you're now watching "worldwide exchange." i'm ross westgate. around the globe, the u.s. government shutdown enters its second week. the looming debt ceiling deadline. shares so i remember of mondei pasca. there's a long awaited restructuring plan. airbus breaks into the landmark deal to sell 31 jets to japan airlines at $9.5 billion at list

price. >> this is in the interests of the airlines. we came up with a package that was unbeatable. >> coming up, blackberry is reportedly selling portions of the company to several possible interested buyers. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. and a very good morning to you. very good evening to you if you're in asia. it's the first "worldwide exchange" of the week. it's also day seven of the u.s. government shutdown with lawmakers far from a resolution. they may vote on a bill passed by the house on saturday to give back pay to furloughed federal workers. house speaker john boehner insists that the president, barack obama, must negotiate if he wants to avert a debt

default. they have a deal if they allow a vote. they won't pass a clean debt limit increase. >> the president, his refusal to talk is resulting in a possible default of our debt. all we have to do is pick up the phone. this is the most reasonable thing in the world. i think the american people understand. why wouldn't they talk to each other? i'm ready to talk. i've been ready to talk. >> when is this going to end? >> if i knew, i'd tell you. >> at the same time the administration secretary jack lew took to the talk shows urging lawmakers to raise the debt ceiling. he's warned that on october 17th when he's exhautsed all of the tools to keep borrowing, the debt default will be imminent saying they're playing with fire. >> we have a preview on "squawk box." very good of you.

nice to come back. >> pleasant to be here. >> look, how far down the road do you think this is? how close is this going to be? how volatile as a result are investments going to be between now and october 17th? >> let's think what we know. this is an exercise in politics. the political actors are all keen to extract the maximum to their own individual advantage. "washington post" today is carrying a story that says if a clean resolution is submitted to the house, it would pass, 195 out of 200 democrats plus 22 republicans are ready to vote with it equals 217 and that takes you over the line. now for speaker boehner or for paul ryan, the big beasts in the republican party and for the tea party, they can't let that come to the house until they've extracted the maximum advantage. so we're paralyzed by forces. >> yes, but what is the

advantage that they're trying to -- and what is an advantage that would suit them at which point they'd go, okay, we'll let it come in. >> from the republican or from the tea party's point of view it's forcing through an undemocratic process of a change in obama care from the point of view -- >> yes. they're not going to change their positions. what is the advantage bins boehner gets? >> boehner is in a position where if he ostracizes the right wing of his party too much, as we saw in the immigration this summer, his chances of being re-elected as speaker go to zero. >> it's all on boehner. he has to decide whether he allows the u.s. to default or whether he cuts the tea party. >> if you pass on one interest payment and say we'll defer it to the future, you don't cause a cross default. each bond is individual. the second thing is you can stretch out a little bit further. look, it shows every chance of

going to the wire. >> therefore, dollar's into its fifth or six week of declines. equity markets, not so great this morning. are we actually now going to see this week much more of a concern from investors? what they've done is, look, the thought process when push comes to shove, politicians won't cough it up. they'll hammer out some agreement. >> so i characterize this, russ, as something close to a buyer's strike rather than a seller's panic. remember, the third quarter of the year world stock markets did very well depending on where you are and it's been a pretty good year for equity investors. so why push it at this stage? you can see that. their volatility picked up a tad. hardly anything. for sure a three month to two month head-to-head clash which does cause more than a technical

default is a bad outcome. you can look at it and say so there are no -- there's no new data coming out. >> no. >> that increases the chance that the fed does nothing on october the 29th. it may even increase the chance to do something on the 17th and 18th of december. the data is so backwards they haven't caught up with it. >> i wonder where the consensus is if the fed doesn't do anything until next year. >> well, you saw chairman bernanke last week talking about somehow how poor the economy was. we're in the lowest nominal growth rate for the u.s. economy in the last 100 years. low nominal growth rate in europe. the global economy is recovering but it's recovering very slowly. now i think the whole taper talk, taper tantrum stuff is as much about market positioning as it is about the economy because if we're in a very slow economic growth despite all the central

bank expansion going on, it doesn't necessarily follow that central bank expansion created that growth. >> all right. good to have you on. stay there. we'll get a lot more of your investment thoughts to come. as we said, u.s. dollar heading for its fifth straight week. losses because of the pressure in the debt ceiling debate. we're asking what happens from now? would you pick the dollar up? do you think it's going to go even lower. what will the impact of politics be? join the conversation. e-mail us at cnbc.com or tweet me. plenty more coming up on today's program. president obama's presence is being felt at the apex conference. we'll get the latest from bali. the shares jumping. their restructuring plan will be in milan. a blow for boeing. airbus has ended its dominance with a landmark order.

that's just after 10:35 cet. three more firms are hoping to get a slice of blackberry's pie. can they improve on the order from fairfax. we'll discuss the emerging bidding war from the states. and after years in the doll drums, european private equities are finally picking up. we'll look at what's spurring the picture at 10:30 cet. right now though as the first trading day of the week, let's bring you up to speed on the details. >> thank you, ross. asian markets continue to see the markets. the dollar weekens further against the yen. meanwhile, china markets are still enjoying the last day of the break. hong kong markets slip .7%. in a bit of turbulence for

japanese airliners, japan airlines is asking the government to revise its decision to get more international stocks at tokyo's miningor competitor, al nippon airlines. of course the landmark deal with airbus. japan stocks finished higher at 3% and they had a loss at over 3%. the second largest property developer ended down by 2.6%. this on local media reports that it's offering cash discounts at a luxury project to attract buyers. gold is turning weak. according to the official urgency, in an effort to reduce pollution, china will replace four coal burning plants in beijing with natural gas fired

ones. the fourth largest coal minor tumbled 3.4%. >> thank you for that. we're an hour and a half into the trading day. the ftse last week closed up on friday just by 4 points. the dax was up .2% by the close on friday. i'll show you where we stand now about an hour and ten minutes into the trading session. maybe we won't. i don't know. yes, thank you very much. down .7%. the xetra dax is off. the cac carant is down 1.15%. sienna is outperforming in italy. 4.19%. we have the latest from george in milan. it looks like the meeting today

