this is "nightly business report" with tyler mathisen and sue herara. >> all revved up and everywhere to go but up. auto sales take off in october with the economy growing so tepidly, why is the industry on track for its best year ever? >> cutting cash. the federal reserve temporarily stops billions of dollars of u.s. money from going to iraq's central bank. and the reasons might surprise you. tough medicine and we'll introduce you to a publicly traded company under investigation in at least six states and shrouded in controversy. all that and more tonight on "nightly business report" for tuesday, november 3rd. good evening, everyone. welcome. talk about motoring along, america's auto industry is now on pace to have its best year

ever after much better than expected october sales. for the month, the annualized sales rate was nearly 18.25 million, the second straight month above 1 million and the only other time that has happened was 15 years ago. phil lebeau has more on the red hot sales and why the factors driving it aren't slowing down. >> americans are buying new cars and trucks at a pace we haven't seen since early 2000 with almost every automaker posting better than expected sales. driving the busy october, a powerful combination of low gas prices making trucks and suvs more attractive and low financing rates making monthly payments more affordable. throw in relatively strong consumer confidence and you see why many americans decided to buy a new vehicle last month. >> cars are affordable. employment figures support it. and the industry's building the best and safest cars with the most innovative technology so

we're very excited and bullish. >> the exceptionally strong sales mean auto assembly plants will continue building and shipping vehicles at a near record pace. the one exception? volkswagen. in october the first full month since the diesel emission scandal erupted sales were up just 0.24%. the gain comes as scores of diesel models are parked on dealer lots because they can't be sold. to bring in customers, vw boosted incentives by almost 30% according to one research firm. despite the strong demand and near record sales, some automakers are offering even greater incentives as they ahead into the end of the year. ford is now offering even greater discounts on virtually every model as it hopes to win back a greater share of the u.s. market. if those are a hit, look for other automakers to match what ford is doing in november and december.

phil lebeau, "nightly business report," chicago. >> so will auto sales continue to thrive in an economy that is growing in fits and starts? let's asks are rebecca, senior analyst at kelly blue book. one of my favorite web sites because i'm a car junkie. so the basic question is, why are auto sales so strong if the economy is so tepid? >> well, tyler, first thanks so much for having me on. >> nice to have you. >> so i think that it's a combination of things. you know, people have been really on the sidelines. the average vehicle age is still well over 11 years. so there's a lot of old cars out there. the other thing that's helped a lot is financing. before in 2000, all of those sales were really financed through home equity loans. people were pulling out equity in their home. instead we're extending the term of a loan now. it used to be 48 or 60-month loan, now we're looking at 72

ran even 84 month loans and with 0% financing, those are really, really cheap payments we've got going on. >> longer term for the automakers may take a toll. if you have a 72 i month loan you're not going to be in the market for a new car for a while. >> exactly, sue. we have seen that again in the past where people don't have equity in their vehicle. they go 0 trade it in but they owe more on it so sometimes they'll refinance the excess that they owe. so we could really get ourselves into some trouble here. we need to learn everyone lessons in the past. and not repeat any of the history. we need to finance wisely. we aren't seeing a lot of substandard financing. >> last night we had on diana olick who was saying right now, only people with pristine credit are able to get mortgages. is that comparable to what's going on in the auto market or can more people get automobile

financing than, say, house financing? >> well, having just gone through my own refinancing i can tell you. i have really good credit. it was painful. so financing a vehicle is completely different. the standards are very different. and also, it's easier to repossess a car than it is a house. we are, again, we just have to disciplined in our financing. and people need to be disciplined in their financing, as well. if you take on a car payment, you're looking at anywhere everywhere probably minimum of $400 a month. suddenly, every month that comes about. people need to be responsible with their financing. >> so does this 18 million unit figure, does that continue or is this an anomaly? i know it's two straight months that we've seen that. but does this kind of strength continue, given the financing background and backdrop and all of the incentives out there? >> well, i think with ford as phil referenced in his piece, was ford offering these employee

discounts, we could really see a run-up in november sales. but again, we've learned from the past when the finance companies did that back in 2000, 2001 -- i'm sorry, 2005, we saw the that actually then sales dropped way off. oh we have to be careful that we're not artificially inflating these sales. >> right. >> you know, so we have to again -- it's in moderation. >> hope you got a good rate on your re fi. rebecca lind lynne with kelly blue book. >> the auto sector, more trouble for vw. the german automakerer disclosing testing has found irregularities in about 800,000 cars. that would add an estimated $2.2 billion to the amount of money this on going scandal will cost the firm. in a statement the company said most of the issues were found in diesel vehicles which could also mean that gas powered cars have been impacted, as well.

