>> it's there. what's app messenger. >>. all right. you're going to understand why that's the music. kick off the final quarter of the year. it's a strong offense your best defense. expected to take shots at wells fargo and mylan. the corporate crackdown and motown, that's why we're listening to marvin. we are live in detroit talking with some of the biggest power

players in that resurgent city. "power lunch" starts right now. ♪ don't you know that i heard it through the grapevine ♪ ♪ not much longer would you be mine ♪ welcome to "power lunch", i'm melissa lee. gm, ford, fiat chrysler all dropped. hurricane matthew is barrelling through the caribbean. could make landfall in haiti. stocks kicking off fourth quarter in the red. take a look at where we stand right now. we have the dow, nasdaq and s&p 500 all pointing lower on the s&p 500, materials the only sector in the green but it is really being crushed today by the downturn in utilities which is down by more than 1%. oil, meantime, is higher today by .8 of a percent. trading above 48 bucks per barrel. we have a busy two hours. we kick it off with brian sullivan live in the motor city for us. hey, bri.

>> hey, melissa. thank you very much. can't hear the song, "heard it through the grapevine" without thinking of the movie "the big chill." when we came here a few years ago detroit was in a big chill. we came back before the bankruptcy. that was more than three years ago. we heard about this great rev t revitae lieization. we have to see it. we have got a huge couple of hours for you and we're talking all two hours with dan in his building, founder of quicken loans, owner of the cleveland cavaliers, owns a bunch of casinos and a man who is more personally and single handedly responsible for the revitalization of a city. >> great that you guys are here. never been on cnbc after noon. i'm excited everybody is here.

>> in your town. >> in our town. we've got so many great guests coming up from the motor city and so many great people who have come together from the political side, from the community side, from the neighborhoods, business sides. >> we've got bill emerson, chris ilitch, we have the ceo of gm, mayor, retail success stories. big hour. let's jump into this first off. we're not going to sit here -- i love this city but i'm not going to sit here and say everything is fine. everything is fine. you built downtown. it looks great. it looks a lot better than it did the last time we were here. there is a lot of work to be done. if you were going to compare detroit to a tigers game, where are we? second inning, third inning? >> it's hard to know. you don't see a scoreboard. i always think cities are -- there's really never ending. you always try to improve, even

new york city, improve things, get things better. here certainly downtown we made substantial progress downtown, mid town. the neighborhoods are just a huge part if not the majority part. you have to have jobs in the central core. these are where the jobs are. we have 3500 people in our group alone. we put a map up. they're all over in all the neighborhoods. to have jobs in the core is great. even jobs in those neighborhoods are great but we have new residential neighborhoods going up for the first time. >> you call people, as i have, about dan gilbert and this is what you hear. dan gilbert, great guy. michiganer, love him. rebuilding downtown detroit, but what is the -- all the money going into the core, the central businesses behind us going to do for all the other areas that are

still suffering. they want to know how is this going to help them? >> of course. it's all connected. the only difference between the neighborhoods and downtown is people's -- when you look at a map, here's a neighborhood, here's downtown. it's a big city. >> big city, 144 square miles. i forgot what big cities you can fit in, new york, san francisco, atlanta. the mayor has done a great job of getting that blight down. to me that was the number one thing that had to happen. i was the co-chair of the blight task force and, you know, we worked with a lot of people in the community, washington, the state and the city. almost 11,000 homes have been taken down the last few years, two, three years that needed to come down. there's a lot more to go. >> last time we were here we were in an area, bright more. >> yeah. >> it was tough to see. sit tight, dan and bill. we have breaking news in d.c.

with aymon. >> yeah, brian, that's right. this is related to the trump foundation, new report here. the new york state attorney general has served the trump foundation with a cease and desist order ordering the foundation to stop soliciting funds because the foundation does not have the proper certification. now this is a report that came out last week that the trump foundation didn't have the certification required under new york state law to solicit funds from potential donors. now the state of new york's attorney general, eric schneiderman, has issued a letter, this is the letter here dated september 30th, to the trump foundation ordering them to cease and desist raising money. a spokesman for the attorney general told nbc news, attorney general's office is the sole regulators of charities in new york state and when evidence of clear misconduct is brought to our attention, we'll take action. i've just been handed here the trump campaign response to this. they're saying while we remain very concerned about the

political motives behind a.g. snyderman's investigation, the trump foundation nevertheless intends to cooperate fully with the investigation. because this is an ongoing legal matter the trump foundation will not comment further at this time. that's a statement from hope hicks, a spokesperson for the trump campaign just coming in as i'm talking to you, brian. so the news here is -- melissa and tyler, the news is that the trump foundation has been ordered to stop soliciting funds by the new york state attorney general. >> is there a comment from the trump foundation at this point? >> there is. we just got that in from hope hicks. we remain very concerned about the political motives. the trump foundation, nevertheless, intends to cooperate fully with the investigation. she goes on to say, because this is an ongoing legal matter, the trump foundation will not comment further at this time. >> let me ask one question here. there are several trump charities, as i understand it, some that involve his kids, some

are his main family foundation. this pertains to the main family foundation, correct? >> yeah, that's exactly right. the main trump family foundation being ordered to cease and desist at least in terms of raising new funds because they don't have the proper accreditation under the state of new york's registration laws. now presumably, and i'm out on a little bit of a speculative limb here, they can continue the activities but the solicitation of funds. >> mr. snyderman is a democrat, is that right? >> that's right. >> he is an aggressive ag by anyone's standard. >> thank you. >> let's go back out to detroit and brian. brian? >> all right, tyler. thank you very much. we were going to talk about politics a little bit later on. i don't know if you heard the news. there was a guy named lebron james who plays for a team called the cavaliers which you

own. he basically endorsed hillary clinton. as the owner of a sports team, are you good with that? >> absolutely. i think the political process, whether you're a famous person who works in an organization, whether you're the owner, whether you're selling popcorn, i mean, everybody should be able to express their political views and i encourage it. i think it's great for the system. >> as a real estate developer, too, this whole trump tax thing, and he's going to probably say, as a developer i'm taking advantage of the laws, the rules that benefit me? how do you respond? a lot of americans don't understand how it works. what do you think of the tax laws? >> i'm not a tax expert. there are things in the tax code whether it's carried interest, excess depreciation. there are a lot of things that become very complex that i'm sure anyone leads in economic growth would do them differently. i think any time, look, the price of taxes is -- what would

happen with that capital if it weren't going to the government? >> let's broaden this out and talk about nationally. we're talking about detroit. some good things have happened. a lot of people are concerned about the federal reserve and interest rates. >> absolutely. >> if they raise rates in november and/or december, takes it you were 1/4 of 1%, what's going to happen to the mortgage market, what's going to happen to the housing market? >> i don't think anything is going to happen? i don't think it will happen in november or december. there's economic data that would say we're moving in a better direction. we both know it's a global economy. anything could happen between now and december. we saw the fed raise interest rates. it had very little effect on mortgage rates. what's going to affect mortgage rates is how does the ten year respond with the fed raising interest rates. i think the fed has telegraphed

it so well that the market will price it in. is the fed doing something in december? >> people watching cnbc said tyler mathisen said the fed is going to raise rates. i need to get a mortgage and lock it in now. you think mortgage rates are going to stay low for a long time even if the fed raises rates? >> i think if you're out in the marketplace the advice is a great piece of advice. >> so rates are at an all time. if you're refinancing, in the market to buy a home, great time to buy it. i also think over the next three to six months you're going to see rates at a fairly similar rate. >> we see these mortgage securitizations, there's x percentage that have very high rates who never refinance. maybe 20, 25% of the population could have rates in the 5s, 6s,

