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. 10-year yield down below 2.62.

it was for a moment. ital ital italy's coalition looks like it will survive and the ecb standing pat with interest rates. adp, because of the shutdown, the the only number we're expected to get this week comes in under expectations. >> and george soros making a claim that the euro crisis is over but the european union may not survive. >> and what is microsoft without bill gates? some investors are pushing for gates to be removed from the board. >> and the three major ipos, brands that you know, we'll bring you the first trades as soon as they open. >> first up, futures moving lower on day two of the government shutdown, this on which data from adp shows private sector added 166,000

jobs last month, below expectations. the numbers taking on more significance as friday's release of the jobs numbers has been hindered by the showdown. the president hosts 19 ceos at the without today, center stage is jamie dimon and, jim, here's how the papers are playing the shutdown. here's "the journal," "capitol digs in for the long haul." here's "the washington post," "bracing for a long battle." market won't like that as much as it will a short shutdown. >> a lot of what we're hearing now is what happens when you can't find key data? when you buy a house, you need to have irs records. if you can't get the irs records, you can't get a house.

housing has been a main stay of the economy. is everything remax saying about the future knocked off because of these numbers? i'm hearing there's people at the labor department. everyone's trying to make a point. the point is this shutdown must hurt you. it almost seems like they want it to hurt key industries because they're so removed from the business cycle down there. >> for those who follow the minutia and washington and john harwood is our best at that following the big picture and the small picture, there does seem to be this belief they're starting to get closer linking everything together. the cr, continuing resolution, for a long time and the debt ceiling and the sequester. there seems to be some glimmer of hope that maybe it all gets rolled in and you get some negotiation and up surprise everybody with a bigger than expected deal.

>> that would be something. i think we're back in one of those moments where you'll see bursts of the futures and that's someone who thinks harwood's coming on, i better go. i'm not kidding. the centrality of it. he's coming on, maybe he's got something. we need to see because of these adp numbers, we are seeing sequester, i think, underneath all these numbers. i think we're seeing that the government continues to tighten the belt. i just don't want to see europe go back because of something we do. i don't want to see china go back. maybe we're going to be an impediment to world growth again. it's fragile out there. >> you mentioned the irs and housing. s.e.c. is operating on the so-called carryover funds. but that should only last a few weeks. >> duncan said last night on our 270,000th show -- >> congratulations. i still remember 260,000. >> incredible how you go back.

>> you were long t-rex futures. >> no, i was short the stegsauerus. >> i was thinking about what duncan said. duncan said we'll be fine. i don't want the qualifiers here. no one knows. ers -- erskine bowles was talking does everyone know how catastrophic it was, the debt ceiling? social security. how do you write social security checks if there's no debt ceiling? >> that will wake people up. >> that's a big wake-up call. >> we're not there yet. looking at all of the different news services that tracks these things. maybe they're having a

conversation, probably not, maybe they will. john mccain may swoop in or maybe he won't or somebody else will. that's the news cycle we're dealing with. >> what happens if boehner says let's just have a vote. >> on a clean cr? >> yeah. then it's over. but boehner has to stand up to his party. but they'll say, new york it's not the republicans. it's not. it's part of the republicans. >> there have been 12 republican members of the house calling for a clean cr vote. the question in the "post," is that the beginning of a trend? how many do you need to get it to a vote in that's the tough question. is it beginning to thaw? >> meanwhile we're going to be dealing with the debt ceiling. >> you're thinking like a business person. >> well, that's the only way to think. >> well, not if you're down there. i think you're thinking, okay, listen, this is the second american revolution, there are people who feel like this, there

was a great article today about missouri and health care and about the tea party taking over the missouri government saying, listen, we got to make a stand here and show people how horrendous the big government is. when reagan talked about getting the government off the backs of the people, he never talked about shutting down the government. i loved reagan. but reagan was radically left. >> compared to these guys. >> compared to these guys. >> political turmoil here. in italy, turmoil averted there after former prime minister silvio berlusconi decided to back letta. and his point is angela merckel

won -- >> they're thinking about world war ii and they're thinking if we have currency, maybe germany doesn't rearm. these guys, this is about 1936. there was a question whether the british thought whether the french would really fight the germans and talks behind the scene between the nazis and british. they never want to go to that path again. they don't want to have negotiations about whether there should be armament. this is the security against armament.

there's a million dollar additional buyback. that he's asking for. >> it's a very stable company versus a shaky balance sheet of an unstable government. >> you seem to have done a better job of figuring things out over the last few days than we have. >> what did they have a verisimo party that buckled? what is that? >> pdl. >> it's not lipton tea, i'll tell you that much.

>> let's move on to microsoft, another company we're watching very closely. apparently three of the largest shareholders for microsoft. this a reuters story. i'll want to share that for you with that caveat. they're pushing, reuters says, for microsoft chairman bill gates to relinquish his position. reuters reporting the three hold. i think his presence blocks the adoption of new strategies, will limit the power of a new chief executive. interesting story, i have not been able to confirm it at this point. i have obviously talked many times here about opposition from some of the large shareholders. well beyond value act but it was value act's ability to recognize dissension without the ranks of that shareholder base that it capitalized on to get itself a board seat next year about ballmer and the fact that he wasn't grooming anybody for suggestion session. okay, they dealt with that. now most recently huge opposition to the nokia deal,

wondering what in the world they were thinking. >> can i just step back for a second? bill gates is a little bit like warren buffett. people think he invented this great system. now maybe he gave it to ballmer and ballmer didn't develop windows. these are people who own a little bit of stock. >> and they're anonymous. the newspaper is not quoting them. >> this is bill gates. what happened in this country that he created this wonderful company and they're going to throw him out. why do they want to throw everybody out? >> gates, 80 million shares a year. by 2018 he'll have no financial stake in the company. how do you square that with someone who is chairman of the company in. >> by the way, that was not lost on jeff of value act when they began that campaign in april, that quiet campaign.

people still assumed he still held the company. that was not the case in parts because of the foundation. >> this nokia thing struck a cord. >> they keep selling and selling. >> this is a great american can be -- i know we may think apple surpassed samsung. maybe nokia is a side step. this is a major american company and they're saying, listen, we have to throw the bum out. bill gates, he created the company. i remember when that deal came public at goldman and i was trying to get a few shares. why? because they revolutionized things. they got left behind yet i'm on their system. they got left behind yet the europeans are getting a little traction with their phone. they got left behind yet every pc has them except for mac. how bad are they really? >> we'll talk more about it and more about the mulally story.

>> it seems hard to imagine that would happen. does that really feel like the right fit for sort of putting the company on a different trajectory for a longer term? mulally's a lot older than ballmer, isn't he? >> he's a caretaker if he comes in. why would you want that? >> i don't want any of this. i think the company needs to get better. companies with great balance sheets can get better. alan mulally is a balance sheet expert first. >> he's incredible. >> he did a lot to save boeing. >> if you didn't see "mad money"'s 2,000th episode, you missed a big treat, a big show. duncan niederaur outside the big board with a surprise for cramer. >> this country you can come back from anything. i slept back here, i had a .22

caliber pistol, a bottle of jack daniels. >> one out of three ain't bad. look at you today. it's your 2,000th show. >> part of the legend for cramer, he lived out of his 1977 ford fairmont briefly after moving to -- >> that thing was a chick magnet. >> was that the actual or the replica? >> that wasn't the actual, that was scratched, not unlike what they do with goldfinger's car. remember that? >> i do. >> i did live in the car. the police are always willing to let you stay in the truck stop, you're not allowed to sleep at venice beach, hancock park, the pioneer chicken lot, all the

places that are well lit, the police do not let you live there. >> you must have had a heck of a dating life then. >> i lived for a shower. i had one cord roy jacket my mom had bought me, i had a pair of jeans. my editor would say you have to get that outfit pressed. i said what am i going to wear? i was doing fire stories, covering homicide. when you're living in your car, you're always first on the scene. >> yes, you are. >> but what a show you had last night. your car totally behind you. >> thank you. that was really sweet. and the president of cnbc, that was great. it was a choke-up moment. i'm screaming at regina gillis, where we going? it's not lit, it's not on the stage. that was my exact model, though i had an automatic and that was

a stick. that engine had souped up power, way more than mine did. >> when we come back, margaret kelly, ceo of remax. implied open down 64. "squawk on the street" back in a minute. ♪ the world's a nicer place in my beautiful balloon ♪ 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.

big day big day for ipos here on the big board. we have three companies going public today, the empire state trust, the owner of the empire state building, the burlingston stores, remax. >> let me say i think the container store is very similar to costco. >> really? >> yes. >> in sort of a cult sense. >> the ethos. yes, in a cult sense, thank you. it's going to be very, very big. i think pot belly is going to be used. they've already bumped the range many times. believe it or not, burlington coat, it's a growth stock. it wasn't for a while. they've been adding a lot of stores. empire a real estate trust and remax.

>> some investment -- 152 companies have gone public this year, it's up 50 plus percent from this time last year and we're not done clearly. >> no. the ipo may face delays. as duncan pointed out last night, the number of jobs created by this is just amazing. is it enough to offset what the government is doing? >> probably not. but every time we do bring one of the young growth companies on, they're using ipos to add jobs, to hire. that's not every time. sometimes we have ipos that are mostly selling shareholders. you have to watch out for that. not watch out, be aware. >> it's an untold story. >> we have twitter coming soon. alibaba early next year and hilton this year.

