not fond of this comment. i would prefer you just give up commenting about women's appearances. donald trump for president. a good sense of humor. wish more people were like him. that is "varney & company" for you today. to say. my time is up. neil cavuto. neil: the federal reserve meeting. on the verge of starting a two-day meeting. growing. they do not opt to do anything on interest rates at this gathering. maybe december 1. we will see what happens. also our development, they are trying to cobble together a two-tier budget deal. an increase in the debt ceiling. we have already heard the leadership reject its no good. false math and silly math.

he will join us in the next hour. all of this is sorting out right now. >> in the house of representatives tomorrow. john boehner is said to leave congress at the end of the week. paul ryan, a dirty barn. we will have a speaker of the house probably on thursday. he is kind of skeptical about this deal, potentially. >> i am reserving budget on this agreement. i want to see what it looks like on paper. i can tell you this, cutting this process. this is not the way to people's business. we will not do people's business this way. >> that is sort of a shot right there.

when i become the speaker of the house, when i become the speaker of the house, it will not be the end of these last-minute budget deals here. what if he does not support this at the end of the day? what about his skepticism. repudiate some of the deal. i think you may be reading too much into that. passing most other budget deals. almost a super majority of democrats. probably 190, 120 republicans. that is the way most things have operated on the big stuff that really really counts. that is very similar to the democrats. she indicated that one thing that they really like is that sequestration. a mandatory spending cut. they altered that equation somewhat. on both the nondefense side and the defense side.

we have to have some relief from these budget cuts. democrats wanted it to be across the board in other sectors. that is why i think you will have a lot of republicans on the defense side did defense hawks, as they call themselves. mike turner, republican from ohio, a big advocate for this. a republican from alabama. he said that this is fiscally a responsible. they bus some of these budget caps under sequestration. many of these conservative republicans from northern california, he says that this completely goes against the budget agreement that we have had here for a while. neil: the irony here is the one thing that was like a budget that phone with the new sequestration cuts, minor in a

multi- chilean dollar budget, they go away. >> they postpone them. under the so-called ryan murray agreement. then the chair of the senate budget committee. they added on a couple of years at the and. going through the early 2020s. a couple of years on the back end of that. this deal, they do virtually the same. it keeps getting punted back and back and back. one of the most important elements of this deal. raising the debt ceiling. they will suspend it. just not count it for a while until march of 2017. that is when the next president will have to wrestle with this. this sets a broader budget of framework here. it does not deal with direct spending. that is something that paul ryan will have to aggress right from

the get go. >> if that indeed happens. thank you. suspending the debt ceiling. 25,000 visa credit limit. it is not raised until visa looks the other way if you go over it. generally not good. judge andrew napolitano wonders if this is very good legal planning. it does look away from the debt ceiling by not automatically raising it. just forgetting that we have it. on a lot of legal ground, i would imagine that there is a lot of room here. >> more economic and legal. just pushing the can down the road. adding to the national debt which is a hidden tax. some form of inflation to pay this money back. to say to the congress whose appetite for spending money borrowed is horatius and uncontrollable. you do not have a limit.

borrowing all the money he wants. the first time since woodrow wilson was president of the united states. no debt ceiling. no cap on borrowing. you have an office and the president who has borrowed the most money and spent the most money and done so with the most reckless. this is a recipe for disaster. the united states will have to pay this back. your children and your grandchildren will be paying the interest on this tab. >> that depends how you feel about your kids. [laughter] the fact that the changes go from a one-year budget deal to a two-year budget deal. i know that companies will often times try to do that. can the federal government legally change the financial posture that way?

>> yes. the constitution contemplates a two-year budgets for the defense department. the budgets were for two years. the reason this budget is for two years is not to bring about economic efficiency, it is to take off the table the issue of the debt ceiling. you know those rambunctious libertarian republicans in the house, this takes one of their big hardening chips away from them. this issue is not something that the house will have to confront intel a new house is elected in november of 16 and is sworn in january of 17 and confronted in march of 17. >> you are right about that. judge, thank you very, very much. the bottom line, how are they making these numbers work? you could suspend that.

former congressional budget office director says what really comes down is how committed you are to fiscal resolve. it is good to have you back. a number of goals here. some radio spectrum auctions. we will get that one in a second here. it sounds like they are looking for money under couch cushions here. without being specific, where are they going to get it? >> the thing to focus on is does overall spending go down? in this case, to raise the defense line. that is the president talking. you have to have some cuts elsewhere. >> what they did specify --

$80 billion through september september 2017. 50 billion of that. >> they have allocated where money will go. where are they taking money from? >> later in the budget window. they're taking some out of social security and disability. >> you buy that? >> we have had deals in the bass with budget gimmicks. no question about that. those kind of things really sound like democrats in the senate saying you will not go to 60 unless you avoid the cuts. >> maybe you can help me with this. i was never huge fans of the sequestration cuts.

neither party could agree on cuts. that was a different design. assuming properly so that these guys could not get their acts together. now they go away with the promise later on. there are two seasons. the question ration. they can go over to get automatic cut. they raise for the next few years. the caps remain in place. neil: you just said they may stick to that. the whole point is to make the cuts in the fast-growing entitlements instead of discretionary. we have real life.

