the chinese and us agree. on trade in particular, though, here's an area where part of what we're trying to do is raise standards for, for example, intellectual property protection, which sometimes is a big problem in china. and if we can get a trade deal with all the other countries in asia that says you've got to protect people's intellectual property, that will help us in our negotiations with china. richard mcgregor. >> can i go back to the issue of debt deprivation. what legal liabilities -- what is your legal advice that foreign creditors must be paid first particularly since it's a sovereign credit issue? >> richard, you know what i'm going do is let jack lew, the secretary of the treasury, make a formal presentation on thursday before the senate committee because this is

obviously sensitive enough and people would be paying close attention that details count and i think prepared remarks from secretary lieu on that topic would probably be more appropriate. but as i indicated before, we plan for every contingency, so obviously, you know, worst-case scenario, there are things that we will try to do. but i will repeat, i don't think any option is good. >> mr. president -- >> steven dennis. >> mr. president, i'm wondering if you could talk a little bit about budget process. in the past you've negotiated with, for instance, blue dogs in 2009 and 2010 along with a debt ceiling increase then including a form. you name add fiscal commission. the republicans today are talking about let's have maybe another committee that would work out our differences over

the next few weeks. is that something you could talk about on the side, something that wouldn't necessarily be a concession but something that could be a format for getting a deal done? >> here's the thing, steve. i know that speaker boehner has talked about setting up some new process or super committee or what have you. you know, the leaders up in congress can work through what processes they want, but the bottom line is either you're having good faith negotiations in which there's give and take, or you're not. there's already a process in place called the budget committees that could come together right now. democrats have been asking for 19 months to bring them together. make a determination, how much should the government be

spending next year, the appropriations committees could go through the list and here's how much we're going to be spending for defense and here's how much we're going to be spending for education. that's a process that's worked really well for the last 50 years. i don't know that we need to set up a new committee for a process like that to move forward. what has changed or what seems to be motivating the idea that we have to have a new process is speaker boehner or at least some faction of the republicans in the house and maybe some in the senate are holding out for a negotiation in theory, but, in fact, basically democrats give a lot of recessions to republicans. republicans don't give anything. and then that's dubbed as compromise, and the reason that democrats have to give is because they're worried that the government's going to stay shut down or the u.s. government is going to default.

and, again, that -- you can dress it up any way you want. if that's the theory that the republicans are going forward with, then it's not going to work. so let me just give you one specific example. i've heard at least, and i can't confirm this, that one of the ideas of this new committee is you could talk about reductions and discretionary spending. you could talk about entitlement reform and reductions in mandatory spending. you could talk about how long you'd extend the debt ceiling but you couldn't talk about closing corporate loopholes that aren't benefiting ordinary folks economically, and potentially if you closed them would allow us to pay for things like better education for kids. well, you know, i don't know why democrats right now would agree to a format that takes off the table all the things they care

about. and is confined the things republicans care about. so, again, i don't know that that's exactly what's being proposed. my simple point is this. i think democrats in the house are prepared to talk about anything. i'm prepared to talk about anything. they can design any formats they want. what is not fair and will not result in around actual deal is a hostage deal or democrats are taking ransom or providing concessions for the mere act of reopening the government or paying the bills. those are not things you do for me and they're not things that you do for the democrats. >> but is there room here where it's not necessarily a concession, where it is you negotiate what the negotiations

are going to look like. you don't have to agree to overturn on obama care, but you can negotiate what the talks are going to look like so everyone is comfortable. you mentioned yourself it's a tough vote. you're asking them to take a tough vote for the debt ceiling. usually both parties want to have some cover, something they can point to to say i want some -- >> which is fine. >> -- process forum before i approve another trillion in d debt. >> which is fine. if they want to do that, reopen the government, extend the debt ceiling. if they can't do it for a long time, do it for the period of time that the negotiations are taking place. why is it we've got hundreds of thousands of people not working right now in order for what you describe to occur. that doesn't make any sense. the small business association fwivs out billion dollars every month to small businesses across the country.