>> and chrysler? the >> these are amazing times. these are making money for people. >> is the president into hot deals? a little stock? >> this twitter deal i reiterate is a $20 billion deal. >> $20 billion market cap, in other words, will ensue as a result of the ipo. somebody is going to say somebody's telling you to buy twitter. >> no, the opposite. >> you haven't seen the s-1. why don't you wait? >> because i know companies would like to buy that to move into social. >> they're willing to pay a big premium that would be 20 bills. >> i got you, i got you. >> steve miller says do you take the money and run here? let's get cramer's "mad dash" after a short bre bre

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♪ i ♪ i feel like busting loose >> usually i know those songs, not that one. >> my research director, nicole, is here. she's done a fabulous job on our show and i should have mentioned her last night. nicole, thank you very much. working hard. >> she seems focused on other

things. >> monsanto has a number that i feel wasn't that bad. this is a love stock, it is red hot. it will come back. as much as people push back on genetic modified seed, this is the future. do not think of it as just an ag play. it's not a fertilizer company, it's much bigger than that. >> do i give it a higher multiple than i would? >> exactly. there's where i'm going. monsanto is a stock that people look at and they come back and say that number won't so bad and they have a bright future. it has been one of the great ag plays. mosaic has not been that good, deere has not been that good. i like biotech and monsanto is a biotech company for seeds. >> fabulous. we're going to keep a look on

shares of mon, up about 8% this year. we have a lot more to keep an eye on, including those three ipos. three companies making their wall street debuts. stick around for more "squawk on the street" and the opening bell after this. follow,

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you're watching cnbc "squawk on the street," live from the financial capital of the world. the opening bell in about ame t minute. a lot going on in october. the last 20 years, dow opening up, runs counter to the image october has. >> as long as i've been in the business, we've always feared october and it turns out september is when you need to fear. you know what, when we're up a lot going into october, that has been a problem. i remember '87 very well. we kept going up and up, japanese came in and bought the opening every day. next thing you know we're, wow, we're 29 multiple.

watch the price-to-earnings multiple here. >> a look at the s&p on the top of your screen. the empire state building trust celebrating its ipo today. other ipos today, remax. we'll talk with them later in the show and burlington store, the parent of burlington coat factory. and speaking of nasdaq, here's what "usa today" fronts the fact that the nasdaq has officially tripled from the 2009 lows and they mentioned all the things we talk about, biotech, technology. nasdaq is up 1% for the week. that's going for five straight weeks. it did six straight at the beginning of the year but it

is -- >> we discovered nasdaq is riddled at companies that are laughing at washington so to speak. they don't play any role. you got celldex, facebook. these are companies that you don't really think that wait a second, debt ceiling, i have to worry about celgene. just the opposite. there is propensity in the nasdaq to look at those companies and realize these are big, bold companies that have nothing to do with washington funding. >> speaking of the nasdaq, tesla does to downgrade, say they're bullish long term but any hiccup in execution could be a problem and they mention rising interest. >> when you look at what's been done, it's hiccupless.

>> when you look at the chart and you look at the interest and the multiple and you've had a buy on it, you're justified in saying, all right, i'm going to at least try and stick with some semblance of reality and worry about the multiple and growth rate and downgrade it. >> is it a bubble with tesla? but whole foods was at 5 in april -- in march of 2009. it went to 8 in april of 2009 and where is it, 58? i mean, strange things have happened to companies that have cult followings. it turns out that whole foods is not a cult, it's where we shop. tesla, maybe he can mass produce. the model t started april 1 of around the turn of the correent. there are people who believe in tesla and they're not going to

be persuaded by a downgrade. >> i'm sure that's the case. >> it seems valuable. >> it sort of does bring us to what happened in auto sales yesterday. we'll keep our eye on ford and gm. september down 24%. short calendar. people talked about maybe it is a little bit of the shutdown. >> well, microsoft's mulally delivered good numbers for ford there. ford had great numbers. >> ford did. >> gm not so great. unexpectedly a bit weaker than had been anticipated. >> a little turn in europe, people are saying german sales hit bottom and they're starting to come back up. big international companies, people only look at domestic, it's a big mistake. >> alcoa is down, deutsche takes it down on a bad aluminum

sentiment. >> always a terrific guy, stuck with producing a commodity that you know what it's like with aluminum? it's almost like people take cans and recycle them and hurt the price of the material. aluminum never stops. it's like every bit of aluminum that's ever been made is still in circulation and he's stuck making a product that we got a lot of. it's true. >> that typically doesn't lead to high margins or high profits. >> stock was at 40 before the great recession. >> seeing a little bit of green here on my screen but for the most part we're talking vast amounts of red. >> are we undoing what the 15 minutes of up -- >> up yesterday. we may be. ge is up. i got gold up a little bit. biotech a couple of things, facebook's up. otherwise financials we haven't really talked about this morning. percentagewise not terrible.

wells fargo, down about 1%. there is rising concern in the journal today in one of their lead stories talks about numbers coming in for many of the big banks, given weak trade be, despite that incredible verizon bond offering, weak overall in fixed income. they're going back to the jeffreys quarter, which was actually june was a bad month there but sort of prestage in what may not be great numbers. >> there's definitely a link. they're down 7 to 10%. they're waking up now and saying negative things? >> when you start talking $10, $11 million with these banks and the fines, it starts to add up. >> some banks are better on fines per share. did you see the piece about how

jam jamie dimon is happy? >> he's walking around the office, smiling. >> he should be like kerry in sh "homeland." >> nobody does a better crazy. >> is he like kerrey at home? >> that would freak his wife judy out if he was like that. would freak anybody out. >> he's calm. by the way, you know, i'm calm. are you calm? >> i'm very calm. yeah. >> you know who's always calm? bob pisani, who is awfully close to post 8. >> we're standing here by empire reality. you can see anthony, whose family controls the largest part of the shares. it's a big ipo, one of three big brand name ipos. it's a big day here, three big ipos going public at the new york stock exchange. the price talk was 13 to 15 for empire. it priced at 13.

that's a tad of a disappointment here. this is a well-known property. actually, it's 18 properties but empire state building the most famous of them. the malkin family had small disputes about going public. and there's issues with reits in johnson because higher interest rates generally hurt interest rate sensitive groups like reits. to the extent that higher rental prices might affect future property prices, that also could be a little bit of app issue here, particularly for institutional buyers coming in. so keep an eye on that. right now it's looking around 13, which is right around where it priced at. burlington stores, though, burlington coat factory, that's right over there. it was at 21 to 24. that price 13.3 million shares at $17. so that's looking like it's going to open on the up side. another well known brand name. and finally remax, which is right around the corner there, i

see indications of 25 to 27 for remax. that priced 10 million shares at $22. while they may be a little late to the real estate recovery game, it's looking pretty good at the open. their rival went public almost about within year ago and they're up about 60% on their initial price. the real estate recovery game has done very well on the ipo for them. this was the big topic overall, the shutdown could last until the debt ceiling deal, two weeks. the hope yesterday would be there was some stopgap continuing resolution measure for one week, two week so everyone could cobble together a deal for the debt ceiling. that may not happen. the talk is right now that if that happens, you can bet fed tapering is probably going to be put off in some degree. the question is how much damage is going to be done and how much is the fed going to have to step

in? right now empire reality is still sitting at $13. we'll see if we can talk to some of the people. remax holdings, 25 to 27 and 21 to 24 on burlington stores. two out of three ipos look loik they'll open well above their initial price. >> thank you, bob pisani. we're only down to one more quarter to hoping this year somehow fulfills the prospects that people felt were very good when the year began. remember the heinz deal or even when the dell ipo was in its early stages? we were all so naive. >> you weren't. i said it was going to be the wave and you slammed me -- you head slapped me. >> i did. you just head slapped me. i walked out of here with my tail between my legs. >> every once in a while i get one right. you got china right and europe right. those were big.

m&a has not been good at all. if it weren't for verizon, you would have had a dreadful third quarter or not a particularly good one. let's take a look and i'll give you a sense of what i hear from the bankers and the lawyers. the lawyers tend to be a little more straight forward. it's not about the pipeline for them. there's a look at the global m&a numbers. that third quarter number helped buy verizon. but we're not seeing it. by the way, to the current moment we're in with no continuing resolution, the government shutdown and the prospect of a debt ceiling fight, you're not going to announce a deal. so here we go, another few weeks at least, let's say, wahere you don't see things, where things don't advance in terms of a potential deal. i can't tell you how many deals i may have spoken to the bankers on and they just don't make it to the finish line. big deals. oh, i got a $20 billion one on the line or a $30 billion. didn't make it.

