good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. the markets under pressure this morning. in fact, take a look at the futures. right now, you'll see that those dow futures are down by about 75 points below fair value. so this is day two of the government shutdown at some point. jobless claims tomorrow, the friday jobs report will not be reached unless a deal is reached on political. remember, this is not a government number. that's why we're going to look at this one very closely. usually we say what is this number and how is that going to match up to friday's number? this may be the only number that we get. right thou, the increase is for 178,000 for september versus

176,000 for a month ago. just ahead of today's all-important jobs report, the ecb will be making its decision on interest rates. the bank is expected to maintain its key lending rate at 0.5%. ecb president mario draghi will deliver comments from a different venue. today's meeting will be held in paris around 8:30 a.m. eastern time. let's send it over to andrew with another big event today. >> we have a lot of big events today, becky. the nation's top bankers are meeting today. among the big names headed to the white are jamie dimon and brian moynihan. the original theme was, of course, fence mending between the administration and the financial sector. now that's all the aif. the government shutdown, debt ceiling there expected to be the major topics of discussion. also today, treasury secretary jack lew pressing congress to act immediately to raise the nation's debt ceiling. right now, the department is using extraordinary bookkeeping measures -- i don't know what

that could possibly mean -- but anyway, to give the treasury more borrow b room. reminding lawmakers that they need to act by october 17th. and new york attorney general eric snyderman is expected to announce a loss over mortgage settlement violations. that suit could be filed as early as today. snyderman warned back in may that both wells and banks of america violated terms of the settlement. bank of america has already reached an agreement with the ag. joe, what do you think extraordinary counting measures means? >> enron employees -- scrucci kept hiring cfos that were familiar with extraordinary -- >> it's not his fault. mohammed is up. what time is it out there? >> 3:00 a.m. >> the baseball season is over for both of us. >> and he's already working the e-mail. >> he's just saying you look

okay despite the -- i'm not disappointed with the reds. the pirates won four out of five. that's like a seven-game series. even though they lost last night's one-game wild card -- they just lost. they don't deserve to go. you can't score more than two runs every game. i saw one home run that would have been a home run that was foul bid a foot. >> you stayed up late to watch it? >> i was going in and out. and then i saw guys on first and second and then they scored one run and then a home run -- what looked like a home run was fouled by less than a foot. and it would have been 4-3, but they probably would have lost. i'm over it because the pirates deserve it. and i will say that unequivocally because the kicked the reds -- yeah, earned success. they won four out of five. i'm fine. i'm more disappointed about the friday jobs report. >> and you may -- and.

>> and then this cover. >> what have you got? >> i just think "the daylightda is -- i know they're partisan, but now they're saying what did you do for our country. and i love the vets. apparently some guys wanted to go into a memorial that was closed down. >> these are actually people who served in world war ii. >> but to tie that all the way back to -- you know, i don't know. >> it's stupid. just fund the government. you can't go through and pick piecemeal what you're going to fund and what you're not. >> accept it, rich lawry's piece, if the way that huge social changes, when you do it along party lines, it breeds this contempt. and i've been saying that all along. this is not going away. i like the way the huff post talked about the obama care stuff yesterday. millions, i think millions tried to sign up. i think that's what it said.

millioned tried to sign. every other paper has shutdown, day one. "new york times" opening rush hit snags. washington post, obama care, they tried to be on board. much interest, some glitches. and "the wall street journal" had it that beset by tech woes. >> you knew that was happening. >> the president said it was so popular, more popular than we had anticipated. and look what happened with apple's io7 that came out last week. within days, they discovered a glitch. >> but when i think of apple innovations, u.s. government innovations, they're the same kind of -- >> i don't know if you saw the video report on msnbc. you saw this probably because it's linked to drudge where she is on the air trying to -- >> and how did you see it?

>> trying to get on -- >> he was watching on cnn. >> did hough post link a drudge thing? >> no. i was on drudge as -- >> you were on drudge? know thy enemy. you have to know what i'm thinking and i looked at huff post this morning. >> i don't read huff post as much as you would think. >> so it's not on your screen right now? >> no. right here. actually, nothing is on the screen. >> i think you read huff post more than any of us. >> i do. i do. you know how i read the e-mail we get. i love you and -- i don't are want to read that. you overstayed your welcome. what are you -- those are the ones i like. anyway, empire state realty trust. does that count? >> not really. >> no. the company that owns new york database well, it owns the empire state building. priced 75 million shares at $13, the low end of the expecteded range. you don't think of realty trust

as a stock, but they are. 13 to 15 was the range. it's going to trade on the new york stock exchange under esrt, empire state realty trust. i get that. oh, another one, real estate broker re/max priced 10 million shares at 22, above the $19 to $21 range. those begin trading today under the symbol rmax. sdpaens of am's ipad mini may be disappointed this holiday season. according to a reuters report, the company may not be able to roll out a retina display version of the mini in time for the holidays. because of delays in the supply chain, that is currently available on the fullside size ipad. so that's a different way of not needing a password? >> no, no, that's how crystal clear it is. on your phone, which you have the iphone 5 -- >> i want it to be able to read

my retina like in mission impossible or something like that. >> no, no. >> that's not what it is? >> no, the samsung galaxy, supposedly if you look down the page, the page start moving down. >> no! >> yes, apparently. i'm told it's a little glitchy, though. >> how do they say they get these artificial limbs to move using your brain. how does that work? >> i think they follow the electric -- >> but they're not electric. it's zero transmitters. >> it has to get hooked up to your brain. >> i know. i just don't know how it works. flae, i was more of a -- >> why are you asking us? >> because it was more of a zen question. it was like, what is the sound of one hand clapping? because now we -- that was on last night. on jon stewart. >> we had another zen moment? >> nope. because the one we were talking about yesterday was from the night before. >> that's the only time i can see it. >> me, too.

but it still surprised me because i didn't realize i was watching a repeat and then o'reiley was on. yeah. >> let's talk washington for a little bit. the cost of the first government shutdown in 17 years has been starting to stack up, everybody. according to the economic consulting firm ihs global insight, the cost in the government is unable to perform is $12.5 million an hour. can you believe that? $3 4u7b million a day. if it goes a week, that's about $1.6 billion. this could be one of the topics that john harwood takes up with the president when he speaks with him later today. mr. harwood, what is your first question? >> just to repair him for the president today. >> my first question for you, andrew, is did you just say a few minutes ago, that something was glitchy? >> glitchy. >> is that not a word? is that inappropriate? >> no, no, i think it's interesting because you remember how on "american idol" it became kind of a joke that the judges would say that somebody's

singing was pitchy? >> yes, dog, i remember that. >> i'm wondering whether in the context of obama care and the rollout of these exchanges that glitchy is going to be a new -- a little glitchy. >> could you bring a laptop to the interview and try to have the president sign up for the exchange on the air? >> that's a good idea. >> i thought that would be an interesting -- >> that would be a great stunt. i don't think it's going to do that one, though. >> i thought it was worth a try. what do you think we're going to hear from him today? >> we hit the debt schedule. that is something that would cost every american money, raise mortgage rates, raise credit

card rates. it could plunge the country back into recession. and having come out of the crisis a few years ago, and it's been a very, you know, slow and tepid recovery and job growth has been there, but it's been weak. the last thing this economy needs is a big, big punch in the gut like a debt crisis. and i think the president, at his meeting with big bankers jamie dimon, lloyd blankfein, brian moynihan is going to try to enlist them to make that case to people in congress that they need to get and do that. and it's been very difficult getting through for him to get through to republicans in congress, but he's got to keep hammering away. >> john, i know that the debt ceiling is the real issue. i know that october on 17th is just around the corner. and with that in mind, how come the two sides aren't talking right now? you have 15 days to resolve this and as best as i can tell, there aren't any communications between these two sides. >> well, i would say the fundamental reason is that so

far what the tea party faction that has been driving republican strategy in the house wants to talk about is something that the president can't talk about. the idea that he is going to engage in a discussion about nullifying his signature achievement, which was passed by both houses, signed into law, upheld by the supreme court. it is just so far beyond the bounds of what is normal and reasonable in politics. >> john, wait a minute. we delayed the corporate mandate, john. and delaying the individual mandate and you repeated to like five things that -- that's on like a talking point thing, the five reasons why it is now law. >> true, true. >> that's what i mean. but it might have been better for everybody to dlat a year so we didn't have all these glitches. it could have been hard for them to do, it obviously, but there are fix that's need to go in. it wouldn't have been the end of the world if you delayed it for a year. >> no, but republicans are not -- hold on, let me finish my

answer. you're bad. you like the end of my answer better than the beginning of my answer. but no, the republicans don't want to fix the law. >> i know. >> if it were about fixing the law, he would have the conversation. they want to kill the law. but here is what i find more potentially promising in an answer to becky's question could lead us to some actual talks. i talked to a top republican leadership aide yesterday afternoon. he had bad news and good news. he earlier said a couple days ago that if we have a shutdown, a few hours, day, a couple days, and then we'll resolve on it. and the idea was that there would be enough pressure on those rebel republicans and the caucus in general that they would get to a solution. now he is of the view it will last at least a week, perhaps more than that. but i asked him, you know, so you go over a week, you roll it into the whole debt limit discussion, how does that get

resolved? what's the zone of potential agreement? and the answer was interesting. it was something we had not been talking about even though this was essentially a budget dispute. the answer was, well, a budget deal. something that replaces some of the sequester cuts with entitlement cuts. that is the real issue and if they can get to the real issue, get to a conversation, that is where the president could engage with them. not on erasing the health care law, but if you're talking about a budget deal, he will have that conversation, i believe. that is the silver lining. >> but i think it's interesting ta they decided to talk to cnbc, swraun. if you compare our audience, although it's not measured properly, to other outlets, it might be small, but you see how influential it is, especially with economic matters and the business matters and the jobs number coming on friday.

and he wants to speak to the people that watch cnbc. i think that's great. >> you're exactly right. and i think this is the moment that of all the levers of public opinion and political influence that you can try to pull, one that is potentially most useful at this moment for the white house in this fight, less on the shutdown, but more so on the debt is the financial community, is the people who would feel the shocks of a -- >> the futures again today. i mean, you know -- >> exactly. and the market reaction has been a little muted so far. so i think there is some notion that there's complacency in the markets. and i think the administration wants to try to break through that. >> but the president wants it, actually. he needs it actually to get a little worse so he can make it better. >> everybody needs it to get a little worse to be honest, andrew. >> john, thank you very much for that. you can see john's entry with president obama coming up at 4:00 p.m. tt on closing bell 37.