that's not happening right now. so small businesses in every state that are counting on a loan to get their business going and you've got the party of small business saying small business administration can't do it. that's what they call themselves. and yet they're suffering. you've got farmers waiting for loans. they cannot be processed. i happen to disagreement think the farmers have done real good under my administration but having said that, why would you keep the government shut down and farmers not getting their loans while we're having the discussions you just talked about? you know, the republicans say they're very concerned about drilling. they say obama has been restricting oil production despite the fact that oil production is at the highest level that it's been at in years and it's continuing zoom up, but they say, you know, the

democrats are hold back oil production in this country. well, you know, one of the things that happens when the government shuts down is new drilling permits aren't processed. so why would the republicans say to the folks who are interested in drilling for oil, sorry, we can't let those things be processed until we have some negotiations and we have some cover to do what we're supposed to be doing anyway. that doesn't make sense. if there's a way to solve this, it has to include reopening the government and saying america's not going to default, it's going to pay our bills. they can attach some process to that that gives them some certainty that, in fact, the things that ire concerned about will be open for negotiation. i told them i'd talk about it. but if they want to specify all

the items that they think should be the topic of conversation, happy to do it. if they want to say, you know, pa ofrt that process is we're going to go through line by line all the aspects of the president's health care plan that we don't like and we want the president to answer for those things, i'm happy to sit down with them for as many hours as they want. i won't let them gut a law that is going to make sure tens of millions of people get health care, but i'm happy to talk about it. all right? >> mr. president, one further question. >> stephen. >> thank you, mr. president. i i'm going through the list. [ inaudible ] in the campaign against terrorism and if we're going see military operations all around the continent, how does that square with your contention that america can't be at war forever. >> well, if you look at the speech i gave the national

defense college several months ago, i outlined how i saw the shift in terrorism around the world and what we have to do to respond to it, and part of what i said was that we had decimate ed corps ail kai that that had been operating between afghanistan and pakistan. but you now had these regional groups, some explicitly tied to al qaeda or some of which are more localized. few of them have the ability to protect beyond their borders but they can do a lot of damage inside their borders, and africa is one of the places where because in some cases the lack of capacity on the part of the governments, in some cases because it is easier for folks to hide out in vast terrains

that are smarlly populated, we're going to go after them. but there's davis between going after terrorists who are plotting directly to do damage to the united states and us being involved in wars. the risks of terrorism and terrorism to come are going to be here for a long time to come. we've god to engage in the region and engage with muslim countries and try to isolate radical elements that are doing more damage to muslims than they are doing to anybody else. we've got to to thing about economic development because although there's not a direct correlation between terrorism and the economy, there's no doubt that if you've got a lot of unemployed uneducated young men in societies that there's a

greater likelihood that terrorist recruits are available, but where you've got active plots and active networks, we're going go after them. we prefer partnering with countries where this is taking place. we can build up capacity but we're not going to farm out our defense. i have to say the operations that took place in both libya and somalia were examples of the extraordinary skill and dedication and talent of our men and women in armed forces. they do their jobs extremely well. with great precision at great risks to themselves, and think they're pretty good examples of how those of us here in washington should operate as well. >> mr. president, can we talk about -- >> did the captor of mr. libby

comply with international law? >> we know that mr. al libi plan and helped execute plots that killed hundreds of people, a whole lot of americans, and we have strong evidence of that. and he will be brought to justice. mark. >> mr. president, while you're waiting for the shutdown to end, why is it you can't go along with any of the bills the house is passing, funding the fda and fema where you were yesterday and veterans benefits and head start. you've got to be tempted to sign bills and get funds to those programs that you support. >> of course, i'm tempted because you'd like to think that you could solve at least some of the problem if you couldn't solve all of it. but here's the problem. what you've seen are bills that come up where wherever

republicans are feeling political pressure, they put a bill forward. and if there's no political heat, if there's no television story on it, then nothing happens. and if we do some sort of shotgun approach like that, then you'll have some programs that are highly visible get funded and reopen ed like national monuments but things that don't get funded like the sba loans not get funded. and we don't get to select which programs we implement or not. you know, there are a whole bunch of things that the republicans said are law that we have to do and i don't get a chance go back and say, you know what? this cockamamy idea that this republican congressman came up with i really don't like, so let's not -- let's not implement that. once you have a budget and a