7s. they don't refinance. the number one reason we hear they don't do it is i only have 17 years left of my mortgage. i don't want to start at 30. that's a total misnomer. can you explain why that still benefits the person deep into their mortgage? >> depends on the individual situation, right? if you want to save money and going from 17 to 20 or 17 to 30 will put money back into your pocket, you can take that money and invest it elsewhere and earn more return. >> then you just added 13 years to your mortgage. >> or you can pay down the mortgage at the same amount of time. >> or there's lenders out there that have different increments of terms. so most of the time people think 15, 25, 30 year mortgages. we have a thing, if somebody had 17 years left on their mortgage, they can refinance to the exact 17% term, reduce their interest rate and put themselves in a much better position. >> ease our viewer's minds. one thing we've talked about. things have gotten good enough where we're starting to see the

really low to no down payment mortgage. make your own terms. do we have to worry that people are going to make the same mistakes they made in '05, '06, '07. >> completely different situation. low downpayment mortgages are back. you have to fully qualify for a mortgage. you have to show your income. you have to show your assets. those mortgages are fully under written to an ability to repay standard. you either meet that standard or you don't. you're not going to get yourself in a situation -- >> they're not at higher rates. >> no. >> we'll wrap it up but the headline is we're not getting dumb again? >> no, we're not getting dumb again. >> not on that issue anyway. >> we have plenty of time. ceo of quicken loans, thank you. thanks so much, brian. let's head back to what's happening in the markets right now. the dow kicking off the last quarter of the year in red. let's get to bob at the new york stock exchange.

what stands out is the decline that we're seeing in utilities. >> utilities, gold, some of the trends in the fourth quarter are continuing -- continuations of the third quarter. pretty mediocre start. 3 to 1 declining stocks. manufacturing a little better. >> the friends in the third quarter. the oil heading 50 dollars the last few days. that's been a big help. tech led by semiconductors. the transports have been doing a little bit better recently. banks and utilities have been fading. melissa's right, 1.2% here. the trend here, well, the fourth quarter trends as we're coming in here are pretty clear here. we've seen up trends in semiconductors and transports and energy stocks and we've seen banks, utilities, gold starting to fade. so gold down here, the only hope

here melissa, fourth quarter is the best quarter of the year. back to you. >> all right, bob. thank you very much. i'll pick it up. up next, clinton's corporate crackdown. these two stocks hitting 52 week lows as hillary clinton ramps up a tax on, quote, bad corporate actors. you'll hear from the clinton camp straight ahead. later, we head back to motown where brian sullivan is live with ilitch holdings ceo chris ilitch. gmceo mary barra. stick with us. "power lunch" is right back. i do the sales, the marketing. i have to do that from my phone. we use tons of data. i really don't have to worry about it 'cause everything is unlimited. i need data and i need it now. it's the end of data limits for your business. get unlimited 4g lte data as low as $30 bucks per line. switch your business to t-mobile @work.

keeping the power lines clear,my job to protect public safety, while also protecting the environment. the natural world is a beautiful thing, the work that we do helps us protect it. public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. we want to keep the power on for our customers. we want to keep our community safe. this is our community, this is where we live. we need to make sure that we have a beautiful place for our children to live. together, we're building a better california.

>> stock is jumping. they have pressure from activists to pursue strategic alternatives. >> mylan and wells farg go, they're trying to make it easier to sue big businesses. long-time senior clinton advisor at the center for american progress, a think tank. mira, welcome. >> great to be with you. >> what do you expect mrs. clinton to say today?

>> well, she's going to be in toledo, ohio, talking about some of the challenges we still see in the economy. she is going to talk about mylan and what we've seen with wells fargo and she's going to talk about how she will be a president who works really hard to protect consumers. both of these cases we see consumers getting the short end of the stick. corporations putting their own profits ahead of the needs of consumers and she wants to reward good behavior. she talks about corporations that are doing the right thing and doing the right thing for their workers and their consumers and their bottom line, but when you see this kind of action, she's going to be a president who takes action quickly. >> one of the things that has sort of crept into american's relationships, either with employers or with companies with which they do business are so-called arbitration clauses that require individuals, if they've got a dispute with

somebody, not to sue but, rather, to arbitrate in front of american arbitration association, i guess they would call them referees, for example. would she want -- seek to abrogate those clauses? what do you do about ones that are already there? and i'm assuming that an awful lot of people who did business with wells fargo, for example, signed them. >> yes, in fact, that is one of the problems with wells fargo, with the wells fargo cases. there are these kinds of arbitration agreements, and she will specifically address this issue, about how we need to curb arbitration agreements going forward. i think this is a big problem in which consumers are sort of forced to abrogate their protections and their rights. if we're in a sort of normal legal situation, that's a disincentive to hurt consumer's interests. when we have arbitration agreements where people really signed the very fine details in

a contract with no idea that they're signing away their rights, that's really not fair. when people are concerned about a rigged system, this is one of the ways it feels rigged. people don't know what their rights are. we shouldn't have a system where they write away their rights and you get a situation like wells fargo. she wants to be a president that's going to have the backs of consumers and ensure that we are protecting them. >> are you worried at all that this is just going to open a flood gate of litigation that's going to put some companies out of business or is that sort of what's, quote, unquote, bad corporate actors deserve? >> i think as hillary will be very clear about when she speaks, she wants to ensure that companies that are doing the right thing, that are serving the bottom line, which they need to do, that they're not jeopardized by this bad practice. when you have companies ripping off consumers like this, that's

a problem for their competitors. we need rules that everyone follows, rules that help people, help consumers but also ensure that good actors aren't getting, you know, sort of hit by bad actors. i think that's really a lot of common sense. people look at what's happening with wells fargo, they look at what's happening with mylan and they see there's something really wrong with the system and hillary is going to fix it. >> i see you're a lawyer yourself. i can well imagine that critics of this will say this is a full employment move for attorneys. how would you respond to people who will say this is the trial lawyers once again stepping in and influencing the democratic party? >> i'd say that the new situation, what's changed is actually a creation of arbitration rules. year after year after year our system is one that is a normal system where if you were hurt by a company, you could take action. what's happened is this is a new development. you know, for those who want to

go to bygone ear ras, it used to be the rule that you could prosecute your case in the court of law and, you know, it was a disincentive to these kinds of bad practices. no one was a threat of litigation, absolutely, but we want consumers protected and that's what hillary is going to stand by. she has a number of proposals that she's put forward. this is just one of them. another set of them is about addressing the costs of increases. so, again, this is just really one step to ensure that consumers are protected, not companies that are doing the wrong thing. >> all right. ms. tanden, thank you for coming on. she's with the center for american progress. she's the ceo. coming up, talking black jack, tractors, and a whole lot of data. the good, the bad, the ugly straight ahead on today's "power lunch." when you call, a small business expert will answer you in about 30 seconds.