neil: republican. they can do just that. >> president. neil: evening getting a republican president. i definitely five entitlement. >> they have been very bad. if you look at the projections of the federal deficit, in 10 years we have a trillion dollar deficit and 850 million on previous borrowing. no president is going to be able to leave that untouched. the next president, republican or democrat, will have some pressure. not because they are braver or wiser. >> thank you very, very much. >> thank you. neil: let's take a look at some market. getting together a dead deal, a budget deal. keep us going for two more

years. we do know this. oil continues to push by. a lot of this has to do with hitting the market. releasing oil from the petroleum reserve. 2017 development. the last thing the markets want is more fire. >> absolutely. a psychological blow. that story hit the wires early overnight. we started to see the prices fall. a production description. now, you potentially will have another 58 billion barrels. an immediate impact of price. >> a separate issue. not raising the debt ceiling.

that would add a lot of uncertainty. >> absolutely. we know this. we have raise the debt ceiling. this political situation downgraded it i like the way that the situation is today. i think that's telling what i selling oil. we do not need money to raise revenues. that is the price at this time. you know, it is still a very dangerous world out there. a lot of people were concerned of dumping oil at a very low price. of course, some people would say our new strategic petroleum reserve will be north dakota. teen you raise is very good question. a 401(k) to either buy something.

you know, strategic petroleum reserve is fair. just needing some extra cash. it does not at least define emergency to me. >> when we have such a large piece, back when the markets were tight, if sent a message to opec. they try to cut production. we had this big reserve that we could lay on them at any time. when the market tie-ins, and it will again -- neil: thank you very much. we are in the final days about over. this is the scariest week of the entire quarter. it has not been unduly frightening. it will be very, very frightening. justice as we have not been

frightened off as investors in october, just wait for what is coming up in november and december. calling the modern day doctor do. he is next. ♪

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and calls and e-mails me if something, like this scary storm, takes it offline. so i can rest easy. what. you don't have a desk bed? don't be left in the dark. get proactive alerts 24/7. comcast business. built for business. neil: all right. the federal reserve has began its two-day meeting. what we have learned right now is that most people do not think that the fed will do anything in this particular meeting. less likely that she will hike rates. that does not mean anything. down about 45.0. any move by the fed would be a

little bit jarred tomorrow if that would be the case. they could be good or bad. it may need of a 30 year fixed rate mortgage. what makes me go lower is interest rates, especially if my next guest is right. forecasting not exactly times for the stock markets which could explain the gloom, boom and doom report. one of the smartest minds on wall street. you say the markets are due for a major hit. 40% of them. is that right? >> i would not be surprised to see a 40% decline. 2134 on the s&p. down around 6000 would not

surprise me. i would like to explain one thing very clearly. a lot of similarities to the end of 1972, 73 when just a few stop went up. the general move, but that are -- arnie did not follow. many stocks are down 20, 30, 40% already. some architects have pushed up by amazon, apple, facebook, microsoft, ge. this helps make new highs. the 15 normally, you are saying that that is not the case. not too long before they all get caught up. whatever we are looking for, the dow right now, let's say we fell

another 30%. that itself could bring on a recession. >> the manufacturing sector. probably already in a recession. you look at the results of cummings. a lot of these companies have declining sales and declining earnings. what is still driving the market is the economy. neil: not exclusively. autos, for example, they are selling well. no. >> i love your expression. the effective use to buy cars.

>> are they making more cars or not as a result? >> they are making more cars. using for capital spending. neil: go ahead. >> tomorrow's demand for today. eventually, it demands all the steam from the future. driving sales up. neil: 100,000 workers for the holiday season. walmart about 70,000. all about 49,000 workers. they must be seeing something as large as pent-up consumer demand that you are not. >> i just look at the first.

the closing. they are not particularly good. yes. you are right. the sector is expanding. low-paying jobs are expanding. manufacturing jobs are better paying jobs. they are shrinking. >> i imagine, giving your views, you are not a popular guy at a party. >> i would not win a popularity contest. just mention the treasury bonds. i look at those in the u.s. ten years to percent. not particularly attractive. compared to france, at least 1.44%. japan, 0.29%.

minus 0.37%. >> we look like an internet stock i comparison. neil: that assumes that the yield does not go a lot lower. >> treasury bonds, they are attract dave's. >> i hope you are wrong. >> thank you very much. >> what is approaching us. a laudable stocking on june talking. the other talking about this whole va crisis. saying it is overblown.

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neil: ever since hillary clinton said a lot of the problems being reported that the va are overblown, they have been responding "fast and furious." not only at the likes of john mccain. concerned veterans for america issued a statement saying she is out of that list that your veteran needs. she is obviously not paying attention. it is real and a taxpayer dollar. whether hillary clinton botched it on this. what do you think? >> this is a deeply personal issue. my husband is in iraq war veterans that served to two hours. this is a personal issue.

neil: they are real. >> the problems that the va are real. those are horrible. i think to jump and be able to say that the va itself is a problem, to throw it out and privatize it, actually be doing a disservice. >> what prompted all this is saying that republicans are making a bigger deal out of it. >> i think that looking at the problems and fixing them, i think that republicans are politicizing it. implying it is such a big deal. the whole system should be thrown out.

