A bit chilly, im afraid, wouldnt you say . And it Stephanie Ruhle is not a bit chilly, it is bloody freezing outside. You might the canadian and used to this, i cannot stand how cold it is. But if anyone is going to talk grand theft auto, it is this girl. Really . Just kidding. [laughter] starting this mornings show with japan. The Prime Minister is trying to hisue his economy and economic policy. He is dissolving parliament this week and calling for early elections, also delaying a second sales hike. The first tax increase is being blamed for sending japan into his economic policy. He is dissolving parliament this week and callingrecession. He wants his plans debated during the election. I want to make it clear for the debates during the general election whether our economic policies are right or wrong or if there are no other choices available for us. Be ont to make japans imagel trial. Eike batista is also on trial, at one point he was the richest man in brazil, the seventh wealthiest in the world. He claims he now has a negative net worth of 1 billion. Wall street is the big winner, over 100totaling billion. The five big banks on these deals will collect 350 million in fees. Goldman sachs and bank of america will be getting a stake in that. Dictionary word of the year for 2014 . Vape, referring to an electronic on cigarette. Gross. That is the word of the year . Is being considered for future additions. Editions what was the last year . Selfie . I think they could have come up with a better one. Three years ago, eike batista, i sat down with him, he was 12th on the worlds richest listing. He was going to get you number two. He had a paper fortune of 30 billion. A bevy of sports cars, yups, homes, and women. My, how times have changed. Not necessarily a good morning for mr. Batista, but it is for home depot. Customers apparently still performing Home Improvements, even as the Housing Market cools off. We have been monitoring the retailer all morning. Home depot . Up, net earnings are up. Guidance reaffirmed, as many analysts expected. But the bottom line is customer transactions after a big data breach are up as well. The traffic is still there. Thinking about one home depot customer that i know well, my dad. He is there every single weekend. I dont think that ada breach is on his radar screen. But it is for other people. But think about the massive amount of people going there day in and day out. We did do some research, i spoke to weight, more than talking to my father . [laughter] he was notately, able to make it this morning, but my call is into him right after the segment. I did speak to david schick, they put out this interesting survey called the intent to shop. Not sure if they interviewed your father, but this is what we know, 63 of customers have heard about the data breach. 47 , caught half, said that it will impact the shopping. When it comes to intentions to shop at home depot significantly, that was pretty much flat. They have done this survey every two weeks since the data breach came to the surface in september. Again, perhaps there is a difference between perception and reality. By no means are they saying they thought it would go down, but he did want me to emphasize that they thought it was too early to tell who would win the market share if there is a movement in market share. Lows . Exactly, but it is unclear. How do you feel about it . I am indifferent when it comes to home depot. Doityourself person . The Customer Service at home depot is awesome. Great job. H do a home depot, great Customer Service. Lows, great Customer Service. There is the argument that they benefited from the better weather. Individuals going out there to do all of their Home Improvements and refurbishings before the weather hit. Also, before it gets more expensive to refinance your house, meaning a lot less cash in the pockets of consumers. All right, thank you so much for giving us the latest. It is, home depot right downstairs. In the meantime one of the worlds Biggest Solar Energy companies is expanding into wind. Purchasing First Wind Holdings for 2. 4 billion. They are here with us for more on what is really a very, very big deal in your industry. It is, and good morning. Why the wind . Incentives until now have been in solar. It is a phenomenal active class. People whothere are are adherents to solar. There are people who are adherents to wind. Clearly they generate the same thing, electricity, but they do it in different ways. Should we think of them interchangeably . Absolutely. Why . At the end of the day, Renewable Energy is the future. It will continue to address the markets that today are not being addressed. The lowercost is being produced on both sides in terms of Higher Energy prices. If Renewable Energy is the future, how far away are we from your industry being able to stand on its own without government subsidies . Let me start first by saying that it might surprise you but at Solar Industry is growing over 17 globally. Next year it will be 15 gigawatts of installed. Sizable for the industry. The overall market . It is not as big as the broader installation. Looking at the wind, it is roughly 50 gigawatts installed for the next few years. It is sizable. Yet a small portion of the Overall Energy markets. How does this deal and the acquisition of wind assets change or your company the cost of capital . It doesnt. At the end of the day at doubles the company and the market. A minute Effective Immediately they are increasing to over twols gigawatts and have an Addressable Market of over two gigawatts. They have eight gigawatts of additional opportunities. What it does for us is we have been able to increase our dividends