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wynn jumping on news that it's a healthy 2.6. onto the bad, tractor supply is at a 52 week low. down by half a percent now. it is an ugly day for teradata. >> packing a punch as it heads towards haiti. we've got the latest on the projected path of this category 4 and potentially devastating storm straight ahead. plus, a major twist in the space race. the eyebrow raising claim surrounding last month's spacex rocket explosion. that and more when "power lunch" returns in two minutes. this i new alert system for whenever anything happens in the market. kid's a natural. but thinkorswim already lets you create custom alerts for all the things that are important to you. shhh. alerts on anything at all? not only that, you can act on that opportunity with just one tap

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welcome back to "power lunch", everybody. i'm tyler mathisen. cnbc news updet. unfriendly actions, russia's vladimir putin says he is suspending a nuclear deal between his country and the u.s. the 15-year-old agreement called for both countries to dispose of 34 metric tons of weapons grade

plutonium, enough for 17,000 nuclear warheads. putin says no more. supreme court denying an obama request to reconsider a major immigration decision. the president proposed overhaul of the system which would have stopped millions of immigrants from being deported was blocked from going forward last june. u.s. regulators are looking into whether 642,000 ford cars and suvs pose a safety hazard. the national highway safety traffic safety probe into door warning lights and steering issues on the fusion sedan. ford says it is cooperating with investigators. a spokesperson for kim kardashian said she was robbed last night in her paris hotel room. a pair of thieves tied up the reality star and made off with millions of dollars worth of jewelry, including her wedding ring. that is the cnbc news update at

this hour. melissa. poor kim. >> i heard that she was in her bathroom. >> i didn't know she was tied up. >> stop the presses. >> extra and extra hollywood. big story. >> where were the security guards, that's what i want to know? >> exactly. let's get to the bond mark. rick santelli is tracking it from the cme. a creep higher in the rates? >> absolutely are. if you look at a two day of tens, long end is catching up. the 30s are still unchanged. all others are up several bases points. you want to keep a close eye on the 160 level. we're by it by a couple of bases points. that cements all the great support in the 150s we've spent so much time. next month 167 level. ultimately 1 3/4. we look at the etfs to assess risk on/risk off. if you look at the hye.t.f., the

lqd, the investment grade, easing back a bit. this is very important because there are many investors that are really digging around to try to find the best deals. it's kind of risk on. we had a guest on today talked about big portfolio managers expending duration. all of this, of course, isn't bad news unless we get some surprise fed activity, in this case whether it's the vix or durations, everything could come back to haunt you. melissa lee, back to you. >> rick santelli, thank you. three quarters down, one to go. what can you expect in the fourth quarter? >> a bit of historical analysis. stocks ending the third quarter firmly in the black to a tune of nearly 40%. focus on wells fargo and deutsche bank's financial woes. that plus an election season that has seen unfavorable marks to next candidates.

q4 the s&p is up 80% of the time with an average return of 5% over the last 20 years. that's according to a data partner. so the bulls may still have room to run. enter the sectors, consumer discretionary stocks up 85% of the time. health care, financials also tend to do well. and if you thought the rally in tech was over, think again. tech typically clocks in a gain of 6% which would be significant given the 12% rise that we saw in tech shares in the third quarter. google, facebook, amazon all rebounding. double digit gains. on evaluation basis, s&p sector trading at 20 times earnings. the s&p 500 was at 18. so valuations will likely be a part of the discussion. earnings though, that could be the big catalyst here in the third quarter. we're expected to see return of sales go up which would be the first time in 18 months that that happens. >> you have to wonder if consumer discretionary will be the performer this year that

it's been in the past considering how down in the dumps a lot of these retailers are. >> right. that will have to be the focus for earnings season if they can confirm that sales trends are better than expected. >> seema, thank you. >> thanks. how should you position your portfolios as we head into q4. we'll bring in two speakers. mark, i'm going to start with you. i'm going to start with a question pertaining to today's market action. the steep decline that we're seeing in utilities, down by more than 1%. this is a continuation of the performance we've seen over the past two months. seems to be a rotation out. is that the right thing to do going into the fourth quarter? >> you know, when i think about where we're positioning and what we're looking for, i would say the market's really been driven by and will continue to be driven by the focus on secure return. so i actually think it's simplistic to think about

dividend yield. i think the stocks working, look at facebook. it entered the year an expensive stock. it's had a nice performance. it has room to run because investors have confidence in the ability to continue to grow and generate cash flows. t.i. is not a great dividend yield. the growth is mediocre at best. i think we had a high degree of confidence in their ability to continue to generate cash flows. and it's been a good stock. >> you said t.i. >> texas instruments? >> yes. >> jeff, i'm going to pose the same question to you. this is interesting because in that discussion, the broader discussion about utilities that margaret and i just had she threw in growth, reach for growth. that also seemed to be a theme in the third quarter given tech's outstanding return in the third quarter. is that going to continue as well? so this dual sort of reach for safety but also reach for growth on the other hand. >> well, we'll see what the economic data tells us. i think as we see improving economic data, as we move in q3,

the surprise index, great barometer of overall economic activity, they lift cyclicals and the beaten down financial sector in q3. i'm not so sure. as temperatures cool down economic data cools down lately as well versus expectations. we've seen that again and again. we can see that cool off. earnings expectations high. a number of these cyclical sectors. analysts looking for 24% earnings growth for global companies. i think that's a bit high as we get into the earnings season. you might look to see that come down in guidance for corporate leaders. >> margaret, as we go into the fourth quarter, how are you thinking about the elections, the role they play, in particular the sectors that seem to be getting much more scrutiny in this election cycle, namely financials and health care. >> yeah, you know, i mean, we try to take a longer term view. we think of the elections not in terms of how do i position ahead of who i think is going to be

elected but really look for outside opportunities to buy. here i was saying mylan was interesting here. i don't disagree that companies that are raising prices on old products don't deserve to do that and that will not continue. i also believe that companies that create innovative products that address unmet health needs generate a decent return. you see a lot of biotech companies that you think there is an opportunity there. >> jeff, a lot of people have poured a lot of money into bonds, bond funds, etfs over the past few years and very profitably by the way including this year basically. what do you recommend people do with the bond holdings into 2017? >> that is a good question. we recommend people are cautious on duration. watch out for high yield bonds.

there are values in intermediate corporate bonds. more importantly investors ought to look at the difference of bonds and stocks. avoiding stocks in the recent years as the five year trailing return for stocks have been falling. generally individual investors chase this five-year return. that has started to turn higher as we've dropped off that horrible august of 2011, meaning that individual investors may come back to the market and start to buy for the first time in some time. that could be a sleeper and unappreciated positive for the markets in q 4 aside from the risks and the central bank. >> jeff and marg rel, our thanks to you. we're following a developing story out of the caribbean as the most powerful storm in nearly a decade makes its way north. weather channel's greg postel is here. >> we are dealing with an extremely dangerous category 4 hurricane right now in the caribbean sea. there's where the center is. that's where all the bad weather

is. it will be moving northward the center crossing haiti tonight with devastating consequences, a ton of rain, mudslides, flash flooding. very strong hurricane winds. then thereafter it will be moving into the bahamas. excuse me, by the middle of this week potentially as a major hurricane. we'll be dealing a significant impact there as well. everybody wants to know, right, what's going to happen to the u.s. east coast? well, i do think the most likely outcome is that you can have beach erosion with a hurricane out here. very big waves, beach erosion. all of that coming with this kind of wind. then there's a possibility that this moves inland to the carolina coast. that would happen perhaps late friday or saturday. way too early to call how close