neil: changing the system. waiting for care in not getting care. there are a number of options out there. a private hospital facility. don't you think that she risks by making a statement like that that she does not care. >> to say that she does not care is wrong. you look at her track record in the senate. she is a co-author of the 9/11 g.i. bill. voting to increase funding. i think that it would be wrong to say that she does not care. >> i commend you and to you for that. when they say that families of veterans who have lost their loved ones to mismanagement and corruption in the government, regardless of our positions, how do you think that those people feel? minimizing their difficulty. >> i do not aim what he has done

is minimize it. everyone acknowledges that those losses are un- excusable. they have to be changed. >> overblown by republicans. if even 10 veterans had problems getting care, that would be 10 to many. and then many who died. i do not know. you can define any way that you want. >> we do also know that veterans do better when they are in the system and seeking help from the va with them when they are not. neil: looking at all of this. all of this is wrapped it. one person. you have to look back and say something is not right. you want to keep going with the institution the way this. that is a little bit longer, don't you think.

>> there are clearly problems. it should be looked at in a very serious and specific way. not these are odd statements. she does not understand veterans. >> she clearly did not minimize it. not much of a big deal. for those affected, for the families affected, it is a big deal. >> absolutely. thank you for having me. neil: very good having you, indeed. in the meantime, we're talking about this refugee crisis that is growing by the hour, by the day. thousands. we have drove use out of southern europe. these are thousands lining up against various country borders hoping to take them in. long before this crisis erupted. we do not have senses.

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neil: i want you to look at the speed of humanity. millions, we are told, maybe 4 million when all counted. a fraction of them will be allowed access into croatia, other points north.

angela merkel has says that there is no instance to this stream of refugees trying to seek asylum in europe or anywhere but serious. it is now out of control. those numbers are probably well north. maybe now postseason. more like 8 million. one of europe's opposition leaders of great britain. sadly predicting all of this. europe has been looking to deal with all of this. we have a flight audio delay with nigel. angela merkel is saying that there is no way to deal with this. that is probably an understatement of the century. >> yes, it is. let's not forget that angela merkel compounded their original error which i pointed out on

your show six months ago. a definition. who was a refugee. anywhere else in the world. oh, come all ye faithful. we should accept limitless people. you just showed those drone pictures. now she is saying there is a problem. neil: -- >> you have a problem. neil: i'm sorry. we have a crossover delay on that. i apologize. down the border. easy access to foreign countries. now it is back up the barb wire. it is like you are a free union. >> yes. now an exponential crisis.

open borders has led to the defense going back up again. to make it worse. now we hear that from may 2016, there will be free access to 75 million people who may come from turkey. believe you me, whatever you are seeing on your screens now, this is going to get worse. neil: when you say worse, do you think this gets violent? >> i think worse in terms of numbers. in the ability of countries, schools or hospitals or housing, what i am really saying is this. we know that at least 2% of those are isis gee hottest. we have absolutely no means of streaming or preventing any of those people from coming.

i will say this again, i do not care people do not like it. we are in paralleling compassion. this policy is mad. neil: all right. i do want you to take a look at these images from europe in european what is going on here. despite the fact that 2% maybe isis, 98% may not be. they cannot find asylum. they cannot find protection. countries that are in financial disarray and could tumble. this is the stuff that is unbinding this union. this is the stuff that will make the european union a memory. ♪

neil: you have seen this video, they be you have not, rescuing isis. america died, joshua wheeler. a 20 year long military. collected 11 bronze stars. a pretty amazing achievement. did he die in combat? >> no. going through verbal hoops. take a listen. >> the pentagon seemed to acknowledge when it was coming clear. there is a combat component to what we are engaged in trying to accomplish. >> we are not trying to resist anything. we are trying to be as clear as we can possibly be about what exactly their mission responsibilities are. diminishing the amount of risk they are sustaining.

the mission that president obama has given them. neil: the reason we are resurrecting all that is because the administration says they want to bring troops deeper into syria and iraq. does that mean that they will be combat troops? senator wondered. the republican from colorado. having some serious issues with the president isis strategy. >> we do not necessarily have a strategy from the president yet. we had these air strikes going on that are averaging 10 or 11 a day. we still do not have a firm strategy. that has led to greater challenges. vladimir putin is now involved in serious. neil: maybe another thousand and

iraq. we do know that the administration goes to great lakes. how do you describe this 11 time bronze star recipient who died rescuing those isis captains over the weekend. >> we describe the soldier as a hero. the fact is this, without a strategy, we will see more and more questions about what is happening. the role of our soldiers. we have to have a clear direction about this administration. what the role is and how we are going to carry forward now that russia is involved propping up the russia regime. whether we should be enforcing a no-fly zone over serial. marco rubio has advocated that.

grandpa said that that would be a mistake. >> you just showed in the previous segment. millions of refugees displaced. we need a no-fly zone. sixty-five countries together. making it happen on the ground and in the air. the bottom line is this, the crisis will not be solved until we can solve what is happening in serious. >> thank you very, very much. all of these concerns to put it mildly. another is when this is a time to raise interest rates most. you heard from them. we are all going down in a handbasket. a little more after this. ♪