government with a set of functions, you make sure that it's all operating. we don't get to pick and choose based on which party likes what. so, you know, that's where the budget discusses take place. now, if there's some things that the republicans don't like, they should argue for eliminating the bunt, maybe the democrats won't agree and they won't be funded but you don't deal with that by issuing a government shutdown. i'm going to take one more question. right here. >> mr. president -- >> your hand persistence has worked. >> mr. president, you talked about the political dynamics that leave the house republicans feeling that they don't want to negotiate with you, they don't want to come together. i wanted to ask you two things about that. looking back at the 2011 dae

fault discussions and the budget drama, is there anything that you wish you had done differently in 2011 and after this what you called nonsense has ended, what do you believe the political dynamics might -- how will they have changed to move forward? >> i think it's an interesting question. in 2011 i entered into good-faith negotiations with john boehner. he had just won the speakership. it was at a time when we were still responding to the recession, deficits were high, people were concerned about it, and i thought it was my obligation to meet him halfway. and so we had a whole series of talks. and that point at least, nobody had any belief that they'd have

come close to potential default. we came fairly close and whenever i see john boehner to this day, i still say, you should have taken the deal i offered you back then, which would have dealt with our long-term deficit problems, would not have impeded growth as much, would have boosted confidence buchl at that time i think the house republicans had just taken over, they were feeling their oats, and they were thinking, you know, with don't have to compromise, and we came pretty close to default. and we saw the impact of that. i would have thought they would have learned from that, that we can't put the american people through the wringer again. that's why i've been very clear. we're not going to negotiate around the debt ceiling that.

has to be dealt with in a reasonable fashion. by the way, i often hear people say, well, in the past it's been dealt with all the time. the truth is if you look at the history, people posture about the debt ceiling frequently but the way the debt ceiling got passed was you'd stick it onto a budget negotiation once it was completed because people would say i don't want to take a bunch of tough votes to cut raises or pay taxes. let me do it all at once. but it wasn't a situation in which, you know, what if i don't get what i want, then i'm going let us default. that's what's changed and that's what we learned in 2011. and so as a consequence, i said, with another going do that again, not just for me, but because future presidents, republican or democrat should not be in a position to choose whether the economy stays afloat and we avoid worldwide

catastrophe or we provide concessions to one faction of one party in one house. but let me tell you a lesson i learned. i think we should. tlink are all kinds of issues we should be talking about and i don't expect to get 100% of my way and i'm still very open to having conversations with not just the speaker but any republican over there. so -- go ahead. >> if you enter into a series of short-term funding bills or a debt ceiling funding bill, you will be back in the same place presumably with the same members of congress rngs so what has changed in the political dynamic if you do the short-term -- >> i think what has changed is they're aware of the fact that i'm not budging when it comes to the full faith and credit of the

united states, that that has to be dealt with. you don't pay a ransom. you don't pay concessions for congress doing its job and america paying its bills. and i think most people understand that you know, i was at small business the other day and talking to a bunch of workers, and i said, you know, when you're at the plant and you're in the middle of a job, do you ever say to your boss, you know what? unless i get a raise right now and more vacation pay, i'm going to just shut down the plant. i'm not going to just walk off the job, i'm going to break the equipment. i said, how do you think that would go? they all thought they'd be fired and i think most of us thank. you know, there's nothing wrong with asking for a raise or asking for more time off, but you can't burn down the plant or

bun down your office if you don't get your way. most everybody understands that. thanks very much. >> good afternoon. welcome to the close bell, everybody. we've been listening to the president taking his fight with the republicans to the american people. le in l not negotiate the affordable care act. blaming the republicans 100% for the government shutdown. bill, what did you hear? >> didn't reiterate his cause to bring to the familiar a bill that would reopen the government and would raise the debts ceiling and then he said he would sit down with anybody from any party to begin the negotiations on the spending. we really haven't moved the needle forward or the ball forward but the markets are taking it in stride as well. the dow down 113 points. at the low of the day we were down at 134. so a sideways move for the markets as we listened to the president in the half hour.