>> going to wish you could say save some for "squawk box" tomorrow. i guess you can't. >> we'll get to see highlights in case you miss it tomorrow. >> so nice. anyway, times for the globe markets report, ross westgate is standing by in london. i know it's a big world, but it's what happens here that really matters, ross. i mean, you can -- i know it's hard a lot of times and you're resentful of that being, you know, the former british empire and all that stuff. but you've got some things to talk -- >> come back any time, joe. >> look at the red. look at the red again. >> yeah. it's not disht looks more dramatic potentially than it is. we had some moves higher and the ftse was flat. right now, about 7 to 2 decliners outpacing advancers. we're off the session lows, which we hit about an hour into trade. it does follow the declines in the united states u.s. markets yesterday, as well. the ftse fairly flat. take a look at where we stand

right now. you see those losses, about 0.75% for the ftse, 0.5% for the xetra dax. the cac 40 down 0.75%. here is a neat feat the u.s. politicians have achieved. they've managed to make the italian politicians look like statesmen. we have having a confidence vote into the coalition government. sylvia berlusconi at the weekend told his ministers to resign and not support the government's confidence vote. plenty of pdl members have come out and said they will support letta. earlier on, there was a report and were sthe sticking the knife into mr. berlusconi. others came out and said, no, we are going to support the government. bit looks like letta will indeed get the support he needs. and the yields have come down 4.37% is where we stand at the moment. remember, they were yielding 4.7% two days or so ago. gilt yields, 2.7%. a little bit of data today out of the uk, construction pmi

still hot suggesting we've got a fairly robust economy. that is where we stand right now in europe. back to you. >> all right. ross, thank you very much. when we come back on "squawk box," he is an icon of technology. but some microsoft shareholders wants bill gates to back it in. we have that story, it leads our executive edge right after this. plus, we are counting down to the 8:15 a.m. release of the adp employment report on this jobs on wednesday. "squawk box" will be right back.

welcome back, everybody. time for the executive edge. we'll start out with a story buzzing around microsoft today. three of the soft wire giant's top 20 investors reportedly want bill gates to step down as chairman. the shareholders who hold about 5% of the company's stock requested their identity remain anonymous because the discussions were private. if they're private, i'm not sure why they're taking them public. but investors are concerned that gates' role effectively blocks the adoption of new strategies and would limit the power of a new chief executive to make substantial changes. in particular, they point to his role on the special committee searching for a successor to steve balmer. there's no indication that the board would move to replace gates. microsoft is not commenting on this. this is a kicker of a story. these guys own on collectively about 5%. i think gates owns just over 5%.

>> and he owns it personally. >> and these guys don't want to be named because these are private discussions. but they want to make the discussions public without their names coming out. >> this is a loser argument for bill gates. bill he's one of the greats. >> and just hearing they're carping about -- don't tell him it's us. look, in fairness, there are things that microsoft could have and should have done. that i'll give him. >> sure. >> but i don't know, he's -- first of all, he's no long ter ceo. he's the chairman. unless you think he's the de facto ceo. but i don't think that's even the case. >> focusing on so many other things. and you still look at year in and year out the revenue number that microsoft is just -- there are a lot of -- a lot of stuff still running on -- >> i just don't think you do that as a shareholder, period. >> and at 5%, too. which is -- you know, it's some stock, but do the market -- >> the problem is, these days, value gets on the board. they only have 1% of the

company. >> what's 5% of $285 million is like $15 million, isn't it? >> we could compliment together. >> we could if you participate. we could possible that together. >> probably. and quintanilla, we could raise that much. >> we'll fight back for bill, then. let's talk about kkr. it's make a large investment in china ma. the firm taking a 10% stake higher. it is kkr's biggest investment in china to date and it's third asian deal in a week. kkr is starting to put money to work in it's asian fund. china's market is expected to grow just 5dz 00 billion in the next two years. >> it's like that geico ad with the guy on the motorcycle. there's just money flying. kkr goes -- put 500 million there. they have to put it somewhere.

>> they do, but first of all, this is actually a good deal. there's been a lot of talk about this transition. >> what? you heard about this transition already. >> did i say the name right? >> i don't know about the first heart. i know the haier is right. >> haier you've heard of. >> they make washing machines. >> haier. okay. >> it's two names, king dow haier. >> but the ream question is, this is a company that's looked to make acquisitions in the u.s. to me, it will be whether kkr uses this as a platform to make additional acquisitions. our bacon -- i don't know. >> this is the opposite. >> oh, a shell within a shell. it may not like summer in the new york city area today, but winter is coming.

the weather channel has released the list of winter storm names. you can check out the list. i don't see a becky, a swroe or an andrew. but there is an electra, a falco, a vulcan. >> youpt to see anything about the hurricane season, but -- are we on "a"? >> bite your tongue. there are people that say why even make the forecast any more because it was supposed to be a very active season the why even make the forecast? >> you think weather forecasters are getting worse? hasn't that always been the joke? >> you know how we do weather, right? >> the weather channel is one heck of an enterprise with wonderful people and management. >> and they came up with this name. >> they did. >> i don't remember which side -- >> and for some reason, it's like the farmer's almanac -- how do they get it? >> they're the ones who are saying it's going to be super

cold and snowy super bowl. >> it's going to be a cold, snowy winter. of course, a lot of -- i think the ipcc, the kiemt change people are predicting a cold, dry, wet, hot summer. i mean winter. cold, dry, wet, hot winter. >> one of those. >> no, they're predicting all of that. do you like that? cold, dry, wet, hot. >> it's going to hat. it's always around. they always work. >> all right. when we come back, it is jobs wednesday. that's right. the government shutdown is taking away squawk's big jobs friday coverage. so we are counting down to the adp report at 8:15 a.m. eastern time today. up next, we're going to take a look at how the fourth quarter could shape up for the markets and the economy. as we head to a break right now, take a look at yesterday's winners and loser. (vo) you are a business pro.

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where'd you get that sweater vest? your ford dealer. good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen with becky quick and andrew ross sorkin this morning. because the futures closed lower yesterday in terms of fair value, it doesn't look quite as

bad as the actual futures this morning. but still down 69 points or so on the dow. and a lot of it has to do with the government shutdown, which is now in its second day. no deal is in sight. something could happen -- could it happen quickly? i don't know. hopefully someone is talking somewhere. a republican proposal to fund and open on a handful of agencies was rejected by democrats in the white house. but it's early today. we'll see. you never know. something -- we might get something from john harwood's exclusive interview with the president at 4:00 p.m. on cnbc. jcpenney is being sued bay shareholder over its decision to sell a secondary offering of stock. he was shock, shocked that the company was having issues.

don't -- hopefully he's not a money manager. anyway, federal regulators have cleared the nearly $25 billion buyout of computermaker dell, by michael dell and is silver lake. the deal says that means the transaction could be complete by november 1st. that's fast. that is, like, so much faster than the whole process getting to this point. andrew? andrew? >> i'm over here on the stairs. and it is now time to check out the squawk planner. sh shutdown putting the brakes on public data. they're going to get the adp employment report. you can see the report for the month of september. we're calling it jobs wednesday, especially since the labor department is now probably going to be closing. right now, there are no plans for it to be back open for the friday report. on the earnings report, mo on nsanto expects to roll out quarterly results today.

we should get those numbers to 8:00 eastern time. and dell is expected to launch tablets today. the event should start around noon eastern time and that is your squawk planner. becky, back to you. >> well done, andrew. let's see how the markets may be handling the government shutdown. joining us is peter bain. jerry webman is the chief economist at oppenheimer funds. welcome to both of you. let's start off talking about this situation. peter. >> well, i think what was interesting to me -- i was disappointed, wall, by gene sperling's comment. he's a smart guy and a good guy. it crept into john's comments this morning in anticipation of the interview. the magic word that appears to be coming from the interview is complacency. a false sense of complacency about the market's response to the shutdown. i think it's an accurate sense of disgust.