what was it? well, there was this issue of confidence, which is always in the background. then there are other issues. well, it was social issues, we couldn't figure out how we wanted to structure it, both ceos wanted to run the company. then there's price issues. well, i'm going to issue an enormous amount of stock. i'm going to wait until my stock comes back a bit. then it's seller issues. i'd like to get a real nice premium in my 52-week high. behind it all is still confidence. and that confidence remains low and the risk for doing a deal is still extraordinarily high for ceos who feel their job is on the line in part for something they talk about all the time, which is activism. >> at the board meeting somebody will say are you really contemplating this deal? do you know what's going on in washington? well, no, the answer is i don't. so then someone says why not wait? there's a crisis in washington every three months. it's a fabulous reason to do nothing. >> and you've got a 2% economy

right now and you've still got it's always a concern. so we started this year with a great deal of hope that there would be a boom in merger and acquisition activity. it still has not come. the brokers i talk to are busy but they're not flat out. >> that does jibe whiith the id that too many people are banking in the mortgage business. >> why doesnn't we go to rick santelli, cme in chicago. >> this morning we had adp at 8:00 p.m. eastern. that fundamental really can be shown to have moved the treasury markets in a rather significant way. look at an intra day chart of 10s. we're hovering right around the mid 2.60s levels, virtually

unchanged. what did we have to look forward to? the adp number. can you say it's not as good as the lms number, tomato, tomato, it's kind of synonymous. we continue to bump along right at areas around 2.60 that are significant from the august chart. most of the action from the upside selling pressures were in the bund. the spread is narrowing between our 10-year and bund. they overtook 1.80. a lot of that had to do with mr. draghi. i read the statement. i don't know that there was anything new but they did end their quarters of negative gdp, underscore that. look at the foreign exchange. it had many reactions at 8:15, big reactions at 8:30, whether it's the dollar, the euro, the

pound. the dollar index and euro are at extremes unseen since february. >> thanks so much. out of three ipos here at the big board, which will have the strongest day today? that includes real estate firm remax. the ceo margaret kelly will join us here. the dow just a touch away from triple digits. now we are. we're back in a moment. life's an adventure when you're with her.

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[ female announcer ] come in to find the right credit options for your needs. because when people talk, great things happen. new york stock exchange. the first one to open, burlington stores, the parent of burlington coat factory, priced at 17, opened at 23.05. >> that's impressive. people are saying it's much more of a clothes retailer, not unlike roth stores, a bargain store people like. if you think that retail is not that strong. they do have store growth. i still find this amazing.

>> roth stores on a tear. based on the prospect of free cash flow feeding stores not next year but years out. >> i remember burlington, their growth slowed and taken private to take it public. it does fit the moment of the consumer being a little strapped. >> looks like at least two out of these three ipos are going to open higher. >> i think it's incredible. there's two different markets here. there's the market we're stuck with, that we've been trading. tomorrow pot belly is going to come and i think it's going to be the hottest since noodles. people are going to say, wait a minute, mcdonald's is stuck -- >> you're seeing mcdonald's today, the worst performing component, as pot belly raided the range,ticker will be pbpb.

>> these boutique restaurant chains, people love them. the big dogs, or than wendy's, people are cooling. >> we are still awaiting the opening of empire state reality trust. take a look at some of our favorite movies seen at the empire state building. you have to lead with "king kong," "sleepless in seattle ", "elf" of course. (vo) you are a business pro.

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let's get "six and 60" with jim. >> i'd be very careful with coke. >> and jefferies says don't worry so much about the i.p. >> people are saying container board prices are slipping. i believe in i.p. when they say things are good. don't bet against the ceo. i believe in this man.

>> this is a big heavy machinery company. people are saying it's a contrary call and they like it. >> siena. >> it's been the best communications play there's been. this stock doesn't stop going higher. >> finally pacific gate. >> these are all the inerenards pcs. >> bob, you around? >> 2625. >> 2625. >> that is rmax, by the way. >> these are amazing. carl, we're so gloomy in one of the country but it doesn't extend to post 9. >> the housing recovery was taking shape in the beginning of the year.

questions for markgaret kelly will be what's happening recently? >> a guest on "mad money" said there's a little bit of blip but then come right back. >> what's coming up on "mad money"? you have a busy afternoon. >> i have enbridge. it's about putting people to work, pipe versus train. and then marty mucci, paychex, i want to hear about the confusion his clients are experiencing. he's always been very candid. >> and something very special will happen -- >> we're going to ring the closing bell from the "mad money" set. i like the love. there is another half of my career where that would not have occurred. >> you're going to stick around. >> i feel like i should talk to remax because it's so important. >> when we come back, veteran

microsoft analyst rick sherr lund. what does he think of the reports of tech giant investors wanting to replace bill gates as chairman? and margaret kelly on remax's debut. the dow is done 1 -- down 104 points. back in a minute. 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

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a lot a lot going on here at the exchange today. three ipos, the third one finally opening, esrt, the company that owns the empire reality trust. not the pop the others are getting. >> the real estate trusts working are the ones that are opening a lot of store. federal reality is one i go to, it's a shopping mall company. they're building and building and that's how you grow your distribution. they're not putting up an empire state building any time soon. >> bob pisani, you're close to post 8? >> yes, empire state went public. anthony malkin standing here. you want to say hello to everybody at cnbc?

bottom line here is $13.05. the price talk here, $13.15, $13 to $15. priced at the low end of the range. a lot of people said a tad of a disappointment. there was a lot of dispute between the malkin family and smaller shareholders about maybe this would give the family a little too much control over the company. but there were other issues as well here. reits have suffered in the last quarter because of higher traits that normally affects reits and some might argue that the property market has hit a little high on rents, versus what can you get from relatively risk-free interest on other instruments. a big day overall. burlington stores pricing 13.3 billion shares at 17 but opening at 23.05, remax at 22 and

opening at 26.25. two out three, pretty good day for the ipos. >> you are a busy guy today, bob. >> day two of a government shutdown. more and more people starting to feel the pinch. is there any sign of a compromise? our own john harwood will have an exclusive interview with the president today, 4:00 p.m. eastern time. you do not want to miss that. plus, remax spiking in its trading debut. the ceo will join us right at post 9. and then a few shareholders want bill gates out as chairman. and we'll take you inside the super rich party scene. find out what weddings, birthdays and anniversaries are like for the world's wealthiest individuals. robert frank has been all over that. >> oh, my god, i love robert frank stuff.

it's done with such great savoie fare, great humor. >> our chief washington correspondent is live in d.c. with the latest. good morning, john. >> reporter: yes, they're noticing but they haven't made any progress that we're aware of. you can hear more voices on wall street and the business community warning about the potential damage involved like erskine bowles did earlier today. here's the former white house chief of staff. >> the shutdown is bad, it's painful, it does hurt some people. it costs the taxpayers some real money but it's not catastrophic. we hit this debt ceiling, that's catastrophic. we are the world's reserve currency. it's catastrophic not just for

the u.s. but catastrophic globally. it's really bad. >> reporter: that's the danger, this is getting mixed up with the debt limit. harry reid making a statement, blaming john boehner, saying he single handedly keeping the government shut down. i do think both sides are digging in and it's going to be a matter of building pressure before the real talks get going and that's one of the things i'm going to explore with the president this afternoon, carl. >> thank you very much, john. big afternoon for you. he will have an exclusive interview with the president. as we said earlier this morning, 4:00 p.m. eastern time. we even have a countdown clock to john's interview. >> and why not. there are people who will buy the futures right into that. something could happen. don't want to be short an interview with the president by john harwood. >> we did get adp coming in at

166,000, that data important since we likely will not have a jobs report on friday. our senior economic reporter steve liesman has more on that. good morning to you, steve. >> reporter: good morning, carl. mildly disappointed that markets will have to accept this because there's not going to be another count, at least while the government is shut down. total private employment up 166,000 versus an estimate of 178,000. august revised down by 17,000. goods producing up 19,000, services 147,000, non-farm payroll estimate, if there was going to be an estimate, it would be 181,000. took a look at the segment, it's something to watch, we have had construction job growth. the red arrow down on financial activities is probably fired mortgage brokers that's something the industry has been contracting there and

professional business services up 27,000. and econmentary saying this is disappointing, if not almost inexplicable, in the light of the downward trend in jobless claims. but he also says gains in september were broad based by size of the firm with the fastest growth at the very smallest and the very largest firms. here's what they look like, the differences over a three-month period were averaged out. on average, off by about 30,000 jobs, plus or minus. it's now near the lower range. tomorrow we do get claims and we'll watch closely at 10:00

a.m., ism private sector for another take on what's going on with job growth. >> adp has never had more time in the spotlight than they did this week. steve liesman back at hq. >> talking about the market, jim. we're down 104. s&p sent me a chart of the shutdowns in the 70s ranked by duration. we're talking 22 days, 21 days, 18 days. four times out of six the s&p is lower by 4%, 4.5%, 2%. some of the shorter ones, it's not as noticeable. the longer it goes, the market does get a little more impatient. >> the s&p obviously getting hurt but the nasdaq is just breezing. it's almost like, well, there's two markets, there's nasdaq and maybe we focus on nasdaq. this is not unlike a period

involving 2000. in the year 2000 the s&p was going up, nasdaq going down. you see sometimes these tremendous skisms. we're seeing that now. >> you're saying the nasdaq is a tell or a lagger? >> i'm saying the nasdaq is a market on its own and they just don't seem to care about shutdown, whereas the s&p companies, i think people just worry that they're cyclical. nasdaq is filled with companies that are not cyclicals. nasdaq doesn't have a lot of financials. >> speaking of some of the names on the nasdaq, microsoft, big news out of reuters that three of the company's top investors are lobbying for co-founder bill gates to step down as chairman. here's what he bill gates said earlier this year about microsoft's attempt to innovate in a very limited space. >> with windows 8, microsoft is trying to gain share by what has been dominated by the tablet