>> of course, the conversation shifting to the debt ceiling debate, the deadline of october 17th next week when the treasury will have $30 billion in its coffers, the president saying not to downplay the importance of the debt ceiling. i want to get reaction. we're joined by larry kudlow and ahman. what did you think? >> i think he will not negotiate until the continuing resolution and debt are signed. he was rare conciliatory after that. he said i'm happy to talk about anything the republicans want to talk about but he kept clearly drawing a line in the sand. i thought he was very effective. i don't know what the republicans are going do. one thing where there might have been a tiny opening, issue of a

short-term extension both for the budget resolution and the debt ceiling. maybe there's some wiggle room there but i'm not sure of that at all. >> by the way, in case you're wondering, we did have a democrat standing by, howard dean, the former governor of vermont was here but he had an appointment and he had to go. eamon, are we making any progress? i know the president spoke with the speaker on the phone this morning. they repeated each of their stances but they don't appear to be any closer that point. >> i think that's essentially right but i agree with larry that there might be a deal potential. also the president didn't really shut down the idea that house republicans have been floating of putting together sort of a negotiating committee.

this would be a committee to sheet it down. he didn't do that. so thatwise one as well and i thought the president showed a little more daylight on the issue of pryorization than he's shown before. he was adamant, there are no options after october 17th. today what the president said was, of course, we prepare for every contingency, although there are no good options if that comes to pass but he said we're prepared for every contingency and we're looking at everything and he indicated we might hear more from jack lew later on this week. not a major movement in the debate right now, guys. >> kill just add to that? i agree with amon. it's not clear to me and i think i disagree with the president on this. no one on the republicans' side is using the word "default." he keeps using that and saying

the world is going to come to an end. boehner keeps saying there's not going to be any guy fault. can i just give you a quick number? any number more or less on average the income tax throws off more than $200 billion per month and the interest on the expense is about $35 billion. so this idea of defaults on our sovereign debt is just -- it's a nonstarter. it's a red herring for heaven's sake and i don't know why -- well, i do know why. it sounds great. no republican wants a defauchlt. >> come on, larry. let's not be disingenuous about this. we understand the spirit in this regard. if you don't raise the debt ceiling at some point you're going to face default on paying your bills even though you have the income coming in. come on. >> no, no. ly come on. first of all he interchanges and he did several times, treasury

bills with the overall budget. the second point is john boehner would say he wants the limit the obligati obligations. that's why he wants less spending and entitlement reform. >> guys, thank you very much. we want to get to our next guess. they're making little progress with each date today. even as every economist agrees that reaching the dead limit will plunge the country into a recession. >> joining us now, a couple of congressmen. represent representative lynn jenki jenkins, republican from kansas. she's vice chair of the gop conference and republicanive john myarmouth who's a democrat from kentucky. thank you. did you hear anything discussion that would move this discuss forward? are we any closer to an agreement at this point?

>> all we've been asking for is to sit down and have a conversation about the parts of the funding bill that we disagree on. and so it mice hope the president is softening about that and will agree to meet with us. >> the president said if you do that, he'll sit down with anybody and talk about the negotiations for the budget. you'd you be willing to raise the debt creeling to do that? >> well, if we had some parameters in place. but, look. i don't think racing the debt ceiling without fixing the underlying problem which is this runaway deficit spending here at the federal level is a responsible thing to do either. this -- >> let me -- continue. >> well, this administration came into office with $10 trillion in nalgs debt. we are approaching 17 trillion

dollars. so that's almost a $7 trillion increase in our national debt in 4 1/2 years. when i ran for congress back in '08 i did so because i was unhappy that the bush administration had added $4 trillion to the national debt in over an eight-year period. >> representative yarmouth, let me ask you. the idea that the president continued to reiterately not negotiate, isn't it the responsibility of the president to negotiate? at what point does it look like the obstacle to progress is the president ran thaer congress to keep digging in? i mean how is this helpful? >> first of all, the president has had about 20 conversations with republicans in the house about the budget. republicans and senators have consistently blocked the conference there. there's been ever opportunity to have negotiations on the budget

levels if f the last six months. >> what has been the excuse for the last five years and the failure to actually pass a budget? isn't the result of the issues with're dealing with today the result of having no budget for five years. >> of course. that's prima facie. that's why we shut down because woe don't have a budget after agreement. >> for five years. >> the house passed one, the senate before that in june and now we're still here. we haven't had a conference. we can do that, we should have done it. the fact remains we cut $3.6 trillion worth of spending over the last three years. the deficit is half what it was during the peak. we are spending less money this year than we spent in 2008. so there's been a lot of

