they'll stop what they're dpooi. >> i'm taking away 20 times earnings -- >> look, look, i'll leave you with one thought. >> 15 seconds. 10 seconds. >> we are at 14 times next years. whether it goes to 16 like lees said, if we get over this crap in washington -- is that all i got? i got more. >> love you, though. >> thank you very much, david. great having you. now it's time for "squawk on the street." ♪ ♪ >> good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber and jim cramer.

reports suggest an agreement on the shutdown is coming along. the 10-year right around 2.71 and europe is up on some of the highest german economic confidence numbers in the past three years. our road map begins with anticipation. two days from the debt ceiling, day 15 of the shutdown, still no deal on the table. but lawmakers say they are clos closer. >> a mixed bag of quarterly results. citi, coke and j & j. >> and blackberry placing an open letter to customers to reassure them, quote, you can continue to count on blackberry. >> there is some hope of a senate deal. they say they're getting close to an agreement to reopen the government. the dow coming close to its

fourth day of gains. the question is what happens. >> listening to david tepper just tremendous this morning saying this is about main street, main street will be crushed, higher interest rates coming. but you know what i don't like to hear? these are senators. it's always -- the senate has always been kind of a convivial place. it's the house that has had such a hard time. maybe they've got some sway in the house or maybe there are some in the house to really do think a default doesn't hurt. tepper is not talking about the banks doing poorly. he's talking about mortgages. it's frightening. >> we have some of what they talked about this morning. >> when you lose your reputation, okay, it's very hard to get your reputation back,

okay. so when you miss a treasury payment, if you miss a treasury payment, that's not a one-week or two-week deal. you don't get it back so fast. it will take years and years and years, okay? we can't afford, we can't take the chance, we can't be monkeying around, can't be playing around. >> you can listen to at thor. i've known him from when he saved me from selling some bad junk bonds in 1985. i didn't even know where his politics were. honest, i don't. all i know is that he's a tremendous visionary about the stock market and the bond market. i know him as a bond market guy. you ignore him because you think default's good. i'm not kidding. you ignore him because you think default teaches everybody a lesson and you starve the beast. i think a lot of people in congress and in the house that feel that way. >> there may be. i think he echos the sentiments of many people in the financial

services company. but we'll see whether that cry is heeded by that group of people in the house of representatives if and when a bim gets to them and gets out of the senate in the next 24 hours. >> is there a legitimate business person who thinks this is good? >> no, no. >> there's a debate about whether it's actually possible to default, there's a lot of debate about that. >> or what the deadline really means or what happens if we krosh that -- cross that threshold on thursday. >> i know four ceos who are democrats. absolutely. i've had a thousand ceos on air and i know four who are democrats. name me a republican ceo who is not a banker because people hate bankers. jaime dimon talks about being

hated. it was kind of an existential moment. >> it's not clear to me they've been completely silent. >> howard schultz is absolutely in there basically saying, listen, this is bad. he's not saying, howard, you could say arguably he's a democrat for some of the positions he takes. he's for civility. how many democrats are being called up by walmart and target? why doesn't the ceo of walmart and targets and say, we got walmarts in all of your areas and we're going to lay off people. >> we don't know that's not

happening. >> why are they so quiet? >> you're saying if it is happening, should they make it public? >> right. >> maybe they don't want to. there's benefits to trying to make it happen. i haven't talked to mike duke. >> mike duke is a reasonable person. how could he ever want a default so that people who don't get their social security checks ? p >> i sure he does. >> it's a little insane to play with this thing. >> like whirlpool's action yesterday. the channel checks, people are blaming on uncertainty about the shutdown. you think that's real? you think americans are tempering their economic behavior because they're worried about a shut down or default? >> come thursday they're going to be real worried. if you ever hear that your social -- there's 80 million checks that could not go out. the idea of prioritizing. by the way, i have a payment due. >> apparently they haven't even

prioritized. larry lindsay in texas apparently seems to know the treasury has not gone through that exercise in even figuring out how would we do it? >> which takes a while. >> they haven't done it. >> what's interest, what's principal? we pay back the 5-year and don't pay the 10-year? tepper is smarter than most every person i've heard on tv and he's saying it's a disaster. again, i come back to there are people who want a disaster as a wake-up call. they're saying we need a disaster to prove to the american people we need business. the american people are like, hey, listen, where's my check? >> meanwhile, the markets keep going up. >> want to sell and have them make an agreement the next day? >> why should we be near the highs? is there something that's happened in the einterim? >> people feel there's going to be a deal?

>> i don't know. i don't get a social security check. it's not going to directly impact me. >> not yet. >> but what's sad is you have a mortgage -- >> what's sad is some lawmakers probably do want a huge selloff for the political cover would give them to make a vote. >> i don't know if anyone in washington seems to own -- i know they do tradesider trading. what we have to do is shut down the government in order to be able to cause tremendous pain so that when we reopen the government, there's tremendous pain because we need tremendous pain. i don't know. where's thomas payne? >> alexander payne. >> remember hamilton? remember lincoln when he talked about the national dealt bt whe went bankrupt? they're probably resurrected. >> we could use their help.

>> ford's theater, right back. honestly, i think if you actually sat down with some of these guys in congress, they would say you know what? it's about time that people didn't get their check. it's about time we put our feet on the third rail. i don't know. the third rail is very frightening to me. the rats seem to be immune. >> the rats are all over it. >> they're immune. or do they jump over the third rail? >> let's move on to things we at least can accurately analyze instead of washington. >> the survival skills of rats. >> moving on to citigroup. they posted third quarter results that did meet wall street forecast, hurt by weaker income revenue, coca-cola, 54 cents a share and johnson &

johnson raised its full year guidance. there we have three of the larger companies in the united states of america. city did come in a very bit below the earnings estimates and fixed income does seem to have slipped a bit, banking revenues down 10% from the prior year. >> that was not a great quarter. >> not a great quarter in terms of fixed income trading, which we can see as a delta on terms of better or worse whether it be morgan and stanley, goldman sachs. >> almost a year to the day of corbat being named ceo. >> this is a good opportunity to sell that box to somebody.