should be improved. jules will be with us in half an hour from milan. we'll show you how we stand with some of the other markets particularly with treasury yields right now. right. there we go, thank you. ten year treasury yields, 2.61%. not far away from the 2.59 that we hit briefly in the middle of last week. what we have seen is a rise high in short dated yields and italian debt, 4.3% yields at the moment. currency markets the dollar down near the eight-month lows. euro dollars, below 1.36. the yen, 96.88. 96.93. we were on fresh five-week lows for the dollar against the yen. the pound just above 160. we were over 162 last week as well. so that's where we stand with

markets. air bus has turned the tables on boeing winning its first ever order with japan airlines to sell 31 a-350 jets. the landmark deal has a price tag of $9.5 million with the option to nearly double the sale. carrie is 450here with the late. how much of a landmark deal is this? >> reporter: in terms of numerical figures in the big picture, perhaps not a lot. we're talking about 31 aircraft and the option to buy 25 more although $9.5 billion list price for air bus is of course a big win for them. i think the significance of this deal is the fact that it actually happened. there was a window of opportunity created for air bus with the grounding of the dreamliner 787 earlier this year because of the battery problems. there were questions as to whether or not they would be able to take advantage of that.

after all the years, a of the domination that boeing has in the market, they have finally been able to win an order from japan airlines. it leads to the decline that we've seen in japan. the u.s. security/japan alliance is the bedroom of the japan security. hence, the strangle hold boeing has had. i had a chance to talk to the ceo of airbus exclusively. here's what he had to say. >> it went through heavy restructuring which was by the way a very successful turn around in the country. we knew we had to think of decisions which are in the interests of the long time with japanese airlines. >> this begs the next question. the next carrier will be alipon

airways. will they ink another deal with alipon airways here? >> you know, the other player, ana, has probably its own criteria and we need to grow for this company to do a good job and then we will see. it is clear that we are there for 50, we have an aircraft of choice for ana. >> commercial aviation is a close tie. it was noteworthy at the press conference that you had a.m. bass is a doors attending with you. the bedrock of the u.s./japan alliance in terms of tee fence has always been the u.s. could this be the start of more momentum towards an expansion of relationship between european

players? i say this because of an interesting thing in your press conference that you notice a climate of change. is that what you're referring to? >> every country in the world is looking for gdp increase and how do you manage it for more free trade agreements around the world? it's clear that japan and the european union have allowed for the process of negotiating free trade agreement. even if this decision is only business related, i think it gives some hope that these negotiations would be successful and this is why there was such a presence of ambassadors. and the ceo's comments from air bus even more poignant today, i think, steve, because of the tpp negotiations going on in indonesia and how much concession japan will give to its u.s. counterparts in this

tricky negotiation process. back to you. >> thanks for that. it would be nice to say the absence from the apec conference, we'll find out after this. at farmers, we make you smarter about insurance.

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>> announcer: you're watching "worldwide exchange." the u.s. president is absent from the apec summit in bali. he's not absent from discussions. there's plenty of concern over the u.s. budget difficulties and the affect they might have on the economy. if he's away, who's been capitalizing china. joining us from moody's debt rating. marty, the president isn't there. how keenly felt is his absence? >> well, ross, that's exactly the thing that everybody is talking about here. the reaction, as you might expect, understandably is disappointment. some leaders think it is a little embarrassing for this to happen to the u.s. we talked to the president of the philippines. he said, look, he understands the situation that obama is in.

he's a little bit more sanguine. the last-minute decision to stop his asia trip because of the crisis in d.c., that is really the big story right now. overnight, ross, we had the house speaker, john boehner, warning that the u.s. is on the path to a default, but here you're right, we talked to folks over in moody's. the ceo, ray mcdaniel, in fact we put that question to him. he said, no, that is still very unlikely. take a listen. >> we have a aaa stable rating on u.s. treasury securities. that reflects our thinking, that it is extremely unlikely that a government treasury is not going to continue to pay on the treasury securities hopefully. it is unlikely that we don't go

past october 17th and fail to raise the debt ceiling, but even if that does happen, then we think that the u.s. treasury is still going to pay on its treasury securities, prioritize those payments. >> from moody's point of view, how different is it this time around versus, say, 2011? >> it feels a lot like we've seen this movie before. i think ironically the fact that we've had this experience in the past gives people more of a sense of calm than perhaps they should have. perhaps less of a sense of urgency than they should have. >> does the market complacency worry you? >> the fact that the market has seen this before and is reacting more calmly is good, but to the extent that policy makers are going to act when stress or distress only reaches a certain

level, the market can play a role in indicating that there is a level of stress and distress. >> but so can moody's, right? >> moody's can, but as i said, we feel that the securities that we rate that are issued by the u.s. government are going to be paid in full and on time. >> ross, that was the moody's ceo ray mcdaniel. we talked to him a little bit earlier on. remember, moody's has u.s. debt at aaa. s&p is the one that's a little bit more bearish. aa plus. the treasury is warning that they've got only $30 billion left in the kitty and that's cash. that's not a lot of buffer or working room. back to your question about what this means for china. it has allowed china to steel a march on what's been going on with the obama issue.

xi zing ping is here. he inked $28 billion worth of commercial deals with indonesia. almost half of them in the resource space downstream processing here. this is kind of interesting because, remember, we've been talking about indonesia and resource nationalism. then want being to keep more of the value added at home. it shows that they are open in that sector. downstream processing to foreign investment as we've been witnessing with the china deals. this is interesting. remember, china is the one that hosts apec next year. they are watching and learning very closely what's going on at the summit ross. >> good stuff. thanks for that. i hope you're enjoying bali. there are worse places to hold a summit, right? >> true. >> okay. thanks, martin. good stuff. catch you later. that's the latest from bali.