>> takata is set to face a $70 million fine. the settlement with u.s. regulators relates to the company's handling of its air bag recall. the defective parts have killed at least eight people and injured close to 100 according to reports. the japanese supplier could also face an additional fine of $130 million. those strong auto sales combined with a rise in the energy sector led to a positive day on all street. the dow jones industrial average rose to 17,918. the knack climbed 18 and the s&p 500 was up nearly 6. on the economic front, orders for factory goods fell for the second straight month in september down 1% but that obviously didn't slow stocks is today. >> and sue, activision blizzard agreeing to buy king digital for nearly $6 billion. king makes the popular candy crush video game. wall street seemed to think the deal was a sweet one.

julia boorstin takes a look what drove the deal. >> activision blizzard is known for strong holds in console games with huge hits including call of duty, world of war craft and destiny. buying candy crush maker king diversifies the game leader in a whole new direction giving it access to the mobile gaming market. expect it to generate more than $36 billion in revenue this year. on track to grow more than 50% in the next four years. >> mobile is important but also attracting women to gaming is really important part of our strategy. and with king, 60% of the audience is now female which is a really great expansion opportunity for us. and they're in 196 countries around the world which is something that's exciting. > the combined company will have about half a billion monthly active users around the world. the ideas that active vision will benefit from king's player network and king from

activision's expertise in hard-core games. >> i think king will work with activision going forward to take some of activisions franchises and drive them into the mobile market and activision will help king move into the mid core hard-core titles versus casual games they've been known for in the past. >> analysts are bullish on the fact the deal will add significantly to activision's top and bottom line in 2016 without accounting for syner synergies. some have raised questions about the reliance of king's reliance on candy crush and the potential for loss of value over time. the potential for activision to make the most out of that game and its revenue. >> we look at the opportunity to sustain some of that $700 million in operating profit. there's cust cost cuts that happen in the king business, and a focus on kind of milking the cash flow out of that candy crush franchise. >> activision reported quarterly

revenue that beat expectations. guidance for the fourth came in lighter than projected. speculation about more consolidation in the gaming space sent zen ga higher tuesday. king shareholders still have to vote on the deal expected to close next spring. nor "nightly business report," i'm julia boorstin in los angeles. >> we told you last night about aig's disappointing third quarter results. the stock was down more than 4% today. and selling pressure isn't the only kind aig faces. carl icahn wants to break up the company to unleash value. management thinks it's got a better idea and announced cost cuts totally hundreds of millions of dollars a year. mary thompson has more. >> aig trying to assure investors it's on the right track. >> we'll be eliminating 23g% of the top 1400 leaders of the company as we narrow our strategic focus on the areas that we can win.

>> peter hancock saying the layoffs and other moves will sa the firm $500 million to $600 million a year and create a leaner more efficient operation. hancock dismissing activist investor carl icahn's call to split the core businesses into separate firms a move icahn sees getting them out in under the federal reserve's oversight and freeing more capital to return to shareholders. it's a plan hancock maintains won't work. >> we are not averse to simplifying the company. but certainly that split between property and casualty and life would not release any additional capital. >> once awarded the federal government, aig returned $26 billion to shareholders. having transformed itself under its former ceo. he sold billions of dollars in assets aimed at repaying taxpayers and aimed at getting the company on firmer footing. two years on the job, hancock's

strategy is to improve underwriting standards and modernize the tech infrastructure to cut costs and improve profitability. the firm failed in the third quart on that front though analyst randy biner points out the core insurance operations also failed to deliver. >> quarts like this show the quality of the business at aig its reserves are weak. >> the weakness in their core life and property and casualty businesses putting added pressure on the company at a time investor pressure is trying to force change at a firm that's undergone lots of it over the last decade. for "nightly business report," i'm mary thompson. coming up, why billions of dollars from the u.s. federal reserve stopped flowing to iraq.