>> who is going to buy that box now? >> it would be a good opportunity if they were 6-0. >> they had an opportunity and they missed the window. >> what about the other names, coke and j & j? >> i told you goreski. i got a man crush on him. >> brees i got a man crush on. >> whom you've been worried about. >> coca-cola was not as horrible as i thought it would be. >> could have been worse. >> could have been much worse. i thought coca-cola, the whisper was basically that people had all switched to pepsico or they were not drinking. they deliver a number that was subpar. great quote from the ceo. >> identify we remain consistently discontent." >> how about negatively content?

>> what is discontentivism? >> somewhat dominant? >> it has been the second worst performing dow name in the past three months. this evenin things like alcoa had come out and not said good things. >> alcoa said can volume is down. coca-cola is an american company. you're not going to be able to stick a fork in that company. it's too good. management is too good. >> it's interesting to look at the quotes from the ceos. they think about them a lot. citi's was we performed relatively well. things were challenging, what we could control, we did control, particularly costs is what corbat had to say. as for your man gorski, he talks

about achieve are near term priorities while advancing longer term growth drivers. >> that's what happens when you deliver good numbers, you can say positive things. gorski -- >> the beat is not as good as it was last -- >> merck's in summit, new jersey, and they're closing the headquarters. you know, if -- merck's like a plane where it's one engine, it's doing fine, three engine go down, fourth engine's still doing fine. what is going on at merck that so many people, including loyalists of merck have been downgrading it? i'm worried about merck. i'm not worried about gorski and j & j. >> is apple looking to focus

more on luxury? the tech giant adding the ceo of berbury. >> and victor cruz, we'll talk to him later this morning. and we're keeping all eyes on washington to see if we get any kind of a deal. back in ament. -- a minute.

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burbury as ceo. she been with burbury for about five years. she's done well. >> watch her video about the need to have social and digital in order to sell. i think that she is going to be the point person on what i have felt was a not great social sales effort by apple. so that's what i think. i don't know her as an apparel person. i just don't.

>> my only question dpsh-- i ha two-fold question. mine is why you would leave b burberry after having a successful career, living in london, you're going to move to silicon valley? >> native of indiana, ball state -- >> muncie, huh? >> one of six kids, i believe. but apple has reached for european ceos in luxury. they hired denev from yves st.

laurent. >> she did a runway first show on digital. she's very much into if you tweet season about b-- somethin about burberry -- i went to buy a couple of ties and for the first time in my life i went to the counter and said, no, i'm not paying that price and i walked away. that is hugely expensive. >> so is apple. >> but there's more utility. if you spill salad dressing on a tie, see you later. hey, i love the show, hey, i can't afford it. i was mortified. people behind me -- i was denied a kohl's credit card once and that was also very mortifying. but burberry is very expensive

stuff. she's a uniter of culture, she used the chat are platform. salesforce.com, that's what you should think of. >> i want to see what she's getting paid. >> take a look at those ties. you would not believe how expensive. i bought a jacket there, a nice black rain coat. >> we get our ties. >> it's embarrassing when you get to the register and you realize come on. >> there's not a lot of bargaining. >> no. >> cramer's "mad dash" is next. one more look at futures this tuesday morning. "squawk on the street" from the nyse straight ahead. we provideu can rely on. with centurylink as your trusted it partner, you'll experience reliable uptime for the network and services you depend on. multi-layered security solutions keep your information safe, and secure.

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♪ shining star, no matter who you are. . all right. we're seven minutes until the opening bell on tuesday. you weren't here yesterday. >> no, i wasn't. >> by the way, net flirks was up yesterday on news there are at least some talks preliminary talks about including netflix on the cabletop set box. >> we did hear "shining star" by earth wind and fire. do you remember the song "reasons." i give you a reason to buy netflix. they are doing new series with sony. >> that's all it takes? >> sony is going to make original content for netflix. they're on the settop box. what more do you need? >> you don't need anything,

septemb except to see they're up 250% this year. >> even if they're a terrible series? >> suddenly you're a critic. everybody's a critic. >> i haven't seen the orange one. >> it apparently gets better throughout. i'm like episode six. >> they have the big first major studio. house of cards and orange the new black -- >> remember dreamworks said last week patron saint. i believe disney is signaling they might be doing something. if they are on the cable boxes, you get a much higher subscription rate. >> stocks went up as the day went on. you wonder about user base pricing. >> whenever the deal is announced, i'm taking price target off. >> talking about hog, we're not going to talk harley but tesla.

>> here's what i'm hearing about tesla. people like the new car. this is a survey. there's a survey being done and it basically says that, wow, i mean, the tesla x, $70,000 to $90,000 estimate, people will pay it because -- well, they'll pay it. >> the stock is up 446%. it's up 446% this year. >> all my life i have watched you. you have never, ever, ever allowed the -- do you not understand the facts should not get in the way of the story. i met you 20 years ago, the facts, the facts. >> i know, i hate that. it was misplaced there. is it misplaced there? >> this is review to earnings. the other one is sony to earnings -- these are cults. these are the two cult stocks. when it goes hold to buy, people say they must know something. my daughter actually came to me

this weekend and said she wanted to buy a tesla. and i said if she graduates with college with all as, summa cum laude and gets a fantastic job at goldman sachs, i would consider it. it's negotiable. >> we have a lot of stocks to keep an eye on, including goldman sachs. buy a tesla, are you kidding me? >> opening bell just minutes away. get ready, another big day coming right up. "squawk on the street" back after this. [ male announcer ] this is claira.

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of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. on the street," live from the financial capital of the world. the opening bell set to ring in a little less than a minute. we await a deal from washington. still from grumbling from the house side. we'll see. >> what do they want? >> apple will open close to $500 -- >> people like a retail strategy. here's someone who has developed

the premiere social digital mobile strategy in retail. i don't think this is a reflection on the product. it may be a person who can get in there and shake things up social digitalwise. >> that there is the opening bell. look at the s&p at the top of your screen. the big board ishares, core etfs. >> very good company. i've been recommending that stock for some time. >> very nice. fedex did this buyback, by the way. >> we have not mentioned that, $32 million shares in addition to the 7 million. it's up 1.70. that could be very meaningful. csx is on tonight at 4:00 on "closing bell." you need these transports.