space. >> joining us on the cnbc newsline this morning, rick sherlund, always good to talk to you, from nomura securities. do you expect anything to happen imminently regarding gates? >> no, i don't think so. investors are not happy with the job that ballmer has done with the past ten years, nor are they happy with the board oversight over this period. i don't expect there to be enough support for bill's departure. i think bill will stay through the selection of a new ceo and bill might decide to turn over the title to ballmer or possibly someone else on the board. i don't know how much longer

bill will stay engaged if his current capacity. but it won't be because he's forced out and certainly not before a new ceo decision here. >> this is jim. was this nokia deal regarded as being the last straw? because this is a revolution among shareholders for what you and i both know is still a great american company. >> jim, i don't think that shareholders like the devices strategy. devices to a software analyst sounds like low margins and write-offs. it was not popular. investors were very frustrated by it. i think that microsoft faced an awkward situation. nokia was probably going to demand much higher minimum payment from microsoft and i hear that it was probably cheaper to own the company than it was to continue to pay what actually were much higher payments going forward. so they faced a really awkward decision, do you get out of the phone business or go ahead and take this next step? and it wasn't a decision anyone

really relished making but i think that the right answer for microsoft, bill wants a product person. investors would like a good general manager like mulally to come in that's had a history of turning companies around. i actually think it's possible you could get both. and they might be two different people. so i don't think bill gates wants to take no for an answer from paul maritz, who built the server and tool business, who built the cloud business. if you pair a paul maritz with the mulally, you get the best of both environments, i think that's fascinating and would be very, very fascinating for the stock if you could get paul to come over. we'll see how successful bill is in trying to convince him to do that. possibly you don't get one ceo, you get a co-ceo.

>> rick, al mulally hasn't been able to kill this rumor. i know that alan did live in seattle. how come this can't be killed? why is this still in play? >> well, my reading between the lines of the comments yesterday was that we don't have a contract with mulally, they seem to be featuring the coo and it's almost like they're conditioning us to think that, well, it's not the end of the world if he does leave. so i think the speculation will continue. he's not the only one on the list, there are other good candidates there as well. but he's from seattle. investors would like to see him join. microsoft can offer a lot of incentive to get the right people to come over. >> rick, we all remember that day in late august where ballmer did announce that he would be retiring. huge pop, one of the biggest in

history. gave it up and hasn't gotten it back completely. what do you think gets us back above the 35 or so? >> i think the nokia deal threw an awful lot of cold water right on the stack, right after you got some good news. i think the next positive catalyst will be who is the next ceo of the company? and if i'm right, you could manage to get a product person like maritz and turn around, good general manager like mulally. i don't think the fund als are very good here. it's kind of a slippery slope. but more important is the co corp -- i think the right product person can focus on whoo do you do in delivery of not just office on tablets but can you deliver new devices and take unique advantage of this new

platform. if maritz, he also built a server and tools business. he's been kind of a real visionary in the cloud. you could drive it to be a dominant vendor against amazon web services. it would be a very different strategy. it will be we'll offer microsoft technology but we want to change the company and change the strategy and not have the fidelity to windows but open up cross platform, not just on the server side but on the tablet side as well. >> right. rick sherlund, thank you so much for your time. good guidance there on a story that's obviously not going anywhere any time soon. >> david faber is back on set, clips on his mic. you know what that means, david. >> we have interesting news here, a develop fight between third point and sotheby's. sotheby's the well-known auction house that has had a couple of

activist investors in its shares, namely third point previously and macado as well. third point indicates it has become the largest single shareholder in sotheby as at 9.3%, a significant increase in its holding. third point, in a letter that was isn't october 2nd, to the chairman and president and ceo of the company indicates it's concerned with sotheby leadership and concerned with its strategic direction, its board governance. there is a demoralizing recognition among ployies that sotheby's is not at the cutting edge, demonstrated by the company's inability to develop a coherent plan for an internet sales strategy, much less

implement one. did have an opportunity to speak to mr. lobe, who runs the large fund. >> you did? >> yes, i did. his contention is this is an underimaginaged company that should have a new ceo, new management team that should be able to dominate the auctions visit, that should to that point earlier i just read in the letter do a lot more in its technology that should be moving into adjacent businesses, for which the brand -- so no shortage of ideas from that he believes in an undermanaged company. he did approach john angelo to have a discussion with him, but apparently he was sent to

investor relations. interesting tack. >> here they send it to i.r.? >> he did have a meeting with management as well. now, this this case loeb is asking for -- he wants right away to be potentially put on the board of directors. i'm willing to join the board immediately, help recruit several enough directors, who share a passion, and he says it's time for you to step down from your position. you can see shares of sotheby's not doing much. >> that's wrong. it should be higher. >> this was anticipated, jim. the road to a proxy fight will take a little while. there's no ability to act by written consent. you're going to have to get -- file next year and then you've got an annual meeting typically when those take place. >> how's stan done in a deal like this? >> he's done well. i don't believe he's ever lost a proxy fight. a big fight would seem to be

brewing for this -- >> principal of art would be good. they know the art market better than anyone. why not do some principal. >> that's some fresh meat to chew on. >> in a much more appropriate size. this is a $3 billion, $4 billion company where you can take a 9% stake. >> these guys have always been the kings of it. i always wondered why they weren't using fully their brand. >> the ceo of remax will join us live at post 9. the dow now down 143. the s&p and dow have taken out yesterday's lows. the nasdaq 100 is still holding in. a lot more "squawk on the street" is back in a minute. ntst exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to.

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celebrating their ipo this morning, real estate company remax, priced above the expected range of $ 22, now trading at 26.26. no small take in a field like this. i want to welcome margaret kelly. >> thank pyou. what a thrill. >> probably a little dicey given what's going on this morning. double digit growth in the first half. do you wish you had done this sooner? >> we had looked at this for a couple of years.

the timing just want right. economic recovery, housing recovery, we're ready. >> margaret, congratulations. i was going to talk about the housing market and then i pick up "usa today" and it says a long shutdown could trip up home loans because of irs application problems. is there any truth to this kind of -- this is a tough story. >> i look at it and say we're a 40-year-old company that had been through 17 different shutdowns. the world is going to continue, people are still going to buy and sell homes. this is a little blip in the screen. we'll move on. >> are mortgage rates coming back down since the federal reserve said they are? >> they are. >> will they go even lower? >> you know what, they could go lower but i think most important is that we're at 60-year lows. i bought my first house at 14.5% and i was thrilled to get 14.5%. so i think anybody over 35 years of age are looking at single digits going, man, this is still cheap money. >> your model is you get paid a

fee by brokers to affiliate with them. they have a much larger payout than they would with some of your competitors. >> correct. >> how many brokers do you think can you add to your brand overtime? >> remax has 6,300 offices in nearly 100 countries now. out of that we only have 20 that are company owned. the rest are a franchise. so we are truly a franchise model. we hit a high at one point of 120 agents when we were only in 63 countries. we'll go past 120 countries and more. >> you don't have a lot of capital expenditures. your business generates a decent amount of free cash flow. so what do you do with it? >> our goal is to do a couple of things. number one is to buy back some of our independently owned regions. we're a franchiseor who happens to be in the el estate business.

we're beginning to pay dividends and we would like to grow those up to where traditional franchiseors pay out. >> so that's the model? >> we've seen some prices that show the gains what they were in the beginning of the year. is that true in the markets where you are? >> the heat we've had in the market right now is mainly because of the imbalance between supply and demand. i'm good with things starting to couple down a little bit. we don't want the rocket ship we had years ago. so balance now, we're growing into stabilizing the u.s. >> canada has been rock solid for yoors. 450,000 existing homes sold every single year. they're forecasting another 3.5%

growth next year. so real solid. >> how about mexico? today lots of articles that are going to be raised that will i chill that housing market. true? >> whenever you get that kind of pr going tloon, people -- >> i think, jim, you got to do "mad money" from a hot air balloon. >> that is a deal! >> just landed. what do i do? what do i do? it was "wizard of oz." >> margaret, congratulations. thank you for coming by. >> thank you so much. we are excited. i wish we could have gone yesterday and celebrated with your 2,000th show. >> you guys are great. i've used you multiple times. >> thank you, thank you. >> jim, thanks for sticking around. >> absolutely. i had to stick around for real

estate. >> in the meantime, high gas prices got you down? one energy is trying to change the way you fill your tank by using things like grass and trash to make affordable fuel. we're going to show you how they do it after a break. and then don't forget, john harwood with the president, an exclusive at ♪ ♪

