Global stocks on track since 2012. We begin with the final trading day of the month and quarter. Hong kong stocks closed lower amid continuing protests. Paypal will be spun out to its own publically traded security next year. The stock spiking this morning. We have more from ebay ceo john donahoe. Caseshiller home price numbers are out. Well talk with Robert Shiller first here on cnbc. Well discuss that decision by ebay to reverse course for something the company was articulating was not a good idea, namely splitting itself into its paypal. Ebay represents more of the profits, but is not growing as quickly as the paypal business. I did have an opportunity to catch up with ceo john donahoe late yesterday. When he was fighting with carl icahn in a proxy fight earlier this year, he said a Payment Network needs a Commerce Network bike ebay. Its no wonder they are getting into payments and Payment Companies are getting into commerce. Ebay helps accelerate paypals growth. I asked mr. Donahoe, what changed . We dont see that growing much in the coming years. It reached its natural limitation. Paypal is the only Payments Network out there thats now much larger off of its home network than i. When you look forward, paypal can serve not just ebay but serve all the commerce iko systems. Do you believe they dont belong together . They are coming together on the various eco systems. We want paypal to be the foundation on which they build those payments platforms. That gets to the very strategy we are talking about where if paypal can help power payments, whether its on skype or facebook or ube or air b2b. What extent was paypal prevented as a result of being part of ebay . Paypal will be able to move more quickly without worrying about helping a competitor ebay. Theyll have the Strategic Focus and agility that will ultimately allow paypal to achieve its full potential, which is enormous. Weve seen changes recently or announcements that seem to be augering change, whether its apple pay or visa doing some interesting things. The Public Offering of alibaba and the huge Ecommerce Company that is. Did that figure into the boards thinking . When we look out three to five years, we see the pace in change accelerating. The changes in the last month are early indicators of what is to come. The key question is, well didnt you know that last year . Yeah. Straight forward, i dont like this. I dont like when a guy comes on and says it makes no sense when theres a very smart investor agitating for it, done a lot of work. Then suddenly it makes a lot of sense, when it would have made more sense earlier. You have 152 million active accounts. A lot of people have more scale. The company is worth less than it was a year ago because of the competition. I still think it what is a good idea to break it up. How about better late than never . They can call amazon, call alibaba, we are no longer part of ebay, we can do business with you. Thats why i wanted it. Made a lot of sense. When youre trying to figure out a new account, i think youre lost in a world of i have itunes, my credit card is on file with apple. I can just go open an apple credit card with master and visa. I can do apple payments. There are a lot of people who want to be in the payments business. Paypal is good. It was worth more a year ago. Its got new leadership. Dan shiller coming from American Express today to be president of paypal. Very senior guy there focused on new initiatives and growth initiatives. Amex. Will become the ceo once it becomes a publicallytraded company. Talk about the players who are in it like amazon, apple and stripe and square. Does this feel like they are running scared from a space getting too tough for them to play in . I think so. You had this beautiful opportunity. Theres people on air today saying paypal can be bought immediately. Thats actually not the way that the law really kind of goes. Somebody could make an offer. Its got to be sold. Its not going to be done tx efficiently. They have to pay a big Capital Gains. That is my understanding. Im surprised someone doesnt buy ebay and do it themselves. Could you do the spin of something. We havent talked a great deal. I have donahoe discussing this in answer to a question, what about the ecommerce business . Which is under pressure. Has not done a great i dont want that. That is a declining growth business. Its still growing. Declining growth. Potentially declining growth. It claims being independent will help it in a variety of ways using focus. Using return of capital potentially. Well run some of this sound later. Great scoop by you. There is some crow beneath you. Its a crow eat story. The by was here. Looked us in the eye. Thats what my role is to do. We did a Strategic Review of you this year and came to a different conclusion. Meantime, the shadow of icahn looms large. Seemingly moving companies to do his bidding at will. He had to wait a matter of months for this to happen. He got his buyback. He got his dividend. He was patient with apple. Apples been a huge win. I think there was a better moment to do this. Yes. I think you need to. I always felt paypal on its own would be more focused. Has a currency. Be able to roll some of the guys up. This is a very combative space now. Visa and mastercard are very competitive. Visa, a forwardthinking company right now. I keep thinking about that apple unveiling. Suddenly there is jpmorgan. Suddenly visa. How they kept that secret is still one of the great untold moments about that apple presentation. This was kept secret, too from themselves. You also have dissynergies. Thats why donahoe is focused on his 35,000 employees making sure everybody understands why we did what we did. Its not about shareholders. Its bithabout that employee ba. Im stuck with what you just talked about. The merchandise value