or whatever. be prepared on the carolina kostistyn. that's uncomfortably close to the united states. >> i've heard about the rain volumes that are likely to hit haiti. >> those are good questions. well, haiti is going to get a ton of rain. they may get as much as 2 to 3 feet. perhaps even more than that. in part because the mountainous terrain over western haiti where sometimes the air flow around these systems bumps up against the mountains. you get a lot more rain production just because of that. we're going 18 inches plus. locally there will be higher amounts. there could be significant mudslides. a lot of the mountain tops are deforestation. it will slide down and carry the mud with it. very, very devastating consequences here. then farther to the north, about the u.s. weather impacts, we're

still pretty far out in the game. i would say the most likely outcome for florida is to not see a whole lot of rain out of this. you get some wind right around the coast and very bad surf conditions but that looks to be the most likely scenario. you've got to play this out. farther up the coast i'm a little bit more concerned about more significant weather impacts including the potential for hurricane landfall, as i said, perhaps earlier in the weekend. >> dr. greg, thank you very much. we appreciate your time. let's head back out to brian sullivan live in detroit. brian? >> all right. thank you very much. we are just getting started here in detroit. coming up after the break, we're in an exclusive interview with chris ilitch. his family owns the red wings, the tigers. they're putting billions into detroit. we've got the ceo of general motors coming up as well. we've got the mayor. pretty awesome retail stories. a lot more to do.

we're going to get your motor city running right after the break. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪

all right. welcome back to "power lunch." again, we are live in detroit, michigan, the motor city because we're talking about the revitalization of this city, a city that's so close to so many american's hearts. this was the fastest growing city not in america, in the world, in the early to mid 1900s and for the first time this year in 60 years we may say population remain steady. waiting to get confirmation on that. if so, that would be a big win for the city of detroit. joining us, two of the guys really, really responsible for what is happening here. dan gilbert with us all the two hours because we're in your

offices here. we're also joined by chris ilitch, president and ceo of ilitch holdings, owner of the tigers, the red wings and your family started little caesar's. are you going to even up that more? >> yeah. right now we're on track to be about 2 billion. we've got about 52 projects right now on the board. we've announced 1.2 billion and we've got about another billion that's yet to be announced. >> wow. >> but you're sort of semiannouncing it now. >> 3 billion. >> well, actually, before we even started this project we had invested about 1 billion into detroit over the 30 years that we had been in the city. so for us, you know, this has been our home and it's exciting times in detroit. i've never seen it -- in the 30 years we've been here, i've never seen so much interest for people and businesses to want to be in detroit. >> how much have you invested?

>> it's probably a little bit over 2 billion. we've got -- we have more to go. but i have to tell you something, if it wasn't for the ilitch family, mike ilitch, marianne, chris, everybody, you can make a very strong case. whether we would have ever been down here. they were here in the '80s. so they were here a long time and they've lid this whole thing. you know, it's amazing how the dominos will fall. you never know if you didn't decide to come down what would have happen. >> you put in a couple billion, you've put in a couple billion. we've got 4 plus billion. i'm throwing in 50 bucks. i would have thought you would have been competitors, sort of trying to vie for the same properties, some of the same buildings behind us? are you working together? is there a little bit of competition? >> i'll let chris take it from here. just the way things turned out, they were up in the entertainment district way

before we got down here. we got south of them and we're doing stuff, you know, that's happening at the same time. you know, i think it's worked out great for detroit. >> co-opetition. >> very complimentary the work that's going on. we've been downtown for 30 years and things really started taking off in about 2011 or so. and dan and his organization have been -- have had a huge impact. and the great thing about detroit, not only for us, but really for any businesses that are looking to grow, invest, be a part of a place, there's a lot of room here. we wouldn't be able to do -- we're renovating and redeveloping 50 city blocks in the city of detroit. >> 50? ? yes. >> if there wasn't 50 to work with we wouldn't be able to invest the $2 billion. there's plenty of opportunity here.

it's exciting. there's a ton of demand. we put out rfps on some residential projects. we're going to be developing about six residential projects in the next year, 750 units. we had 22 developers from around the country respond to the rfp. five years ago we would have had zero and so seeing that kind of demand, hoteliers the same thing. >> after the bankruptcy, obviously money is tight everywhere. i know there is a bill in the state senate of michigan that would provide further tax breaks for development. there are people who would say, chris, this is billionaires getting more tax breaks. how does it benefit us? if you were to speak to the senate or congress of michigan to explain why this is needed, what would you say and how do you respond to the critics? >> i would say the state got a deal of the lifetime. the state stepped up with 250 in seed money. what they got instead of a $650

million development. they've gotten a $2 billion development. in addition to the $2 billion we've invested there's another 800 million that's been categorized from the arena. that's unaffiliated with us. the tax base is growing. currently we've got 12,500 jobs on the books in terms of new jobs, which is very important for our community today. and so the pay back for the community is tremendous. i might also add, the approach that we took on our project was to made it michigan made detroit built. we have $500 million in contracts out on our new arena in the district that we're building. 93% of all of those contracts are with michigan firms and over 60%, over $300 million are with detroit based firms. we are trying to keep the money locally here to make the largest economic impact, which today is projected to be about a $2.1

billion impact. >> when the pistons move into your arena, then what? >> then it will be even better. >> are the detroit pistons going to move into your new hockey arena? >> i hope so. do you have some news you want to tell me about here today. you could break it here? >> do you think it's going to happen? >> we hope it happens. i've gotten to know tom gores very well. very solid guy. he has a great vision on what he wants to do with his basketball team. he grew up in this region. he grew up in flint, not too far from here. he wants to make a difference and i think he's really evaluating what's the best way to do that. i hope it happens and hope to, you know -- i hope he's got something to announce before long. >> are you going to bring an mls team here? is there going to be a major league soccer team here? >> we're working on that. there's no secret, there's a

jail, wayne county had unfortunately half built. working with the county, the city, the state, working with a lot of other private developers to work something out that that prime piece of land is not a county jail but is rather an mls team. i have to tell you the pistons, if they do, making a deal, that would be the last team in the nba that was out of the urban core. that will make 30 out of 30. i think it's economically smart for sports teams to be in an urban core for many, many reasons. >> chris ilitch, pleasure to have you on. don't be a stranger. >> you compete against him in a lot of ways. you have the cavaliers. >> melissa lee, we'll send it back to you. >> more questions surrounding last month's spacex rocket explosion. we have the eye raising reports next.

launch alliance. u.l.a. reportedly denied spacex the ability to investigate. the accident investigation team has an obligation to consider all possible causes of the anomaly and we aren't commenting on any specific potential cause until the investigation is complete. the falcon 9 exploded on its cape canaveral launch pad september 1st. there was a breach in the system but the cause is still unknown. ceo elon musk saying just last week that the quote, obvious possibilities have already been eliminated. this sheds a light on the fierce rivalry between spacex and ula which is a joint venture between lockheed martin and boeing.

since then spacex has won its first defense deal. there are more contracts up for grabs. on the heel of the recent explosion ula ceo asked government officials to postpone the deadline for the bids. the contract awards has gone to the lowest bidder. they can cut their numbers from 1/2 to 1/3. >> that is a way out there story reported by jeff besos. >> thank you very much. appreciate it. there is, by the way, some good news for elon musk. tesla taking off after some big numbers on vehicle production and deliveries. we couldn't go to detroit without talking cars. brian will sit down for a "power

lunch" exclusive with the ceo of gm. we don't want to miss this. "power lunch" returns in two. i'm only in my 60's. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call now and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, it helps pick up some of what medicare doesn't pay. and could save you in out-of-pocket medical costs. to me, relationships matter.