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welcome back to "squawk on the street." the price is right and could go even higher on priceline. the stock is currently a buy rated stock with a $1,200 price target. they are setting another record

high, david, in trading today. >> thanks very much, dominic. >> the idea of using natural gas as a fuel hasn't quite caught on yet but one company in new jersey might change all that. jackie deangelis is live in new jersey with that story. jackie. >> reporter: hey, good morning, david. we are here at the primus green energy demo facility where they are turning natural gas into fuel. they're holding a special meeting here today where they're talking to analysts, the media and also most importantly potential investors about their technology and about this process. as you mentioned, we are literally taking natural gas here, turning it into fuel for cars and eventually jets as well. it's a chemical process that's been done before, it's been explored by companies like exxon as well, but this company, primus, saying that they can do it more efficiently and scale it up faster and better than anybody else. let me break this down and give you some examples. this demo facility can produce

about 100,000 gallons of gas a year. in the scheme of things, that's not that much but they are breaking ground on a new commercial facility next year, hoping to see a yield of 25 to 28 million gallons. it would be up and running in about two years. they say their process is so efficient, it leaves a lot of wiggle room for margins. >> our current estimates of our operating costs are $1.65 per gallon. >> that's your cost? >> that's our cost to produce. >> now, there's two caveats here the first is going to be investment and how to raise capital for these projects. we're going to talk more about that later throughout the day. but the second is natural gas prices. this morning we got an industry report on demand and supply forecasts for this winter. demand expected to hold steady, tick up maybe a little bit and supply is also supposed to be

abundant. so we're not expecting big price increases for natural gas this winter. the ceo for the company told us for their economic model not to be viable anymore, they'd have to see nat gas go to double digits. that's not something the history is forecasting any time soon. >> we are keeping a close eye on the market today. the dow down 130. we pointed out the dow and s&p have taken out yesterday's lows of the session. there does seem to be some relative strength in the nasdaq 100, holding in above yesterday's lows but of course a long session still ahead. we have breaking news on crude oil now. sharon epperson at the nynex. >> we're seeing a big jump in the level of crude supplies.

we're seeing a an increase of 5 million barrels, much higher than the american petroleum institute reported last night. we're also seeing a big increase in gasoline supplies. we've been telling threw's plenty of supply and not enough demand. once again, we're seeing an increase of 3.5 million barrels in the past week. that was different in terms of direction from what the average analysts were expected. they were looking for a decline in gasoline surprise for the week. we're also looking for a decline here in distillate fuel supplies down 1.7 million barrels. but gasoline definitely the commodity to watch today after our report and we're looking for a selloff in futures. >> the department of energy says they can operate until october 11th in terms of putting out data? >> yes. they can get another report next

week but it's uncertain will what will happen after that. >> thanks. straight ahead, three top microsoft shareholders reportedly want bill gates at chairman. and that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help

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you are looking at a live shot of the new york attorney general's office. expected to announce some new actions against some big banks this morning. kayla tausche has more on that. >> reporter: in may, eric schneederman's office said they intended to take action against banks. only b of a reached a deal. streamlining the number of people at the bank dealing with affected borrowers and government agencies who have complained of not being able to reach the right people when trying to get these matters solved. they must provide clear list of

documents affected to consumers and the bank agreed to stop shipping the loans to servicers or foreclosing on borrowers when they are in the process of trying to modify the terms. people familiar with the matter say talks broke down with the attorney general's office last week. wells fargo called the approach disappointing while bank of america said it was pleased to resolve the matter without litigation. we should get more once the presser gets under way. it's certainly a new development for something that started about five months ago. >> the meantime, the journal has a story about jamie dimon, unphased by activities. >> it's going to be a mega settlement, $4 billion in relief for homeowners and consumers and upwards in $7 billion in a government find.

i'm told it's the government shutdown putting a delay on this. even though you have the essential personnel there, the support staff have to be drafting the settlement that are furloughed right now. it's going to take them a couple of days once they're back on the grid to actually put this settlement together. it could be last this week or early next week. >> kayla tausche, thank you. >> could there be trouble on the horizon for bill gates? three shareholders reportedly want him to step down as chairman. i haven't been able to find out who the shareholders are. it's an interesting concept. >> reporter: it is. shareholders with just over 4% of shares combined, that's not that much. steve ballmer has about 4% of the shares himself. if gates sells much more of his

stake, ballmer might become the single largest shareholder in the company. 13 years ago when he was ceo, gates owned 14% of the company, according to microsoft proxy filings. in a way, this is a sign of the times in tech. look at carl icahn pressuring apple to security more money in buybacks after he tried to get control of dell from michael dell. oracle upset about larry ellison's pay pack, alibaba looking to contain voting control through a special class of shares. i talked to someone with knowledge of microsoft's board's thinking saying he's spending a lot more time focused on the company has it -- alan mulally has been a top name on the list.

it's clear now they're not alone in rattling change at microsoft, even if it means pushing to replace gates, almost unthinkable, given that there's probably nobody more associated with his company in the world than bill gates. guys? >> a lot to watch on that front, too, jon fortt over in san jose. >> blake irving is the ceo of godaddy. he joining us here at post 9. are you here to talk about your fifth acquisition in the last 15 months or vice versa? >> no, we are talking about five acquisitions in 15 months. we're talking no about rona. we married that with something called outright, which allow as small business to basically get

out of the shoe box and get their receipts, their expenses into a place along with their revenues through invoices that can really even generate your information for your tax return at the end of the year. so it's a way to help small businesses do business, you know, much more easily. >> you are number one in domain, right? >> that's right. >> number one in web hosting. >> that's correct. >> you clearly have the confidence to go out and buy some companies. we had the discussion earlier about why other ceos don't have that confidence. maybe it's because of some of the madness in washington. how do you get your head around that is this. >> we have a vision and a strategy that's very consistent. we know that the acquisitions we're making are great acquisitions that will fuel that strategy, whether it's being first in dough mains and we made an acquisition, a company called aft

afternic. we acquired a company called locu, that is amaze ing. we believe if our strategy is right and we believe it is, if we fuel them with great talent and great locations, we can't go on. there's not just my own confidence but confidence throughout the company and board. >> what's the strategy then? many may know your company from super bowl ads and not know what you do. >> they certainly do. our advertising of the past certainly got a lot attention but it didn't tell how we were and what we do and we have moved our advertising in a direction more about that. we introduced ads featuring jean-claude van damme and small business people, like florist. we want to help small business kick ass.

it's a little irrelevant. it's sifting to make it easy for people to confidently grow and successfully run their venture, whatever it happens to be. we do domains, hosting, help companies acquire customers, retain customers and help them do business easily. >> i'm trying to remember the last time a ceo said that to us. >> once you become public, you can't say "ass" anymore on air. >> what happens to danica? >> danica is a wonderful spokesman. she represents the little guys that we work our tails off for. i made sure to use the right word. danica survives in a sport in a is primarily male dominated. sheep does a really good job fighting and scraping every weekend in nascar. she was actually here yesterday

in new york unveiling our cancer car. we have a pink car that we run in nascar. also, we were here with chevrolet and showed the pace car as well. >> let me shift to microsoft for a moment. you were a long time employee there. there's plenty of lists going around and maybe you're on some of them. i'm curious as to what you think. >> it's a big company. the company has been pretty darn successful. the stock hasn't shown it in the last few years. it's it's easy to malign steve because the company hasn't grown. it's easy to say somebody is going to come in and split the business. maybe that works, maybe it doesn't. maybe having a unified answer is better. i personally don't know. they're all going to be hard

pressed to try to figure it out. what they need to do is talk to employees, talk to customers and talk to shareholders. >> some have argued they're stealing apple's playbook, going vertical, taking whole ownership what would have been a partnership previously. do you think that's a fair characterization? >> no, i don't think that's a fair karkt signatures. i think still to this day certainly when you look at the enterprise, that's true. there has definitely been a trend, that's an amalgamation trend between boogle is easier to control from a quality perspective and time to market perspective when it's one company doing an integrative sweep, which apple has done and google has done it as well. they've had a little bit of a difference because they've

bifurcated or more among folks with the amway product. >> come back soon. >> thank you. >> when we come back, we'll take you inside some of the most lavish weddings you've seen, from a playmate wedding. you would not believe the money people are spending to celebrate, coming up next.

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after years of laying low, the millionaires and billionaires of the world are spending against on parties, from destination weddings, to birthdays of rock stars. nothing apparently is off limit. robert frank has been to a few of these and joins us with a look at the super rich world. >> good morning, carl. tonight we're going to take you to two parties, one is the

wedding of a playmate and the second is a party planned by the masters himself, david mann. take a look. >> he needs to kick it up. can we take that roll cage up? >> reporter: make no mistake, david gets paid millions because his client's reputation is on the line. david's getting paid big bucks to turn the world upside down? >> yes. >> his vision? >> this should feel like it is a natural upside down forest. >> a forest hanging from the ceiling. >> guys, wait until you see the finished party. you not only have the forest but you had two other areas. it was 50,000 square feet of party space. the lighting was done by broadway lighting experts. it just tells you how much money and expertise goes into these things. >> that is incredible, robert.

can't wait for more. be sure to catch a brand new episode of "the super lives of the super rich." still ahead, jean-claude

welcome back to "squawk on the street". what day is it? it's wednesday's edition of the santelli exchange. a couple pieces of data out today. we have the weekly mortgage data which continued to show question marks on the housing. we continue to see some of the effects on the 815 number, adp job, emanating from housing or lag of so lack of the refinancing. but one thing is for sure, adjustments made to adp by mo y moody's have continued to make the tracking with friday's bls number that we're probably not going to get this week rather closely correlated.

you go to adp website, you look, those lines are just about on top of each other. so from where i sit especially looking at revisions that we tend to get on the dls side, i think it's a pretty good proxy. i know people are worried about things like energy with the government shutdown. we have the best in the business in terms of sharp especialof sh. but there is private sector like ap iflt. maybe this is a good time to push the private sector to supplement some of the data points. but let's get to it. if you looked at the 8:15 eastern number, expecting 180, we ended up with 166. ou our last like was revised to 159. i just did a quek ickie. 12 months preceding the latest release, the average was 170,000. if you look at the last three months, the september we just

had and august and july, the rate is 162,000. granted it isn't huge, but this goes to the point there were numbers towards the end of last year that were over 200,000. over several month span beginning of the year, there was also some 200,000. the point is that the rate of change, roc, is will also talwa important thing. and it always does come down to jobs, jobs, jobs. many are disenfranchised with the closing. yesterday we talked about you can do it the old fashioned way and bring appropriations to the house that puts the house of representatives and you could get some of this moving along. it doesn't based on current news that the other side of the aisle will allow that type of solution. but in the end it is about jobs and we do have a special guest coming up in about 45 minutes, john claude trichet, and on the french side of jobs, there a new law that looks like it will be passed. it basically deems if the

government thinks an enterprise is economically advisable like a factory or enterprise, big business, you can't close it if you want. deal talk about the structural issues and our jobs market and five year an ver ris of the criscr anniversary of the crisis with trichet. we do have sad news to report. tom clancy died last night, he passed away at a baltimore hospital near his home. clancy wrote the hunt for red october, pay the yolt gatriot gr and present danger. he was 66 years old.

