in where as 30 years ago i don't think you did. >> nothing that happened in the last few months in the nfl from a public relations standpoint put a dent in the audience. more people are watching the nfl than ever before. >> but they love it rough and tumble. they love people beating each other up. >> one of the interesting side effects is lebron james said i won't let my kids play football. that's an interesting thing that happened in the last week too. >> sally, thank you so much for being here. great reporting. really appreciate it. sally jenkins from the washington post. straight ahead is the terminator franchise a glimpse at the earth's future. self-aware robots could decide to start wiping out humanity within the next five years.

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threat of a terminator-like disaster happening in the artificial intelligence world. he wrote the pace of progress in artificial general intelligence, is incredibly fast. the risk of something seriously dangerous happening is in a five year timeframe. this is not a case of crying wolf about something i don't understand. this is a common theme now for musk. he first warned about it here on this show back in june. >> i'd like to just keep an eye on what's going on with artificial intelligence. there's potentially a dangerous outcome there and we need to -- >> dangerous? >> potentially yes, there's been movies like this like terminator. >> or escape to mars. >> the ai will chase us there pretty quickly. >> the awkward laugh administer. is this something we should be seriously considering as a danger though? so he made a couple of investments in companies like deep mind and vicarious and the reason he does it is not for the

assessment but for the access he gets to what's happening in this space. what he's learn sd why he's worried about some of the advancements. >> robotics is such a hot area. we've seen google buy a number of robotics companies. i spent a lot of time-out there and they have ai and robotics professors that i dream of creating a robot that will have feelings. he firmly believes we're arriving at the point where humans and robots we will be able to live forever because we will slowly but surely be replaced with robotic parts. he's not alone in what he believes is the progress in the field. as always there's a debate about the technology. >> and the ethics involved. the morality of it. >> look, i don't know where this all goes but i'm imagining milton friedman designing his robotic foms and we can never make a mistake. >> too much money in the system.

>> didn't we see this in 1973 where we had this android and western theme park setting. >> yeah. >> so that was only what? 40 years ago? >> yeah but the joke is that it wasn't a joke to some extent. it's only taken us a couple of decades to see the human-like o robots. we can't ignore where we're putting the decisions even in the small level. >> where does that make it on the priority list? >> the nuclear weapons and he's with pakistan and so i don't know -- i guess that's why this is probably left for the last part of the show. >> leave you with the final thought. one of the professors said we won't know. think about the fact that we don't know if a frog has feelings at this point. we don't have a good test for that. so we may come up with a robot that has feelings and we don't even know it yet. >> i'm excited about all the technological advances. >> it's a very bullish world.

when you listen to things like that you think our world is going to be so different in 20 years. >> you hear elan musk and you get excited. >> you think i'm not going to have to drive anymore. >> no ro bots doing the jobs of an economist. >> i don't know. >> it's going to be hard. >> the perfect forecast. >> listen just a couple to watch. what are you watching? >> this week is going to be critical for the retail reports we're going to be seeing and i think the guidance from the retailers really to judge whether or not the consumer is going to show up during the christmas shopping season. >> speaking of scandal in brazil, batista goes on trial. the man that lost $30 billion in a year. >> watching the inflation data, particularly the cpi. we get down side surprises, imimportant prices. last months or thes. we're getting good stuff on retail sales. >> i want whatever that is.

>> cheaper prices. >> it's a bullish world with killer robots. thank you for being here. i appreciate it. fast money is coming up in just a few moments. melissa lee what's on tap. >> you know gas prices have been falling, falling, falling, so we have one under the radar, falling gas play. we have the ceo in an exclusive. not going to name names. over to you guys. >> thank you, fast money starts right now. i'm melissa lee. your traders are dan nathan, brian kelly, and guy adami. facebook not suitable for work, maybe not anymore. we have details on facebook's move into your office and whether linkedin could have a fighting chance. the stock closing down more than 4% today. we have someone who says the move is way overdone. he'll explain why. but first to japan and the story that surprised much of wall street today. the third largest economy officially entering recession territory and the news shook the nikkei today but we have been raising red flags on japan here on the showin