it does matter. >> intel and yahoo! will be a big part of the conversation. marissa myers is going to take some questions from the public on the call. more questions about when does she grow revenue, when does google go public, whens did alibaba take some shares? >> the momentum from alibaba and the increase in that company, she's getting a lot of time because of that. that's been reflected in the stock price. >> they could run in place in that alibaba -- since this were at 17, you've been telling me

that could be a big deal. >> they could be valued at $100 billion, a large percent is held by yahoo! 12% will be sold. but they're going to hold another 12%. if it's $24 billion of value on yahoo!'s balance sheet -- >> go short yahoo! and long alibaba? >> you're getting it at an extraordinarily low value. people say strip out alibaba and you're left with a core business that still will turn around. >> i am a believer in her, i'm a believer in the initiative she's putting in. i think she's going to show some growth. i think this is a company that never lost its page view count and i think it can take some money and really do some amazing things, maybe do some buying. i know you said twitter in terms

of the size was put to shame. but if they could develop something competitive to twitter, you need twitter. you need a twitter philosophy. you do. >> well, you have it. it's called twitter. >> yeah. it's very difficult. and some of the reporting that's been done on twitter at the times this week shows how it's a mix of luck and serendipity and skill. it's very hard to just strategy a twitter. >> well, on -- they've made it a science, more of an m.i.t. approach, more of a science approach. i like the site. i like pictures of cats. >> or lists of top-ten things. >> there's a piece in the "washington post" today about why cats are so moody and why it's so difficult to have a real

relationship with the cats. >> that's why the cats and i get along. >> he reads every part of the paper. >> he does. >> did you read jamie dimon was innocent until proven guilty. >> j & j is leading the dow. your man gorski getting it done. >> he's for real. i think this is the big farma stock with growth. think about it. how much a ceo does matter. >> interesting because pfizer is underperforming. >> and merck. >> i can't think about amerimer. they can't figure out even where to put their headquarters. >> you'll have a full-page ad,

blackberry pleading for patience with not investors so much as users. they say you may have read the headlines, blackberry is not for everyone, we have substantial cash on hand, no debt and we continue to work what we can in the way of security and mobile. >> it's kind of an interesting plea, right? we're not going out of business, stick with us. it's a whole new rap. hey, we're not dead yet. >> we're not dead yet. >> we're not dead yet. that's an interesting theme. it's a catchy thing. like be all can you be. we're not dead yet. diamonds are forever? hey, maybe we're not forever but we're okay. kind of a theme. >> trying to hang on to something as they try to sell the company. we'll see how that ends up, too. >> i think they could develop a thing of something like that. reach out and maybe we can touch you. >> or maybe not. >> i think a little tepid, right? i'd walk a mile for a blackberry. >> really?

>> yeah. >> blackberry tastes good like blackberry should. >> it's a fruit thing. >> didn't they band those advertisements? >> yeah, but they stick in your head because of "mad men." >> microsoft did get an upgrade. jefferies takes it from buy to hold, providing greater transparency. >> i want earnings, they want transparency. what's the matter with earnings? you want earnings or transparency? >> i want earnings. real teearnings so i want transparency and earnings. >> i don't want to see the boxer, i don't want the kim ca- kimono to be open.

geez. >> my parents were in retail. my father always had to work christmas because of stores running out of bags, he'd have to run bags to them. but he never worked thanksgiving. tough day to work. >> plus we got this apparel problem generally speaking in retail that we haven't figured out or they haven't figured out. the sales are -- you could walk into a lot of stores now, 25% off, 40% off. >> you shopped? >> i did do a little shopping. i bought a few pair of pants. >> slacks? >> trousers. >> i won't say wear but it was 25% off. >> sometimes he's got pants that don't match the jacket. that's called two suits. >> giving away all my secrets, man. >> at least i got pants on.

be thankful. >> versus the transparency of microsoft. >> exactly. >> let's get to bob pisani. >> good morning. for all of the major sectors here, buying not very heavy. we had very light volume buying. a lot of comments about that deal. it looks like it's sort of status quo but a lot of people in the retail area are worried about kicking the can down the road into january and february deal. remember all those discussions about the fiscal cliff fiasco and the delays of sending out the reevened checks and walmart saying it was really tough because refund checks weren't going out? that's the concern that people have right now. put up that full screen. setting up the showdown up to january creates that worry that tax refunds might be delayed again. one retail guy very big in the retail area said it could be horrible for christmas sales. he said people rely on that money and it's imminent no deal

will get done, they're not going to buy in december. let me talk about the stock market leadership. i was very happy yesterday to note the russell 2000 historic highs. if you look out there, there's very few new highs throughout. yesterday 184 on the nyse. there's 3,000 securities that trade here. look how long it's been since big cap leadership has hit new highs. ibm popped out in march. mcdonalds and at&t popped out in april, exxon mobil in may and july. i would like to see some of the big famous names hit new highs in addition to those small and mid caps. walmart, today is their investor day. i want it hear about any numbers they're going to introduce for the next year, earnings estimates. the analyst estimates are like

10% higher than this year. i'll bet they'll be a little more conservative. walmart was down yesterday. no ipos down here today but we're going to get a big one tomorrow and i mean the biggest within of the year, believe it or not. plains gp holding, ownership of pipelines is floating a $3 billion ipo, far and away the biggest of the year. the second biggest one last week was antera, that was also $1.5 billion. so these things are very big. a lot of these guys have 5% and 6%. that's an anomaly, a low dividend. by the way, viva is also going to be pricing over at the nasdaq. buy yof sciences as well as cloud computing. they've already upped the size of that particular deal. finally solar city, elon musk

company, they're going to do a secondary and we've had secondaries all over the place in the last couple of months. secondaries are on fire once again this year. i'll be here talking about the plains tomorrow, they go public. >> the house gop plans to push a separate bill to raise the debt limit, to do an end run around any senate deal that comes their way. >> really horrible. that could be the nuclear option. i can't believe they're doing it. >> that's not good. >> listen, it's tuesday. these things take a little time. >> we don't have time. >> right. conceivably or else maybe we do and thursday doesn't really matter and it will be friday and we get something by friday or saturday. >> they need to be on "meet the press" and beat each other over the head. this is very bad, the republican -- if you want a deal. i get people that say, hey, who

are you to want a deal? who are you to want the markets to do well? i don't know. i i'm a guy who has talks with a lot of people who own stocks in is a very bad thing if you want a deal. if you want default, it's a good thing. it's a very good nuclear option. if people want default, this is the way to go. >> darrell issa saying it's a way to seek a delay in the medical device -- >> who cares! more for j & j. >> we don't have a transportation or farm bill or energy bill or anything out of congress. but you know what we do have? we got a lot of oil in this country and a lot of natural gas. if you want a good news story, some environmentalists might

argue with it but if you want a good story, it is our increasing ability to provide our own resources when it comes to energy. and jim and i have talked a great deal about this when i was in texas last week and had an opportunity to talk to a number of people down there, many of whom are in the oil and gas business. jim, you've talked a lot about pioneer and the promise of that company. you spoke to the ceo i think it was last week. >> largest oil field in the country. second largest in the world. i think the stock should be up another $100. >> i did have a chance to speak to will van lowe, private equity partner who invests largely in upstream deals and i asked him specifically about whether in fact pioneer and its find is for real.