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neil: we have a huge teal to pay about. this may explain why rite aid stock wants to be bought by walgreens. spook -- sneaking up rite aid. closer to $10 billion. this would unite the second and third largest player in this arena. a great deal of scrutiny from uncle sam. again, pressure. it may come together in favor of some of the obamacare degrees. walgreens wants to buy rite aid. 30% premium over that stock. we will keep you posted here at

after trading in sunday, we will get numbers out of apple. jolene kent. >> all about the iphone. that is one metric that really counts in this particular situation. the ceo said not to worry. they have been able to buck the trend. also in hong kong and taiwan. we will deal up to see what that is like. we will also be able to look at the apple watch numbers. the big question is china and the iphone. those are the two i will be watching. neil: every time he talks about the watch, i think the wall street journal, let's burn them on this, we are selling more this quarter than we did the last quarter. we expect to sell more next quarter than we did this quarter. why can't they be more specific.

so robust they would be screaming about it. >> the iphone has done so well. the ipad has disappointed. helping the way investors react to the stock. a very sensitive situation for apple. they continue to perform so well. in fact when i asked tim cook, apple watch is doing, he just gave me a thumbs up in and a big smile and that is it. neil: it would not be a thumb. you have probably heard by now that walmart wants drones. that is expected to be among the popular christmas gifts this year. what you give when you just do not know what else to give? obviously, a drone.

how big of a deal will this be? pent up demand for instant delivery and good. >> maybe in the future. i do not know if we are there yet. competing head-to-head with amazon. that is really all that they are doing now. asking for permission to move forward. we will be at a point. try to see what the future holds. already getting groceries delivered by truck at home. all kinds of things from amazon. the holiday season. >> so many of them out there now. they are growing rapidly. look at this and register like a do cars. >> recreational is different from commercial. walmart wants commercial use of drugs.

recreational, you will now have to register george toy, if you will. a million of them will be sold over the holiday season. amazon wants to the liver from distribution centers. walmart is looking at several different things. delivering, get this, a drone to bring the package to you in the parking lot of the store for all the people that are too lazy to get out of their car and go into the store. will the american public deal with this? connell: doing with the people. that would be connell mcshane. >> to the point, is it such that

you are so low to going into a store dropping down to the parking lot or outside your door. that could host a problem. >> the biggest problem is how are they going to manage the air traffic. just this year, the faa has had 2000 approvals for commercial drone use. right now, you cannot let the drones get out of your site if you are operating it for commercial purposes. amazon has an idea between 20400. you will have a high-speed lane for drone flying. i am not making this up. >> you can look at walmarts website. they sell them. >> there was a power outage in l.a. some adult flu a drone into a

power line. >> processed meats. the vice president commented on this debt deal, two-year budget deal. we work very hard for it. this is a step in the right direction. the congressman next. ♪ hey, i see you're working on your portfolio.

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neil: welcome back, everybody. i am neil cavuto. you are watching "coast-to-coast" on the fox business network. i do know we are wanting to know where congress is going. pushing it aside as a near-term problem. i am not saying raise the debt ceiling. i am just saying suspend it for a couple of years. let's say $25,000. looking the other way if you go over that.

if you are looking the other way when you spend more when you should. kind of what is going on here. a two-year budget deal. it is off the table. a presidential election year and it looks wonderful on paper. is it a good deal. neil: nobody gets whatever they want. crisis to crisis. congressman mark meadows, they are not buying it. one of the most disciplined players on capitol hill. you do not like what is going on here. what specifically bothers you? >> here was a deal that was struck in the middle of the night. one of the benefits is that it does have security for a longer period of time. your analysis was spot on. it really just increases our debt ceiling with a date certain.

no accountability. accounting gimmicks to actually pay for it. it really is not fiscally responsible. i think that that is what the american people want. this was done with just a few players. no member of congress negotiating the deal. neil: you will be moaning and complaining about it. spending principles. i commend it, by the way. that will get done. it cleans up the barn, to paraphrase speaker boehner, to get past this little impediment. what do you make of that? >> it does clean up the barn. >> i just think it moves the stuff around in the barn. >> that is well said. i we just moving the chairs titanic? while we look at this, whether it is saving social security

disability, what we are doing is borrowing from retirement fund and moving it over. that is not being a rough form or anything that is transformational. what we have to do is get serious about the types of rough form. speaker ryan will be committed to that. why should we be surprised with this particular date. why are we waiting for anything until now to address this. the american people do not run their house like that be 15 thank you for seeing us. other developments that we are following. could be selling some trouble for donald trump for the third time in as many days. another poll that shows them

trailing. a national poll of all the republican major candidates. coming in second to ben carson in states like iowa. is this a trend here? keep in mind the overwhelming majority. virtually all of them up until this week. fellow gazillion error. what you think? >> i think ben carson is an awesome guy. he has great conservative values. he has great integrity and great character. neil: you are pivoting as we speak. it does not show a proven background in leadership that i think is so important to this majority that has been awakened now. neil: what do you think is happening now? losing the support among females. is this the beginning of

something that worries you? >> no. thirteen months until election. plenty of times for the primary. i am trying to justify this. i think as he comes out with this plan, you will see a concentration and a focus that will bring much of the labor. >> donald trump. a slight more vulnerable than those donors that have been holding off money with mainstream candidates. i want to bring charlie gasparino into this. you know, connell mcshane, i said, no. what do you think? >> yes.