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pedal to the metal. tesla reporting strong numbers. the stock on a tear. should you get in on it now. trump's taxes a genius or avoider. live with gm ceo. the second hour of "power lunch" begins right now. ♪ ♪ hey, everybody. welcome. i'm tyler mathisen. let's check on the markets with two hours until the closing bell. a mildly down day. final quarter of the year kicking off with losses. the dow, nasdaq and s&p 500 all in the red by about 1/3 to 2/5 of a percent. utilities, real estate and energy right now the biggest drags on the markets. in the headlines at this hour u.s. builders cutting construction spending for the second straight month. facebook announcing an online marketplace to rifle ebay and

craig's list and microsoft making a $3 billion investment in europe. let's go out to a place i attracting a lot of investment. brian, take it away. >> yeah, tyler, it is. thank you very much. you just heard from dan gilbert, chris ilitch. that's $4 billion in re-investment and rebuilding in downtown detroit all alone. in a few minutes you might have heard of another company, little startup called general motors. mary barra is going to be your exclusive guest as well. they're doing redevelopment work as well. we're talking about keeping the car talent in the detroit area. the mayor is coming on. we have to deal with a deal. big one, nothing to do with detroit but a big story. janice capital and u.k. based company are going to merge, $320 billion in assets. janice capital ceo is joining us. first question, why do this deal

with henderson? what does it get you? what does it make you? >> thanks, brian. great question. i think the first thing is obviously the complementary strengths that we bring to the table from the two sides. we have excellence in investment but in different kinds of investment. if you look at the lineup of products it will be strong in european equities, global equities which we were doing less well on here at janus. we bring u.s., u.s. fixed incomes which they don't have so well. first is product. the complementary nature means it will be much stronger together. second is clients. >> let me jump in only because we're in detroit, we have limited time. is this a sign though? you and i have talked about being a mid-size firm. is this a signal that the smaller the mid-sized firms simply will not work, that you've got to get bigger to

compete against the black rocks of the world? >> i think it's a sign that it is better to be bigger if you're excellent and bigger. it's not necessarily helpful to be bigger if you're not excellent. competing with the black rocks is tough. we're a mature industry. economies of scale matter when we're returning to our investors a good return. i think scale helps us. it helps us deal with rising regulation costs, deal with increasing expenses in markets around the world. the scale helps tremendously. the diversity helps in terms of balancing risks in market cycles. in shorthand if you get scale and diversity, that's wonderful. to get there you need to bring the people together with a great culture. that's where henderson is a perfect partner for us. they'll very much like janus across the pond. our cultures fit, our strategies fit. >> you've got a lot of smart

people there. we have one on the show. you had a fund worker that says the mutual funds are net sellers, are we in some ways witnessing the depth, the final sort of rattle of the actively sort of managed mutual fund? >> that's a great question. i think absolutely not. i think the answer is that actively managed mutual funds will have a strong place in the industry going forward, but it's fair to say it's becoming more competitive. so in order to be qualified as one of those folks who survive and thrive as an active manager, it's tougher than it used to be. that's fair. it's great that clients have the choice of passive, but we believe that we can deliver rich, congested return that's better than passive on a go forward basis so that's what we're all about. >> last question here, the employees, i know you're going to be a co-ceo. you have denver, you have london. what does it mean for the janus workers and out west? any changes there?

>> not so much. it doesn't mean much for bill other than i hope we have more distribution that can grow a business around him. for the rest of us, there are some overlaps. there are some redundancies and we'll have to capture those. for the vast majority of people they'll continue on just as they are. >> dick weil, ceo of janus capital. we appreciate you coming on cnbc first. thank you very much. >> thank you, brian. tesla shares are rallying right now. the electric car maker posting a 70% surge in quarterly deliveries. that is the best sales quarter ever for the electric car company. they missed its delivery target in the previous two quarters. joining us is james albertine. great to have you with us. should we look at this which is sort of a rarity for tesla on the delivery number because

maybe they discounted the cars? we just got that e-mail internally that surfaced last week that he had to say don't discount any cars, they should never be discounted. there is a question as to the sales tactics used to reach this number. >> thanks for having me, melissa. the idea of a rogue trader internally, right, with incentives i think is part of what we're calling the context of this number, right? there are fooets and misses but taken out of context, it's hard to know what to do with them. the broader context is that luxury sales broadly are weakening. de3457bd we can tell from looking at audi, bmw and others is worsening, particularly for cars. what we think is tesla's not impervious from that. that's not a bad thing necessarily. incentives combat that. given where they are in their maturation cycle and looming investments in the model 3 and

giga factory, the stakes are higher. from that perspective we'd be more cautious considering the incentive conversation has ramped again at tesla. >> you're cautious, but is it correct that you have an overweight rating on the stock? >> we're overweight from a longer term perspective. clearly they have 400, roughly 400,000 individuals who have put $1,000 to work to wait for the model 3. the question is over the next quarter or two or three-quarters where are their cash needs, where are their sources of cash and how do they bring the gap between the weakening demands? we hope it's launched by this time next year. our caution is short term in nature. they have an opportunity to prove us wrong. that's why we didn't take the opportunity to readdress ratings. still there's caution going into the third quarter print.

thanks so much for your time. hillary clinton speaking in ohio right now about cracking down on what she describes as corporate bad behavior. aymon has been following it and is in d.c. with the details. hi, aymon. >> reporter: hi, tyler. it's hillary clinton's economic address. she singles out wall street and particularly wells fargo a few minutes ago. here's what she had to say. >> look at wells fargo. really shocking, isn't it? one of the nation's biggest banks bullying thousands of employees into committing fraud against unsuspecting customers. it is outrageous that eight years after a cowboy culture on wall street wrecked our economy we are still seeing powerful bankers playing fast and loose

with the law. >> reporter: as expected, hillary clinton picking up on donald trump's tax story. she accused donald trump of taking a $951 million loss and possibly not paying federal taxes since then. hillary clinton saying donald trump is simply part of the same bad system that he claims he's out there trying to change, guys. so hillary clinton on the stump in ohio today. >> thank you very much. aymon. let's head back out to brian in detroit. what do you have coming up? >> we've got a big interview coming up here after the break. the ceo of general motors. we'll talk about cars, the revitalization of detroit and also can we get a full silicon valley for cars right here 2,000 miles away from palo alto. we're going to find out after the break with mary barra, the ceo of gm.