i think what you're going to see on, you almost have a situation where you're seeing the administration and washington generally trying to talk the market into a panic over this issue. because i think their view is if they can convince the market that the stakes are high enough, which they obviously are, and the likely consequences are disastrous enough, which they are not and will not be, that the market craters that will put greater pressure on the republican party to drop the complaints and move on and get a deal done. >> is this debt ceiling in particular -- >> particularly. >> the government shutdown, maybe we can get through this for a week or something. but the debt ceiling in particular, this is 15 days away at sh point. there's a lot of acrimonacrimon. >> since '76, there have been suspect shutdowns. the median duration was four days, but the longest is 21. we're 15 days away from the debt ceiling deadline. it could well be that you're going to try and see the administration shutdown long enough. >> honestly, that makes sense to

me. >> it makes total sense. >> you don't want to do these stupid negotiations again and is again. wrap it up in one big deal. >> why do you face armageddon and solve it once and five days later face armageddon again. >> have you saying the debt ceiling is not at an absolute panic point? >> defaulting on the government debt is a panic point. >> what are you so sanguine about, then? >> what's that? >> what are you so sanguine about? >> i feel that if the market doesn't fall into a fans sense of complacency, the market stays steady, focuses on the economic merit because the recovery does continue and doesn't panic, then i think the administration will say, okay, we cannot default on the debt. the republicans cave on obama care and the administration moves on spending initiatives. >> down the road. >> yes. that's my gut. >> you need a budget deal here. what you hope this would really produce. the crazy thing about this

continuing resolution business is basically it says, let's spend the same money that we spent in 2011 on this stuff in 2014. we're going to fill the same potholes. so we need a budget deal. we've made -- i think we always forget, we've made more progress on the federal debt and deficit than we remember, right? >> but that's not anything that congress and the administration -- >> listen, we don't like it. but they did that. >> the sequestration is the fact that they couldn't get together. >> it's not a very good way to reduce the deficit, but it is taking into about 3% this year, lower next year. we did it as we usually do in an incremental sloppy kind of way. but we are in much better shape with debt than we were a year ago, two years ago, three years ago. >> but gdp is down because gdp has recovered. >> we should be -- that's the interesting thing for us to be talking about is by all the ways we've made, all the complaining, this economy continues to grind

along. you know, the business of the country is business. and he's talked about this before. what is really the interesting thing is in spite of all this and i know you're tired of hearing about it, the deleveraging cycle, why it is seven biblical years, business has done pretty well. we've made money and gdp is growing more than anybody, i think, would have expected. why is that happening? highways the interesting question. >> i don't think that gdp is growing more than anyone would have expected. every single forecast has been -- >> i'm not saying it's been a -- you know, we'll take 2%, obviously. but it's been lower than people had forecast. >> we kept saying 2%. that's a fair point, john. i think it's disappointing and i think job growth is disappointing because of uncertainty and disapointing and administrative policies. you have huge regulations,

serious impairment in hiring plans going forward, especially obama care. >> it grew, i believe. >> better than it is contracting. >> people thought, too, which is encouraging. let me ask you a different question. if you were to push obama care out four years, would that be better for the -- it might be better for the markets short-term, but -- >> you've got to settle the issue. one small xhen economic because this should be an economic discussion, not a political one. i do find it interesting that in this discussion nobody is actually arguing that obama -- that the affordable care act is a good piece of legislation. all you hear them say -- and john said it. it was passed, signed by the president, upheld by the supreme court. that doesn't mean it's a good law. it doesn't mean it's good policy. but it has to get settled. >> go back. i was thinking about medicare part d, right? but wait a minute. so medicare part d passes. everybody noets knows it's

fraud. they try to put it into effect. it doesn't work. bush passed this thing to get it out and they say it's so complicated, it can't possibly work. there were a few amendments, it's too expensive, we probably shouldn't have done it and it finally works. so what has to happen here, of course something that massive and complicated isn't going to work. it's going be glitchy. government with business needs is -- just tell me the rule. and i'll live with the rules. i might hate them, i might vote against them, i'll do whatever i can do to block them. >> we're doing our insurance planning for next year. tell me the rules, i can work with them. >> we got this lock memo from our hr department about you're not going to do this, but here is what i have to tell you about it. >> your total wild side is in your socks. >> it's my wild side. >> your wild side is in the

shirt. >> i have very dull socks. >> i think it works, though. >> is that working for you? >> no, it is. i can't believe it, but i think it is. shocking, isn't it? the yellow, it's a white collar, the stripes. >> i have an english who said i look like rupert bear. >> but it's like you can step out down here, right? poor webman, all you've got are socks. but your ideas were not boring. >> why would you think that? >> next, democrats and republicans are at a stalemate with no sign of compromise. so whatever happens, whatever happened to these, were they totally different putting party differences aside like president obama and tip o'neill did decades ago? someone who was there and who knows about what he's talking in this context, hard ball host chris matthews will put this moment in time in perspective, next.

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toes walk through the first class private suites, on board lounges, the shower pods and cockpit wes these visual tours you can get. for more on business travel, go to roadwarrior.cnbc.com. our next guest knows a thing or two about effective leadership and what it used to be like. joining us from new york is chris matthews, host of msnbc's "hardba "hardball." it says you know something about part is anship. >> i know all about that. also author of "tip and the gipper." when politics worked. and my second question, chris, and you say this and you've seen some of the rebuttals people have put out that it really wasn't so great or wasn't that different, you saw midnight in paris. remember, owen wilson, all he wants to do is keep going back to the golden years. people there are saying, wow, i

wish we could go back to the golden years. did they know it was the golden years? >> i didn't know it. when i lived through it, i said that was the most partisan time in history. i was going to call this book donnybrook with these two irish guys fighting with each other. and then i realized when i looked through the social security deal and the tax reform deal of '86 and the big spending tax bill of '82 and the way they worked together on northern ireland and the way tip really did secretly help reagan on ending the cold war with go gorbachev, i realized that they fought out and out in the back room and then they would find this wonderful way of coming together and deal making. that's why those were agency shutdowns. they basically pass all the appropriates bills by october the 1st. and you also had two guys that knew how to put things together quickly so they were almost forgettab forgettable. >> all you have to do is look at the video we're running.

can you in your wildest dreams imagine president obama and mitch mcconnell or president obama and john boehner looking anything like that body language wise? >> how about this one, right when reagan was shot, the first guy in to see him, because jim baker was the super chief of staff, that guy on the right with the white hair went in to see reagan, the first guy in to see him and they kneeled down with reagan and they played the 23rd psalm together. and he kissed reagan on the forehead and said get well, buddy. it was a really interesting relationship. tip was reagan's envoy to meet with gorbachev at the time. he was the one with the letter. he went over and vouched for reagan. a lot of this stuff is coming out in the book. but it was different. it really was different back then. >> i keep wondering, is there any back door communication between the staff, between the speaker and -- not with us. all i can tell you is i kept this lernlg book, this only 1960s ledger book of everything

that happened in those years. mike was the power of the speakers. later when mike got in trouble with the law after he left, tip wrote a letter to the judge. ken did you berstein and i were friends. we all respected jim baker. it was fascinating. a even albert norris, in a weird way, we're all in this government together, but we're going to argue. and the great thing was these two old irish guys would get together and argue it out in the back room just hauring with each other. >> chris, if you below this book about today's period 20, 50 years from now, do you think we're going to look at this as the golding age? >> i hope it's notice the new norm. and i really do think that there's a real -- president obama is a relatively cold person in terms of other politicians. whether he thinks he's better than them, he looks like he does. he doesn't work the house. he doesn't community even the things you have to communicate, like fear. sometimes you have to make

joranmy fear you. machiavelli was right in the patcho strike. tip would always talk to me about how reagan made his bones with the patco strike. when he broke that wildcat strike against the federal government with those guys breaking their contracts and breaking their word, that got over to gorbachev and chernenko. those guys were impressive, breaking the union when it's breaking the rules. that fear would be more impressive right now with the house republicans than all the love in the world. >> do you have a path out for the current situation we're in? >> no. i think the president treasurers the health care law. it's his moment in the sun. it's his moment in history, his legacy. it's all that the democrats have been fighting for. i would have called it the democrats health care bill because they passed it. i've been saying this, i know it's a clever metaphor, but usually the kidnapper grabs the baby and asked for the money.

in this case, they've held the money and they're asking for the baby. he's not going to give up his baby. so i worry this is like "guns of august." where both sides think they are a winning hand. i think this is going to go on right through the worse? it is but back then they were individual then. they were totally different. >> they were leaders. >> joe was a typical liberal. he spent and taxed like a liberal. when he spoke, they listened to him. reagan was the father of conservativism. these guys were powerful lead pers that could lead people in hearts and minds. when they said okay, it's a deal. >> how were you there, a 7-year-old intern or something. >> i preserved myself some what. in fact that's why i kept the ledger. i walked into this job, nominated to top assistant that first year.

he said old dog can learn new tricks. he wanted to learn from me about the media. i love work for the guy. i knew this was important. i thought reagan was going to beat him and tie in many ways on many issues. you would have learned so much. becky, you would have gotten something. when these two went at it -- first time i met ronald reagan, i walked up to him in the green room our ceremony office. i said mr. president welcome to the room we plot against you. he says not after 6:00. the speaker says we're all friends after 6:00. >> i met him in 1997. meeting him was amazing. i wish i could have known him like you did.

i'm not as old as you do. >> you always take a little irish shot. any way, you can see the bottle here? any way. >> reagan never drank. >> hooked on jelly beans and cookies. >> the book is called the gipper. good timing. thank you sir. >> when we come bag, fixing the debt and rising above. bowles up next, we'll see if he has the solution next on "squawk box" when we come back. by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions...

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to turn the government around. former chief restructuring officer, james mill stein. today's secret lives of the super rich and the need for speed. we'll talk to one of the most successful dealers in the country, only 26 years old. we've got more coming up on squawk box coming up in a moment.