>> when you look at how big the permian basin is, it's substantially larger than the eagleford and bachan. a lot of the future oil growth will come out of the permian. >> so you're a believer that pioneer is for real in that? >> they are. they're sitting on an amazing position there that's really not replicable. >> they never tell you how your hair looks, by the way. sorry about that money. >> could have used some oil and vaseline. >> i could have used some permian basis oil. >> the second biggest oil field in the united states, accessible by the many different wells that pxd is drilling, bigger than eagle ford. >> now they're going back and

finding a lot of this they can get to through fracking. >> they bought all of this land from majors, who didn't think it was there. the majoring continue to demonstrate very little ability to harness america technology. sheffield does not impress my -- me as a blow hard, i think he's for real. it's very nice to hear someone else not from the company agree with me. >> it's bigger than anything in russia, bigger than anything in kuwait. >> we always forget, this is a technology story as much as anything else. we talk so often about silicon valley and the advances there but this is technology also. >> it's midland odessa, everybody in the world ask get a job at that place. everybody had written it off.

the word is it is gigantic. eog that has the delaware basin, i don't think it's as good as this. pioneer natural, if you believe that, you know the stock is $100 too low. >> no one's talking about it. it's a small company. >> litz get to eamon javers in washington. >> reporter: republican leadership confirms to me house republicans are going to move their own bill here at some point later on today. this is something you guys have been talking about based on previous reports. i'm told that this is the way the bill is going to be structured. the bill will delay the medical device tax that's part of obama care for two years. it's going to install income verification for some of the obama care subsidies so the government can check and see the people have the income level they say they have.

and it will have language that will cancel health insurance for subsidies for members of congress and members of the presidential cabinet and the debt ceiling will be lifted until about february the 7th. that's the structure of the proposal the house republicans will move. that's very different from the deal being cobbled together on the senate side. now we have clashing house and senate here going into the final hours of this debt ceiling showdown. the question is which chamber will prevail here. republicans in the house seem not to be ready to give up at this point and accept a senate deal on its own terms. they're still pushing for more, guys. >> why would mcconnell float certainly that he didn't think boehner could deliver on on his side? why is that not happening? >> that's been one of the questions with the senate deal since they started to cobble it together. mcconnell can sit down with harry reid and cobble together anything he wants, but if it doesn't have the votes in the thousands pass, then it's a dead letter.

so the question is will speaker of the house john boehner ultimately accept the mcconnell proposal and is this bill they're working on today in the conference meeting, this going on right now, is this sort of a last attempt by house republicans and they're going to ultimately cave to the mcconnell position or is this the house republicans saying, no way, we'll go this far and no further. that's the brinksmanship we've been receiving all along in this entire debate and we're continuing to see it here. >> it does bring in mind what congressman labrador says in the post. he said the problem with the senate republicans, they always want to have the fight next time. >> i study these medical device companies. do they know what they are? is this what the republic hinges on? it's absurd. >> i watched some of these medical company stocks. dominic chu was reporting the stock prices of the company affected by this medical tax were going up, i'd and down

ways, they didn't know how to react. is it in? is it ou? where does it stand? >> so it looks like a vote eamon? >> i imagine if the republican leadership is voting for it in the house, they have to send it to the senate and you have to imagine mitch mcconnell is not going to receive it with open arms. >> it's just obama care. medical device. >> hey, boston scientific. cutting numbers, u.s. government. raising numbers for medtronics. downgrading the american people, upgrading right here, j & j because of the device. how stupid. do they even know this stuff? do they even know it? >> when we come back, the executive chairman of jarrodin.

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you are about to look at a live shot at washington where house gop leaders are supposed to have a conference after a meeting this morning saying they are going to float their own bill, with a medical device tax delay, as we get within 48 hours of the debt ceiling expiration, the exhaustion of the borrowing power of this country. it's going to get interesting.

stocks down about 36 points. maybe complacency, maybe this is an attempt for the gop to say to their base, we tried, we've done everything we can before they finally do give in to a senate plan. >> we're down a half a percent. we doubled our losses on the s&p and now we're back to where we were prior to hearing the house had this competing version. the market, complacency perhaps some would say or rightly assuming they're going to get something done. >> that open question as to what the conservatives within the house -- the house within the gop are going to do, there was a question as to even if the bulk of the party agreed to the senate, whether they might gerrymander through another 48 hours and then hit the debt ceiling. there are still many questions in the air and it's difficult to know whether an alternative plan takes you forward or backward.

>> john, help us read between the lines here this morning. >> carl, my read is the same one that you just mentioned a moment ago, which is this is the attempt by john boehner to manage the anger and concern among some in his base who have been calling the senate plan to s surrender saying we'll lift the default, but that has no chance of passing in the senate. the speaker would be able to say i tried your way, didn't work, now i'm going to put it on the floor. i think this is an attempt at coalition management by john boehner. >> there are some viewers who wonder why is it the house members are the only ones who have to compromise and give in? >> the house members are the one who is had the irrational demands that had no chance of passing in the first place.