per share guidance. Is what it does more than anything else. I believe the ceo was on a Conference Call with investors today saying that they paid a fair market rice, but both stocks are up 20 . How does that work . It has to do with growth, with unlocking value. Here we are picking out the best saylass arguably i would the best wind company in the United States as a platform that has development and the best in Class Management Team with a backend platform that goes up to five gigawatts without adding a dollar. It really creates value. Adding a bit here, by putting the Development Assets into son edison and terraform, we are able to unlock value. Both stocks are up 20 right now. What is your International Demand . Do you have plans to take us on the road . They ared say that arguably the largest renewable developer in the world, operating already internationally. Withisk profile has to do up takers with a certain risk profile. So, we are taking our wind platform globally, on the Development Side we will be able to use the existing footprint in the back office to add to our to their customers. And then for terraform we will continue to partner with son edison, our partner for growth. Earlier, todayll we presented our longterm growth model from 15 in july to 24 . It does for us, 15 to 24 . In what kind of timeframe . Five years. Over that time how much of your anticipated generation is already timed out . A great question. For the back of the pipeline it goes to over four gigawatts for terraforming. How good are those counterparties . Investmentgrade. So, people should have no concerns about being able to pay the bills . I am glad youre asking me this question, that is paramount to the terraforming. We are effectively providing you with a lower risk stream, packaging electronic into longterm predictable dividends. Wind energy expire last year and most republicans want to kill it entirely. What will that mean for you . Great question. You are asking a lot. In our calculus we have already assumed that it goes away. That was part of the underwriting. It effectively does nothing for us. If it stays, its upside. For those who dont understand the relationship between son edison and your people dige more into it and read the transcripts or Conference Calls, the more they come away saying to themselves that it sounds like a lot of Financial Engineering that makes them nervous. First of all, i would say that it might be a new beenmenon, but it has around for a while. Ishe end of the day, yulko another form of mlp. Onfocuses very simply owning and operating assets. Of cannot do a lot engineering when you are paying hard cash to your shareholders exampleitting to for taking the dividend from . 95 to 1. 08, then 1. 30. Cannot hide around Financial Engineering. You actually have to a hard cash pay hard cash to shareholders. What are the risks . Has takenon haslopment risk, terraform will board andue a committee for a wellrun company with fair market value. It is our decision. We buy the assets at the same fair market rate. We just get visibility for partnering. Carlos, thank you very much for being here. Terraform, their Parent Company just did a deal that the market loves. Both are up 20 on this acquisition. You thought you had a good summer . Carlos. When we return, they are rocking the bond market. Who is kind the new era of volatility for treasuries . Sounds like a great job, drinking great wine and writing about it. I think so. Of course you do. October 15 started out as a normal day for the treasury markets. Take a look at the treasury markets. Yields plunged before rebounding with the 24 7 24 basis point jump. The biggest fluctuation in one quarter of the century. It blew the doors off the hedge fund community. Is this what we can expect Going Forward . To paint the scene, we are coming off of a really low number of years because of the stimulus. Has been a big surge in since 1989. People have been expecting , this wasnt some degree of emasculation. You have got to remember the world derivatives around treasuries have swelled. Trillion world of cash treasuries is magnified dramatically by the options out there as well. On the flip side you have a complete change in the structure of wall street. Dealers who were previously using that money to make markets and paying traders to take risk and to be available. Now all that they can do . Treasuries get the Biggest Discount possible in capital treatments. There is no penalty, really, for trading treasuries their way that there is from corporate bonds. By that banks right now you still cannot have been taking on billions in risk and sitting on it. That, but you have got to think about why they traded treasury in the past. The reason why was to offset the risk in their inventories, right . Offsetting the risk in their corporate debt holding. Some of the activities that they did on the proprietary trading did lead tomarkets their Holding Treasuries on this position. There is actually more to it than just risk avoiding for treasury. There is still Market Making going on in the treasury business. The group to a degree that does not exist in other forms. Degree, but why would dealers take on the risk of treasury . They are not allowed to anymore. I am not saying that doddfrank is blocking it, but the people who are running investment banks right now are not allowing their teams to take on these positions. It is not a regulatory issue, it is a management inside banks issue at this point. And then there is a electronic trading. You have a surge in the amount of government bonds that have been traded in the electronic marketplaces. Government on trading will be conducted in the Electronic System next