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. good morning . good morning everybody. welcome back to "squawk box" here on cnbc. i'm becky here with andrew. the future this is morning on the second day of the government shutdown are showing red arrows. 73 down for the dow future, second day of the government shutdown begins. yesterday the market shrugged off concerns. maybe now things are starting to settle in. in our headlines, more focus on the private sector employment. economists look for 178,000 new jobs for september compared with 176,000 last month. the number is out at 8:15 eastern time and we'll be watching it closely. president barack obama hosting 19 financial industry ceos at the white house today. that was originally scheduled to improve relations between the

companies. the shutdown will be a prime topic when john sits down with an exclusive interview with the president of the united states here upon cnbc. microsoft shareholders are pushing for bill gates to relinquish the position. many think his power limits the chief executive. no word on this point if the board members will remove gates. >> just stand up and say it. i find this whole thing -- >> i agree. >> let's get back to what we're focussing on. the capital operating with a skeleton crew this morning. shutdown continues. we are join ed from the national mall in washington d.c.

do you make plans for friday? is it all you good now hampton? are you going to hope someone gives you a number just in case? >> i just report for duty wherever i'm told. it will be a so near yet so far if we end up you across the street from the labor department rather than up on the terrace. i'll miss be in the the utility closet with the report ahead of time. let's get to business at hand. day one of the government shutdown we had one story you would hope would bring a wake up call if you will to both sides in all of this. i call it the greatest generation versus the government shutdown. it happened over at the world war ii memorial which was closed. >> it breaks my heart personally. >> it's stupid. we're here just one day. >> this was the scene when 91 world war ii vets from

mississippi, part of the honor flights program arrived and were initially told they couldn't tour the monument. a group of congressmen intervened, moved the barriers aside and our veterans got to see the monument built to honor their sacrifice. in the end it was a red white, blue experience for all. >> little civil disobedience. it's better to ask forgiveness than it is permission. >> now another group of about 100 vets from chicago is due here today to go to that memorial. the barricades are back up. this could get more political with politicians joining the the vets at the world war ii memorial specifically. the house came up short by the way in trying to get two-thirds votes to pass specifics to fund things like the park service, vets benefit, even d.c. government. before i leave you guys, take a

look at this. we've got a barrier on a portion of the national mall that's about two blocks from the capital. we're basically seeing pedestrian or occasional bicycle traffic. you never run out of barricades when it's shut down time. >> okay. so you're 18 and 1945, you'd have to be 84 years old. that's why the the world war ii vets we've got to cherish them. world war i i'm sure they're all gone. 84-99 these guys. i don't know if anyone thought of that. that's the daily news talking about that on the cover. that's an unfortunate thing. at least something got done, hampton, in terms of letting them get in. made the trip from mississippi. thanks. >> our guest host this morning

has been behind the biggest restructurings in the nation and has strong views on our budget battle. the chairman of mill stein and company. he's a former recon construction officer. we have a lot of questions. in the 6:00 hour jack lou says he's taking extraordinary bookkeeping measures, unquote, to keep the government going. what is extraordinary bookkeeping measures do you take? >> you've got a lot of governmental accounts where the government is borrowing one pocket from another. you can make bookkeeping -- >> that doesn't sound extraordinary. that sounds everyday. >> it's like household managing. it's cash. we're facing cash restraint. he's got to move money around to stay within the debt ceiling.

here's the real question, debt ceiling. your expectation of how this plays out and if we actually fall over, the ceiling. >> we can't do it. it would have such an act of irresponsibility on both parties art. you can't really imagine it happening. >> you can imagine it happening. >> in modern history, a government with the capacity to pay which we have has never done this. argentina and the early part of this century defaulted on a hundred billion worth of debt. it didn't have the international dollar reserve to pay that debt. we have access to borrowing markets as long as they permit it. >> we're talking about figuring out a way out of the box that's been set up.

politically you're talking logical argument but politically, how does this work? >> politically they stair into the abis the default would be. they have to back away from it. it would be throwing away the american century truly. >> one of the big issues and concerns has been that the markets thus far have not reacted. >> the markets are reacting this morning. >> but there hasn't been enough pressure brought. you have all going to washington today. do they matter? what is going to be the trigger, pressure point to which both republicans and democrats find some way to decide to play together? >> republicans and democrats, the capital of the united states has an asset which is called the about to borrow at extraordinarily low rates in the debt markets to fund their deficits while they come up with

a budgetary fix, long term fix. if they throw that asset away, they're making their problem even harder to solve. there will be -- first the question and market access. will they be able to borrow all at any price? if they are a country that has the about to pay and says i'm not in the game of paying anymore. it's like a customer running up a bill in a restaurant and walking out on the check. they've already ran these bills up. they've committed to spend this and borrow this. they haven't authorized themselves to do it. if they intentionally refuse to raise the debt ceiling -- >> why does the debt ceiling exist? >> the congress has the power of the purse. this was a way of restricting the executive branch. >> don't they have it when they set the budget already? >> yes, they do.

>> this has to involve the debt ceiling. >> you know the president and work there. is there any place for him to give? >> i think the republican party first has to decide whether or not affordable health care is existential yes or no. i think they're taking the country down with us. that's obvious. the president says this is existential to him. he's not giving up. if the republicans say the party is dead without its defeat, i think the country is in a huge

crisis. assuming this is not existential for the republican party -- you would have thought the leadership would have declared victory on the budget. the resolution is a roll over of 2012, a budget that yes had tax increases but had significant spending cuts. the republican party won on that. what about talks to include entitlements? can you get to a point to tackle the entitlements? >> is there a silver lining that gets you there? >> everybody in town, administration, harry reid and senate have got to find something meaningful to the republican party that allows them to stay face and move on. they're now caught in a problem of their own making. they've been running against the affordable care act three years since it passed. >> the way it was passed was not

optimal for anyone. >> it was not. i was there during that period. republicans were part of the process and peeled off at the end because of pressure put on them. >> you saw the deals democrats signed on. >> that's legislation. >> when you lose ted kennedy's seed to a republican because of the -- that should have been a little bit of an indicator. you couldn't go back. you had to do reconciliation with the deals of senators. it was a huge social change that we've never done on a purely one party act. >> i agree with. that the politics of this have been difficult from the beginning. >> it's not a great piece of legislation. it's 39% popularity in this country. >> okay but if you ask the republicans what their

alternative is -- >> they have alternatives. >> when i don't sleep at night, i listen sometimes to you guys and sometimes listen to cspan. we're going to have a guest on. >> cspan puts me to bed. >> the point is that the essence of the affordable care act is health care which is republican idea. >> we have the private ones that private sectors go to. >> that's right. if you're going to move to the plan, you need exchanges. >> that's true. you get that. can you see the seeds of a compromise of long term? >> we're going to slip to break. you're going to be here the rest of the program. up next, usually the warm up act. today's private payroll is taking center stage. we're going to talk to a guest

next about the shutdown. keep pit locked on "squawk box," bowles is going to be joining us when we come back. it locked on bowles is going to be joining us when we come back.

welcome back everybody. we've been watching the futures this morning. they have been under pressure this second day of the government shutdown. dow futures down 2 points.

s&p off nine points. john will have an exclusive interview with president barack obama . we'll find out if there's a resolution to solve the debt ceiling. >> joining us now jim pallson, wells capital management in minneapolis. good morning. >> good morning. >> do the specifics of how this finally gets worked out, do they matter to you? can you tell me just assuming that two months from now we'll be in a position where the market is back to doing what you thought it would do the last year and a half or so? are you watching every comment from the democrats and every comment from the republicans at this point? >> well, sure. i mean, just like everybody else we're watching the news as it comes out. i think so far the markets

remain fairly calm. that suggests maybe correctly so this is a two way train in financial markets. two years ago with the different american psyche that thought armageddon was around every corner. dealing with armageddons for five years, we're realizing this is more important. it's going to have real economic impact if it drags on. it also could be catastrophic if we have default. there's down side risks to that. if it gets resolved, there's upside. the upside will grow more we come down, joe. i think there's huge odds on the side this ultimately gets resolved. the question is how long does that take? for sure, the longer this goes on everyday, the greater the

panic will build on wall street. there's risks here in the interim. >> before you decided to change what you were recommending people to do, you would have to see some actual underlying effect in the economy, the overall economy itself that would cause a bump in the road for the recovery. that i can't -- you must think the odds of that -- knowing you as i know you, where do you put it at, 20%? >> i think lower than that. there's estimates one tenth of 1% per week in terms of what the impact might be on gdp. it can't drag on a long time. if it drags on a month or something, that starts to become significant. i think if it does sell off, this is to me more an opportunity when i look beyond the next couple of months and

look for a 12 month window. i'd have the shopping list ready and see which parts get hit the hardest. i'd take advantage of that. >> if we were in a 7 percent gdp and cut a tenth nobody cares. at 2% cut a tenth all week off, you're not that far from 0. what do you think the real number is right now? i know there's sequester and things. does this feel like the base level now? >> it does, joe. the economy grow one eight but two nine in the private sector. i think the run rate here if you can get a government to flat line, the run rate for the economy is around 3% already. that's why the market is somewhat calm joe. we're getting bombarded on the other side by good data

everyday, better than expected data in the united states in the last two weeks better spending, better income, better ism reports. we got syncization going on. we've got global syncization. i don't remember the last time we had u.s., europe and japan all growing and ek seaccelerati the same time. it's a big bet if you're going negative against the undertoe which is positive here if we get the resolution. >> we're just off all time highs. 15-2 on the dow down 60 today. right now the market is indicating everything you're saying. it's not ready to panic yet. hopefully the politicians and the case made earlier, to get

the other side, some might want the market to panic and are hoping for that. i hope that's not the case. >> i just think the market panic is almost not linear but directly tied to time here. unlike any other crisis, it may be tied to news flow. every day you go on, the market gets jittery. right now it's calm. not only stocks, there's no rush to bond, gold, to the dollar. >> gold was down like $40 yesterday or something. all right jim, thank you. you can see i can kind of know what you're thinking. i knew you were at 3%. i'm with you. any way, thank you. we'll see you again. >> thanks. yesterday investor bill

miller had this to say about the airline sector. >> i've heard jim cramer talk about the shut down being negative for airlines. it's short term for airlines. give you an opportunity to buy them if they go down much. >> we take a closer look at tell you what names are ready for takeoff. and a special interview with erskine bowles. we'll cover it all. stick around. "squawk box" will be right back. what does lydia say the average purity is in the check republic? the answer when cnbc "squawk box" continues. yo, yo, yo. aflac. wow. [ under his breath ] that was horrible. pays you cash when you're sick or hurt? [ japanese accent ] aflac. love it. [ under his breath ] hate it. helps you focus on getting back to normal? [ as a southern belle ] aflac. [ as a cowboy ] aflac.