of the new ebay is not a business i want. I want paypal and hope paypal gets acquired or has a currency to do something. That is not going to happen overnight . The stock is up correctly because suddenly management realizes this is a good thing. Im not chasing it. Youre not chasing a lot of things. I dont want to. Meantime, pro democracy protesters in hong kong vowing to continue their democratic graciouses. This despite calls from the government to stop the civil disobedience immediately. Susan li is on the cnbc Business News line. If you can hear me, im in the midst of the protests right now. The crowds are expanding. This is the biggest protest weve seen in hong kong. There are thousands streaming into the main protest site. Im looking at 200,000 plus. Ive never seen the main thorough fair. People are being herded into the central part of the city. Even with thunderstorms and lightning about an hour ago, people are not going anywhere. They are coming out in drove at this point. Tomorrow is symbolic in hong kong. People are coming out in droves to voice their opinions against beijing. Back to you in new york. Susan li, thanks. I dont like this. You know what . As we close the quarter, a quarter that brought us ukraine and isis, how fitting that it goes out with more turmoil overseas. What happens if our president says, you know what . You do something militarily against these people, we are going to put sanctions on china. You dont like this because you are not in favor of democracy protesters . That is so unfair. Really. That is so unfair. Im giving you an opportunity to put in context your last who has been more anticommunist than i . Youve got to go back to mccarthy to be as anticommunist as i am. The president of the United States does not want to see Tiananmen Square in hong kong. They have a lot of issues in china right now. It would surprise me. Look at this september. Nine out of the last so much days, september 30th, have been down. And down significantly. Yesterday was the anniversary of the 700. We got a nice bounceback when we realized the house was going to pass t. A. R. P. I like the setup today we were down yesterday. The hong kong thing, what are we going to decide, you know what . Thats going to end great. Its a communist party. They have complete control out of every aspect of peoples lives. There are some expectation they treat hong kong differently than the rest of the country. I hope so. They are not that pro democracy. For the sake of the stock market, we hope it goes away. We want democracy to rule in china. Let 1,000 democratic flowers bloom. Their economy would go straight ive got a fiveyear democracy plan. As if that werent enough this morning, coming up later on, john fords first cnbc interview with mark howard. Hurds first broadcast interview since succeeding larry ellison. Robert shiller and about what he thinks about the recent market volatility. What if we finally had a back yard . That would be amazing. Hey, what if we took down this wall . What if this was my art studio . What if we were preapproved . Shut up from finding to financing, howd you do that . Zillow. Open port twentytwoohoneseven on the firewall for customer db access. Install version twopointthree of db connector and ensure verbose flag is set in case of problems. clapping sound isnt the cloud supposed to make business easier . Get the one that can connect to the systems that you already have. Today theres a new way to work. And its made with ibm. Lets get back to the key housing data of the morning. Home price increases slowed in july. The cofounder of the k. Shiller index, Robert Shiller, professor of economics at yale university. Slowest since november 2012 . Weve seen three consecutive months of decline in the seasonably adjusted number. They are going down at 6 a year. 19 of the 20 cities saw slower annual returns in july. Yet we got these august new home sales a couple of days ago that were best in six years. Do you think july was the low in any sense . That was new home. Existing sales have been weakening pending home sales have been weakening. So there is a sign of some weakening. Not dramatic. What do you think is driving this . Is it an exit of the cash buyer, lending standards being tight . These are very complicated and not big moves. Can i cite the biggest city . The biggest drop . San francisco. San francisco is down 0. 4 . Thats the worst. It also happens to have been the city that went up the most between 2009 and just before it was up 2 3 over 65 . They were the most bubbly city. Home prices continue to rise two to three times the rate of inflation. To me that says not a bad idea to buy a home. If it doesnt go down, it might be an okay investment. We are living in a world of disappointing investments. Absolutely. I say the same thing about the stock market. Its overpriced. Its not a bad investment. All things considered. And where is supply beginning to come out and overweighing demand . You still have good new york numbers. People didnt understand this five years ago. Why is the stock market overpriced . Thats xlik kalted. You are used to having multiple answers. Ill give you a number of reasons. Its about overreaction to things you didnt need to overreact to. The market tends to overreact. Of course, its the recovery since the depression scare we had. Its been ongoing. We see the fed has been supportive of this. People have a sense that the government support, though its coming to an end, by the way, this whole support. Its something about anxiety. You might see stock markets should go down when people are anxious. People are anxious because of the international situation. Inequality is getting worse. People are worried about being replaced by a computer. All these things are on peoples minds. It creates kind of a desire to save more. The saving