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want to re mind everyone that in a little more than five hours, john harwood will have an exclusive interview with the president, 4:00 p.m.. the president postponed his trip to the philippines because of what's going on in washington. meeting with 19 bank ceos this afternoon. so fertile ground for questioning between john and the president. >> and i think one of the key things investors are focused on is what is the linkage between a continuing resolution and the debt ceiling and is there going to be perhaps any progress on a

larger agreement of some kind that can get government back to running and deal with the debt ceiling. >> one of the big questions this morning on twitter at least was what is the argument for aaa in this country right now given everything that we're juggling both self made problems and problems given to us, what's the good argument for aaa? it's a tough case. >> it is given we're rear advvi it yet again. >> if you're just joining us, here is what you missed. >> welcome to "squawk on the street". >> this shutdown is bad, painful, it does hurt some people. it costs the taxpayers real money. but it's not catastrophic. we hit the debt ceiling, that's catastrophic. >> only jobs report you got, up 166,000 in august. that compares to an estimate of

178,000. >> everyone trying to make a point and the point is, listen, this shutdown must hurt. it almost seems like they want to hurt key industries. >> what the heck is happening in this cup that you got a guy who is obviously did a pretty good job, he created this incredible company. >> i don't know how much longer bill will stay engaged in his current capacity, but it won't be because he's forced out and certainly not because you've got a new ceo. >> i'm not sure if it's ideas that he believes at sotheby's is an undermanaged company with aboard that does not hold a lot of stock. >> we're a 40-year-old company that has beendownsshutdowns.

the world will continue. this is a little blip in the screen. we'll move on. >> good wednesday morning. we're live at post 9. let's get a check on the markets as we apparently brace at least the markets that is for a protracted government shutdown. the dow down 147 earlier in the morning. currently down 107. finally got about four or five components in the group led by the likes of jpmorgan and ge. again taking out yesterday's lows, the nasdaq held in there down just 15 and the s&p at 1684. shares of pandora are rallying this morning. the internet radio service says its active listeners rose 25% year over year to just over $72 million. and stop me if you've heard this before, shares of blackberry are down. the smartphone maker said in a filing it expects a $400 million pretax charge part of cost cutting might bes the company originally predicted charges of only $100 million.

let's get to the road map. day two of the government shutdown in washington, right now it looks like there is no he said in sight. so as the fight in d.c. drags on, will the markets get dragged down, as well? speaking of washington, the top bank ceos in the cup meeting with the president in just about 30 minutes. we'll go live to washington and find out what's agenda. top investors of microsoft want bill gates out of the country. we'll talk to john skully. get his take on gates. and is the euro crisis finally over? george soros says the answer is yes. we take the pulse from the you're peuropean economy from a player. that's the former ece president trichet. in 30 minutes, the president will meet with top bank ceos.

aim mond and i monday jabber has more. >> we're expecting more than a dozen top wall street ceos here in washington.jabber has more. >> we're expecting more than a dozen top wall street ceos here in washington. president expected to make the case in a one on one meeting that he wants them to go out and help sell the idea up on capitol hill of not going through the debt ceiling limit on october 17th. he wants some political push from the big wall street banks to will help particularly with will that votes up on capitol hill. that's where he thinks these wall street guys can be post effective. they will meet with the treasury secretary jack lew, they will meet with hill leaders and we expect to be over around 12:30, 12:45. we're on high alert and see if we can talk to them as they do co come in and out. >> a lot of the ceos who he will

ask for support from argue that they are the target of this administration. could set up an interesting dynamic. >> you're right. there is an astonishing moment going on. just last week, we were standing on pennsylvania avenue chasing jamie dimon on pennsylvania avenue as he was going into the department of justice to negotiate a potentially $11 billion settlement with the department of justice for a host of alleged wrong dogs by jpmorgan. now the president is asking jamie die mon to come here to t white house and ask him for a favor at the same time he's negotiating a potentially historic settlement. an awkward moment, but shows you their interests are aligned here on this particular issue no matter what else is going on, no matter how major that may be. >> strange bedfellows. look forward to that. aim aim on j aim on jabbers in washington.

exclusive interview with president obama at 4:00 today. three of the microsoft's top investors are lobbying for bill gates to step down. here's what will gabill gates h say about being in the leadership role of tech companies. >> tech companies whoever is the leader is always questioned, you know, they say is this the end of them. and there's more times people think that's the case than it really is the case. eventually they're right and they remember, okay, we said these people would have challenges. >> let's bring in john skully, former ceo of apple. always good to get your insight. good morning. >> good morning. >> obviously they're entering a new chapter, right? we know about balmers tenure ending. we know about the challenges they have had getting the stock price up and we know about gates' declining ownership stake in the company year after year. is it time for him to go? >> well, i think it really needs

to depend on who they select as the next ceo. >> if they were to attraction a superstar lie ke alan new amula think he could take responsibility for the new direction. if they choose someone with less experience, there is good reason to want to keep bill still there. he set the noble clause that created microsoft. he still is i think a very powerful influence in terms of the culture of microsoft as we know it today. >> what if it's not mulally, though. both he and bill ford giving comments the plan is to stay the ford. if microsoft can't attract someone who has staged big industrial turnarounds at large companies time and again, does that change things? >> i think there is a big difference if you can get somebody who has been a

successful ceo running a large organization, lou gersner did a wonderful job at ibm, be he had a vast majority of large corporate experience before he took that job. so so getting alan new allmulald be a real coup. he's been a trusted adviser to steve baum foreseveral yelmer f. so the transition would i think p as smooth as you could imagine. soipg we have to wait and see. no one will say that someone will leave or someone will accept the job up those things actually happen. so i don't think we really know the answer to who will be the ceo at this point. >> it can't be a good feeling when you fire up your terminal in the morning, you read a reuters story from three investors who are not named but you have about 5% in total.

is the level of activism more sbeps than we' intense than we're seeing? >> i think microsoft is getting an unfair bad wrap. their stock is up $50,000 this year. ballmer, if you look at what microsoft has done in terms of bringing new products to market, building lines of business in the enterprise side, it's been outstanding. yes, he missed mobility. that's a big miss. but the reality is that the company can i think recover nicely from that miss. there is still in the high tech world, it's like a weather system. it can change on the landscape very rapidly. so don't count microsoft out would be my advice to investors. >> john, some have argued that microsoft has been great at doing partnerships, but in the last 12 months or so, they have tried to start things vertically, let's do softsoftwa

hardware, services. the kinds of things that apple and google do very well. are they trying to apply a game at which others have proven themselves to be better? >> clearly apple, facebook, google, amazon have been stars in the consumerization of high tech. microsoft has not demonstrated any particular skill. they have been a little tone deaf. on the other hand, microsoft has a long history of not getting the products right the first time, but being persistent the second or third time. the surface didn't get a good reception, but the next one that came out, much improved product. so i think we just have to look at a few more quarters before we count microsoft out. for them to become a consumer company, not likely. but for them to be able to play a big role in mobility, cloud,

moving in to those sectors with more success than they have had, i think that's very much a possibility. >> something to watch, something might move the stock, too. john, always good to talk to you. >> thank you, carl. just got some fresh pictures of washington, d.c. where some of these bank ceos are arriving to meet with the president. will this is a live picture there. somewhere in the shot is lloyd blankfe blankfein. the president is meeting with i believe 19 bank ceos in the financial services forum. you see there leaders of deutsche and others. that meeting expected to take place in the next 20 minutes or so. better sha co this is the home page for healthcare.gov, the portal that you're using in some 34 states. you're using in some 34 states.