the house and senate leadership realize that plan that cruz and the house taken party members had no shot. you see a wave of commentary now from republican policy people, former bush people saying this was crazy, it never had a chance to work. as mike gersen, the former bush aid said, now the challenge for the gop is to stand up in front of their members and say two plus two equals four. that's the reason the house has got to give in because their initial demands were so off the charts. >> howard schultz, the ceo of starbucks was on the show friday and he said people are crazy if they celebrate what turns out to be a short-term solution. how short-term is what's on the table at the moment? >> it goes until january for the funding of the government, at

which point presumably it would be replaced by a longer term deal, the debt limit would go to february 7th. so then you say, well, are we going to be back in the soup again in early january, late january on the debt limit? and the question is is the president's gamble, that is to say we are going to try to break the fever of this kind of shakedown negotiation on the debt limit going to work or not? we don't know the answer to that. i think he hopes so. the white house hopes so, but nobody can be sure whether in fact he's going to succeed. >> surely the very strong indication goes with the fact they created the sequester, a nuclear option that would have to be diffused further down the line and both sides would have to come together because it was so terrible and ultimately they couldn't diffuse that. >> yes, but the sequester was a

much lesser problem than a debt default. the dealt default could take the economy. a sequester hurts certain constituencies, according to ben bernanke, it holds back the economy and doesn't achieve the president's goals or other republican goals but it p it's not a catastrophe for here and around the world. >> john, give me a timeline again on the next few days in terms of votes, probable votes, when they can happen and whether they can get all of this done -- >> i would predict, david, that the senate passes their bill either tonight or tomorrow. it would quickly go to the house -- the house i would assume would pass its bill today. they can act very rapidly. they're not bound by the sort of procedural obstacles that are in the path of senators. but mitch mcconnell has told harry reid that if they get a deal, they will try to expedite the procedures. it will be up to ted cruz and mike lee, the two senators who

led this effort, to see if they want to try to drag it out and use every lever at their disposal. i would expect it to pass the senate by middle of the day tomorrow, go to the house and at some point very close to the witching hour, i would expect it to pass the house. >> no predictions on what cruz and lee might do at that point, john? >> you know, cruz -- the desire by republicans to stop this self-inflicted bleeding is extremely strong right now. the anger at people like cruz and lee for what they have put the party through, you look at the poll numbers that came out last week, they were horrendous for the republican party. i think there's going to be an awful lot of peer pressure. now, these guys might not respond to peer pressure but sometimes when the sentiment in the caucus is so overwhelming people give and we'll see if they do. >> okay, thank you.

we want to bring in our panel. do you agree with john's line of this being coalition management? >> i think the jury's still out. the house republicans are basically agreeing to kick the can. what they're disagreeing with is the cost of the down payment to kick that can. i mean, what we're going to be back in the soup because the broader deficit reduction talks that will be due by dooet 13th, unless there are enforcement mechanisms put on that, you're never going to get the grand bargain. you're telling house republicans, guys, trust paul ryan, we'll get a really good deal by december 13th. that's into the going to happen. so when you get back into this fight in january, you're going to have a lot of very angry

republicans with a lot of buyer's remorse for the deal they're going to pass probably by this weekend. >> at that point if things go the way we think, secretary lew will not have some of the wiggle room he has this time around. does that make you more worried about equities or about the economy or both? >> not so much the economy, carl. weep know this has a negative impact on economic activity the longer the shutdown continues. but given the fact that we know the furlough workers are going to get back pay for the time off, can you see a consumption splurge coming up again. that will help to reignite economic activity and recover what is lost. what's continuing to spook the market is if we continue to move from fiscal event to physicfisc event, i'm concerned for the

more short-term basis. that's the most discouraging thing for me from an investment standpoint. if we get some fiscal clarity, i think investors would wake up to the fact that risk assets ought to be a very rewarding experience but are going to be held hostage by the votes that are going to be upcoming in the senate and the house. >> chris, a lot of people around the world will feel that america's creditors are the ones being held hostage at the moment. we come very much from a market standpoint, we come from an international financial community standpoint. do you think in that context in that context that the president as commander in chief has done enough to ensure the good standing of this country through this process or do you think he has perhaps been too bogged down in party political things? >> look at leon panetta's comments this morning, obama's former defense secretary saying the president needs to have a stronger leadership role in

this. what's lost somewhat, too, with. >> sort of fixated on the debt ceiling, the government's in its second, almost third week of a shutdown. the president had to cancel that trip overseas where he was supposed to have face-to-face time with vladimir putin, the chinese leadership. the president tried to bring the leaders back down to the white house yesterday, cancelled the meeting at 3:00 because they didn't want the president involved, sort of blowing up the deal. the president and congressional republicans have such a poor relationship that quite frankly, it's probably been a positive he hasn't been terribly focused on these talks, letting the senate leaders work on it. how it all comes together remains a bit of a mystery. >> ordinarily on a day like today we would be talking about coke and about mortgage originations at citi. yesterday we saw harsh action at

whirlpool suggesting consumers are tempering their purchasing conditions and then that live shot in d.c. how is that going to affect gdp in the fourth quarter? >> it's going to have a negative attribution of gdp in the fourth quarter. that's what i'm most concerned about, i'm worried about the impart that this has on confidence, not just among consumers but business leaders as well. we had actually seen an uptick in business leader confidence that was encouraging with leading to the prospects of continued business spending, which has been largely absent for the economy and could be an economic driver. and the consumer we know has been remarkably resilient. we continue to think that their balance sheet that has been repaired through due to financial assets increasing, leading to all-time highs in net

worth, aggregate means it's beneficial to the wealth effect. any kind of deterrent to thwart that could lead to negative results possibly leading in the first quarter. >> understood. guys, thank you very much for that. apparently the house gop leader is going to take a little longer than we thought. gold did get down to 1251 this morning when it looked like a deal was going to be a little bit smoother. it has bounced back to 1270. we'll keep an eye on that and g get you out to watch after a commercial break. don't go away. what if you didn't know that it's smart to replace washing-machine hoses every five years? what if you didn't know that you might need extra coverage for more expensive items?

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still waiting for house gop leaders to take the mic in d.c. to introduce a bill that would delay the medical device tax for two years, somewhat different than the senate plan that we were expecting, clearly is trying to cram in a little more activity here before we reach the debt ceiling expiration on thursday. the market, guys, appears to be finding equilibrium so much it can decide whether to go right or left, down 21 points on a day where there's a lot of corporate

news, too. >> you still have the fundamental belief they're going to have a deal before they hit the debt limit on thursday. that still remains the fundamental view of most people, otherwise we'd have chaos, if they thought it would be a completely different situation, people taking a couple of days. >> i think if it looked like we were really going to breach the day in question. we should point out the nasdaq having a positive day dey thus far. apple's up, google's up, facebook, microsoft, tesla also up about 5%. jim cramer mentioned earlier a brokerage house did a survey. >> they took a survey and found that 20% of respond ents would be absolutely willing to drive an electric vehicles and a lot of them would be willing to pay a 5% premium for fuel economy. the discussion is going to be