progress made and the idea that this is getting worse and wore worse and worse is borne out by the facts. >> speaker boehner said there will be no default. there's got to with middle ground somewhere. there's gog to be something done where either they have the continuing resolution passed, the debt ceiling raised or somethingless has to happen. what is that something else that ee going to happen that will keep us from defaulgt on our national debt? >> a simple conversation between the two sides that sees things differently. right now that's the only thing that's missing. we invite harry reid. our appointees have been sitting at the table now for over a week waiting for senate negotiators to show up and they have not yet shown up.

>> and they have said they will not do that until there's a continuing resolution and a debt ceiling bill passed in the house but you're saying that's not going happen until they sit down so we've got the classic catch-22 here. let me ask you because we're running out of time here. can you guarantee us there will not be a debt default? representative jenkins, you first. >> absolutely. we don't whiens the president would want to do that. >> >> congressman yarmuth? >> they would love do that but you can't negotiate the kinds of things republicans want to negotiate in 80s or nine days. we couldn't do it in months and months and months after 2011. all this stuff, we'll be back at it again in six weeks or two months and that's why this kind of hostage taking negotiation we

can't do. >> all right. thanks very much. we appreciate it. the markets are off of the lows, down about nine points on the dow jones industrial average. we're just about 30 minutes before the "closing bell." >> you know where we see the reaction is in the short toechbld yield curve. it's come up quite a bit. on the selling, not so much on the long end. we teal talk about it. >> terry duffy says he has a solution. he'll be here to explain it coming up next. especially when it comes to my investments. you want a broker you can trust. a lot of guys at the other firms seemed more focused on selling than their clients. that's why i stopped working at my old brokerage and became a financial consultant with charles schwab. avo: what kind of financial consultant are you looking for?

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stocks are getting lower. we have the fears about the looming debt ceiling crisis. where does this market go from here? joining us in a late "closing bell" skparj we appreciate your patience. kimberly, she's the author of "wealth by zone" and our own rick santelli joins us. thank you for your patience. we are down 5.6% on the dow since the market hit its all-time highs in september.

is that a market that's fearful of what's going on in washington or just a correction going on? >> there's no question the market's been fearful. it's been steadily rising. there is nervousness, but at the same time the market is getting used to this stuff. one of the things we look at is what is the average climb in the s&p 500. the average was 1.8% decline the first time during the shutdown. 2.0% the last five times. the market is getting used to, but nonetheless there is hope. >> you get used to it till it happens to you. yes, the markets have been complaisant but do you worry as we approach that october 17th deadline we go from the panic

increases and suddenly we find ourselves in a massive skyrocketing rate environment? >> we're more worried about a lid quitty issue. what's been interesting to us over the last few days is to see the t-bills on the short end have gone up by libor and swath haven't at all. >> why do you think that is. >> what is the market telling us? >> the market is expecting the fed to provide liquidity very consistently through this. >> come bkimberly foss. do we even pay attention to that? does it matter when we've got to wrangling in washington? prioritize for us. what matters to you most as an investor right now? >> i think for the investors

it's really what's going on with washington. politically there's no advantage to all this politics. it's hurting consumer confidence, it's hurting business confidence and it's hurting investor confidence. of course, with don't want anybody to default on the debt but the longer it takes, the more untrusted and instability the markets are showing. i think in the long run we will get through this. i'm cautiously optimistic but the question is how, at what cost, and when are we going to get a resolution. >> yeah. rick santilli, what did you see in chicago? >> yes. 35 basis points in chicago at 11:30 eastern. highest auction rate on a one-month bill since october 28th of 2008 because the period in question where maybe payments wouldn't have be paid which i think is highly unlikely, anything that's in that time slot is a bit under duress and how that may address the repo