it does it does moves to the page to create an account. that has still been hanging for me here at least some five minutes even though the site says the wait times are averaging about two. so the glitches persist. we'll see how soon they get these cleared up. back to you. >> interesting report out of market watch today. they tried 51 times yesterday and had zero success. but others argue when concert tickets go on sale, when a new product launches, sometimes day one is tough. >> and there are people, so you can give a call to the call

centers an those folks can help you walk through and start to especially up your account. and you don't have to buy a plan until december 15th to be sure that you have coverage starting january 1st. >> i know you're all over it. thank you so much about. it is day two of the government shutdown. markets don't seem to like it too much. we're still down triple digits. but about 45 minutes off the low on the dow. if the shutdown does continue, where do stocks go from here? we'll try to answer the question in a moment. first, rick santelli a very special guest later on in the hour. >> cool accent, for boot. we'll have jean claude trichet. we'll ask him about a multitude of issues. the u.s. shutdown, the u.s. having no budget. ideas about taxation, issues in france. and of course maybe the biggest thing, five years after the crisis, his thoughts. at farmers we make you smarter about insurance,

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dow now down 93. you can ceck secan see consumer down. >> stocks like you said near the session lows. consumer staple stocks are leading to the down side. this sector is seen as being more immune to the overall ups and downs of the economy since we're talking about things that everybody uses every day. toilet paper, food products. some of the laggers in the s&p 500 consumers staple sector include big names like snap maker, campbell's soup. you tack on coca-cola, colgate, all about 1.5%, 2% so far today. so the big names in consumer staples very much laggers in today's market. >> meantime markets across the board very red as we enter day two of the government shutdown. we're now just 15 days away from the debt ceiling. are these choppy waters just a hint of what's to come? scott black is the president of

delphi mlt and davanagement. and david sieberg. good to see both of you. david, let's start with you. we were down 150, now down 90. is it surprising to you how afraid some people are to be short even with everything that's going on? >> no question. i've been saying that for a long time. being short right now is an insap prin s sap proposition. the market will continue to grind higher. we actually made a comment yesterday when you talk about some of the high flyers, we talked specifically about biotech and especially investors increased risk tolerance and investors -- >> let me stop you just one second. live shot of jamie dimon and eamon javers, micro phone in hand. >> i just want to see america grow so people have jobs. >> what do you make of the moment where you were here last

week negotiating on a major session and today political matter, awkward timing? >> no, not for me. >> is it for the white house? >> i doubt it. >> anymore opt miimistic after meeting with republicans that you can avoid the october 17 deadline? >> we're just learning about all the things that happened here. we just want solutions. and i think if people do the right things, america will grow rapidly. that's what we should be looking for. what can we do to make things much better. >> thank you, sir. >> with that, jamie dimon going into a meeting with the president and 18 other bank ceos meeting with the white house and financial services forum on a day where the president trying to rally support obviously as the government is shut down and obama care is launching. get back to to our discussion i believe with david sieberg and scott black. scott, it does say something when we're taking live shots like that as quickly as we can.

how does it affect the way you're seeing the markets? >> even before this debacle in the lemgs leps la late tore, my is not so much the short term, but what happens october 17 if we don't raise the debt ceiling. we had this act a couple years a go and the s&p dropped 18.8%. you have the repo market seizing up because collateral is not any good and the bottom line is this is totally dysfunctional. the economy after the fourth quarter probably just went somewhere between 1.5% to 2% real gdp and prolonged layoff could put the economy back it recession. and i don't think that's good at all. >> david, don't you have to get a little bit nervous?

>> absolutely. i had some conversation with gary kaminsky yesterday. we talked specifically about that. the debt ceiling is coming up. if this prolongs and we get up toward that level, there will be a lot more concern and the market will selloff. but i think you have to be a buyer on the dip. we're seeing an incredible amount of risk tolerance in the eyes of investors. you look at the names flying high. people are chasing growth. they will it continue to chase growth. they will continue to do that through the end of the year. i get questions all the time on biotech and internet. we had a bubble period. the answer is when you get those question, i think these things last a lot longer than most predict. >> cover of "usa today," all about the nasdaq tripling.

what is it -- is it about names for whom you're not exposed to a consumer, not exposed to government spending? what is making the naz hold in and does that make you anymore interested in it? >> well, we're value players. so if you want to buy the tez las and facebooks of the world, this is the greater fool theory of investing. would he have seen this movie before in 1999 and 2000 and ultimately the stocks get crushed because they don't go up on air and trees don't grow to the sky forever. but there are value stocks out there, but i think you'll have systemically a decline in the stock market if we don't resolve the issues between the congress and the president in the immediate future. >> scott, david, more time to talk another day. you but thank you so much for your insight on a lot of cross currents today.

a brief bit from the scene at the white house. you saw jamie dimon walking in. there is lloyd blankfein. dimon was asked whether or not this is an awkward time to meet with the president because of some of the investigations into jpmorgan. he said no. also deutsche in there, james gordon from morgan stanley. brian moynihan. if there is a big bang ceo in this country, he's at the white house today. and as soon as we get headlines out of that meeting, we will bring them to you. with that, dow down 93. remax, burlington, empire state realty trust opening for trade this morning. would we'll get a closer look. and john harwood has an exclusive with the president 4:00 p.m. eastern time on cnbc. you have to tune in for that. ♪

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the the president has invited congressional leaders to the white house for a meeting about the government shutdown. that may be one reason we are a bit off the lows. we will see. >> bonds better, stocks worse. dollar a little weaker. gold a little higher today. two week shutdown? that's not in the cards. yesterday they were talking one week get a continuing resolution extension and make a deal. but not shut the government down. that's not in the card. ipo markets, three brand name ipos all pricing above their initial bryce.

burlington stores, priced at 17. $23.05. highs for the day. i'll show you what people think is hot about this. number one, the company has changed. they moved away from the coat business and doing ready to wear. they are buying from a lot more people and better systems and m management. that's why you're getting the premium price. ross stores at a historic high. they will get killed if they drop the ball. remax, bottom line priced at $22. opens at $26.25. and look at this, still right near the highs. another good one here. what about the higher interest rates, what about that hurting the overall real estate business? we talked to the ceo and she told us she wasn't worried.

>> the world is going to continue. people will still buy and sell homes. this is a little blip in the screen. we'll move on. >> she's a little bet late, but good time to go. remember their competition went public exactly year ago.iet latt good time to go. remember their competition went public exactly year ago.t late, good time to go. remember their competition went public exactly year ago. that stock up 60% over initial price. empire realty, a slight disappointment, but still trading above. they priced at $16. $16.38. a little bit of issues here. some of to the company and some of it not to the company. number one, put up the full screen, malcolm family which controls empire realty, they were in a bit of a dispute with some minority shareholders. they doesn't want them to go public. and reits were pulled down a bit. still three main companies going public today.

good sign on the ipo market and they can get blown around pretty eas easily. so everybody should be pretty happy. >> thanks, bob. got strong comments from george soros who says the euro crisis in his words is now over. so how are things really returning to normal in europe? we'll ask that question to the man who was at the center of the euro crisis for years. the former ecb chief john claude trichet. the american dream is of a better future, a confident retirement. those dreams, there's just no way we're going to let them die. ♪ like they helped millions of others. by listening. planning. working one on one. that's what ameriprise financial does. that's what they can do with you. that's how ameriprise puts more within reach. ♪

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going to we're going to listen and hopefully have constructive conversation. s sgr. >> should the president negotiate on the debt creel something. >> i'd love to see solutions that are good for america and growth. i think every in the group will say the same thing. >> so he should negotiate. >> you can call it whatever you want. i'm not a politician. >> you were here last week negotiating on a major setme settlement and now political. is that awkward timing? >> not for me. >> the white house? >> i doubt it. >> jamie dimon on his way this to the meeting with the president. meantime we now have officially that the president has invited to the white house at 5:30 p.m. this evening senate majority

leader harry reid, mitch mcconnell, john boehner and nancy pelosi. a.p. quoting an official saying obama will urge the house to pass a spending bill to allow the government to reopen. with that the dow is up a bit. down 8 # points. let's bring in michelle caruso-cabrera and talk about europe. >> does anybody care about europe? of course we do. italian stock market was a standout today. all is right in the world. most of europe was weak because of the u.s. government, but spain and italy higher. berlusconi backed down. it is an incredible thing what has happened in the last week. this man who for years dominated italian politics, tried to disband the government over the weekend and he failed. there he is today, he voted for

the current prime minister. something he said he wouldn't do. so the prime minister of italy survives his vote of confidence and so far things are calmer. take a look at what happened here with italian yields. they have fallen steadily since we were worried monday morning. that's the peak you see there. take a look at the stock market. it has recovered all of its recent losses as you can see. so it is really about the trend. very nice move there. the other italian making big news today was mario draghi, european central bank leaving interest rates unchanged discussing a number of things that europe is much steadier than it used to be but still the situation -- can didn't talk ab crisis the way soros did, but he said the u.s. government shutdown is ont a threat if it's protracted. >> thanks, michelle. european central bank leaves interest rates up changed.>> th.