cameron is joining us. it's interesting. you can see the safe haven bid in the long data treasury's here and clearly government debt sort of had a pretty good equity. >> ross, i think why do people say it. they say to hughes that money. the bonds pretty much everywhere, you have a negative real year yield. the bond is either -- all of the betting will be a major correction. they will have a strong chance to get in. the problem is when you have a major correction, everyone gets quite nervous. the money doesn't flow until after the market's gone up. equity investors have the advantage of this stage. the bond markets are financing a great deal of corporate debt and actually quite a considerable

increase in the activity. so that's the final claim on the cash flows of a country. i'm offering a real view and real rate of return. it's a good time to be a corporate trader. >> you've been able to fund much longer term and reasonable rates? >> sure. >> you know what the cash flows are for the day? >> absolutely. you have to pay your workers. you have to pay your suppliers. you have to pay your government, then you have to pay the debt holders. >> some of it is divided with equity holders. >> how helpful is currency volatility. the currency is down to eight-month lows. have you got to hedge out currency risks to beat sure returns. >> currency is very important not just because of the return

risks. also because they've chosen to manage currency volatility. when the u.s. dollar is particularly strong, as it was for a while, that's fine in the domestic money policy because they're essentially selling dollars and buying local currency to try to stop their currency from depreciating and vice versa. that's what we've seen with the fraj gierl five. a dollar weaker, currency is much more important than that. the cost of hedging is so high. >> just very briefly, it's actually the most important thing. we're going to hold equities. when you get in is more important than anything else at the end of the day. >> valuation tells you nothing about the short-term rate. if you just could the exercises, decomposing, profits' growth is a great deal about the

evaluation. >> it's okay. not a particularly worrisome area. >> good to see you. thanks very much for that. chief investment strategist at black rock investments institute. expect investors to go starry eyed. the oldest diamond could rake in $35 million. the current is $27.7 million. and still to come, a diamond in the rough or not? shares of monte de pascheo? we'll have the latest out of milan.

>> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. these are the headlines from around the globe. u.s. government shutdown enters its second week as the war of words continues. shares of monte dei paschi

continues. airbus sales will continue for $9.5 million. >> it's in the interests of long term at japan airlines. we came up with a package that was unbeatable. the pie. blackberry is looking to sell to several possible interested buyers. right. eurooueurope mean equities up. the ftse is down by 1/3 but doing better than others. on bull markets, yields a little bit low for treasuries. the yields are steady. currency markets the do the lar is pegged down there 8.5 month

lows at the moment. euro dollar below 1.3676. the high for the year around 137. as far as yen is concerned, we have five week lows. around 96 and 92 as well. now john paulsen is taking a gamble on the greek banking sector. there are two banks that have merged in best shapes since the crisis. paulsen is best known for betting against the housing market. he thinks they will recover. thanks for joining us. what do you think of mr. paulson's statements regarding greek banks? >> i think he's spot on in that greece does appear to be recovering. i think the banks are a turbo

leveraged way to play this recovery bet. so i think it's directionally correct. i think what's interesting is just the intersection of that with what we see going on with the u.s. government right now. i think the risk is that paulsen's making a risk on bet and that could collide with a risk off trade. >> that's the problem. >> i think that's exactly right. it's a bit of a high stakes turbo leverage on greece. >> there's an underlying assumption, most of us believe, that when push comes to shove politics anns won't say that. >> i think that's the underlying assumption. i think it's definitely correct. i think the chance that the u.s. is not good for its debts is virtually zero. having said that, i think there could be quite a bit of technical mess in between the current situation and the final

result. those technical issues can be a very big deal for the credit markets in particular. >> where would you expect to see the biggest stress? >> i'd expect to see the biggest stress from a credit market standpoint in the public markets, particularly the high yield market. that's important because in terms of financing, roughly half of european loan issuance to support, for example, leveraged buyouts this year has come from a combination of u.s. market and the high yield market, both of which are technically driven. >> we were talking earlier as one who was talking about how actually the availability of credit in the states has been beneficial for big companies. extraordinarily praisy because of that size of the money? >> i think that u.s. companies are releveraging.

they have access to the credit markets, whereas, in europe the banks have been under pressures and the clos have been shrinking and are expiring. >> interesting, let me read this now. the last three months have the -- this is a new report. 119 deals. trying to present 19.7. that's rising 120% for the previous quarter. so, look, are we just playing catchup? is this also because it's just as easy to get an exit? the house of frazier is now thinking about coming to the market. >> i think what we're seeing is a reflection that the financing markets are open for business and actually are capable of supporting large buyouts. notably ee specsly this year some of the larger buyouts which

are influencing those statistics are tertiary buyouts. >> for yeast that's been the only exit for them. >> that's what i was trying to say by now there is a seconds dairy options. now we see the public markets reopening. >> does that encourage then fresh money? does that encourage -- now that there's a second exit, does that mean you have to be more willing to buy new stuff? >> i think that's correct. there's a lot of stored up private equity money on the sidelines waiting to enter the market. the financing markets are open and able to support new deal activity. i think we will see an increase in transaction activity going forward. >> only two 1 billion euro plus deals in the u.k. so far this year, which is kind of interesting. they talk about megadeals

driving values up. it's the second highest quarter ever recorded. clearly germany is taking a bit of a chunk of the money. why do you think that is? >> i think in germany the data is influenced by two large transactions, both ista and springer sides publishing. >> yes. >> both are very attractive deals and both are third-time produktsds let us sell to each other. in the bad news is that the debt markets are open for business and we're able to support those effective effectively. captain, debt markets are fairly healthy. they have access to finance, is that right? >> yes. >> is that because it's too expensive? >> no, it's just the

probabilities. on any given day we'll see deal activity in different regions, the u.k. actually, the economy looks pretty good. you'll ee more. if france is difficult -- >> france is definitely going to be difficult. in the last couple of years from an economic standpoint. >> always good to see you, robert. >> thanks for coming. >> park square capitol. blackberry is recording talks with cisco, google and s&p. they say that will be an alternative to the $4.7 billion deal that they met with fairfax financial. this has been met with -- intel, lg and samsung by early next

week. blackberry stock up 3.5% in frankfurt. every week cnbc is asking you to talk the trend by taking part in our online poll. throughout the week we'll bring you the results. this week we're asking if you would buy twitter after the announcement of one of the most highly anticipated ipos of the year. head to trader paul.to vote. you can have your say on twitter using #traderpoll. there you go. it's all of that. don't miss out. shares of monte dei paschi is soaring. they're holding a board meeting today. the eu authorities have asked them to raise 2.1 in capitol. do we now think jules they're on track? >> reporter: well, i think there's high hopes today here

that monte dei paschi wasn't happy. they had accepted 4.1 billion euros of state aid. the suggestion back at that time was that they may launch a probe. they may ask monte "d" pass ski. the bank has suggested they would raise up to $1 billion worth of at that point toll. they want them to rise $2.5 billion of the mon kae cap. we're looking forward to it to see whether they agree on tougher proposals. they want to see further cost cutting. they were concerned with how

softly they were dealing with creditors of the bank, too. what they've already announced, they've announced 4,600 job cuts and 400 branch closures. what else today if ultimately they agree on a tougher restructuring plan. they hope they'll comply with the eu demands today. ross, back to you. >> what time is that board meeting this afternoon? we might hear something by the close of plate today? >> yes, absolutely. the board meeting 2 50 30 cet. we'll have to wait to see if we get announcements earlier. >> jules, what else have i been interest. we've been talking to the ceo here. he was talking to me about the fashion industry and the idea of

made in italy. i'm also going talking to another ceo and about some of the corporate issues we've been speaking about plenty coming up. >> yes. jules for now, thank you. that's the latest from milan. still to come, jet star's dream liners have finally landed after a five-year wait. more when we come back.