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stupid aflac things? >> it's not stupid. >> trust me. who the heck is lydia? >> you'll meet her later. what's the check republic have to do with it? >> it's all copping. >> if you have comments or questions about anything you see here on "squawk box" send us an e-mail. >> lydia? >> i would ruin it for us, but i won't. >> which names are ready to take off? which will be grounded? erskine bowles will discuss the shut down. we're coming right back.

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everyone. in our head line this is morning, mortgage applications 0.4% last week. there was a 3.1% jump in

activity as mortgage rates dipped 13 basis points to 4.49%, lowest in three months. we're three minutes from the latest decision from the european central bank. ecb is expected to leave the key rate unchanged. that decision is out at 7:45 eastern time. with the president holding the news conference 8:30 eastern. treasury secretary jack lou says he has begun to employ necessary measures to push back the day the government runs out of borrowing authority. he continues to look toward the day authority will be exhausted and calling on congress to immediately raise the debt limit. >> adp report take an extra importance this morning. job data due to be released friday. that looks unlikely. steve joins me now with a preview of the adp data. we're calling this hump jobs day

on wednesday. >> humps jobs day? >> should we forget about fridays in the future? >> i'd like to say we could do that. my report will show you we really can't. whether adp is good or bad is irrelevant. it's what we've got. thank friday it's not too bad. many call it a bad series of ind day tors for the job report. the 178,000 is the report. we'll get that at 8:15. here's the private sector and how they work together. they're rarely in the same place any given month. more or less they work together. adp gets the direction right of whether job strength is weakening or not. about 40,000 plus or minus. bls has been higher over that amount. steady in the 38,000 absolute area. the markets will have to rely on private sector. this datas comes in all shapes

and sizes. manufacturing services, nfib, nabe, and there are other ones. there's the rail time association of american railroads. what else do we have? weekly steel mill shipments, plastic resin production and electricity output. these are things your going to have to go to if job containe containers -- if the job data good enough? unfortunately no says the economic advisors. he says in terms of breath, depth and quality, government sector has it beat hands down. he says the real reason is simple. there's no profit for private players providing public good. sample designs and collections seem to be. the market needs the government

unless it wants to make on container shipment data. they take this stuff and put it into the broad. government has a charge of doing this. there may be -- according to chris really, really good private sector data out there. we don't know it exists because guys pay for it on the side. it's hard to make a business model out of the kind of collection that's necessary. right. it's 300,000 establishments on the bls data and 50,000 phone calls for house hohold. who is going to do that? >> you would think bridge water would do that. >> but they would hang onto it. they may have enough money to hire people to call and create a sample. it's not public good. that's what government is supposed to do. in this case, the economists i talked to have high praise for the government status issues in this regard.

>> we don't know exactly what's going to happen with the government shutdown. when will we know we're def nitly not getting fridays? >> it's done. there's no way. >> what if we were back in business at 3:00 this afternoon? >> i don't think so. they did the data survey. i think they've collected the data but haven't had the chance to put the political spin on it. >> cool aid. >> it begins with a "c." >> somebody has to write the press release and put the information out. they can't work from home. >> it doesn't agree with the government data. we have the series. ism data goes back a long way. conference board michigan data goes back a long way. it's the length that's important.

when you have seasonal issue, there's time to figure out. new data is problematic. >> in the past when we've had the government shutdown, we pay everybody lretroactively. >> there's antideficiency act. this is an 1870 law. i just got the big wrap here. you can read about this on the web. i wrote a story yesterday. >> we have time. he heard you say that. we've got plenty of time. he said please wrap. >> becky is interested. >> i'm interested. >> who passed it? >> who was the author of the bill? democrats, republicans? 1870. >> it makes it a crime for a government official to incur the obligation to the government not by the congress. it was passed in 1870 after lincoln funded the civil war and

then told congress to appropriate afterwards. you cannot volunteer to do government work. there are government officials now telling workers don't look at your cell phone. don't call. that could be volunteering. the act specifically prohibits volunteering. this jobs report is preshutdown. we won't know. >> we need a new jobs report to reflect the furlough and this is already old. this will be -- >> i have one other question. we have to go. >> about the act? >> no. if they actually came out with numbers, when would they do it? could they do it on a wednesday? >> they could. >> there's no law that says it has to be the first friday of the month. >> if the government was back in session next monday -- >> we could have jobs tuesday or saturday. >> i think this friday thing may be going out the window quickly. >> would you apologize in the

back it was not my fault -- >> thank you. >> joseph. >> okay thanks. bill miller talked about the airlines yesterday. this is pretty phenomenal. check out what he said first about the airline. >> i've heard jim cramer talk about the shut down being negative for airlines. it's a short line negative for airlines. they give you the opportunity to buy them if they go down much. >> which is unheard of. our guest host told me the theme of the future, always, a low blow. airlines would always be the investment of the future. they never worked. warren buffett said he'd never buy again after u.s. air. with everything that's happened with legacy carriers, maybe this is time. joining us on the phone is don hodges, chairman of hodges capital management that oversees more than 1.2 billionle. i notice you like the same names

as bill miller. u.s. continental is first pick. is this the first time ever this might be a good investment? >> i think we've reached the point where airlines are a good investment. very much like the railroad which had a terrible history of making money back in 2004-05 began to turn around. now there's the blue chips in the market. the airlines have had a perfect pattern in front of them the last 25 years of whatnot to do. i think management finally wised up and they do have pricing power today. they're charging for auxiliary services. >> a growth vehicle, amazing. which you would buy across the board legacy guys?

>> our favorite in the group is delta. our second favorite would be united. then u.s. air. southwest is a great airline but they've been efficient for years. it doesn't have as much potential for a turn around i don't believe that delta and united and u.s. air do. we're very positive about them. >> hang on one second. >> we started buying them about two years ago and already got great gains. >> let me asked the question of jim for a second. you work for u.s. air? >> i do. >> you're nodding your head. you don't think these are growth stocks? >> if you look back since deregulation, this industry has been subject to enormous competition and new entrance. the thesis there's a new stability, the history of this airline is every time it stabilizes at all, somebody shows up to disrupt.

there are few slot restricted airports in the united states. any guy with a little money can lease a plane, get an operating certificate and start flying competitive flights. >> i thought it was hard to get the slots if american -- >> there are few slot restricted airports in the united states. >> la guardia i can get one? >> slot restrictions. >> chicago? >> you can play. the point is that the history of the airline industry in the united states -- >> one question. there's a case seeking the deal. you have a motive perhaps -- i don't know. i'm just asking. i appreciate that but part of

the argument they're making to get the deal through is that there's competition in the marketplace. if there was competition in the marketplace, they lose this transaction? >> the transaction is to reduce competition instead of enhance competition. their position is it will enhance because it will create a stronger airline capable of competing with delta and united who otherwise are going to dominate this industry. at least until a series of new entrance take it away. >> i wanted to put it out there. >> i appreciate that. >> don, thank you. maybe that gives you more info to work with when considering investments as well. >> coming up, the adp jobs report is the number to watch this week with the government shut down. the labor department is not releasing official data. numbers and market reaction coming up straight ahead.

erskine bowles erskine bowles joins us on where he thinks the feds can cut spending. it's only on the "squawk box" on cnbc.