market under a bit of duress, but as you move on the curve, they're up four basis points. the fives are up two basis points. 10s and 30s are on change. it's more of a calendar function, shore-term financing possibilities, but i will still say the chance of default in boehner's own words is zero and there's a lot of chicken littles in very high offices these days. >> all right. thanks, everybody. we appreciate it. >> while the two sides in washington are still unable to reach a compromise. our next guest thinks he ooh is got the best solution for the debt creel deeg bait. our next guest is terry duffy. welcome back. >> great to see you. >> you've been watching while we've been watching. what's the solution? >> i don't know if there's a solution, maria but a couple of things i find interesting. the republicans keep putting out bill bus the democrats keep rejecting them in the senate so what they're saying is they don't want to have a piecemeal

legislation. what the president has done is he's given an exemption for 80% of businesses in america. so if you have 50 employees or more that work 30 hours or more a week, you do not have to abide by the affordable care act. if you don't, you do. so that 20% represents roughly 60 million people that are not exempt from this. so i think what the republicans are saying, give evan exemption and we'll reopen the government. thank is the first and foremost important thing we need to do. it's a simple solution. if he doesn't go about it, he's doing nothing but loading up the republicans a year from now because the cost of this program will be met with less participants in it than there is if everybody's in the participant. i give the president a lot of credit. it's first time he's got a bill pass bud at the same time if he's going give an skpejs to the others, give it to the other 20%

also and see how it goes out. that to me only makes common sense. the president also said -- i'm sorry. >> what about -- you know, let's talk about the democratic side for just a moment, terry. what about those who say it's just irresponsible to even use the debt ceiling as a -- a leverage tool in these nesh gauche united nations. we should not be messing with the full. the president has said he's willing to sit down and even talk about the efficacy of the obama care bill but they've got to reopen the government and raise the debt ceiling first. is that unreasonable? >> no, it's not unreasonable but think you said something very interesting and the president said something very interesting today many times. he's ll to sit down and talk. is he also willing to listen? i think that's what's critically important here. it cannot be just his way or the highway. i tlink's two bodies of congress

that have a vested interest. >> terry what you're saying is this is what the republicans are pushing for and the president continues to reiterate we just heard from him for an hour and five or ten minutes. >> i know. >> and he said he will not negotiate on the affordable care act. >> he will but they've got to pass the continuing resolution first and raise the debt ceiling. then he'll talk. >> but that's not right. he already did negotiate. that's disingenuous. he negotiating but telling businesses they did not have to comply with the a fordable care act for the next year and the other 20% he did not do so. that's where the republicans have a problem with it. he started it so he should finish it. >> why are the markets reacting? >> let's talk about the debt ceiling. you look at where interest rates

are today and rick santelli knows them better than anybody, but we're at historical lows. just the pure rhetoric of this could have interest rates on the rise and then i think this is where i will agree with the president. they won't go back down because people are going to eventually get tired of listening to these arguments about the u.s. every two years on the debt ceiling and they're eventually going to charge more for us to borrow money. that's a big, big problem. >> trust me, we're all sick about hearing it. >> thank you so much. we've got to 15 minutes before the "closing bell" sounds for the day. >> still definitely affecting the markets in a bad way and it could only get worse if the tone doesn't change. up next two market watchers tell us how they're playing the market right after this. ♪

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welcome back. this market having another tough day. >> courtney ragging break down the rough days. >> that's exactly right. it started out as an okay day and then things really deteriorated after both sides spoke in washington. if we take a look at where we

are. the market is down 4% on the s&p. if you look at the sectors, thinks are shaking out as you might expect them too. the sensitive names selling off. tech is selling off. consumer discretionary is selling off. then the consumer staples, utilities leading the market high fehr a second day. biotecks. the nyc biotech index down at its lowe esest level in two yee. the trends that we saw in the third quarter are not likely to continue and then the home building stocks are also falling as a result of that down grade. back to, you bill and maria. >> thank you so much, courtney. we've got about ten minutes before the "closing bell" sounds for the day. we're down 5%, billsome. >> 5.7%. >> 5.7% from the highs. yes, it's sort of a slow and

steady decliechblt in fact, it's a slow and steady decline so we're seeing a pretty good reaction here, negative reaction. >> we're giving back september's gains. another day, another selloff. if you think cooler head willing prevail in washington, do you think it's time to jump into the market and buy this dip? we'll talk about it coming up. t. so we talked about her options. her valuable assets were staying. and selling her car wouldn't fly. we helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today... and tomorrow. so let's see what we can do about that... remodel. motorcycle. [ female announcer ] some questions take more than a bank. they take a banker. make a my financial priorities appointment today. because when people talk, great things happen.