just a reminder what's on the agenda in asia. the spotlight will shine on indonesia. they'll watch the rate hikes. it continues in bali and in japan more numbers are due. the british government has asked the eu for a chance to split up rbs. this request was made back in july. the stock today is down 2%.

this week joining me on set is our british expert, elia. >> i think honestly there is a matter of covering options. there's been a lot of discussions with ear rop in the last six months with the government with things like lloyds, rbs, making sure there is a dialogue open in terms of the competition and making sure we're at the right side of that. i don't think anyone is expecting the position at the end of october to be a split. you never know. with rbs, politics always rules. >> that is the point. there was a time when it was totally off the agenda. it's wound its way down. what would be the pros at this points in time for doing? why would the chancellor consider doing it now?

>> i think the argument put forward is that the easiest one is that it would increase lending. if you can get the toxic assets off the privatization, that's the good bank. you can sell that quicker. that part of the bank would be able to lend quicker. there are other shareholders, not the taxpayer, not the u.k., would have to agree with the split. many would say, yeah, that's great. if you want to car of it up and chuck it inside some bad bank to take over liability for that, that's no problem. we'll have a clean bank. it probably wouldn't be like that. perfect situating major share hold injuries and they haven't seen the shares succeed, they're going to -- it's going to be a very tough sell to get them to pool all the liabilities into a

bad bank. >> the second part of right to buy, anyone who wants to borrow up to 600,000 can get a home mortgage. >> not the home mortgage. 15% would be insured by the government. >> it enables us to go higher on our loan to value ratios. the question is are there any banks ready to do it to support the scheme? >> only three. government-owned banks. barclays hasn't said yes. we need to see the details. what we're finding out tomorrow morning from the chancellors is how is this going to work? we know that the bank of england is going to be given a kind of oversight role. that will be next year. what we're 2350i7b8ding out tomorrow is how will the government charge banks for this service, for this insurance service. there that fee be passed oorch

to the consumers. there's a lot of kickup will consumers be able to afford it. if there's a load of back ended fees -- >> mortgages add fees onto the loan. they add fees onto the loan. the point is if you listened to david cameron, despite warnings from business secretary, a safe distance about an seat bubble, it's in order to make sure that they get on the mortgage, that 20% deposit is una for the bubble. >> we're going to make it more expensive which means you'll need more money for your 10%

deposit. helia, not that that was you, thanks very much for joining us. now airbus has turned the tables on boeing winning its first ever order with gentleman pachb airlines to sell 31-a 370. earlier we caught up with the ceo of airbus. >> went through a heavy restructuring which was by the way a very successful turn around with the company. we knew we have to take decisions which are in the interests of the long term of japan airlines and we came up with a pam cage that met the goal. >> stefan has more reaction where air bus is limited. >> if it's the size of the deal not so much the significance in terms of it's a new market. what do people think? >> the size is good because $9.5

billion, most importantly, russ, it's a very symbolic victory of boeing because traditionally they may have us both, according to al bers, the first long in a long series. it's great for the new come pot sits made. think' got the triple 7 from its typical problems from the dreamliner. the aircraft was grounded for more than three months because of technical problems with the batteries. that may be one of the reasons why japanese airlines switched to boeing for this contract. and we saw airbus was able to benefit from the weaker political relationship between

toek yes so that's also from paris. one of the reasons that we see from that. that is a common from the same sift -- that's the contract. the stock is up 1.4% and really outperforming. >> all right. for now, stefan, thanks. at the same time, airbus's rival boeing has been cisit setting i sights. dreamliner is getting its first. we have this report from melbourne. >> it's he the first of 90 million to be sold. when it officially takes delivery of its first aircraft here in seattle tomorrow.

the discount has ordered us to remain no cross carriers. it's using 20% less fuel than its kmet tors. it's a good price. >> this is an amazing of people. >> the arrival of the aircraft hasn't been smooth sailing with both of them first inspecting the new additions back in 2008. this is where the final assembly of the 787 takes place, at boeing's facility in everett, just north of seattle. now this giend building is the largest by football fields inside these walls.

the fleet has been grounded earlier this year after problems were discovered with batteries used to control crucial problems. >> with any airplane we are learning fast and incorporate the earnings. >> boeing is optimistic on the outlook for aircraft orders going forward. >> with the government shutdown we are staying in close contact with our counterparts in the faa and other agencies. at this point we don't see any imoctober ev impact going forward. >> jet star, meantime, will have three dream liners flying by the end of the year. with all 14 delivered by 2015. and prime minister shinzo abe is looking to win the

confidence of asian pacific business leaders on his abe no, ma'am mick flat form. he wants the key correspondent. hi. >> reporter: hi, ross. yes. on the sidelines japan's prime minister is reassuring business leaders that it will not put a dent in the nation's economic recovery. >> translator: economic revival and physical reconstruction, restoring fiscal health, i believe they are compatible. this is my conclusion. restoring fiscal health and retaining order in the nation is important. >> abe says the government will introduce a $50 billion stimulus process. it will pursue deregulation, frming and the medical industry.

he said the japanese economy has been stuck but now it's moved on to a direct path to recover. the government will continue to seek further growth. that's the nikkei business report. >> that's the latest from tokyo. amidst the debt selling talks. the pent at that gone has arded nearly all 350 workers back to work. chuck hagel made his decision based on our pay military act which guarantees they would get their paychecks on time. the defense krotor has canceled its plans. wall street banks and brokerage firms are going up to handle any firms who could have problems. trading platforms can process

deals. sifma is counting on the treasury department to give notice before it misses changes. the. u.s. dollar is heading for its lowest number. join the conversation here at worldwide exchange. you can get in touch with us by e-mail worldwide exchange. also still to come, with ten days to go, the war of words continues as the looming debt ceiling deadline in the u.s. approaches. we'll discuss the potential fallout and what it means for investors right after this.