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welcome back everybody. the ecb just out announcing it is leaving rates unchanged as expected. we've been keeping an eye on futures. after seeing pressure with the dow futures down by as much as 75 point, dow futures down by 41 points. all of this is tied into what's happening in washington. those battles over the budget and debt ceiling continue with the government shutdown into the the second day. now is erskine bowles, cofounder of the campaign to fix the debt. he served as co-chairman on fiscal responsibility and reform. >> which half is he? >> he's the bowles. >> i got it. erskine, you must be ready to rip your hair out over what you see happening in washington? >> becky, i don't have much hair anymore.

what i have is falling out every second. >> what happened? two years ago when looking at things and proposing things and trying to get people to pay attention to what's happening with deficits, did you imagine a situation like? >> no. i hoped common sense and real analysis of data would lead to smart decisions. you know, in hindsight, you could see this coming from a mile. since we came out with the report, we've done the easy stuff. we raised taxes on people making more than $400,000 a year. politically that's not too stuff. they forgot to tell you what they were going to cut. they don't agree today. they've done stupid stuff. you don't get much stupider than a sequester. we've avoided stepping up doing the tough stuff, focussing on reforming titlement programs,

slowing the rate of growth health care down the growth of the economy, making social security sustainable. we've avoided retaining the tax code to be globally competitive. we've got to replace these cuts with programs with smart reforms in mandatory and entitle m programs. that's what make sense. people understand that. we've got to get through the man made crisises and get to real problems. >> the sequester may be stupid, but would the situation of the debt ceiling, if we don't raise by the 17th would that be stupider? >> the shut down is bad, painful, does hurt people, cost the taxpayers real catastrophic. we hit the debt ceiling, that's catastrophic.

not just for the u.s. but globegloba globally. that's really bad. i'm sure administration will be talking about it today. >> has fix the debt, the organization you're leading, have you managed to convene leaders from both sides to start that dialogue on the entitlement programs on tax reform? >> yeah. we've had just tons of meetings. you can't believe the amount of education that's needed so people understand what kind of things you have to do to bend this health care cost curve to slow the growth of health care per cap basis. we spent a lot of time there. they needed enormous education on how we can really reform social security so it won't go bankrupt in 2032 so it won't be the big cut in payments and make it sustainable solvent. on the tax code, you'd be amazed

at the number of people that had no idea in congress of how much we're spending on these exceptions and deductions and credits and loopholes that are there. we only net $1.3 trillion income taxes. we have $1.3 trillion worth of back door spending in tax cuts. >> are thought leader across the aisle that you have convene had the are talking to each other across the aisle? >> yeah. i think there are plenty of people across the aisle especially in the senate that are constantly talking to each other, trying to figure out how to get past this ultra partisan ship to get something that makes good economic sense done. there's even discussion in the house. >> how come we don't hear from them? >> we do hear from them, but the things we're talking about doing

are tough. the way the districts are divided up, it just doesn't make political sense from these guys to come out. the problems are real. the solutions are painful. there's not an easy way out. it takes political courage to stand up and say if you're a democrat we've got to reform entitlements. if if you're republican, we've got to reform tax code. we're willing to do it on a basis that's not revenue neutral. >> you mentioned districting. it's always a big issue. you wanted to attack the issues on the merits. i wonder whether you want to attack the districting issue. that to me may be what held up everything to the extent you think washington has changed. that may be why, no? >> i agree. it's no reason anymore for most of the people in congress to compromise. elections are not in fall. they're in the spring, and

people aren't worried about compromising republican with democrats. they're worried if you're a democrat afl or aarp will run somebody against you, fund that person, that person left of you will probably win. since it's an all democrat district, that's the election. same with republicans. they're worried grover north will float down with great white robes. they'll run somebody to the right of you, fund them pretty well. that person will probably win the primary. that's the election. now you end up with great extremes. that's not something we really faced in 1996. >> how do you fix that piece of it? >> that's the tough part where we've got to look at various things that have been done. california is trying a system now that goes to much more sensible districts. my state of north carolina has a

district that runs literally from east to west. it just takes out all the democrats. all districts on either side are republican districts. that skews the political thought of the state. it's fair. all is fair in love and war and politi politics. it skews the outcomes. >> thank you very much for joining us. obviously these are long term problems. we need you to keep coming back and remind viewers what's important and needs to happen. we thank you for your time. >> thank you, becky. >> this debt default would be catastrophic. that's what we can't have. >> he has the squawk uniform. he had the jacket on and said you know what -- he's got the squawk. >> jim, take off your jacket. >> there we go. we're all going to roll up our sleeves. >> i'm rolled up and ready to go. coming up, health care ceo

trevor fetter coming up. john hardwood will have the interview with president barack obama , the economy, debt ceiling and much more starting at 4:00 p.m. today. "squawk box" coming right back. bny mellon combines investment management & investment servicing,

giving us unique insights which help us attract the industry's brightest minds who create powerful strategies for a country's investments which are used to build new schools to build more bright minds. invested in the world. bny mellon.

as we head to a break, we'll check out the futures. down 38 points now, "squawk box" will be right back. fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee, affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. get up to $140 in mail-in rebates when you buy four select tires with the ford service credit card. where'd you get that sweater vest? your ford dealer.

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welcome to jobs wednesday on "squawk box" the adp employment report may be the only jobs number you get this week. wake up and pay attention. we'll bring you the data live from the man who prepares the report, mark sandy. the third hour of "squawk box" starts right now. welcome back to "squawk box" here on cnbc. i'm joe along with becky.

our guest host the chief restructuring office skmer now the chairman and ceo of the company. this is millstein and company. more from jim still ahead. first, it's your company. >> it's my company. i try to mix it up. >> there's a millstein. why not change it for the name of the company? i'm with you on that. cover all your basis. makes sense to me. >> becky -- >> we are less than 15 minutes from the adp private payroll data. this could be the only read on jobs we get if the government shutdown continues and delays the report scheduled for this friday. 178,000 private sector jobs added in september compared with 176,000 from last month. if we were watching the futuring this morning we have seen

improvement. we've been down by as much as 75 points below dow this morning. dow down this morning now you 48 points. overseas in europe you can see red arrows. biggest lose cac in france. central bank left half a percent. in italy pay political crisis averted. foreign prime minister says he'll support the government and prime minister. that's a turn around from last week when he demanded five of his cabinet ministers split the government and bring it down. overnight in asia, nikkei down. the government shutdown continues with no end in site. debt ceiling still looming. the treasury department is using

the last of four bookkeeping measures to try and keep the government from hitting the debt ceiling. with the extraordinary measures, the go. will hit the spending limit october 17th. we spoke to debt commission co chair bowles about the consequences of the shutdown and not raising the debt ceiling. >> the shutdown is bad, painful, does hurt people, cost the taxpayers real money. it's not catastrophic. we hit this debt ceiling, that's catastrophic. we are the world's reserve currency. it's catastrophic to the u.s. and globally. it's really bad. >> the nation's top bankers meet with president barack obama today at white house. jay monday joins us now. >> reporter: they're going to meet with secretary jack lou. also a meeting with the capitol

hill and president barack obama . the meeting is to help save the case not going over the debt ceiling cliff coming. lew sent a let tore capitol hill reaffirming the fact the october 17eadldline is real and a hard deadline saying they're using the last of extraordinary measures in store to make sure they get all the way to october 17th without triggering the u.s. default. imagine the spectacle we'll have later this morning. last week we were chasing jammy diamond at the department of justice where he was going to personally negotiate with the attorney general a possible settlement maybe as much as $11 billion in the air for a variety of alleged misdeeds by j.p. morgan. now jammy back in town this week meeting with the president. the president is going to make what is asked of diamond to make

the case on capitol hill particularly with republicans that we should not go with the debt ceiling looming on october 17th. the president needs help now from diamond. last week jamie was here negotiating over this settlement. it's an awkward situation. we're going to watch it play out today. >> give us the back story. was there a back story from the j.p. morgan side about whether diamond should go? conversation about whether he should say something publicly after he sees the president, i imagine about the potential settlement? give us the inside dope. >> i wish i had inside dope for you know diamond is con officialed to be here. we're going to wait and see if he'll say anything when he comes out. typically they designate one or two of the figures who are here to come out and talk to the press afterwards.

will jammy dimon be among those? we don't know. i don't know if the white house weighed having him here. it's an awkward moment. jammy wants something from this administration. he wants this settlement to be done, dollar figure low. the president wants something from jammy. you've got an interesting moment where we have this weird conflict of interests or alignment of interests is a better way to put hit. >> strange bedfellows. thank you. a reminder, don't miss the exclusive one on one interview with president barack obama today at 4:00 p.m. on cnbc. a deal completed in health care. the $4.3 billion deal yesterday.

let's see how that plays into the grander scheme of the affordable care act. joining us now, ceo, trevor fetter. apples to apples, that's almost doubled your size in terms of market cap? >> it's a substantial acquisition and increases the size of the company by 60%. it expands us in interesting new markets. >> it's completed and was announced a while ago it gives you not only outpatient but 77 new hops? >> it's 77 hospitals in total. we completed the deal in record time, 98 days. the financing markets were terrific. i was pleased with the way this came together. >> geographically, did that play into where you'd want to expand with the backdrop of the affordable care act going into effect yesterday? >> yes.

it's interesting. the more you're exposed to states with large numbers of uninsured people, today the better it is for a hospital in the future. in this case, we're doubling the size of our company in the state of texas. we're adding a very important market in san antonio, texas, south texas, brownsville texas. we have an important new hospital under construction in new bronsville, texas. we'll have $3 billion in revenues just in texas, a fifth of total revenues. the bigger you are today although a difficult environment, as those gain coverage, that will provide upside for us. >> pretty amazing strategy. you go to where uninsured are because they're going to be insured and then you're in a position to service them. >> those are also states that have great demographics, growing, creating jobs and particularly in texas, a great

economy. >> you won't have the emergency room problem anymore. to sign on full force with obama care, trevor, did you get pay break on cost containment for most hospitals? i don't know who's at fault for rising health care obviously. we've seen how hospital bills come in. it's like you've got to be kidding me for aspirin. was it a deal you get the emergency rooms covers but you don't have to worry about getting squeezed on margins if you agree to do it? >> the deal is not quite that good, joe. first of all, there are still plenty of uninsured people in united states. we'll still have patients that come to emergency rooms not able to pay. the cost pressures on hospitals are relentless. data shows the increase in

health care costs have been slowing. we're at the lowest rate of increase in decades nationally. hospitals have done a good job reducing readmissions eliminating errors. we're working hard to reduce our costs. that's a good competitive strategy for the future, provide good quality care and keep your costs low. in most markets we're far from the price leader in the market. we're obviously substantially below some of the large not for profit systems in our markets. >> i can see what needs to be done. hopefully people will still have skin in the game with their own health care. i think that's the only way. if you think you're taken care of, then maybe you don't live as healthy. lifestyle changes. if it costs you to visit someone when you don't necessarily need that utilization -- prevention and all these things i think we

can do. if you had skin in the game and change your lifestyle, we can hold the costs down. >> i agree with you. one of the big etrends going on people have more skin in the game. employers shifted to high deductible plans. employees that have insurance through employers owe more out of pocket relative to the total cost of insurance. the very interesting thing to watch is health care exchanges. this is a consumer oriented solution to an uninsured problem. people who don't have insurance today are going to shop for insurance on marketplaces. people will have skin in the game. >> we have to figure out in the future how our basic science and technology is getting ahead of what we can afford to do for every single person. we've got to figure out a way.