european central bank leaves interest rates up changed. let's get to rick santelli in dh chicago with a special guest. >> let's start there. first of all, i'd like to welcome a very special guest. a former ecb president for eight years. he's now two years out of office. of course i'm talking about jean claude trichet. welcome, sir. >> thank you very much for your but one thing that caught me eye especially when i read through the statement several times and that was he would like to see general reforms that may help employment sped up a bit. your thoughts on that and some of the issues of one of the larger economies, france. and some of the potential laws they are making that would be going the other way on reform

for example, what penalties there would be if the development deems them economically vile. would you like to weigh in on those issues, sir? >> i would say that it is extremely important for the entire and particularly of course for some countries like mine, but not only mine of course to embark on very, very bold structural reforms. not only for labor, more labor flexibility, which is overdue to augment employment, but also in the domains of goods and services. because we're supposed to achieve the single market and it is not yet achieved. so a lot remains to be done and it always has been the permanent message of the central bank to governments in europe and of course also to the open

institutions. >> we are now five years past the crisis. you were president of the ecb of course during that period. in 2008. my question is simple. would you have guessed that we would still have the levels of unemployment in europe, asia, the u.s. that we have in what are the good things that you think occurred, what are the things that are lacking. and in the end, can central banks fix the global vustructur issues that we seem to see in many cups, not juountries, not u.s.? >> well, it's of course the important question. first of all, i would say that the crisis started six years ago with the subprime and for the ecb the first nonstandard measure that we took a ton the of august. of course in '08, as you say, it

was very difficult to imagine that six years after the subprime, five years, we would still have growth that is not sufficient, unemployment which is much too high, employment creation much too meager particularly i have to say all the advanced economy, and on top of that, the central banks in all advanced economies embarking on extraordinary nonunconventional measures. so that means that the episode we are observing is a major problem in all major advanced economy. in a way, we are called to structurally change in japan, in the u.s., uk, euro area. and that of course puts on the shoulders the central bank an

enormous burden because they should not i would say give time if at the same moment the job which is necessary is not done by the government and private sector. >> as i look around, there are many services in the u.s. government that are closed. we really haven't had a budget in five years and we live hand to continuing resolution. you can weigh in on your thoughts on the impasse in the u.s. government and how the rest of the world may view this? is it a positive, a negative? your thoughts. >> i think it's anything difference because it signals an enormous difficulty for the democracy of the united states which is a model for any to find out the appropriate way i would

say go in the direction of the superior interests of the nation. so i hope very much that the solution will be found out. i think it's crucial for the u.s.. and very, very important for the global economy. i would also say that there are several steps in this i would say question issue which is dramatic. what is -- what would be totally absurd would be that the ceiling could not be augmented in two week time and that the $16.7 trillion would not be augmented. because there we are playing with the creditbility of the united states signature. this is absolutely exception not on essential for the only for the just, but for the world. >> thank you for taking your late afternoon/early evening to spend some time with us.for the. >> thank you for taking your late afternoon/early evening to

spend some time with us.the wor. >> thank you for taking your late afternoon/early evening to spend some time with us. my deepest gratitude. moments ago, we showed you some of the top bank ceos arriving for a meeting with the president. the top of the agenda must be finding some way to avoid a crisis over the debt ceiling. but given the level of distrust between the white house and wall street, is there a solution to be found? we'll talk about that in just a moment. ♪ ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪

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coming coming up, a good one for you. stock hunting from bourbon to diapers. an interesting list of names. he's with us for the full hour. plus george soros says the euro crisis is over. so where are the bargains? and trading tesla. is today's downgrade a sign to buy or bail? we'll debate that, as well. >> i don't know how you'll top yesterday's show, but i can't wait. we'll see you soon. meantime the president sitting down with some of the bank top ceos of the country. eamon javers did a nice job keeping up with dimon. >> well, all the ceos came if and i had a chance to talk with jamie dimon as he came in with

the whole group all coming in at the same time, which was a little surprising to us, but nonetheless here's what he had to say this morning. take a listen. >> do you think he should negotiate on the debt creel something. >> i'd love to see solutions good for marpg and good growth. you can call it what you want. i'm not a politician. >> you were here last week negotiating on a major settlement and now today you're here talk to therd abo president a plit matter. awkward timtiming? >> not for me. >> he said it's not awkward for him. at the same time, he was just in up to last week over the department of justice meeting with the attorney general, the

president's attorney general, over a potential $11 billion or some large settlement over alleged misconduct by jpmorgan itself. so very interesting con flew espn con through insifluence of timi. but he doesn't position it's awkward for him or the white house. >> of course john harwood interviewing the president at 4:00 p.m.. nice work today. for more, let's bring in todd hagerman and dennis berman. good to see both of you. dennis, has the relationship between the white house and the ceos been corrupted to the point of where they wouldn't want to help even if they could? >> i don't know if they say we don't want to help at all. but i think you have a good word for it, corrupted, gone sour, gone bad. dimon certainly sounded like a

politician. i'd love for there to be jobs. who could be against that? but taking a step back, really asking the question the relationship between wall street and the white house, there is no doubt it's soured. the consumer financial protection board is doing its i don't think job, whether you think it's a good thing or bad thing. new settlements, prosecutions going on.it's a good thing or b. new settlements, prosecutions going on.good thing or bad thin. new settlements, prosecutions going on. the state of the relationship is not that different between the democratic party and the republican party. >> todd, are you willing to go that far? seems a little extreme. >> i mean, i don't disagree actually too much in terms of every time that we've seen the ceos parade into washington while the political rhetoric is not too different from what we've heard in the past, i don't really see how a meeting with the current administration is really going to change a whole lot. clearly what we've seen in

recent months, recent years, whether it's the legislative aspect, whether it's the derivative litigation piling on the banks, it seems that the influence is limited at best right now. >> dennis, you guys have a good piece in the journal today about dimon specifically, how he apparently hasn't been thrown too much by all the investigations. how is that weighing on him? >> he says he's not a politician, but he really is a great natural politician. and part of that is reflected in the way he has responded to the string of settlements. he's trying to take it in stride and maybe in a way he has convinced himself it's no big deal. stock not doing terribly. the bigger question is the forecast for real bank profitability over the next few years by the bank's own doings and by washington's regulation, these are going to be far less

profitable entities than we're used to and they will have to adapt to that. that's the big question for jamie dimon. >> we're not too far from the beginning of earnings season and we'll see what the likes of jpmorgan say in a couple of weeks. will has been in the media and press, everyone is taking down their numbers. particularly for the larger banks. third quarter will be a -- going to be tough. and -- as you think about the capital markets and -- which is generally seasonally weak in the third quarter. trading in particular has been very weak. and while we have seen some pickup in some of the m&a and advisory activity, it is not going flow flew this quarter and by the same token, you still have the pressure for the low rate environment and most noticeably the dramatic falloff in mortgage. it will be a very tough earnings season to say the least. >> yeah. absolutely. given all the dynamics you listed. todd, dennis good discussion. we will see you later. thanks so much. >> thank you. speaking of washington, make sure you stick around this

afternoon. john harwood, exclusive interview with president obama. it all begins at 4:00 p.m. eastern time. it has been an amazing year for tesla. one analyst downgraded the stock. we will talk to the analyst about why he took it down today in just a moment. my customers can shop around. but it doesn't usually work that way with health care. with unitedhealthcare, i get information on quality rated doctors, treatment options and cost estimates, so we can make better health decisions. unitedhealthcare.

don't need the tell you, shares of tesla soared 450% this

year alone. has the stock gone up too far too fast? our next guest thinks so. ben, thanks so much for coming in. >> thanks, carl. >> people have been saying this all year long. why is now the time? >> i think now with the valuation where it is on the backdrop of some of the exciting things like the gentry, coming on in the next couple of years, but also with the risk of those models coming on and hiccups as we see as they ramp up production. now is the time. >> you talk about the rising short interest as well. 17.8% versus little under 16% back in may. have they given you reason to think there will be hiccups, as you put it, in execution? >> what we saw with the model s coming out, there are slight hiccups. i rate execution as an a-minus or a. bringing on new car line. but now we are talking about multiple models out there.

we are talking about resale vehicles for model s in the marketplace. maybe -- capitalizing demand. we are entering a new period of additional risk out there. again, we have a valuation where we are running up into the mid $20 billion. >> yeah. you actually leave your target at 187. you mentioned a bunch of things people thought about before. the infrastructure, buildout. obviously advances in battery technology. one thing i don't see is the threat of rivals catching up. right? gm, ford. moving into their market and taking some shares. do you not think that is possible? >> well, it -- it is possible on the fringe. i still am bullish on tests on the long run. i want to get through this period here. one of the reasons i'm bullish at the end of the day, althouth they are an automotive company, they are a technology company.

i think most of it is priced at the current level. >> where would you get interested again in you she sort of material correction in the stock? >> you no, i think down in the -- 150 range. get down to that level, and there are a lot of investors that don't think we will see it again. but, again, there is a lot of -- lot of execution ahead of us that -- could get us back on those levels. >> controversial provocative call. got a lot of attention today. thanks for coming in. >> thanks for having me. meantime, congressional leaders will be heading to the white house later today. of course, john harwood has an exclusive with the president. 4:00 p.m. eastern time. right here on cnbc. we will be back in a moment. so ally bank really has no hidden fees on savings accounts?

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congressional leaders to the white house after that interview at 5:30 p.m. eastern time. meantime, keep your eye on some train day reversals. j.p. is back in the green. after we saw jamie dimon approach the white house in that meeting that's going on now. let's get back to headquarters and scott wapner. >> carl, thanks so much. welcome to the "halftime show." super mario. the famed investor is here for the hour with a list of his latest stock picks. trash to soros says the crisis over. our top story continues to be the market's reaction to the ongoing government shutdown. whether it is a buying opportunity or buyer beware. we are also trading tesla downgrade today and that that means to that stock's road ahead. it is "halftime." let's play the action. how are you playing this government thing? >> i was