this is "worldwide exchange." i'm ross westgate. the headlines, the u.s. government shutdown enters its second week. as the wars continue over the spending and looming debt ceiling deadline. shares of monte dei paschi continue. boeing has a landmark deal to sell 31 airbus jets for $9.5

billion at list price. >> we take their decisions which are in the interests of the long term of japan airlines and we came up with a package which was unbeatable. cutting up the pie, blackberry is reportedly willing to sell to possible interested buyers. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. all right. if you have just joined us this morning, state side. it's day seven of the shutdown. lawmakers are far from a resolution. the senate may vote on a bill passed by the house on saturday to give back pay to furloughed federal workers. house speaker john boehner insists the president, barack obama, must negotiate if he wants to end the shutdown and avert a debt default.

house members say they would vote if boehner would allow a vote. boehner says he doesn't have the votes and they won't pass a clean debt limit increase. >> the president, his refusal to talk is resulting in a possible default of our debt. all we have to do is pick up the phone. this is the most reasonable thing in the world. i think the american people understand, why wouldn't they talk to each other? i'm ready to talk. i've been ready to talk. >> when is this going to end? >> if i knew, i'd tell you. >> u.s. treasury secretary jack lew took to the sunday talk shows. he's warned that when he's exhausted the tools to keep borrowing, he says a default is imminent. >> they know the consequences and that this doesn't need to happen. they can vote today. they have a majority to do the right thing. >> joining us on set is the head

of trading at amplify trading. how twitchy is it going to get? >> it's going to get pretty twitchy. i think the kind of deal they've done, they're kind of drifting back into work. they have confirmation that they will get back pay. i think firstly the economic damage from the shutdown is dramatically reduced. i think this is perhaps the republicans buying themselves more time to negotiate on the budget and the debt ceiling. i think we're going to go right to the wire. i think the government will be shut until the 17th of october and i think the deal gets done. >> what does that then mean for someone that's trading fees and investing? >> the closer we get, if we hit this weekend coming and the government's still shut, which i'm sure it will be, then the nervousness will start to ramp up. i think this week will be

negative. so far it's interesting that the s&p has been down 10 of the last 13 sessions and yet has only dropped 2.5%. >> yeah. so is this actually just an absence of buying rather than anybody off loading anything? >> i think that will change. i think there's good key support on the s&p at 1625 which is the august low. i'd be very surprised if we're not down there by the end of this week. >> yeah. are we going to hit a point before the 17th where people are selling? >> i think so, yeah. i think that will happen. it's obviously another embarrassing situation, acutely embarrassing situation for the u.s. from the international world's eyes it's democracy gone mad. it's quite interesting that we're the leaders of the free

world and democracy has failed completely. from a market perspective you have to assume the same old thing will happen. we'll go to the wire and a deal gets done. i think inevitably as always the closer we get to it, the nervousness ramps up. we'll continue to talk about the fact that they're not willing to negotiate. they want cuts in obama care and obama's going to dig in his heels. >> yeah, but that's already been done. >> that's why democracy is failing. this is the insanity of it. you'll see stocks come under a decent amount of pressure. >> are you looking for a buy? >> i think there's a buy at the end of it. i think that's how this works. i think wall street can sit back and complain about washington politicians. ultimately they didn't provide volatility. there will be a buying

opportunity. i think underlying all of this, if you think about the fundamentals, i think it's a pretty good story globally really. if you just eliminate this nonsense then there's a pretty attractive story. >> if only we could eliminate the nonsense. >> then you'd be out of a job. what would we be talking about? >> no, we love the nonsense. yes, right. exactly, what would we talk about? we'd talk about other investment opportunities. stay around. head of amplify trading. right now though let's bring you up to speed with the global equity markets. the asian section, first trading day of the week. thank you, ross. a negative start to the week due to the u.s. standoff. japan's nikkei fell down 1 boin point 2%. china markets are enjoying the

last day of the break. ahead of the next batch of chinese data due out tomorrow. japan airlines has asked the government to reconsider its decision. while there's been no decision made investors still seeing the silver lining. reports of that landmark deal with airbus moved the stock as well in japan. airlines gained 3% today while ana lost over 3%. now for a look at some hong kong moves. the second largest property developer ended down by 2.6%. this on local media reports that it's offering cash discounts at a luxury project. according to the official shingquan news ang si, china will replace four coal burning

plants. we know heavy smog plagued china. shares of china's fourth largest cole minor tumbled. >> thanks for that. that's where we stand in asia. we saw the dough 76 points. up 1 1. the dow is below fair value. the nasdaq is 29 points below fair value and the s&p is some 18 points below fair value. the commentary for the weekend, i don't have anything for stock market. ftse 300 is down a percent. we're now two hours into the trading day.

foo ftse mid app performing again. it is down .25%. the coalition government survived very much intact with that confidence vote by silvio berlusconi. the senate committee has suggested he does get kicked out of parliament. that will go to a full vote. treasury yields. we have seen longer dated yields to come down. short-term interest rates have gone a little bit high. gilt yields fairly steady. the dollar is still down. no real extra pressure. equities have sold off. the dollar is kind of where we were on friday. euro dollar below 1.36. we hit last week, 1.37 was the high for the year. dollar yen pretty much down. $96.91 than what we saw last

week. we are seeing in long-term ranges, the year ranges. we haven't moved out of those. that's where we stand with investors and prices. the battle with blackberry heating up as a few more firms are showing an interest. the latest coming up. bny mellon combines investment management & investment servicing, giving us unique insights which help us attract the industry's brightest minds who create powerful strategies for a country's investments which are used to build new schools to build more bright minds. invested in the world. bny mellon.