largely political, john. there's various points about how the closed conference meeting went today. any color on that? >> reporter: not yet. we're going to wait for republican members to come out. staff has come out. they were kicked out of the room so members could confide in one another but we haven't seen the members come to the mic yet. >> the bit about the medical device tax, john, is that -- is it considered a wedge, where if they win a victory on that, a delay for two years, they can argue for more down the road? >> reporter: well, the reason that the white house is resisting that provision and democrats are resisting is not because they care about the medical device tax, they don't. it's just $3 billion a year in revenue. but if the president is trying to make this argument that he's going to prevent ransom demands at the time of the debt limit, he's going to try to hold this provision. the other provision to take away the so-called exemption for

staffers and members of congress is mostly a fake p.r. kind of amendment as republicans members will tell you privately. what happened was during the passage of obama care, senator grassley trying to defeat the obama care put in a provision requiring people that -- members of congress to go into the exchanges. and the way that the law ended up getting written in the end, it appeared to deny the ability of staffers and members of congress to keep the health care from their employer that everyone else who worked for a large employer had. john boehner worked with harry reid to try to preserve that -- the ability of those members to continue getting the employer contribution and so this is more of a gimmick and a p.r. device as opposed to a serious legislative proposal. >> those subsidies would be taken away from members of congress -- >> and only from them.

this would be the only ones -- staffers as well. they would be the only ones who would not be allowed to preserve their employer contributions the way people who work for nbc or other big companies do. >> right. hard to believe we're actually talking about that level of g n granularity with so much at stake. we'll be right back. [ male announcer ] legalzoom has helped start over 1 million businesses.

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welcome back. we're getting some movement outside of the meeting of the house republicans on capitol hill. there's more people coming out. it would appear that the meeting may have broken up. obviously we are awaking speaker boehner detailing exactly what that section of the party or the gop is going to do in the house as the senate works on its own compromise between the both sides there. so you have conflicting plans potentially coming through. bertha coombs is with us who covers health care for cnbc. where are we now on the provisions on the counterarguments from obama health care? there is the $63 additional

charge per person next year be delayed? >> that fee is for reinsurance, which is part of what is helping mitigate the risk for the insurance. two of the insurers who have the biggest exchanges are aetna, surprised a lot of people, 16 of them are on the federal exchange in 16 states and then also well point with the blues, which is on 14 states. so if you push back, there's some talk about pushing back that fee. carl mcdonald said if you just push back the fee for a year, just the fee, that's good for insurers because they get the risk protection. if you push back the whole program, that could be difficult because that reinsurance helps mitigate the risks of people with very high claims who come on the exchanges. a lot of these people who are rushing on are people who have preexisting conditions who are really very anxious to be insured quickly. >> you might expect movement in some of. device makers.

it's not happening today. maybe just exhaustion, policy exhaustion or waiting for the news before you make a move? >> i think investors have heard this now for a couple weeks and the device maker tax has been out there as one of the things that they might push back, that at this point it hasn't really gotten so much traction and it seems these talks are so fluid, a lot of people are taking a wait and see. >> we should also be clear your fundamental assumption if you're in the market is that obama will reject it, because that is the promise that's on the table, that he'll use the veto. that stays a working assumption as it goes through this the process? >> the idea is the white house won't negotiate through the process but perhaps later. this does impact a lot of people, a lot of folks who need knee replacements, hip replacements, every time you have one of those devices, it

taxed and it's already being collected. that helps pay for obama care, helps defray the cost of the subsidies. but it does put a lot of increase on people who don't necessarily benefit from subsidies. >> we continue to talk about the technical glitches with the web site and i think we're going to discuss more some of the lessons learned from part d. has all of that been sort of part and parcel with the expectations of a roll out of a program of this size? >> it was clear there were going to be problems because they had a very, very tight time frame, it was a very ambitious project and it was much more complicated than anything on medicare part d. the scope of the project and that it's so intractable is surprising. but now that we're hearing about

the design flaws and execution of the architecture itself -- the requell kwe is whether they can get this working properly and get a real flow here within the next two to three weeks. they've really got to start signing up people in the tens of thousands a day if they want to reach that metric of 7 million uninsured by the end of next march. >> speaking of which, let's bring in the lead of new york's health exchange, which has been signing up folks by the thousands, not without some hiccups. donna is the executive director of the new york state of health. donna, appreciate your time this morning. >> thank you for having us. >> how would you characterize as candidly as you can the early going? >> things are running smoothly here in new york. we have signed up just a little over 100,000 people for low cost, comprehensive coverage through our marketplace in just the days we've been operating since october 1st. >> donna, those numbers are impressive that people have gotten through the system,

although i've talked to a couple of people that are still having problems getting all the way to get their accounts and actually look at plans. can you give us an indication of how many people who have made it through the enrollment have actually signed up in plans and are actually enrolled in insurance? >> all of the hundred thousand people have received an eligibility determination so they know what they're eligible, they know if they qualify for financial assistance in the form of tax credits. many have gone on to look at the health plans and make that decision. >> the federal government said they're going to wait until november and report it monthly. are you going to go along with that calendar. >> we're accumulating the data now and we'll have a regular calendar available shortly. >> donna, can i just double-check on these figures that you have, just as a kind of a rough rule of thumb.

we had i think 1,700 that were completed in connecticut at the beginning of the week, you seem to be a whole different order of magnitude or are you saying of the hundred thousand that have registered, maybe 1,700, 1,800, 2,000 may have completed? >> no, all hundred thousand people have completed their applications and been given an eligibility designation. >> your exchange appears to be working better than the federal exchange. are you satisfied you're ready for the crush of people that are likely going to want to enroll for january 1st coverage coming in the next month or so?

>> we are. we've quadrupled our processing capacity and made it much more efficient. we continue to get feedback from consumers and we look at any way we can to enhance our web portal so consumers have a better experience. we also have our customer service specialists who have talked to over 47,000 new yorkers and provided them with assistance through phones and we have people throughout new york state, about 5 hoon people. >> what have you done to make it simpler and unclog that bottle neck. >> we've identified some places in the application where consumers were waiting simply a little bit too long. some consumers have identified

places in the application where it would be easier for people to follow. >> are you getting the sense -- this might be hard to prove but do you get the sense that consumer decisions about whether to enroll or how to enroll is being buffeted by what they're seeing in washington? is this affecting health care consumer behavior? >> we don't think so. from the calls that we receive and all other indications are that new yorkers are very interested in the affordable health coverage offered through our state marketplace and we'll continue to work with them every day of having them enroll on january 1st. >> donna frescatore, thank you for coming today. >> we are waiting for john boehner and other members of the house gop to begin talking. we'll take a quick break.