these polls are, i hate to say it, i'm going to sound like jeb bush right now, i hate to sound like low-energy jeb, they are really large on these polls. public polls measuring likely republican voters. they are all over the place. there are some trends that you can pick up. he is losing some steam. there is no dow about it. neil: how do your money guys feel about that? suffered very rude pulling. now it looks like the nonestablishment vote is now, at least according to the trend, not to scientific, these things. then carson.

the rubber meets the road with donald trump if he spends his money. i do not know what the timing would be. showing his creativity. >> he promises much in his interview. stuff will come out, paraphrasing here. it will intrigue you. >> i have seen some of it. if you want to talk about stuff, the guy played in new york city real estate for his entire career. more phony and that business then there is hair on my sizable harry had.

they messed up on donald. everyone of them. they have not used it. neil: a matter of time. trump is still leading in a lot of polls. i heard that as well. he has restored a reputation. certainly not very popular. by and large, he is not enduring the wrath that donald trump has. >> everybody has information on everybody. you should run for office.

everyone will know that pumpkin spice latte. >> coffee and sweets. an unopened book. >> nobody has, listen, you just have to look at the business background. he flopped on let's be real clear, his business, pediatric neurosurgery. not a lot of crony capitalism involved there. a mug of new york city real estate. neil: you also know new york politics. there is a view of donald trump.

things are going to get uncomfortable. he just of families. >> no. i do not think that that is going to happen. they are sick and tired of the establishment. neil: he has you as a friend. the american people want them sitting at their table. what they do when it emerges a movie shot of him dancing with hillary clinton at his wedding. the average american, the average republican voter is like, who is this guy. >> you dance with hillary at his wedding. >> sitting in the white house right now.

>> fed up with it. charlie: it is a sizable time. i am not saying that there is anything wrong with it. the american people. neil: they do not know this already. charlie: i do not think that a do. i love donald. he has to play the game. the american people want to know that he played the game with eclipse. they have all played. that is a washington establishment. they do not want to see it anymore.

>> did the bushes do a dance with hillary clinton at their wedding? >> they showed up after. neil: stop. we do not know. good luck with your bills. you never know. you absolutely never know. i had a feeling this may come up. the gop's presidential debate. november 10. in the meantime, following other details. all of the controversy on capitol hill. and a lot of the candidates, both on the left and right on how much liberties you will take when you start checking out on something someone could be doing that is evil. ron johnson from the state of

wisconsin, you are working on a cyber security bill that balances the privacy needs with our security needs. you are way over compromising our privacy. what do you say? >> people concerned about people losing their personal information. their privacy. concerned about cyber hacks. these massive cyber hacks. what we're trying to do is craft a bill here that does recognize that delicate balance. companies in the private sector sharing the information between themselves. we will be removing personal information. we need to understand what those threat indicators are. we already know the attacks.

neil: the read that i had is that you would compel companies -- i go to apple or google and they say no we are not doing that. then what happens? >> a do not share the information. this is a voluntary process. share attacks that have occurred. they are not written to be sued out of existence. that is just a basic minimum standards. neil, such a high percentage are known threats. 75% occur within 24 hours of an initial attack. that is how we got to share this information very rapidly. neil: iran has been invited to

join these talks on syria. how do you feel about that? >> the number one state sponsor of terror in the world. i am highly concerned about the leverage. we have gently witnessed the alignment within the middle east. it will be terrible for world security. now that russia has moved more troops. that will not be helpful. economically, the economic power of europe with the united states over $30 trillion to combine economic power. 10% of our economic strength. look who is pushing you around the middle east. >> senator ron, johnson.

more to do with this budget deal. money that has been frozen in place. thanks for this deal in the next couple of years. everyone is very happy about it. we will have more after this. ♪ the promise of the cloud is that every organization

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so jill, i know the markets have taken a hit lately. mm hmm. just wanted to touch base. how did edward jones come to manage over $800 billion dollars in assets? huh. okay. here's our latest market outlook. two things that i'd like to point out... through face time when you really need it. so that's interesting, you know we had spoken about that before. it's how edward jones makes sense of investing. tand that's what we're doings to chat xfinity.rself, we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around.

neil: i want you to take a look at home builder stocks. they have been battered around lately. a lot of housing data. things might be slowing. year-over-year trends are good. we did see home price strength across the country and a general

sense. twelve months ending in august. that momentum has been in a lot of cities virtually nonexistent. what does this say about the recovery. robert, what do we make of this? >> homebuilder stocks do not correlate very well. >> no, they don't. you are right about that. the housing market shows much lower momentum. it is very different. looking a little weaker. used to be up 10% a year ago. now it's close 5% the weaker is always a source of some concern in a market like this. it may be in a downward path.

it may fall to 0% or even negative. that the next couple of years if we were at a high level. it still looks up words right now. >> existing. a lot of these builders were once again going back to building home communities where they will be very concerned with their cash. do you think that they were getting ahead of themselves? >> responding to a stronger market. history shows that elders are not always completely rational. neil: what happens at the next

point was shut mark is it a given that that stops prospective home shoppers? the rates will go up. i have to move now. >> the possibility of using the level of rates in forecasting home prices, it did not seem to be the most important factor. more important is the employment those are the really big things. it is looking better. i am still optimistic. this next year, cannot be sure. >> getting back to 2000 levels. nominal terms.