year. Bond trading will be conducted in the Electronic System next year. There is a dynamic going on where there is this one Mass Movement in one direction. Why are you going to stand under that falling knife when it is not calling coming from a rational not the right word, but someone thinking in real time because the market is moving so quickly. When we talk about electronic trading in this context, it is not the same as what people have gotten used to in the equity world. Like what Michael Lewis wrote about in his book, which has been debated since then, these are different players i presume than those who were transacting in the fixed income market . Extent, but some traders use algorithms to decide when to buy and sell. If a lot of bad news is coming out on the 16th of october outflow trading in the fixed income market is not new. But there are fewer dealers and traders on the other side you. You have got to think about the positioning of the market. The huge short position on treasuries dominate is not just people that are speculating on treasury, it is the People Holding on high yield bonds, loans, illiquid securities hedging against the rise to offset the risk in the fixed income portfolios. A lot ofarger hedging going on in the worlds derivative, pushing people through a narrow door when they. Eel they need to remember when derivatives and options make the market more stable . Lisa, thank you so much. That was the latest on the fixed income markets. Coming up next, the senate gets ready to vote on keystone. Is it a matter of too little, too late. . It is time for bloomberg to take you on the market. Lets talk about urban outfitters. A net profitted analysts expectations. Samestore sales were at 7 , another big drop after last quarters plunge. I am guessing that people are not in the room not in the mood. Margins are shrinking quarter after quarter. Looksts taking a close cannot see a catalyst for a turnaround and investors cannot either. They also took a hit because of all of the fashion out there. Five or six years ago you did not have h m, top shop, all the others. Keystone pipeline is next, when we come back. Live from bloomberg headquarters in new york, this is Market Makers. I am erik schatzker. And i am Stephanie Ruhle. A Senate Showdown is set for tonight over the Keystone Pipeline which would provide an easy way for Canadian Oil Companies to ship their crude oil to american refineries. Supporters need 60 votes to pass the bill forcing the administration to authorize it. President obama would still have to sign it into law. Right now, Senate Insiders say there are 59 firm yesses and a handful of maybes. The question today is does the pipeline matter anymore . Lets bring in skip york, Principal Oil analyst and joins us from houston. Does keystone even matter . Think the pipeline Still Matters from an industry perspective. If you are a Canadian Heavy Oil producer developing the oil sands, you are still interested in costeffective ways to move that crude oil to a large market like the gulf coast. Those shippers still want access to the gulf coast by a costeffective means and keystone xl is one of the ways they can get to that market. Doesnt matter less given the fact that heavy oil from the tar sands has found its way to example andail for that u. S. Oil production has really surged over the past few making the importance of keystone to north American Energy security perhaps a little less relevant . We can split that question and half. In half. Yes, you can move by rail but its much more expensive for the shippers. From a refiners perspective, it is ultimately more and raises the price of that heavy crude oil as they acquire it coming into the refinery. Statistically, pipelines are a bit safer and more environmentally benign. Although those are not the key factors, its that cost factor that has both the Oil Producers and the oil refiners interested in a pipeline option as being their first preference. Its a different quality of crude oil. Areu. S. Gulf coast refiners configured to run heavy crude and a lot of the oil being produced in the u. S. Is more of a light and sweet crude just not a very good fit for the gulf coast consideration. While that tide oil is good for the east coast and refiners in the mid continent, the gulf coast refiners need access to a heavy crude slate in order to optimize the operations of their refineries. Boone pickens has said in terms of keystone, its not a matter of if, its a matter of when. Is he wrong . I think it is a matter of when. See it in this congressional session and that might have to go into next year but i think there is just enough education going on in the political realm that i think the politicians were ultimately going to make this decision are coming up the learning curve of how critical that pipeline is in the material that will be in that pipeline is to the viability of the ghost of the gulf coast refining system so i agree that i think we will eventually get it. Is just a matter of when that political process take the final step so that the construction and operation of the pipeline can begin. They are debating the Keystone Pipeline and mary landrieu, senator from louisiana who is facing a tough reelection fight, is making her presentation to the senate. Clearly, she wants keystone built that there is another alternative that has been composed and that would be a pipeline from alberta to the canadian east coast which could subsequently shipped heavy crude to places like india. Is that a lesser alternative in your mind . It from theok at refiners perspective, if you are and you. S. Gulf coast move crude oil to the east coast of canada and put her a ship, it could stil