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hopefully getting some clarity here in the next few moments. in the meantime we'll keep you updated on all things in washington. we'll shift to citi.

kayla tausche has some of the highlights of the call. >> interesting earnings out this morning and missed most estimates. citi's mortgage business was hurt most by refinancing, which makes up most of citi's business and commitments made to customers who locked in low rates as mortgage rates started rises. u.s. consumers on the whole are still cautious and deleveraging, which has hurt citi's credit card business but it is seeing loans pick up outside the u.s., especially in latin america. that means they're having to put more money away for bad home loans there. the more business, the larger percentage that could go long. fixed income and the asia business hit with what they called a pronounced doubt due to the fed's no-taper announcement

in september and uncertainty of the pending potential default. and how washington handles unchartered waters of a potential default. citi has sold reserves and asked them not to use the collateral. >> you're watching live pictures of a news conference due to sart at any moment with speaker boehner and the house gop in the wake of their meeting today to decide how they should respond to of course now the debt ceiling 48 hours away. let's look at what the markets think the federal reserve will do if the u.s. defaults on its debt. steve liesman is back at hq and is doing work on that.

>> reporter: treasuries seem to be trading calmly. there is widespread belief that a deal will be made at the last second and that federal regulators can come in and ease the pain. here's what george said "it would never be painless but no way, things could be kept secret." it could also rule that no additional reserve requirements are needed for the defaulted securities, treat them as if they still have a par value. cnbc has ruled that regulators are considering such a ruling but publicly refuse to comment. there is no restriction on buying federal debt instruments that are impaired in some way.

the expectation is the banks will not charge a big fee if any at all for this, for fear of being seen as taking advantage of the situation. that would be another bad p.r. mark for the industry. bottom line, fed can ease the situation for the long term but the long ter goes on, the more extreme the measure will have to be and the harder to continue the market working normally. >> we're going to take another break as we await house speaker boehner and the rest of the gop leadership. we'll be right back. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

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century link. your link with what's next. a lot of things to trade on today, earnings from coke, citigroup, j & j, fisher saying he will not support tapering in the next meeting.

when they do begin to speak, we'll take it live. apple upping bringing on new ceo burberry from london. let's bring in jon. can you hear me? >> reporter: yes, i can. >> you are on live television. talk to me about mrs. ahrendts and what she brings. >> reporter: burberry is a $11 million market cap company. it's interesting, she's from the midwest, big family, from the midwest, she's an operator, she knew when to cut back at burberry when the downturn hit. that's part of what made her successful. also gave a lot of creative control to burberry's creative

director, was able to turn that brand around. she said in a wall street journal profile, if there's any company she looks at for guidance, it's not another fashion company, it's apple. she's been very good at turbo charging their e-conference. it seems like she's been working on this apple relationship. she's been very public talking about things like energy. she has a talk on energy where she already sounds like an apple-type executive. if she's going to fit into apple's cult, she might have to tone that down. not a lot of apple executives have a high profile out in front of the public. >> she spent a little time on the west coast. we should note that. in london, it's been a phenomenal performance on burberry stock. i think the stock up 480% over the past four, five years. so through the recession, it was

about technology, it was offl obviously about increasing the prices. when she took over, the burberry brand, some undesirable people in the u.k. were wearing, rather than the natural target of a higher end goods make person. >> the brand had definitely been diluted. when she came in, she really took this turn around story with force. a lot of people getting bent out of shape with rely of her pay pack. she's the highest paid ftse 100 pay package. she took home $27 million, 19 million of that being burberry shares. earlier this year that pay pack was cut back to $11 million, still a lot of money. but in the time that she was at the helm, she managed to see shares more than double, the share price jumping by well over 270%. again, she brought it back to an

up-market company. she's really managed to see the company through some very, very tough times. and now there's a lot of special lags abo -- speculation if can you take a ceo with a sense of fashion and see somebody with a sense of fashion and whether christopher bailey will be able to take on the ceo role as well. you've seen giorgio armani leading his company into a much more business sense. you've seen it with ralph lauren and it can be done. we went down to the last show and asked her about the deal with apple where they were streaming a whole lot, getting it out online immediately and this is what she had to say. >> the imagery we were able to capture on the iphone 5s, we always use these shows to keep burberry on the forefront and

that's what the collection and the collaboration did today. >> now the last u.k. ceo who left a u.k. company and went to apple only lasted six months and then stepped down from that position. no doubt a lot of people will be looking very closely at her and very closely at this pay pack. she's leaving on a high. what else can you ask for in terms of being a ceo from a company like this? >> did you believe it, she's going to be making more money probably at apple given how much the top execs there even under the ceo make in apple stock. >> jon, people want to take lessons hiring from efficiency st. laurent, hiring puerto rico burberry and extrapolate what it might mean for the next move out of apple. are you willing to go that far? >> i don't think so. ron johnson had been in retail first. he came over from target.

then cook went to john browit from dixon's. now he's going higher end with somebody with a burberry background, luxury, maybe understands apple's brand a little bit better. >> i'm not sure that it's actually not about that and about geographies and understanding emerging markets. >> reporter: oh, yeah. >> this is a woman who cut back half the operation in china recently and said china was going the wrong way, latin america and indonesia were emerging markets. she knows emerging markets. that's what tim cook needs. >> reporter: he needs other markets. particularly because they're trying to sell a luxury product but in a mass market way. she should have some insight into that, in part because of her background. she's at a luxury brand now, but she grew up in indiana, she went

to ball state. those of us who spent some time nindian a know that's working class there. >> humble beginnings. a lot of talk about her humble roots. obviously we're going to watch it closely as it gets close to 500 today. keeping a close eye on washington as well, still awaiting the speaker and gop news conference. >> still we're talking about some relatively short-term deadlines as they extend but they don't extend very far, possibly to january and february. so the uncertainty will still be around. the big question, how do you run a business, run so many businesses through what we're witnessing at the moment? joining us now is martin franklin, the founder and current executive chairman of jarden. we should point out here you've got 100 consumer brands, cross pot, sunbeam appliances.