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hello, my name is watson. i we worked with pg&eof to save energy because wenie. wanted to help the school. they would put these signs on the door to let the teacher know you didn't cut off the light. the teachers, they would call us the energy patrol. so they would be like, here they come, turn off your lights! those three young ladies were teaching the whole school about energy efficiency. we actually saved $50,000. and that's just one school, two semesters, three girls.

together, we're building a better california. putting the brakes on auto sales in september. the slide was smaller than expected. sales at ford fell 4.7%. fiat chrysler had a 1% drop and gm down .6 of a percent also due to a pull back on fleet deliveries. all three companies are trading higher in today's session. speaking of gm brian is in detroit with a "power lunch" exclusive interview. brian, take it away. >> melissa, thank you very much. we're here with gm ceo mary barra.

thank you for being with us. >> thank you for coming to detroit. >> love it here. you do a lot of good stuff with high schools, technology. before we get to all the good work gm is doing with the city. i want to ask you about auto sales. as we said, down a bit. most of that seemed to be fleet sales. how do you describe the auto sales market retail consumer versus fleet? >> we, again, had a very strong retail month. up .3%. i think, again, it represents our focus on profitable growth. it's a trend 15 of the last 18 months we've seen retail growth. we also are seeing very strong transaction prices. when you look at the market, the market is strong. 17.8 is still a strong market. we plan on continuing to build on that, being very disciplined and growing retail share. >> we shouldn't focus on or gm investors shouldn't focus on, look, they sold fewer cars. should we continue to see that happen? >> we focus on the quality of sale. looking to drive profitability

in a very strong market. able to grow retail sales and not focus on the less profitable fleet shows the discipline we have. it will aim towards more quality of earnings. >> how does innovation drive auto sales? it's not always a short-term thing, more of a medium or long-term thing? how do you look at it at gm? >> focus on the customer. when we look at innovation and technology, what is going to create value for the customer and the driving experience. when you look at connectivity. when you look at, for instance, the innovation on that vehicle on the volte. it allows you to go 238 miles on a charge. that is real value for the customer and that is what we focus on. >> i looked at technology. you said a car is technology on wheels at this point, right? >> you have tesla which is in some cars, you have google getting into the car. we're in detroit. how do we make sure that stuff

is designed and built here? do you have the talent? has the brain drain, if you will, and i'm not -- not to be offensive, but a lot of people leave the state. how do you keep them here toll work for you and build the next generation of technology? >> it's when you do great products. we have seen a lot of people coming to southeast michigan. we have different operations. we have plants in detroit. we have our renaissance center. we have over 5,000 people and in southeast michigan and warren we have our engineering centers. we have people all across the area. we're seeing the growth. there is work on products that are going to be on the road. they want to work on the latest technology. when you look at connectivity, electrification, when you look at economists people are coming here. >> brian, chris ilitch before he left because he wanted to get one statistic in, in 2011 the net migration of college-aged students or college graduates was 120,000 that graduate from

michigan universities and colleges. we had a negative 11,000 and last year we had plus 14,000. 25,000 swing. >> college graduates moving in rather than leaving. >> and coming to the city because there's so much to do. there's the -- >> have to be jobs. >> there's jobs, then they're finding great places to live, they're finding opportunity, you know, from an entrepreneurial perspective. they want to start their own business. i met with several of our interns this past summer and they couldn't tell me enough about how much they enjoyed living right in the city with all it has to offer. >> the internship program for gm, for ourselves, from 202 colleges. we're talking prominent schools, stanford, harvard. that was unfathomable. >> they're coming. i think, mary, you are the most

gm person i think i've ever met. you've been a gm lifer. fiat chrysler, we're not goings to build small cars. how do you convince someone to come to detroit when they hear your competitor say they're going to move some jobs. i know ford has said there's no net loss of jobs. how do you keep them here? >> our general foil loss if i is where we're going to build and sell. it goes to the jobs. they want to work on cool technology and that's what we're putting in our vehicles. we're building on a 20 year lead we have in connectivity with on star. the most connected vehicles. over 12 million vehicles across the globe will be connected from the general motors perspective. that work and the onstar, one of our headquarters is in detroit. >> can you stay price

competitive to keep the jobs here? >> well, i would say absolutely, especially from an engineering perspective. frankly, to have engineers work in southeast michigan to hear. the cost of raising a family here and the fact that michigan had so much to offer from a seasons perspective. go up north and you're skiing, there's the beauty of the lakes. the culture in the city, not to mention all the cool whether it's retail or restaurants coming here. >> we have to talk about this, education is everything. they were sued if they were not adequately reported. mary, you have done something with high schools. everybody would agree that the education system is badly under funded, under staffed and maybe under skilled and some of the kids are being left behind. how do we stop that? >> i think over the last five years general motors donated

over $27 million. we work with seven high schools in the detroit area and our goal was to get the graduation rates up to 80%. right now we're at 79.9% which starts to look very much like the state and the rest of the united states from a graduation rate perspective. one of the great things that that's happening, how do we improve the schools for the kids, whether it's making sure they're getting the foundational start. >> last week i know the mayor is coming on here soon to talk. i was in a meeting with the pay i don't remember -- >> we're going to talk about education with the mayor. >> i met with him and the new superintendant of the detroit schools. i was about as impressed as i've ever been in, in any meeting, let alone education. i think the mayor has right

people in place. there are elections coming up for the school board. >> melissa lee back in england. >> mary, i have a question for you. you know, we just got tesla's q3 delivery numbers. they were record numbers in a period, mary, in which tesla had all sorts of issues with the disclosure of a fatal crash. they still managed to deliver at a rapid pace. >> we look across all the different oems. it's intense competition in the auto industry. that's something that hasn't changed. i think when i look at electrification, in the city of 2kr0i9 we built the chevy. we're going to be out with the vehicle that has 238 miles to

the charge and is affordable after federal incentives, around $30,000. when i look at what we're putting into the marketplace, we're going to continue to build on the technology. >> driverless cars. mary, are you as bullish as all these other folks coming through from california or elsewhere? i'm bearish. i like driving. >> i'll be in meetings and someone will say 80, 90% of cars will be driverless. i know you like to drive cars yourself. are you going to tell us what you think? >> i love to drive. when you look at it from a customer perspective. you're not experiencing the love of the road for driving. if you're paying a lot of money to park, you're in stop-and-go traffic to get going, you don't know if you're going to have a place to park. sharing and autonomous is a

natural business to put into the sharing. it takes the most expensive sharing, ride sharing 1.0 out when you remove the drivers. the other thing we have to look at is safety because right now in the united states 34,000 people die on our roads every year. 94% are human error. as we move to autonomous, i think there are cases where it -- our business of cars, trucks, crossovers will be our business for a long time. >> we'll leave it there. a 20 second anecdote which mike is going to kick out of. i like to drive and i'm kind of a control freak. coming in my uber it was a cadillac stx. i was asking the guy how he liked it. he loved it. how does that work? watch this. he takes his feet off the brake as traffic is slowing down in

front of us. i'm hitting the chicken brake in front of us. we're sort of kind of there but i was terrified. >> we have automated emergency braking. that was not the intent of the technology. >> yeah, two stars. >> what percent though, 15, 20 years is going to be driverless? ballpark. >> i don't want to hazard a guess. it's a very worthy place to work on. >> mary barra, thank you. good work around detroit and the high schools. tyler? >> the other story dominating the headlines today in politics and that is donald trump's taxes. how america's tax loopholes work. opportunities aren't always obvious. sometimes they just drop in.