real terms, probably not. in denver, it has surpassed the 2011 levels. both nominal and real. thank you very much. i appreciate it. >> we have a little bit of a potential dustup. you heard it out of the chinese. some islands that were international waters. now, we have a naval vessel there. sort of monitoring those islands. about 12 miles off. the chinese are not happy. ♪

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neil: now we're in the south china sea. it has been going on couple years. china is taking area in international waters

militarizing them almost overnight. turn them into active military site. it has done this with dozens of such islands across the south china sea. now we hear the uss lassen is within 12 miles of one of these islands. i think that is just to show force here. one vessel. comes at a time when china already militarized a number of these islands. kt mcfarland whether this might be a too little too late. kt, what we're sighing is, we'll keep doing this -- saying is we'll keep monitoring this. what do we mean by this? >> we should have been done this all along. china has scene rocks in south china sea and expanded them. it added naval bases and airstrips. neil: this is stunning. >> yeah. neil: the whole, turn these islands around. calling someone like you said were glorified rocks. we'll show some of these images. to ahead. >> the reason this is important that the chinese are saying therefore this is chinese territory.

we claimed 12 nautical miles around our island. but the next moves going down the road, they will say, wait a minute the whole south china sea, in other words from the chinese main land to these islands, that's ours, that's ours. one of the biggest waterways in the world through 30% of the world's sea going trade goes. all energy, oil, natural gas, lng going from the middle east, it is going to china, going to japan. going to south korea. going to taiwan. it all goes through this area. so if the next step is that the chinese say, well, we're now claiming all of the territory between main mainland china and these islands, then we're in for a real crisis down the road. that is why it is so important, we preserve the right of freedom of the seas. united states should have been sailing past those all along and not allowing the chinese to claim, first of all, those islands as sovereign chinese territory. secondly the entire south china sea. neil: you know makeup of this

region far better than i do but let's say they militarized the ones they wanted to militarized. they claim rights to the south china sea. along we come with a u.s. frig gait to compete, hey, we're sealing out here to check out real estate. chinese said they don't really like that. i can see where something like this could go. >> well, it escalates. their complaint wasn't that big. we sailed there today. they complained this afternoon. they say they have to take action to reinforce the area. neil: what does that mean? it could be empty threat but, only one vessel we have there, right? ashton carter said, defense secretary said we'll conduct similar operations in the future. i don't know if that means more ships. this one sort of hanging out in the area. if more start doing, that would be read provocatively by the chinese, maybe it should, and then i'm wondering if we have like a cuba-type crisis, you know what i mean?

>> we have one destroyer there. we don't have the entire seventh fleet there. we don't have aircraft carriers there, do you think we should? do you think we should have more than this one vessel? >> no. but i think we should have been having vessels like this all along. we're finally doing it. this is part and parcel of more aggressive, not terribly aggressive, less weak obama foreign policy last 10 days. this is something we should be doing. our allies in the region should be doing. the philippines, indonesia, malaysia, japan. a lot of countries need the sea route. we should all be sailing by. so not a big deal. it's a big deal now because we haven't done it for couple years. it won't be a big deal if everybody continues to sail through. chinese are just testing. seeing what they can get away with. they tried this before where they had air identification zone. this is china's airspace. tough have permission to come through chinese airspace.

i think it is really just another symbol, and move by the chinese and others around the world, what n we get now? we think we have weak american president. see what we can grab while the grabbing is good. neil: they're grabbing. thank you very much. thank you very much, kt mcfarland. speaking of kt's views on this subject, gary kasparov, former world chess masters of masters, written provocative book on this subject, that we're seeding ground to chinas and russias and those that want to bully their way around the world by doing nothing and they are seizing that void. he is coming up. much more after this. when a moment spontaneously turns romantic, why pause to take a pill? and why stop what you're doing to find a bathroom?

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neil: all right. earlier outside the naval observer the vice president of united states commending this deal, this two-year deal that suspends the debt ceiling for a while. gets us through the difficult passage here. at the same time you get a two-year budget deal provides more money for defense and non-defense items. so everyone is happy accept david walker. so this really doesn't show much resolve. of course former u.s. comptroller general. we haven't gotten serious about this. this doesn't look like a deal with step in that direction. i guess both parties are relieved, they punt this until after the election, right? >> deja vu all over again. neil, congress passed timely budgets and appropriations bills four times in the last 64 years. at same point in time we

shouldn't be using debt ceiling which is tactical nuclear weapon as a way to hold hostage. what we have to do is move away from the debt ceiling and, replace it with a debt-to-gdp target with triggers, automatic enforcement mechanisms to deal with mandatory spending, tax expenditures and discretionary spending. there is one positive thing out of this. for the first time, they did something on mandatory spending. they have modest reforms to the disability program. but, that's the disease. the disease are the things that i talked about. now we need to get serious to start moving forward to try to address the disease. neil: i don't know whether we just delay treatment for the disease, just to get us sort of over the hump here. and allow people to get their spending fix. i'm not making judgment on whether you want more defense spending or more non-defend spending. happy to know you will get both.