all right. ten minutes left here. we're out from the "closing bell." what he's trying to say is the market is down 120 pointses on the dow jones industrial average. >> you want to talk about investing in the uncertainty, chad moore began laernld along with chess lof. god to see you. we've got this slow decline for stocks dhouchl you think clients are reacting to this dysfunction and approach the october 17th deadline? >> it's funny. i thought the market would be down a lot more than it is today just looking at the carrage goi --

carnage across the tape. some people are buying defensive names. i expect that to go forward until we get a change in the language in washington. >> two other times this year, chads we've had a 5% decline in the market. subpoena it time to get that going? >> i'll get you a shopping list. you can find quality opportunities. at this point, though, investors are moving up the quality spectrum. they're buying some of the consumer staple stocks. the momentum players have taken a back seat. what's your take on biotech, one of the worst performers for the day? >> they've had a run but you can

find other opportunities, okay? biotech should be selling off because perhaps it's overvau yooled but you can find on the oil service side and the come super side. i think when the deal comes the market's going to gap higher. >> are you going to do that? >> not yet. >> i didn't think so. >> did that surprise you at all? we're in a wait-and-see attitude right noud. i think i'd rather play it from the short side. i want to see a big flush selloff. >> we haven't had that. >> no, we haven't had it. this 120 down point is not a big event. we're not seeing it from down here. that's not to say they're not doing it right now but i think people are locking in some profits and that's going to gone on until at least friday. that's a long time in our environmental. >> approaching that october 17th

deadline if this government shutdown continues and we don't have the resolution, do you think things turn ugly going into this deadline? ? we could see a bounce but it's not like this date appeared out of nowhere. they're kicking the can down the road again and it's really becoming a crisis of confidence as far as from a trading side. >> and these words are used all the time but that's what it's become. >> you have to look three weeks out. >> you think it will be done by then. >> we're going to get done three weeks out and the market is going to be higher. matt's going to be right about that bchlt u you have to start looking right now and have your shopping list real tight because there are going to be themes of opportunity. >> okay. you can tell he wants to buy. >> thank you, gentlemen. good to talk with you. >> we'll come back with the closing cauge ing countdown. >> afterward don't miss out on the interview with john thain.

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quick back. we just got word that speaker john boehner will go publicly before the camera as make a statement presumably in response to the president's news coverage and we'll provide live coverage of speaker boehner's statement coming up at 4:30, about a half hour from now. a lot to get do in the meantime. first let me show you how the dow performed. today we're going out on the lows right now. down about 150 points, so we've taken out all of september's gains and then some. we're down about 5.8% from the peak. where's the response to what's going on in washington? it's at the short end of the yield curve. the one-month t-bill. the yield skyrocketing today. we're at 3.2%. we were at 3.5% at one time. there's not a whole lot of daylight between one month and two years. short end is what's showing a

little bit of panic so far. alcoa reports earnings after the bell. they looking for a profit of 5 cents on $5.6 billion in revenue. terry dolan, what in the world do you do with this market right now? >> earnings, washington, how do you play this? putting washington aside, i know that's hard to do, we actually like the market here. >> do you? >> we do. we thought some of the short-term movers have cleared themselves up. i think that, you know, the market is at least ready for a bounce of some sort here if not sustaining a little bit of rally. >> what would you buy? >> you know, i think across the board you'd see value. i'd be in tech and some other maybe doubles and higher yielding stocks as well. >> what would the catalyst be, the fact that they get together in washington? >> i think two things. i think that the market has

reach aed a zone that's technically desirable and we don't think they can shut it down without raising the debt creeling. >> thanks, terry. the dow down 160 points. earnings from alcoa. john boehner coming up in the second half hour. i'll see you tomorrow. >> it is 4:00 on wall street do. you know where your money is? hi, everybody. welcome back to "closing bell." i'm maria bartiromo. close at 157 points. we saw selling intense fife just about 10 minutes before the close. nasdaq composite down 75 points. that has to do with technology and biotell. biotechde