♪ oh, those millennials. they're the fussy and entitled generation, right? wrong. at least according to the new cnbc/all-american survey. when it comes to those ages 18 to 34 and their place in the economy, it seems they're not so different after all. steve liesman has the results. >> reporter: conventional wisdom holds that the millenial generation influenced by the 9/11 attacks, burdened with student debt and reared in a world of high speed mobile devices is a unique group of young people. but a special cnbc/all america

survey focusing on millennials finds them to be more similar to the rest of the population than they are different. like when it comes to investments. just a third think this is a good time to invest in stocks. that's about the same as the overall population. 46% of all adults say it's a bad time to invest. one difference, fewer millennials say it's a very bad time to invest. as a group, somewhat more risk averse than the rest of the population. 21% say savings account and cash are their top investment choice. that compares with just 14% for all adults. that could be a his take. >> the real thing that is different about this generation is the skepticism toward stocks. this preference for cash is kind of the key instrument when you're really young is totally backwards. i understand why it's the case because of the financial crisis, but that's the thing we should try to change for young people more than anything else because they have a great opportunity, even investing a small amount, it should not be in cash.

>> looking at the importance of six traits in a potential ply employer like work life ambulance and diverseert, millenial preferences are about the same as the general population. they're more likely to be concerned about opportunities to advance in their careers and flexible work hours. they care less about an employer's retirement benefits which you would expect from young people. they appear to be more satisfied with conditions at work than the average american suggesting this is not the whiny and disgruntled generation some made them out to be. for "nightly business report," i'm steve liesman. mixed results from cbs is where we begin the market focus. the network posting a strong bottom line but revenue miss because of lower add sales and content licensing fees. the owner of showtime and other properties blamed the miss on nonrenufl sports contracts can among other things. shares volatile in initial after-hours trading.

during the rel session up a fraction. tesla bigger than expected loss. the electric carmaker said it delivered more cars than estimated last month and predicting it will beat delivery estimates for the fourth quart. shares popped right after the close during the regular session, the stock was off 2.50% to 208.35. and a wider than expected loss from sprint. the wireless carrier posted a 15 cent a share loss nearly double what was expected. revenue below forecast. this comes as promotional price cuts helped the company add subscribers but weighed on results. shares down 7% to a fairly light $4.51. a similar story for archer daniels midland. the corn processor missed on both the top and bottom line. the stronger dollar and gut glut in the commodities marketed weighed on the quarterlies. the maker of polaroid cameras is suing go pro. polaroid which has its own cube

shaped action camera claims the hero 4 session camera infringes on its patent. shares of gopro tumbled to $25. despite an earnings miss, the online site retail me not hiked full year revenue guidance. profits did tumble nearly 90% but investors overlooked that and shares soared 20% to 10.53. a troubling report today in "the wall street journal." according to their front page article, the federal reserve and treasury department temporarily shutoff the flow of money to iraq's central bk out of concerns the funds were ending up in iran. and in the hands of isis. eamon javers has reported on the money that flows in and out of iraq and joins us now with more. where does this money come from? >> tyler, the money originates inside the new york fed. it's a vault in new jersey off of route 17 there. these are sierk funds though.

a lot of people look at the story and think it's american dollars going overseas. no, these are sierk funds denominate mateded in u.s. dollars withdrawn by the iraqi central bank from its account at the fed and driven down i-95 to andrews air force base and flown over to baghdad often on air force planes and distributed to the central bank of iraq and the concern that american officials had was they had noviceability into what was happening to these billions of dollars in physical cash, bills shrink wrapped and lifted on forklifts into the airplane. they didn't know where that money was going once it got to the iraqi side. their concerns it was somehow making its way to isis and over the border to iran. >> ittent do sound like there's any way to track the cash especially after it leaves the u.s. >> reporter: that's right. because it's iraqi government cash, the u.s. government doesn't have that much ability to see into iraq to see where it's going. but officials tell me that the u.s. does keep track of the serial numbers of the bills that

are sent and the date those bills are sent. so the if they do circulate to isis and u.s. special forces team, for example, are were to capture them, they would have a little bit of visibility where that cash actually came from, hese circulate inside the iraqi economy, you don't know just how many stops that bill made between the central bank of iraq and isis coffers. >> this is eye opening. have the shipments of the cash resumed and how do we know whether will the money is being handled correctly now? >> i'm told that the shipments of cash have now resumed. these date back all the way to right after the u.s. invasion of iraq when the u.s. government decided to unseal the assets of the saddam hussein regime and turn those over to the current jeerk government. they have resumed and rewith told that the iraqi government has given account u.s. side assurances where the money is going. >> eamon javers from washington. coming up, how one drug company managed to grow 600% despite only having one product

on the market and a raft of controversy. ♪ here is what to watch for tomorrow. adp out with its private employment report which comes ahead of friday's big jobs number. fed chair janet yellen testifies before the house financial services committee about the d's plans for bank regulation. and we'll also get the results of a closely watched read on international trade. that is what to watch forat wednesday. >> glaxo smith cline unveiling an expansion be plan today.