if you're just joining us today, a recap of the headlines. day seven and still no deal. the u.s. government shutdown enters its second week. shares of italian lender monte dei paschi is meeting to work on its restructuring deal. and airbus is selling 31 jets to air japan. little bit of data out of the eu. the second quarter gdp, bit worse than we thought. revised down to minus 6% versus half a percent yield. meanwhile, some of the other stories we were following today, the u.s. government has acknowledged for the first time that it does need to fix software problems that have kept people from applying for insurance from the online health insurance. an unanticipated surge caused

the crashes. the department of health and human services said sunday that federal state websites need changes to improve efficiency. blackberry is in talks to sell all or part of a company. blackberry's reportedly asked for preliminary expressions of interest from potential buyers which include intel, lg and samson. then we stop in frank further, the stock is up 4%. still to come, president obama's absence is being felt at the a pec summit. we'll talk about that when we come back. i love having a free checked bag

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martin soon filed this report from bali. >> the story here at the apec summit is president barack obama's sudden decision, last-minute cancellation to not attend this meeting and what it means for u.s. commitment, involvement and the pivot towards arab shampt more specifically it has people wondering about the momentum for freer trade. i'm talking about the trans atlantic partnership. now it's including 20 companies. 40% of global gdp, 1/3 of trade and excluding china for now. >> right now we're focused on closing these negotiations with the 12 countries that are around the table. p tbp was designed to be a living agreement. to use this platform to help

strengthen the multi-lateral trade administration as well. >> what's interesting is within the last 48 hours schenn has signed on to an international i.t. agreement which could lead some analysts to think of an involvement in a trade of services agreement or tisa which is being know ghooe negotiated. we shall see. martin sung, at the apec summit in bali, indonesia. if you're joining us this morning, u.s. futures are indicating a negative start for the week. the dow is currently some 132 points below fair value. the nasdaq is some 30 year points below fair value. the s&p is up. dollar index is down eight month lows. levels we were at last week. dollar yen at five year lows at 96.97.

euro dollar at 1.36. we got up to 1.3640 last year. is it time to buy or will it continue to fall. clifford said he thought the dollar will keep going down. if you want to join the conversation, let us know. the e-mail address is worldwide@cnbc.com. with me is pierce curran from amplify trading. what do you think of the dollar? we've pushed down to recent lows on pairs like sterling and the euro. >> that's right. back to the cable and the euro dollar back up to sort of the january peaks. you have to think about quite a few variables with the dollar. obviously we've got the default risk which you could argue is

going to be obviously negative for the u.s. you could argue that's negative for that currency. on top of that this moves to the eight-month low. it's really because of new expectations about stimulus. so we haven't tapered. we're not going to taper until perhaps the end of the year now. so i think that has probably been the driving force behind this dollar weakness rather than the -- >> politics? >> the politics. the other thing to think about is if you do get a default, if the unthinkable happens and these politicians really screw it up, is the dollar going to weaken? the answer to that is probably not. that default scenario would trigger a global problem economically and obviously the dollar is a safe haven. so i think on top of that the fed will continue to stimulate. so you've got a weird mix of differentials. i think ultimately if the fed -- sorry, if the government do take us over the cliff, then i think

the dollar will strengthen against everything apart from things like the swiss frank or yen. >> in classic risk off trade that we've seen for four or five years. >> i think with the euro dollar it's insane it's this high. >> the euro is not just on fundamentals. >> this is right. we have a liquidity issue and draghi failed to kind of give us enough to kind of expect any action on that in the near term, which was the shame. i think they need it. i think euro dollar trading at 1.36 is not going to help what is a phenomenally fragile economy. i think once we get past this debt ceiling -- >> we've got minutes coming out this week. it will be fascinating to see how divided the fed was and how much of it was economic concern as opposed to a political concern. >> i mean, i was heavily critical of bernanke when he failed to taper in hindsight. it looks like it was the right

call. definitely i will put my hand back and say fair enough. >> maybe the problem was there was no communication ahead of the thing saying, guys -- >> he communicated it very, very badly. i think in hindsight it's clearly been the right call. but i think with the -- i think with euro dollar, if we get past this debt crisis -- sorry, default risks, then i think it has to trade down to 130 into the end of the year. >> the fascinating thing is if we don't get a default, if politicians work it out, they work it out for a few months, the interesting thing will be what the fed procedures of the economy in december and january. at some point when we taper, that's dollar supportive, right? >> i think we're back on the taper talk as soon as we get past the 17th of october, it will be when is the fed going to taper? that weakness that's in the dollar should drift back out.

i think there aren't many convincing arguments for me to suggest the dollar's going to weaken further. >> the thing is we're back on the taper talk. theoretically there would be a buying opportunity. if we're back on the taper talk, how much of a head wind is that. interesting. >> i think the politicians do the deal on the 17th. i think you'll get dollar strength. equity market strength. bonds will probably start -- yields will start ticking back higher again as we expect tapering to come back in. yields back up at 3% for the ten year into christmas. that in itself is a bit of a drag on economic -- it's a bit of a nightmare in terms of ten different balls you have to juggle. >> that's what successful traders do, right? >> yeah. well, that's the idea. >> they juggle the balls. right. we've got some news out of greece. the finance minister says unemployment is now only 26%.

the greek deputy finance minister, it says it's going the right way. it's at 1.6% of gdp and they're going to ask creditors to honor the obligations to cut debt. right. that's the news out of greece. if you want to stay clear of the dollar and traditional investments, sotheby's investment house. buyers are set to go starry eyed. they have a perfect 118 carat white dye mopped iamond which g auction. this is the largest of its kind which could rake in $35 million. the current record is $26.7 million. without pictures it doesn't quite tell the story. we'll try to bring those to you imminently. we'll move on. airbus has turned the tables on boeing winning its first ever order with japan airlines to

sell 31 a 2k38s 50 jets. the landmark deal has a price tag of $9.5 million. earlier we caught up with the ceo of air bus in tokyo. >> japanese airlines went through a heavy restructuring which was a very successful turn around of the company and we maneuvered to take decisions which are in the interests of the long term of japan airlines and we came up with a package which was unbeatable. >> this begs the next question. the other carrier here in japan will be al nippon airways. does this give you the opportunity to ink another deal with al nippon airways here? >> the other player, ana, has probably its own criteria and

we'll need to grow and do a good job and we'll see. we have an aircraft of choice for ana as we head for japan airlines. >> it was very noteworthy here at this press conference that you had ambassadors from a number of european countries attending with you. the bedrock of the u.s./japan alliance has always been the u.s. could this be the start of more momentum towards an expansion of a relationship? >> i say this because this is an interesting thing in your press conference. you notice a climate of change. is that what you're referring to? >> there was a climate of change. every country in the world is looking for gdp increase. and how do you manage it to more free trade agreements around the world? it's clear that japan and the european union have allowed for