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i'm melissa lee. here's your cnbc news update. united states are suspending talks with russia. they're accusing moscow of

attacking civilian areas and preventing humanitarian aid from reaching the war-torn country. wells fargo is losing the state of illinois. they a wells fargo has been find $185 million for opening accounts without knowledge. treadmills are explained for a number of pediatric burns. hand burns are the second most common type of hand injury after stove top injuries. garth brooks was honored for being the first recording artist ever to earn seven diamond status from the recording industry of america. that is the cnbc news update at this hour. the market closing for the day. jackee deangeles is joining us with the closing. >> we saw a little bit of choppiness this morning but wti and brent crude turning around. having a pretty strong session.

wti actually crossing over 49. going to close under that level and brent over $50 a barrel. this is aftermath after the opec meeting. the market digesting the news and discounting the fact that when the cartel meets we may not see any deal formalize. right now they like it. back to you. >> thank you, jackie deangeles. now to the race for the white house. donald trump's taxes. the candidate's 1995 return shows he could have avoided paying taxes for nearly two decades. robert frank joins us to explain how the u.s. tax loopholes work. that's a big story to cover. >> yes. it took a lot of digging but two days later i think i have it. his tax holiday was made possible by the little known loophole of net operating loss. you can erase up to 916 million in income over 18 years. it was first enacted in 1918.

at that time it could be applied to two years of income. over the years it's been expanded. in 1995 it was 18 years. now it's 20 years. talk about how much this has exploded in size. in 1995 and 1996 taxpayers claimed 50 billion in nols. by 2014 that number had approached 200 billion. the idea was to help companies ride out economic cycles. now it's not to be confused with investment losses which they know can be used to offset capital gains. it can only reduce your personal tax as $3,000. he's found ways to turbo charge the nls provision. they can report huge paper losses even while making large incomes. now the use of nols, not uncommon among the wealthy, but

the magnitude of his wealth and those losses are almost unheard of. accountants i talk to say the big question is how he generated that $916 million loss given that he's not said he's going to release his taxes. >> a lot of debt, wouldn't it? presumably. >> that could be one. >> and depreciation. >> yes. personal guaranteed debt during that time. >> yeah. yeah. but no one i had talked to had seen one of $100 million. >> when they were talking to "the new york times" reporter and the accountant, he said you had to go in and hype it. >> the program couldn't accommodate numbers that big. >> turbo tax didn't have that. >> it rejects it. >> it rejects it. thank you, robert. in addition to the tax issue donald trump now has a problem with his charity. the new york attorney general served the trump foundation with a cease and desist order. how will this impact the

election with one month to go? let's bring in ben wright, a cnbc contributor, larry sabato. larry, he may not be the teflon don but he seems to be the teflon donald in many ways. a lot of things he would have said over time would have disqualified other candidates. do you think these revelations about his taxes hurt mr. trump with his base? >> not with his base. not a chance, tyler. the most honest thing he ever said in his campaign was i could go down to fifth avenue and shoot somebody and i wouldn't lose any supporters. i think he could shoot multiple people and as long as his aim was good, he wouldn't lose anything from his base. this wasn't his base and they've been trying to enter guise various parts of their coalition without much success.

this is a great issue for average people who pay a sizeable slice of their very small salaries to the federal government and, look, this is something that only the super wealthy can take advantage of thereby confirming what we've always thought. >> ben, let's talk about how mr. trump might fight back on this. his campaign has issued statements about it, but my guess would be that they would go after mrs. clinton and her husband's foundation, the president's foundation, money that they have raced and there are opportunities there that he didn't pick up on in the first debate. >> that's one of the problems. that's one of the problems trump has had is taking one of these problems and delivering it as a sustained message. as i wrote on cnbc.com, there is a case that trump could win. that needs to be a referendum on

hillary clinton and the economy and a change election. he doesn't deliver that. it's always about donald trump and the tax thing i think you saw hillary clinton's campaign seize on that today. she's out there talking about how does a genius lose $1 billion a year? you know, that's a lot of money to lose in one year. that's something they're going to continue to hammer on. he's not able to get on offense. >> larry, give us some insight because i know as a long time resident of the state of virginia you have known governors and i assume you know mr. cain. how do you look at that debate tomorrow night? how effective do you expect him and mr. pence to be? >> i think they're both low key. they're both substantive. they will certainly clash as they discuss hillary clinton and donald trump, but they're professionals. they have debated many, many times. i don't think it'll be the most exciting debate in the world and of course vice presidential debates, always the one that sarah palin was involved in with

joe biden, they have millions of people less than the presidential debates. the partisans show up. just people who want to cheer people on. >> it is the undercard in this. let me quickly, ben, if you'll indulge me to can larry. has anything changed in your map, you're electoral college map since the last time we talked? >> no, but it's going to. we're accumulating these battleground polls. one just came out in colorado which people are calling tied incorrectly. clinton was ahead by 11 points in colorado. there are a number of state polls in battle grounds that have come out since the first debate. there are others being released this afternoon. >> you'll let us know and we'll be on watch for it. larry sabato, ben white, thank you as well. shares of netflix rallying today hitting four-month highs. the stock is down next. how to trade it next. ♪ ♪

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netflix shares surge into a four-month high today this on some unsubstantiated rumors that disney is looking to acquire netflix.

let's discuss it in trading nation. bart, i'm going to you. you cover both of these companies. >> right. >> it's interesting because disney has surfaced as a potential acquirer. what do you make of disney here seeing that it -- i mean, these are rumors, of course. >> right. >> but the seeming perception that disney is willing to make a big acquisition that isn't directly in its lane? >> right. i think that it's very much speculation. you know, i don't think des any has said anything and i do what so many other media companies have done and not successfully which is buy a big internet company. could it make sense for disney to buy netflix, potentially. so i would not make that the korean to be looking at buying a netflix stock today. i think that's very speculative. >> prior to the rumors did you

think anyone would be shopping for a fairly big acquisition given him going to stop. >> i think someone knew disney might think about it, but i've heard nothing from either to suggest that they're thinking about this type of push. i think it's all been put out to the disney machine, not about picking up internet distribution. things like twitter, netflix, they might make sense. i'd be surprised if it happens. >> is netflix up for sale? >> sorry, yusef? >> i don't think it's up for sale. it's been here before. we've seen many rumors. at one point apple was

interested. at one point amazon was interested or google. it will continue to grow on its own. i think the time of it being in front of them is over and i think before you know it it's probably going to be a global -- or it's already becoming a global phenomena. i think it's going to be out of reach for most players except for maybe one or two. we're not seeing -- really we're not seeing, we're not hearing anything to that effect. >> should note that netflix declined to comment. thanks so much for joining us. for more market insides, trading nation.cnbc.com. next, back out to brian in detroit. power is back in two. >> and now the latest from tradingnation.cnbc.com and a word from our sponsor.