i don't know how we're going to do. i'm going to live to be 150-200. i don't know what i'm going to cost. we all want to do that. we should. >> thank you for being on. we appreciate it. >> thanks. we're minutes from the adp private payroll number for september. the shutdown continues. the labor department delays friday job reports. this is the only read we get on unemployment for a while. stay with us. presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

welcome back welcome back everybody. it's jobs wednesday "squawk box" steve joins us with that number. >> enjoy the adp, only jobs report. up 166,000 in august compared to 178,000. august revised down. good sector producing 19,000 jobs. 140,000 job non payrolls not going to get estimated 181,000. this number 166 in line for the average for this year but not as strong as 190s pulling in june and july as part of the slow down we've had. let's bring in the most important guy about jobs in the

country now. mark. you're it man. the market is hanging on your every word. you know more about jobs than anybody is going to know. >> you'll be happy to know i triple checked the numbers this time. this is consistent with the job growth the past three months, really the past three years. between 150,000 to 200,000 per month. i think we're on the soft side of that in the past few months. we've been closer to 150,000 than 160,000. >> let's look at job growth by industry. construction not too bad, 16,000. manufacturing up just 1 is. the service sector 147. what's that tell you about the economy? >> housing market is kicking in. more construction and more construction jobs.

hopefully we get more construction and construction jobs over the next three years. that's key to getting back to full employment. manufacturing, even in the best of times when running full flat out doesn't create a lot of jobs. 1k, 5k, that's the best we can expect in the rough times. that's good. >> i'm guessing financial activities down 4,000 is mortgage brokers? >> that's exactly right. the mortgage bank per brokers are laying off workers. that's reflected in the number. the rest of financial sfservice >> let's bring up you the adp data whether or not picking up effect of obama considare which showed by industry sides there was less hiring where the obama care would kick in, the 50

employees. 74,000 job growth and 50 to 500, 28,000. is this affecting the job cusp with obama care? >> not that i can see. i have a lot of business clients screaming loudly about the effects of obama care. they're usually quiet people. they're exercised about this. i expected to see i. as you pointed out earlier in the year, i did start to see impacts for companies with around 50 employees. i don't see it in adp data, employment work. maybe it will show up. we don't know what the counter is. could be that we could see stronger job growth without obama care. i'm sympathetic to that data.

>> it's not showing up in data. you can't prove it as you see. >> mark loves the counter factual. >> i live off that. >> i'm just listening. i'm just watching. >> it's possible. i talked to the head of the trade group for the franchises. they would be affected by obama care. that's their argument. it would create more jobs but not if for obama care. >> we did a national survey. if you had hours cut or lost your job because of obama care, it was under 3%. 3% could mean 0 or 6%. if 6% or 3%, it's a measurable amount. it's not an amount that's helpful at this time given how weak job growth is. >> it's important to point out obama care fixes the economy in lots of ways.

we're focused on the job market directly. this is one way it can happen. . we're watching and will continue to watch. mark, real quick, anything you can give about the growth of the economy from this number here. is it a number that talks 2% economic growth to a half is this. >> we're below 2%. it's 1 half half % gdp growth. now with the shutdown, that certainly is at risk as well. we're on the south side of that weak growth we've gotten throughout the recovery. >> hi mark, i'm jim millstein. >> how do i pronounce your name? >> do you have visibility on the impact of the shut down on fourth quarter gdp? >> if all shut down ends this week, no big deal.

i don't think it will have meaningful effect. if it gets to next week, that starts to become a problem. on october 17th if they haven't increased the debt limit, the fourth quarter will be dark and the rest of next year will be dark. given that dark scenario, i can't imagine they're not going to sign a piece of legislation to increase that debt ceiling in time. >> you and me both. they have to evacuate where they hold the meeting inside the national park. all these weddings are cancelled, people around the country that have their weddings at national parks. >> yosemite weddings were in trouble from the fire. >> now you have the shutdown. that's the economic impact. it doesn't look like it's a lot. unless you were one of the veterans, the first trip you've made to washington. one of the california school kids made their way to new york or washington to see these

things. >> there was a charity for the women's prison association. >> the what? >> women prison association. >> don't get him started on this. >> the women's prisons. >> you know who was there? >> the new black was you there. >> this is what got him going. >> if you give money, you can keep the government by spending more money helping women in prison. and to reduce the rate and all that stuff. >> we don't do weddings. >> wedding singer, there was a movie about you. the mud crunchers. >> the moon crunchers folks. >> we keep saying this is the last jobs report today. >> we're going to get claims. claims is not so much an appropriation. we'll have claims tomorrow. it's like 99.9% we're not

getting the jobs by friday. >> thank you steve. thank you mark. >> copping coming up, the effects of the shutdown on the job market. we're kicking off this super rich wednesday with a 26-year-old college dropout that happens to be america's largest lamborghini dealer. you're watching "squawk box" on cnbc. first in business worldwide. bny mellon turns insights like these into powerful investment strategies. for a university endowment. it funds a marine biologist... who studies the peruvian anchovy. invested in the world. bny mellon.

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welcome back to welcome back to "squawk box" among the storys we're following in morning, three of microsoft top investors want bill gates to step down. they requested their identity remain anonymous although discussions were private. the three investors are concerned gates rolls as chairman effectively blocks the adoption of new strategies and would limit the power of the new executive to make changes. they point to his role on the special committee searching for a successor steve bammer microsoft is not commenting. gates himself owns 5% of the stock too.

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welcome back welcome back to "squawk box" let's look at stocks in today's trading months. fourth quarter losses of four cents wider than analysts predicted. separately the company announced the acquisition of analytics company called climate corporation. $930 million in cost. blackberry will recur reconstruction charges through you the end of the year. rather than 100 million it predicted it also says the adoption focus operating system has been slower than anticipated. is yours working right? it's over there. is it still turned on? another day it's still working. good day for you.

alcoa is down from hold. aluminum outlook. tesla motors, some chart to behold there. a programming note for you. don't miss john's exclusive one on one interview with president barack obama today at 4:00 p.m. eastern time on cnbc. the partial government shutdown still in effect. it might disrupt -- i will say it will disrupt the housing recovery. loans can be taken but without irs is social security, they may not be able to proceed to closing. we'll talk about fanny, freddy and the mess we're in. managing director at graham fisher and company. good morning. >> good morning how are you? >> i put it out there and said that this situation is going to hurt the fragile housing

recovery if you want to call it that. do you agree or disagree? >> i absolutely agree. confidence is impacted by this. we've seen weakening trends started early july with the rate move. frankly it's accelerated. first time home buyers having collapsed, investor share starting to fall off. those buyer who is are buying are putting down more cash than they were a year ago. i am concerned we're going to see this impact and force housing to stall further. >> you've been critical over the years. we keep saying we're going to fix the gfc. do you have hope in the next, i don't know what, that we'll actually get to this issue again? >> we have a bill on the senate side. 11 cosponsors. a bill from house of financial

service chairman on the house side made it through committee. i don't think either are products that have all that much hope of ending and crossing the finish line. congress is starting to pick up again. senate members are working on their own bill that they hope to pass committee by the end of the year. i don't have great hope we'll see before the midterm election, signed into law. i think there's real problems with what we have seen. >> if the housing recovery is as fragile as we think, is there a possibility by introducing whatever shift we make on freddie and fanny that undermines us on short term basis? >> there's to question to that. both bills that we've seen so far, fanny and freddei create the the unwind. that in itself is going to cause

disruption on markets and increase uncertainty and concern. >> i have another issue i wanted to throw at you. i saw you quote stories around j.p. morgan. there's a settlement going on, we don't know, related to the washington mutual situation. the fdic may have to bear the cost or j.p. morgan would like them to bear the cost of some of the settlement. you commented it could be as much as $3.5 billion. does that make sense to you? >> it doesn't make sense costs would be shifted from j.p. morgan to fdic. frankly i would be surprised if fdic allowed that to occur. again, it seems in the driver's seat with discussions from the department of justice. i would be surprised if j.p. morgan was able to shift losses to fdic. given the fact both in 2008 when

acquired washington mutual said this would come at no cost to the fdic. >> now i'm going back to crisis thinking of freddy and fanny. j.p. morgan has the settlement hanging over its head. there's a debate about its role in the crisis. they say they help the country taking over washington mutual. there's other people that just said you know what, j.p. morgan wanted to buy those things. they did it own their own and at the price they wanted to. does j.p. morgan deserve credit for what they did during the crisis? should this enter the conversation in terms of all settlement talks? >> it shouldn't enter the conversation especially since we found a lot of mortgage origination problems they're in negotiations over now were neither washington mutual or