so the, any, anything that hints of discipline is a promise in this. i wonder whether that really helps address any of the matters you said? >> no, it doesn't, not in meaningful way. the government has grown too big, promised too much, loss control ever the budget. we've gone from, you know, the government is 10 1/2 times bigger today than it was 100 years ago. it controls less than a third of the budget. so we have to recognize that we have got to do something with regard to mandatory spending, with regard to tax expenditures. we need to have more intelligent way to constrain discretionary spending other than across the board sequester approaches. some programs work, some don't. some are in the constitution. some aren't. and to have more disciplined way to go about that. neil: wild stuff. david walker. thank you very much, my friend. david walker. you ever get feeling with global developments with iran getting involved in syria talks and discussions and vladmir putin leading the way, he is sort of playing the world like a

fiddle? i think a certain grand chess master, when it comes to vladmir putin, he is playing chess, we are playing checkers. now mr. kasparov himself, gary kasparov, has a crackerjack good book that spells it all out and what we've got to do. that is next. can a business have a mind? a subconscious. a knack for predicting the future. reflexes faster than the speed of thought.

can a business have a spirit? can a business have a soul? can a business be...alive? >> time for fox business brief. connell mcshane, back with that. we have seen declines for the oil price and price of natural gas.

this really turned into a big market story. oil down by 2%. trading at 2-month low. inventory concerns there. with that price and natural bass price falling, below $2 for the first time in three years, you have, you have stocks in particular area leading to market lower today. energy related stocks in general. this is chevron by $1.68. that is almost 2%. exxonmobil by little less than 1%. many other energy related stocks are lower in today's trading. economic data isn't great. consumer confidence is weak even with oil prices moving in tandem with housing which is normal actually. apple, as we talk about will be a highlight. but for now lower energy prices. that is big market story. neil back with more kos to kos in a moment. "coast to coast" in a moment.

neil: heard earlier in the forecast they are talking about 1000 to 2000 iranian troops into syria to help russians out. if that isn't weird enough, russia's foreign minister is on the wires, we have to discuss ways to resolve the syrian crisis. to which my next guest would say, this is a little weird. gary kasparov is probably one of the finest international mind i know. you know him as a chess master champ extraordinaire.

much more than that the way he thinks. latest book, enemies of the free world must be stopped, he dei will at thats a lot of stuff predicted over the years eerily coming out to play right now. i was joking with him during the break here that vladmir putin is helping him sell his book. good to see you. >> thanks. neil: the biggest thing you feared is our non-reaction to a lot of this stuff and i'm wondering if that embowlens someone like putin, right? >> emboldens putin. it emboldens iranians and north koreans all the dictators in the world. they're getting more aggressive, more arrogant. they feel invincible if they see no action from our side. all we hear now is weakness, indecisiveness and retreat. neil: i think you were the first to come up with that line very familiar now. putin is playing a game of

chess, we're playing checksers. others say he is playing a bad game of chess because this is short-lived chance in the sun. >> not so much because he knows how to bluff. he has a very weak hand. no one on other side -- neil: he is leveraging it. he is leveraging it. >> he is making mistakes. he knows opposition will always follow the course. neil: now when you say opposition, what should the western world be doing? >> yes, we can talk about the free world but it is still starts from the oval office. if, have commander-in-chief of the united states military just accepting defeat before the battle even starts, and try to remove america from its global role, at expense of europeans. they're dealing with massive refugee crisis, which is result by the way of putin, assad and iranians dealing in syria and again, america pretends it is all far away.

so for decades america had enjoyed the luxury of two giant oceans but the world is getting smaller. for those who are saying it is too far away from us, yes. japanese military buildup was far away. al qaeda training camps in the '90s? far away. if you think we're done with war, the war is not done with you. neil: here is what i'm looking at, gary. we've done this before. oil prices slip-sliding away. that is vladmir putin's currency, right? with them down again today, and we're flooding our market, we'll sell oil reserves on the market, he is the one who is hurting, not us. so this is all a head fake and we shouldn't be worried about it. what do you say? >> getting crazier and crazier. yes, he is running out of money. he is spending a lot of his remaining funds and military, security and propaganda. this is the war budget. if he is really desperate he will start new wars.

what about crossing nato borders in the baltic states? or trying to push isis down south to saudi arabia. neil: what do you think of that, gary? we talked earlier about china militarily occupying islands. we have a ship there, might be too late. talking about how the russians are taking the north pole. what do he do? do we stop and meet them with troops? >> china is a separate story. china is strategic threat. neil: they're taking advantage of the same -- >> i think it should be dealt with, china makes the steps because they could see american weakness all over the place. the threat from putin is immediate threat, more of a tactical threat. neil: what do we do? the idea, you once talked to me about ronald reagan, doing with the "star wars" defense initiative he frightened enough people to think he was crazy enough to do something. and that jarred them. >> but you should not wait for oil prices to destroy putin's regime. there are still many ways for him -- neil: president obama is saying

let him hang himself. >> fine. what about saudi arabia? it has been blown up, if you know the crisis moves down. israel is few hundred miles away from the new crisis zone. putin will find a way to create more crises and more havoc. neil: why would he be more emboldened to do? the more he hurts the more he strikes out? >> he needs crisis. he has run out of enemies in russia. he needs enemies elsewhere. five minutes of listening to russian propaganda you can understand. neil: do russians buy that, when he goes shirtless? >> 24/7, 24/7. difficult to resist. neil: so stupid. >> eventually will not. tell russian middle class elite there is a price to pay. there are so many ways you can do it. so financial measures -- neil: more sanctions? >> look, financially, yes. many things can be done. visas with sanctions. you know, not just -- neil: haven't we tried all of that?