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welcome back to "power lunch." i'm brian sullivan live in detroit, michigan. let's bring in a new panel. detroit mayor mike duggan along with two independent business owners as well. we have the owner of the wine store house of pure van. did i get it right? >> yes. did the best i could. >> and owner of the clothing store detroit is the new black. mayor duggan, first to you. you're sitting here with the guys responsible for a lot of this. we had chris ilitch on earlier. also responsible for a lot of this. they're billionaires. how does the city do its part? what's the one, two, next three priorities for you? >> my job is to make the city welcome to everybody and open to everybody. and that's, i think, what we've done. we've taken basic services and now i think we're rising past that. if you come down to our river front that ten years ago was covered with cement silos on a

weekend, there are thousands of people of all ages and sizes and colors mixing together and as you go through our shops and our stores, we've got an entrepreneurial spirit here. >> one of the things about the bankruptcy and book detroit, i don't know him personally, you talk about the hour long response times for the police, the fire departments having their problems, fire hydrants don't work, lights are out, mayor. you've made improvements with those. where do we stand with those? literally life saving services? >> the lights are on, 63,000 street lights have been replaced. we have the largest city in america. 100% l.e.d. the ambulance response rates are down from 18 minutes to 8 minutes. the police response time for a 911 call is down from 30 minutes to 15 minutes. 12 is the national standard. not quite there. we'll be there shortly. the garbage is picked up on time. the buses are running on

schedule for the first time in years. there's a real feeling of hope in the city. >> the mayor is a little bit humble. under his leadership, and especially his operational focus, he's on his office he wants to show you the dots on the map of the homes that are being taken demolish because of blight removal program but shows you houses being remodelled and sold. he is running the city. it has been a remarkable -- >> nice compliment for you. you are from seattle. you lived in new york and harlem. why did you come to detroit to build a business? seattle is booming. >> new york is amazing. i worked in fashion there in new york for years. detroit, love brought me here. i actually fell in love with the city after i came here. i have been here about three years now and was super excited toope an fashion company here in detroit. it is sort of an aspirational t

shirt supporting a positive vibe about the city and wanted to create something that i felt was inclusive and spoke to the broader detroit and not just the 7.2 miles that we might talk about and opened a store downtown. it's really serving as sort of retail for small businesses that may not have distribution downtown and this commercial retail hub but allows shop space and an opportunity to sell their brand. >> i'm an idiot because i drive through michigan twice a summer up 75 over the mackinaw bridge. i did not know there is a massive wine industry in michigan. >> we are number five in the country in terms of great production. we have about 124 active vineyards selling wine and brings in about $600 million to the michigan economy and another 2 million visitors and $30 million in tourism. >> we have a special guest. this is not a call in show.

no one calls in. we have a special guest on the phone who has made a $100 million five-year commitment to detroit through his company jp morgan. jamie dimon calling in. >> pleasure to be on. >> i know you have been to the wine store, i believe. why make the $100 million commitment to detroit? >> the reason is right in front of you. dan gilbert and mayor mike duggen doing a great job but the mayor is an example of how society should work together. you see him in front of you with a smile, working with unions, big business, local business and entrepreneurs. and to make it work and focussing on whattually works. and then the two entrepreneurs in front of you, we help finance out the entrepreneurship for color for people who want to

create new businesses. look at the job that they have done. it was a pleasure visiting them. i love seeing you guys on tv. that is how you change society right there. that is why i wanted to join in on this call. >> your job is to make money for your company for shareholders. talk to us about investing in small business. easy for dan what about investing in rosalynn or rugina. >> we are in cities and around the world for good. so every business i know wants to make its community that operates in better. every business i know is not just philanthropic but says can you help local churches and synagogues and local schools and local entrepreneurs. we are making the community better. we are a big bank there. we are the biggest bank there. if detroit does better it is better for our bank in detroit. the fact is every bank i know around the world does this and

it is invaluable. we are going to continue to do it. >> every bank doesn't do what you do. you have been in this city a half a dozen times. you is been in the houses we renovated. you have been in the apartments. you have been in the businesses we finance. you have just been a great partner. >> and jamie, your down at street level or what i like to say is the bowels of the business. you're talking to borrowers and customers. in your view urban cores because you live in a lot of them and live and work in one, what does detroit in your mind have to do to attract more capital? you made a lot of commitment but it is about continuing to attract investment and capital from banks. what do we need to do? >> thanks for the kind words from both of you. it is pretty basic. we are all doing it there and you guys are doing it more than

anyone. you need jobs and for that you need training. you have these vocational schools. you need affordable housing. i have been in a couple of affordable housing. the line that you put between mid town and downtown will create a more vibrant life and the issue with detroit you have to face the issues at once. we have homes and getting businesses. you can put your whole business down there. you doing all the right stuff. entrepreneurs, if you want to buy a physical plant you could go to detroit and get qualified workers. you can buy them very cheap. beautiful homes. you buy them cheaper than other parts of the country. you see entrepreneurs moving out and starting businesses there. >> jamie, feel good story, 100 million over five years. before we let you go i have to ask you, deutsche bank, what is

the outcome of deutsche bank? >> there is no reason that deutsche bank shouldn't get over its problems. remember there are two different really -- they are both created by government which is the legal element which you create certainty and the ongoing capital confusion where people don't know where the rules end up. they have plenty of capital and liquidity. we want all these things to get through because it is better for everybody that we move on and help do our job in a fun society. >> thanks so much for phoning in. i wanted to ask about what is going on with wells fargo. seemed like a wells fargo specific issue. we have come to a point in the conversation where the entire industry is being attacked in congress. they said we want to call on every big bank ceo to explain their practices. hillary clinton today saying

bankers, the term bankers are playing fast and loose with the law. how do you think about the situation in terms of impact on the industry and prospect for increased regulation? >> i didn't call to talk about we wells fargo. he is a quality human being and a friend of mine. obviously when these problems happen every bank is questioned about their practice and every bank is going to cooperate which they should and in due course people will be disclosing policies and procedures. i think cooler heads should prevail sometimes. we should be careful about statements being made. let people do their homework. >> if you don't mind, i have a question for jamie from manhattan, first time long time. when mrs. clinton says bankers are prone to a cowboy culture not talking about wells fargo, i understand your personal connection and admiration for

him. how does it make you feel like you are back in 2008-09? >> look, i think when people blanket a whole class of people by making statements i think it is unfair to everybody. i can do the same thing about media or politicians or lawyers. they are never accurate. this business is full of high quality, qualified talented ethical people as you find in institutions almost anywhere. i wish people would stop doing that and people broke the law and should be punished. let's take a deep breath. you all in the press don't have to fuel it all over the time by adding to it and oversimplifying it. >> have you been asked by congress to provide information or to go to capitol hill? >> i don't know about congress but we have been asked by multiple agencies. this always happens. this is standard. someone does something in the industry everyone gets requests

from everybody else. >> jamie, it was a real pleasure. thank you for calling in and answering questions. $100 million five-year investment and local business here. we appreciate it. thank you so much. >> and coming up again in december sometime. i look forward to seeing you personally. >> look forward to it. >> jamie dimon breaking news. >> does he bring 100 million every time he comes? >> he doesn't want to let the rest of the country know how far past it he has gotten. >> good luck to your businesses. got about 20 seconds left to the show, next thing? >> next thing for us we will see vertical in the city meaning massive new construction in downtown, mid town. elections started it.

i think downtown will see significant activity. >> dan and your whole team thank you very much for having cnbc here today. there is a lot of stuff going on here. thank you all. we'll see you back in new jersey tomorrow. >> thanks for watching power lunch. "closing bell" starts right now. and welcome to "closing bell" in for kelly evans here. >> i resemble that remark about new jersey. stocks kicking off under a little bit of pressure. take a look at what is behind the move lower and how money managers are positioning themselves. >> just heard jamie dimon talking. democratic nominee hillary clinton taking direct aim at wells fargo this afternoon in