a process of negotiating the free trade agreement. even if this decision is only business related, i think it gives some hope that these negotiations will be successful and this was why there was such a presence here of ambassadors of four countries and the european union. earlier i was talking about this diamond up for auction in hong kong. you do need to see the pictures. there we go. this is the 118 carat white diamond. the largest of its kind. the estimate is that it could rake inasmuch as $35 million? >> would you wear it? that's the point. >> wear it? >> would your good lady want to wear something that expensive? >> no. >> i don't think so. they wouldn't mind having it. >> wearing it isn't the issue. >> you would score some brownie

points somewhere. >> very, very safe deposit box somewhere. take a short break. still to come, where corporate makers are allocating the cash. we'll have the first look at ghana's 2014 i.t. spending forecast, fresh for you, hot off the press, right after this. stick with innovation. stick with power.

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this is "worldwide exchange." i'm ross westgate. here are the headlines. the u.s. government shutdown enters its second week as the war of words continues over spending and the looming debt ceiling deadline. shares in italian bank monte dei paschi will happen top after a long awaited restructuring plan. airbus breaks into boeing's turf in japan. they're selling 31 jets to japan airlines worth $9.5 billion at list price. >> we will take decisions which are in the long term of japan airlines and we came up with a package which was unbeatable. and cutting up the pie. blackberry is reportedly seeking to sell portions of the company to several possible buyers.

>> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. right. very good morning to you. if you've just joined us state side, welcome to the start of your global trading day. right now futures are down currently. the dough is 132 points below value. the s&p friday was p up 11 points right now. europe inequities are out there. the ftse 100 down .8%. it was up maybe 4% last week because the coalition government survived the confidence vote. what are investors to do in the united states? here's what some of the experts have already told us on the channel today.

>> hsbc is our topic managing as opposed to growth. we believe bbva will be better. they're more exposed to mexico. our risk report ranking compared to brazil which is our least favorite latin american country. they derive 1/3 of their revenues from it. i think definitely everybody realizes that capitol of the banking system is at least doubled. we've got all of the u.k. plays in our portfolio. we think some of the valuations are trading at value are very interesting. >> we're asking are people selling the dollar? we're not seeing it too aggressively. the debt ceiling is a miningor

thre -- major threat. i think we'll see people avoid the dollar. we won't sell overly aggressively. it's a good option given the public safe haven. well, that's the thoughts of some of the analysts and guests we've had on. meanwhile, it's day seven of the u.s. government shutdown. the senate may vote this week on a bill passed by the house on saturday which would give back pay to furloughed federal workers. they insist president obama must negotiate if he wants to pass aed a bill. they have a clean spending bill if boehner would simply allow a vote. boehner says he doesn't have the votes and they won't pass a clean debt limit increase. >> the president, his refusal to talk is resulting in a possible default on our debt.

all we have to do is pick up the phone. i think the american people understand, why wouldn't they talk to each other? i'm ready to talk. i've been ready to talk. >> when is this going to end? >> if i knew, i'd tell you. at the same time u.s. treasury secretary jack lew took to the air waives to raise the debt ceiling. on october 17th, the threat of the default is imminent saying congress is playing with fire. >> the president believes that the responsibilities of congress know the consequences and that this doesn't need to happen. they can vote today. they have the majority to do the right thing. still with us is pierce curran, head of trading at amplify trading. pierce, is there any possible scenario in which you think the u.s. would not pay the interest that is the debt owed to foreign investors around the world? that's what we're talking about principally. that's what scared the world the most.

>> yeah, no. there's no way they would. i know people are fearful of that risk and quite rightly. if it materializes as massive. >> it's a huge risk. >> it's enormous. it lit calico trigger a complete unwind of the last few years sort of recovery from the financial crisis, you know, worst case scenario. given that consequence, then the politicians will do a deal. i think that what the definition of insanity is the same thing happening again and you expect a different result. how many times have we seen this in washington? i don't know. multiple times. we will get the same result, which is they'll do a deal right at the last minute. >> but the question is is how much more volatile are things going to be between the s&p and you talk about this 1625 level is the target before that. >> yeah. there's no economic data.

if there is, they'll release their data. >> for the retail sales, it's going to get delayed. we're not going to get pay rolls until the government comes back. in the meantime we have earnings season starting. that doesn't get going until next week. there's no reason -- >> there's nothing to trade on. >> there's no reason to buy equities at this point. i think we'll get a consistent negative phase over the next ten trading sessions. that will take us down to some pretty attractive areas should the fiscal obstacle be overcome. >> what happens to treasuries, clearly the short end, short papers got very twitchy. we've seen the safe havens flow into treasuries. we hit on the ten year, below 2.6%. currently 2.62%. >> it's a bit of an oxymoron. you're worried about the u.s. defaulting on their debt. treasuries don't sell off. given the nature this is the biggest economy, where else do

you put your money? given on comparative yields they were that much lower. 1% lower. i think 2.6% is attractive. i don't think they'll come out of treasuries as a result of the default risk. if anything, they might push into them. i think we'll tread water. i don't see movements in treasuries and then yields will drift higher as taper talk begins to come around. >> can't wait for that to happen. now let's turn our attention to i.t. in july. they cut their forecast for i.p. they're holding their annual itx symposium in orlando, florida. it's 2014 outlook for the industry. i'm happy to say you don't have to join us is peter sunday --

sunday der garth ner. what is going to happen next year? are we going to see an increase? is it going to be slightly stronger than this year? >> yes. so this year, ross, has actually been not a great year for the growth sector such as the technology sector. we expect it to grow faster, 3.6% growth next year and the industry will therefore become a $3.8 trillion industry. we are on a path in two years' time for the i.t. industry for a $4 trillion industry or 5% global gdp. okay. that makes it kind of fairly important. how much is -- where is the proportion of that spending going? business spending on tech, government spending on tech and consumer spending? what's taking the biggest part of the pie? >> the biggest part of the pie is starting to become consumer