it doesn't work? >> white house says either peace or war. i'm not arguing about boots on the ground. there are some things america and american allies can do without -- neil: like what? is it too late now? if we're putting a ship in the south china sea, if we're ignoring what the russians are doing in syria and we're ignoring what they're doing in ukraine, is it too late to get bravado. >> is it too late? sanctions will hurt russian oligarchs and middle class. people need to understand crimea has a price. neil: rich guys feel the pain. >> middle class also. so far they, they want putin victorious. putin should look like a loser. this is the way to encourage people to rise against him. send weapons to ukraine. demonstrate real political will to confront putin. start with the political will. start doing something, protecting american allies in the middle east. neil: real point, when donald

trump says don't engage and let russians fight isis, their problem not ours you say? >> okay. just, let me repeat. al key training camps in afghanistan in '99. 2000, they were very, very far away. neil: who is your candidate? >> i don't one so far but you know, if concerned foreign policy i believe marco rubio is best one. he is cuban. he has a genetic understand of kgb communist and other facts. neil: gary kasparov, the book is "the winter is coming." it is page turner. he was not blowing smoke. he single-handedly planned international incident in concert with his book which i think is brilliant. more after this. active management can tap global insights. active management can seek to outperform. that's the power of active management.

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neil: take a look at amazon. the stocks is up to $612.18. had been up a little more. company getting a lot of news headlines and a lot of kudos what will be ready for very busy christmas shopping season. plans to hire 100,000 folks to help out with packages. toys "r" us, walmart, others beefing up holiday hiring by 100,000. the question is, then what? what if customers don't show? wayne rogers and jonas max ferris whether we'll see not only economic santa rally whether that translates into a stock market santa rally. wayne, what do you think? >> i don't think it translates necessarily into a stock market rally, no, but i don't see anything on the downside. you have a lot of questions out there. you've got china. you've got, you mentioned russia just recently, all of those things that are happening that could disturb the market but i don't see that as a fundamental

thing happening right away. neil: when i hear economists talk about how things are slowing down, neil, it is not really that great, when i hear guys who have money on the table commit to hiring a lot of folks are planning for what will be a lot better holiday shopping season than the economists are, i tend to buy what the guys who do this for a living are saying. what do you think? jonas. >> i'm sorry. i think the consumer is doing a little better than wall street and economists expect. you see that in sales of fairly expensive items like ford trucks recently are very strong. i don't think it will be weak holiday shopping season. that said, the stock market is expensive. we just rebounded from a fairly mild crash in grand scheme of things. we'll not go another 2, 3,000 point to record highs without global economy looking more like america and it is far from that right now. we're only strong market for commodities, for anything. without that there, a lot of

companies in the stock market obviously are money abroad, it will be really hard to grow the market strong from here. we're at end of a pretty long good bull market. without the rest of the world joining it is basically i don't say over, but will not crash either but will not have big gains. neil: wayne, this is problem week typically for the markets. as fourth quarters go this is most problematic week. this month or worrisome october, all averages sprinted ahead very nicely. how do you think it looks when all is said and done? >> i think it looks fine, neil. the, you're right, october is a one of those months in which everybody thinks oh, disasters are right around the corner. i must tell you in our business, the ones that we manage, we had a record weekend this last weekend in sales. i don't see it as happening anytime soon. i think there is enough money in the economy to keep everything even.

neil: all right. so we've got to limp through the rest of the year if he is right, jonas but, two averages, s&p, and nasdaq are now in positive territory on the year after being down going into fourth quarter. so what are we to make of a fourth quarter comeback for the dow? >> i think only thing that would really send the market down is in the federal reserve meeting right now basically panics and somehow thinks there will be inflation even though commodities are down, labor is not really there and they preemptivelily raise rates in hindsight too soon like last time and start a recession. stay low and let the next recession be mild recession. go into it with very low rates, things should work out. only way to unseat the market at this point. neil: we will watch. wayne and jonas. wish i had more time, guys, we don't but i want to thank you both. other forces playing on this♪ market after this. every dollar count. that's why i have the spark cash card from capital one.

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i stand corrected it began at 10:00 a.m. eastern time, not noon. our charlie brady clarified that he is our very bitter boomer but exacting with details. so they have been, now meeting, i guess, trish, close to four hours. take it. trish: not a lot will come of it. but we'll watch it, we'll watch it. thank you so much, neil. breaking everyone, donald trump find himself in unfamiliar territory, second place. i'm trish regan. welcome to "the intelligence report." after falling behind in two recent iowa polls, donald trump is now coming in second in a new national poll. dr. ben carson surged to the top of the pack with 26% of the vote followed by trump at 22% and today, for the first time, donald trump is acknowledging he may not win the nomination. >> i'm in it to the end. now, i think if i don't make it, which of course, people say, oh, he said -- but it's a certainly a possibility that i won't make