bear. both were problems but turns out their own book had flaws if we're to believe stories we have seen. that's important to remember. on top of that, while j.p. morgan really wasn't an enormous player in the sub prime heading into the crisis, the strategy changed in 2006. they became much more involved in that market. >> hey josh, it's jim. >> how are you? good morning. >> i want to go back to warner and the bill. you and i talked a little about this. if you wind down fanny and freddy, where does mortgage securitization go? >> they're trying to put in place a process federal mortgage insurance company to functionally create a replace management for freddy and fanny. the problem with that, it's going to end up with this system ultimately where the two big

failed banks which both parties and both sides of strong said we need to reduce become more central to the housing finance system. i'm not sure that's the best way to approach it. it's important to remember fannie and freddie's failure, they were intended to provide quitty when the primary market failed. the problem i have, they used portfolios not for quitty is intended but as a hedge fund. they were inadequately capitalized. those issues were the primary drivers of their failure. it's funny for political reasons we're leaving prague anitism at the door. >> do you see having a 30 to 40 year -- >> they never used portfolios

prior to 1995 and the capital put in place in the 1992 gfc reform act a, it seems clear there's a path way to fixing them making sure their only secondary market players never crossing the line to primary mortgages which was the problem. that drove the ultimate failure. >> josh, you still have to deal with the guarantee. is it delivered through private companies or do we do what was suggested to create a new agent say to deliver the guarantee to build up taxpayers against future losses? >> we've never seen the government do a terrific job of pricing risks especially when the push for social subsidies falls into the mix. credit risk pricing is best done in the market or with information from the market reflected in guarantee fees. i don't really have a problem

with fannie or freddie. i'm concerned we're going to form a government issue who's pricing the risk. when we come back, we're taking a closer look at the lives of the super rich. private jet, penthouse apartments and lamborghinis. up next, robert frank joins us with the best selling lamborghini dealer, a 26-year-old who never went to college. stick around. fshz (vo) you are a business pro. maestro of project management. to be this awesome. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow.

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at a ford dealer with a little q and a for fiona. tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee, affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. get up to $140 in mail-in rebates when you buy four select tires with the ford service credit card. where'd you get that sweater vest? your ford dealer.

. america's best selling lamborghini dealer is 26 years old. robert spent a day at the dealership to see what people spend on these cars. a billion at 26 is still a lot. >> he started selling when he was 17 years old. >> what are they about $300,000? >> the one outside is $400,000. we have the ce o of prestige of auto in miami. he's the largest dealer of audi the last three years.

thanks for joining us. you have your finger on the high end consumer. are they worried about what's happening in washington? are you seeing a decline in confidence with your consumer right now? >> that's a great question. that's definitely not going to sell us a ton more lamborghinis. between our miami segments we have our local buyers and four nationals with what happens on the market and global markets, it definitely affects us but not when this style sale come from all over the world. >> how important is the overseas money in your business right now? >> the lamborghini segment across america has been phenomenal gathering hype. in miami we have so many people that come to miami looking to develop a lifestyle they can't

develop in their kun tris. they come to buy a house, boat, car, to live a lifestyle. that's primarily what we're focussing on. we've built our sales force to be a united nation of sales guys to help anybody that comes to mime i'm to live that lifestyle. >> you haven't sold a car to someone who's primary language was you english in years. do you see this slowing down for the wealthy or are they still buying the lamborghinis? >> everybody is coming to move here. it's not financing deals. we're witnessing a brand new weather. young maerk, female buyers of lamborghinis. everybody that's coming here realizes miami has had the fastest rebounds. >> it's cash. how odd. >> what are you suggesting? >> no financing. do you care where the money

comes from? >> of course we do. that's part of the cool thing about our business. i love being on the opposite side of the desks and the secrets to their success and how they are on the opposite side of the table. >> how many cars would pit take to reach the billion sells. you sold your first at 17 years old. who did you sell it? >> missy elliott. my father looked at me and didn't realize or think somebody would buy a car. missy and i met at a gas station. she came the the next day to the dealer the next day and bought her car. i used the frank say gnat tra line on her. >> you weren't working at the gas station i don't think.

>> no. i was at the right place at the right time. i got in a small argument with my father about selling cars. she just came in at the dealership. i walked over young, fixed the car and invited her to the dealership. >> is there a lamborghini made with a clutch anymore? >> no unfortunately not. they're all paddle shift. you tell me the difference and if you want to go that way anymore. >> what kind of commission do you get on a $200,000 lamborghini? 10% across the board? >> i don't think there's a $200,000 lamborghini. >> he has preowned ones. >> of course. >> listen, the preowned market starts from $100,000. with the certified preowned package it's easy to maintain and preown. sales are up 25% this year. lamborghini has done a job with

leasing programs. what's your commission on a car? >> it depends per vehicle. we take care of our guys. in our market it's always supply and demand. >> the demand to this. this car is $400,000. the waiting list is 12 months. is it still 12 months? >> in certain markets it is. for ours, it is more. we have such a demand for hit because of what lamborghini created. we're blessed to be a part of lamborghini. i'm a second generation dealer. i witnessed this all the way. >> do you have a service department at your dealership? >> we actually do with six full time teches and shops in the country for lamborghini. >> during the show, you'll see bret change the oil. that's how he started, changing oil in the shop. lamborghini up 50% last year.

this year, do you think they'll be equally strong? >> they're going to be amazing. if you see what lamborghini is coming out with and the group behind them, they have the opportunity to enter the market with great grace. think about the race team they just came out with to open the racing segment and bring the racing enthusists into the world which we've never had before. >> when you go to a club and expect your lamborghini to be parked in front of the club. is there already a traffic jam in miami of lamborghinis. you can't expect the best spot in the club? >> he's got the gold lamborghini. >> is it really 14 carat gold? >> it's gold plated. >> you drive that to work everyday? >> it's one of the things i have to show the public these are

daily driven. >> are you kidding me? i thought you were kidding. >> no kidding. he drives that to work everyday. >> there's a family tragedy behind how he took over the business. it's amazing drama about his past and the family. you're going to see that tonight. >> he does walk the velvet rope. there's no wait right? he doesn't have to bring girls or anything. >> we drove with him in that car through miami. you wouldn't believe the number of people that stop, scream wave. it's better than being with a celebrity. he can fix it. that's the great thing. >> i want to know the commission. >> i think he said like $59,000. is there active night life in miami? >> i hear there is. i wonder if he's out every night? >> that's where the business is

too. >> got to go where the business is. coming up, claimer celebrating with the 2000 episode of mad money. he's back this morning ready to talk stocks on the new york stock exchange. stock exchange. it's beenw, stock exchange. years since the beginning of the financial crisis. >> tomorrow, it's been five years since the beginning of the financial crisis. and the rules to prevent the next crisis still haven't been completed. we'll talk to former secretary hank paulson live from chicago with special guest warren buffett. you can't afford to miss "squawk box" tomorrow starting at 6:00 a.m. eastern.

welcome back to "squawk box." the futures this morning are indicated down by about 76 points again. we've seen this fluctuate back and forth, a modest improvement. mario draghi speaking at a news conference after the bank left its key interest rates unchanged. draghi says monetary policy will be accommodated for as long as needed and key interest rates should remain at present or lower levels for an extended

period of time. the euro has been moving higher as draghi is speaking. let's get down to the new york stock exchange. jim, how was the party last night? i heard andrew went. >> yeah, it was great to see andrew. it was a very nice party. management did a terrific job. my executive producer was fantastic, mark hoffman, our fearless leader gave a really nice talk. i was just thrilled. it was a really nice, touching night. >> congratulations again. 2,000 episodes, that is no small feat. we've been watching the futures this morning. for a while we were 75 points below fair value. saw that down by just 40 points below and now it's back down again. what's happening this morning? >> i was listening to your show ande and erskine bowles talk, i was chilled. i'm wondering if both sides don't think this is nearly as dangerous as bowles said. i don't think the president gets

the sense that it's that dangerous and there are a lot of people in the house that want a default. maybe that's why bernanke said i'll be able to buy all the bonds i want to. >> we've certainly gotten more complacent. it's gone all the way back to 2008, shocks in the market. is this the situation with government shutdowns? what happens if we do default on the debt? is there an instantaneous -- >> shut down perfectly legal. maybe we're all looking at the debt ceiling wrong. maybe it's not a constitutional issue. we're all so used to treasuries being backed by the full faith and credit. it's very difference from an s&p default. suddenly it's social security. and the president better say, listen, social security doesn't get paid if we don't do this. that's how you get the job done.

>> that wasn't a great jobs number either. >> we don't want to see interest rates go down because the jobs are bad, joe. this is kind of a not-great setup. the president has to say the reason i'm not negotiating, republicans, we're not sending out social security checks so go enjoy yourself. if he says he's not negotiating, that's his tactic. otherwise he has to go to the sport. i think it's illegal. he has said over and over again it's not illegal. what is it then? it's a constitution bedrock. it's got to be social security. that must be the card he's going to play. >> okay, thank you. jim, everything i ever said about the "new york times," i take back, andrew. >> what -- >> the dining section. all these different ways of making tacos. >> i love tacos. >> they have veggie tacos. everything i ever said, there is a reason for this paper.

in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.

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we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon. well commonwealcome back to host. jaime dimon, lloyd blankfein, they're going to see the president today. what should they tell him? >> i think the president gets

him and you think he's basically asking for their support on the hill. i think the congress has to understand that a default is no place they can go. it will bring the banking system down, freeze the markets, undermine the currency. it's a disaster. >> thank you so much. >> that does it for us today. make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ roxanne, put on the red light, roxanne ♪ >> good wednesday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber. futures are down about 75 points. by the way are later today on cnbc, john harwood will sit down for an exclusive with the president, 4:00 p.m. eastern time.