spending and con summer spending on technology is growing faster than business and government. inter price spending is still 2.8 trillion dollars. a portion of that enterprise spending is government spending but it's in the consumer space that we see the growth. obviously in consumers it's really on devices. it's mobile devices, smart phones, tablets, so forth. this year is actually when those categories have slowed substantially. we've seen most markets of the mature markets really be saturated with smartphone sales, which is part of why we've seen a stalling. plus, of course, consumers have been somewhat cautious in terms of spending on pcs and on tablets. >> you've got a stat here. you say by 2017 new device

categories. mobile phones, cab blets will represent over 80% of device spending. when will sorts of tablet spending outstrip pc sales as a percentage of total spending. >> by 2017 over half of new purchases will actually be tablets. as you said, 80% of spending will be on smart phones, on mobile pcs and on tablets. so we've seen an invention of a completely new industry in ten years. ten years ago most of these product categories did not exist. >> how much of this is the sort of emerging markets. with emerging market demand ramping higher, how much of an effect is that having? secondly, this is going to be a problem from margins for companies creating these

products having to go to a price point which is damaging margins and profitability. >> yeah. so the emerging markets is really the growth area. they've actually also slowed this year. that's where we expect the pickup next year in devices. device sales goes from being flat this year to next year being a growth sector of 5.5% growth rate. it's in the emergency guy. this will benefit a company such as google in particular. google has a 79% market share of smartphone operating systems. so android is really the dominant operating system, and that goes into the mid and low end market of many of the emerging markets. >> peter, taking this a little bit further forward. people are looking at new intus

stris and growth. what massive economic impact are the changes going to have? things like 3-d printers coming out. digitalization will be coming out. how big is the government going to be? >> yeah, so the really interesting trend is digitalization of the enter price. it is the censors, products, they bring in. the devices we run around with, they're fashion devices. the important part is it goes into products everywhere. as that happens, we see an economic value in terms of cost savings because we can do things more efficiently but also new product revenue. we think by 2020, digitalization, the 3-d.

some of it will be savings but some will be economic value at growth that will come from technology. technology is pervasive, invisible, in all products. that's what drives the value and products over the course of the next many, many years. and it changes the face of the i.t. industry. people that you don't see as technology vendors will become technology vendors. all companies become technology companies. >> peter, as an investor, that changes the game a little bit? >> yes, it does. i'm worried about the margin story with a lot of these devices. to grow revenue they've got to hit the emerging market space. that's going to be quite damaging. you made an interesting point about google and their operating sills testimony having 78% in the market share. this is the failing of apple.

that's all they use as a single system. that's really beginning to shoot -- they're shooting themselves in the foot a little bit. whether or not we'd see a dramatic decision where they might start using other operating systems or pushing that ios system to other devices, that might be where apple goes from here. in the meantime google and android will continue to eat up the market. >> good to see you today. pierce curran. peter, thank you as well. always good to see you with this report. we appreciate you. now the u.s. government has acknowledged for the first time it needs to fix software problems that have kept people from applying for insurance from the online health insurance services. they said an unanticipated search, they said they need more design changes and if you've just joined us, a recap of the

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blackberry may be looking for more than one buyer of its struggling smartphone and e-mail operations. courtney reagan is state side with the details. high, court. >> good morning to you, ross. blackberry is reportedly in talks with cisco systems, google and sap about selling them all or part of the company. reuters says a deal would be part of the deal. the $4.7 billion bid to take blackberry private has been met with skepticism over possible financing. blackberry has asked for potential interests from buyers. it's unclear if any of them will make a bid. righters says potential buyers are looking at blackberry's

secure network and pat tons, but there are questions about the value of that. it had a 1.5 bld amount. it's likely to be cut in half over the next 18 months. private equity firms have asked the company and vicars for more information about the various businesses. that process could take another few weeks. blackberry faces mounting legal woes. a big reason hiebld the company's second quarter loss was a writedown on unsold inventory of z 10 phones. we'll check how blackberry phones are trading in frank further at the moment, up by 3 1/3 there. there are still somebody to be

made. we'll take a short break. still to come, how the u.s. government shutdown enters its seventh day.

the s&p 500 currently down 14 points. ben lick ten stein is president joining us from chicago. ben, how twitchy are we going to get the next couple of days? >> well, there's obviously a not of nervousness associated with this trade right now. concern about the debt ceiling coming up and obviously as we enter into our second week of shutdown now. the s&p is still up above a couple of key significant levels. for the most part if you look at this market you have to wonder where everybody is that used to be saying we need a bit of a

pull back, a bit of a correction because that's really all we're seeing right now. for the most parts that we have seen, all the way back to june, 15:50 met with people. the middle of august we saw the 1619 level. so this is really just a pull back. it could get worse. don't get me wrong. if this market gets initiative to the downside, if it starts to seek value lower below significant areas of value that's established on the up side, that could be concerning. for the most part just a bit of a pull back off the 1726 high we saw. news related associated with the fmoc meeting. this market is just correcting at this point. certainly on the cusp, if you will, of some major support here near some major support. if you look across the word, the

gold is holding. above that 1330 level. euro currency did see the 136 handle. nothing convincing up above those levels. we're basically continuing to be in this holding pattern for the most part. >> previous guest of mine this morning talked about 1625 as sort of a key level in the s&p. do you go with that? >> sure. yeah. i'm looking more like at the low around 1619. that area is definitely significant. that's the most significant recent rejection, if you will. again, a little bit of a pull back. one thing we notice the buy the dippers are less aggressive. >> we'll see what happens there. we've got no data to trade off either, ben. we'll have to see what happens. good to see you for now we have to go. thanks. have a good day in chicago. that's it for today's edition of "worldwide exchange." coming up next, "squawk box", the countdown to the opening of

trade state side. keep it here on cnbc. whatever happens, have a profitable day. bye for now.

good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe concern than and andrew ross sorkin. take a look at the boards and see how things are shaping up. this is not a good picture this

morning. the dow futures down by 117 points. this is day seven of the government shutdown. the pentagon has ordered 300,000 employees back to work. the house voted to pay all government employees retroactively. the bigger issue is next week the u.s. runs out of credit to pay its bills. treasury secretary jack lew making the sunday talk show rounds. >> if we cross the line, we're going to a place that we've never gone. it's very dangerous. >> the argument from house speaker john boehner. >> the nation's credit is at risk because of the administration's refusal to sit down and have a conversation. >> they're saying it's a risk to have a clean debt limit. >> we are not going to pass a