rate is higher. Also the economy is well, it has been relatively weak. They bid up the prices of everything. We take your temperature on stocks every time youre on. We refer to the shiller pe. You said in the past, i think its on the higher range. I dont think you used the word expensive before. Have you . I cant remember what i said. A year ago my cyclically adjusted price earnings was 23, now its 26. It could keep going up. I dont have a precise way of timing the market. We hear restrictions on mortgages are difficult to get. Do you believe that . Do you believe its still harder to get a mortgage now . Thats what i hear. Im not an authority on this. Seems like it. Fannie mae is the only game in town. They have to keep selling fannie mae. Theres not like a good private market yet in mortgages. This is another problem that worries me. We have a government, you could say socialist housing market. That is not something that will exist for a long run in america, i believe. Finally, they are still throwing you nobel parties. You went to one last night . Yeah. I got my name engaved on the nobel monument right next to the museum of natural history. I know exactly where that is. I spent a lot of time in that park. A lot of new yorkers on that list, too. Thats great. Congratulations. Normally they told us its normally only for dead people, but they make an exception for nobel prize winners. Next time i see it, ill tell my kids i know that guy. Who is buried in grants tomb . Robert shiller, please come back. Great to see you. Well get cramers mad dash. [ male announcer ] eligible for medicare . Thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. 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Time for our mad dash gopro. Professionals and amateurs. Professionals use gopro, the new one, the hero 4 silver. Wall street journal says maybe amateurs, nonprofessionals might want to use gopros. Amateurs keep buying the stock. Professionals keep shorting it. Its now on that nasdaq hard to borrow list. Youve got amateurs overwhelming it by liking the product and buying the stock, and professionals being confounded by the valuation. Who will win . All i can tell you is you know how difficult it is to short on valuation. This review, if we get others like it says this is the gift for holidays. Its no longer for surfers, no longer for extreme snowboarders, you want to use it to be able to take pictures of what you like and post it on youtube. Thats what people do. They put these things all over themselves and they walk around. Its got High Resolution screen. Its a bullish review. Its a review in the journal. 11. 5 million market valuation. A lot of people were short it saying sony has one and there are knockoffs. I hesitate to use this word. This is the word i used when it came public. It is its own ecosystem. That makes it so you really if you take the battery life, you take an hourlong movie, you want to highlight it so you use the editing system. I think people have to recognize this is now conventional parlance. Twice the number of orders of last year even before this new iteration. According to my sources. Opening bell coming up. Tag sooner or later, Everyone Needs a helping hand, or a helping paw so mattress discounters good deed dogs is raising money to help train Assistance Dogs for wounded veterans. Veteran i live independently because of what all it provides for me. And its huge theres a lot of wounded, ill, and injured out there just like myself, who just maybe need a little bit of help. Tag you can lend a helping paw too. Give at mattressdiscountersdogs. Com or any mattress discounters. Mattress discounters good deed dogs helping dogs help people. The opening bell in about 30 seconds as we close out the Third Quarter. What a quarter. Oil hit twoyear low. One of the worse quarters in about a year. Gold flitting with the 11 handle. Your best bet would have been short russell, low volatilities. Hedge funds are looking for any bids they can find. Hard to find a bid in europe, hard to find a bid in china. Where can you raise money . There is the opening bell. Look at s p. Big board standard register provider of communication management for companies. At the nasdaq, tube mogul, Enterprise Software company for digital branding. We talk about the pain of the quarter, Tom Mcclellan says the dow 50 day has been successfully defended three times. Its as if someone doesnt want the real damage to occur. That is interesting. We know the retail etf has held. There are a couple of critical things going on. Mcdonalds twomonth high. Jack in the box alltime high. Jack in the box, a really good piece about the idea of spinning off some cadoba. Its very well run. I understand chipotle is special. You get that vegetarian burritto, its a killer. Im not familiar. Vegetables and i down yesterday. A followthrough bid today. Down another 0. 3 right now. Its not even what they discussed. It was more russia and south america. South america amazingly bad. Europe, incredibly bad. U. S. Margins down. Recall prices. The recall costs gigantic. Mark fields, was he dealt a bad hand and we didnt realize it . This couldnt have happened the last three months. This was a tough meeting. A lot of people thought it was going to be the showoff of the f 150. Only thing could came out was bank of america holds alcoa. People are saying better performed. That truck better do the trick. I dont know. I bought a 350 which is known as the super duty. Ford trucks are terrific. That ford analysis, the ford year, shortterm pain, long term gain. There is no long term in this business. I want the playoffs now. You are not unlike many investors. The average hold period is nine months for mutual fund, maybe less. Normally i would say they are who we thought they were. This is not the case. We are getting breaking news o