it could regulatory approval for up to 20 new treatments before the year 2020, the cao explains how reaching this goal would help the firm. >> that clearly is the fuel that can drive our pharma business and as we again, we saw in q3 as the different division are now moving to scale and the innovation starts to come through to the marketplace, we're getting optimistic about our ability to deliver earnings growth over the next five years. >> is an effort to rejuvenate its portfolio impacted by falling sales of key drugs. >> painkillers dispensed in the u.s. nearly quadrupled from 1999 a 2010, but americans report they still have the same amount of pain according to the centers for disease control and prevention. the c dp c also says that more than 20,000 people about 45 a day died last year from prescription pain killer overdoses. pretty grim statistics that make the alleged business practices

of one publicly traded pharmaceutical company even more disturbing. we have more in the series "pushing pain, profits before patients." >> the device that i brought with me today allows the patient to simply with no priming spray the drug underneath their tongue. >> that spray is a highly addictive opiate, 100 times more powerful than morphine. >> raise your tongue toward the roof of your mouth. >> it can cost between 900 to over $300,000 per package. according to the fda it is only meant to be used for persistent cancer pain. it is accused of pushing it far beyond cancer patients trying to turn the drug into a cash machine. >> i ended up resigning october 2nd of this year. >> former sales representative shannon walsh told cnbc she had to leave the company after she realized. >> there was insatiable greed as far as trying to just get as

many prescriptions as possible, titrate these patients up to the highest dose possible. >> reporter: that alleged strategy seemed to work. insist stock is now up over 600% since the stratospheric raise from the 2013 ipo. how the company achieved the growth is now being investigated in at least six states. california, massachusetts, connecticut, arizona, illinois, and in oregon. where the state accused insist of engaging in kickback schemes, having pharmaceutical reps taking doctors out on dates all in an effort to boost sales. >> i've been investigating drug cases for about 15 years now. and the conduct that we saw in this case is among the most unconscionable i've seen. >> insist declined an on camera interview and refused to respond to our repeated requests for comment. reports also say that some insist employees were able to

push the pain killer by teaming up with physicians like dr. james gal lond, the top prescriber in oregon. according to this report, he had a long history of running into trouble with medical boards including having his license suspended 2014 in part because he misprescribed opiates. we made multiple attempts to contact him who is still employed at a click in oregon bug our calls were not return. insist payments to him were nothing compared to what the company paid other doctors. several of them arrested and are currently kund investigation revealing exactly how the company used medical professionals to grow profits. >> there was harm done to patients on a level that i'm not used to seeing. >> reporter: insist settled with oregon for more than a million dollars, almost double how much it sold in the state. it entereded into an ainsurance of voluntary compliance agreeing

to adhere to regulations but at the same time not admitting to any wrongdoing. we also need to point out that the that stock has a heavy short position and the company is scheduled to report earnings on thursday. and dina joins us now on set. it's such an interesting story. this drug is so potent, it has a special designation. tell us about that. >> because of the risk of misuse, an buse and overdose, the fda says physicians who it have to be enrolled in a special program which says the benefits of taking this drug for a patient far out weigh the risks because the chance of addiction for opiates in general is so high. >> this story reminds me in a way of valiant whose business practices have been called into question. how is this case similar and or different? >> valiant became a story because of that report oeport versus in this case everything that was in our story has been backed up by legal documentation. we know when it comes to insist,

they're being being investigated on the state and federal level. doctors associated with the company are also being investigated and in their own 10 q filings they reveal there are at least six states looking into their business practices. >> we look forward to the second installment tomorrow. thank you very much. all right. >> all right. an that will do it. >> that will do it. i'm tyler mathison. thanks so much for watching "nightly business report." >> i'm sue herara. have a great evening. we'll see you again tomorrow.

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