how difficulty is it to do business if you have this uncertainty on capitol hill? >> i think on main street it's less impactful than you might think in the short term. i think the sentiment is after explaining all alternatives they will work this out. consumer behavior hasn't changed that dramatically. it's a concern for us if things go the wrong way. >> that's very encouraging because particular will with the government shut down, we were concerned that was going to impact discretionary spending. we saw it to a certain extent in some of the ceos who have reported but you're saying overall you don't think it going to be a problem, martin? >> well, if i look at our business, we finished with our q3 figures and we're going to be at the high end of our oreggani growth range. we have about 10 brands across our groups covering a lot of

different demographics. consumer behavior has stayed pretty healthy. >> where do you take the business? last week you did a deal with a shell company that you set up earlier in the year to pay $1.8 billion for private live held chemicals group. i know you've got other interests, particularly in europe. where do you take the business now? where do you make money in the future as things stand? >> well, from our perspective, you've got a pretty healthy environment from a transactional point of view, you've got a continuing low cost of capital. the outlook for that is pretty good, you've got economic growth at the same time. if you can find transactions that represent good overall value and you're disciplined and you don't overpay, it's still a very good time to transact. access to capital is there, both in the credit and equity markets. i think it's a pretty good time to be a buyer and not just a

seller. >> it's a good time not to be selling apparel, which you guys don't sell. give me your take on the consumer right now. you come on and you always tell us sort of how it feels. how does it want to sound too optimistic, but i think the reality is the consumer's pretty healthy. the consumer's been continuing to save. you see the activity in the banks. a lot of people -- a lot people have refinanced their mortgages. they've got a little more access to cash than they had before. unemployment is -- it's not been rising, obviously it's been falling slowly, but falling. so people feel secure in their jobs. it's really not that bad out there. >> so when will you pay attention -- when are you going to pay attention to what's going on in washington, then? when does it rise to a level when you really start to think, okay, are people going to stop buying -- >> when it hits the proverbial fan. i mean, at the end of the day -- [ laughter ]

-- i think that the -- i think the positioning and the painting themselves into the corner and all of this, i'm not a politician, but the brinksmanship at some point, there's an overwhelming feeling that the brinksmanship is for show and at the end of the day there will be an agreement reached. obviously, i think sentiment among consumers will change if america stops paying its bills. that will be an impact. >> martin, finally, various reports about retailers managing their inventory for the holidays, very cautiously. when you see that, do you believe it, or not? >> no. i think that retailers don't want to -- don't want to miss revenue. and i think that if we look at the open-to-buys and the consumer activity, i think that there is a feeling that christmas is actually going to be okay. i don't think it's going to be dramatic organic growth. but i think it'll move in line with gdp. >> we'll let you get back to work, martin. thank you for joining us. martin franklin, founder and

executive chairman from florida. thank you. >> thank you. >> i love ceos that answer yes or no questions with a yes or a no. >> because he's british. >> isn't that refreshing? >> it is. a live shot of washington. house gop leaders are expected to speak eventually. when it does happen, we'll bring it to you live. in the meantime, the dow is stuck in the range, but currently down 50. back after a break. in a world that's changing faster than ever, we believe outshining the competition tomorrow

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a live shot of washington, d.c. that photographer is getting more air time -- [ laughter ] -- than anyone in american media. he's been on tv for the better part of an hour, as we await the gop leaders. eventually, speaker boehner will take the mike and we'll pay attention to him. but for the meantime, he's the most interesting thing in washington. meantime, blackberry taking full-page ads in newspapers worldwide, trying to reassure customers, pleading with them to stick with the mobile company. in the ad, these are no doubt challenging times for us and we don't underestimate the situation, but you can continue to count on blackberry. calvin, the founder in chief of blackberry, got his haircut at

the blackberry launch. kevin, good to talk to you again. >> good to speak with you, too. i was thinking you would mention the haircut. [ laughter ] >> i can't decide if this ad is positive or negative. on the one hand, it does sort of acknowledge their own mortality, so to speak, but you have to tell people that you're going to try to stick around. what'd you make of it? >> absolutely. i agree with you. it's a little bit of both, i think, depending who you are, you're going to read it differently. the thing is to put it in perspective. they really wrote this as a message to their customers, their partners, and their fans. you know, the sentiment around blackberry has been negative lately on the back of the challenging times, as they say. so i think this is their chance to take control of the message, say what they want to say, and remind their loyal user base that's been with them over a decade that they are still here, and they're -- (unintelligible) -- even if blackberry -- does change. >> kevin, do you think they will survive? >> i think it's -- i think they

will survive, but it will be a different company. i mean, they've gone ahead and said, look, we're getting out of this sort of consumer, head-to-head mobile handset space in the sense that they're not going to focus on the consumer. they don't have the warbucks to go after the apples and samsungs head-to-head on marketing dollars, so they're pivoting and focusing on the professional user they've known for year, the power communicator, the person who, you know, has money, maybe buys multiple devices and really -- >> kevin. kevin, if you can't persuade people to buy the blackberrys at the retail level, how is a technology officer going to persuade people in a business that they should be using a blackberry? >> so, i mean, the question is, do they stay in the handset business? and a lot of the -- you know, the rumor and speculation has been that it's likely they want to get out of. it's almost an ibm-type play where, you, know, ibm makes a lot of computers for a lot of year, and (unintelligible) --

enterprise -- a more stable player. right now, blackberry phones -- [ inaudible ] -- phones that have been in the pipeline. and i think, you know, the pipeline goes out a couple of year, so you may see quite a few phones to come, but ultimately, you may see the company pivot and become more of a service provider to enterprises, governments, et cetera in the mobile computing space. of course, on the back of that, they'll have some consumer services (unintelligible) -- >> kevin, i know you're not a banker. do you hope it's fairfax or somebody that leads them to the next chapterer? >> i don't know what's going to happen. i think the next -- it's hard right now to even say what the company's going to look like in six months. you know, i think -- i think they're still firing on a bunch of cylinders. they're in the process of sort of downgrading or downsizing from a -- you know, from a v8 to a four cylinder, but in doing that, they'll find a model that gets them more mileage.

the question is just how they're going to do it right now. and i think coming back to the letter part of this is, you know, they need to keep the revenue flowing as much as they can while they make this transition, to whatever it may be. between fairfax or, you know, mitel, i'm not sure what i -- in [ inaudible ] [ audio difficulties ] >> kevin, thanks a lot. we'll keep our eye on the stock. talking blackberry there. as we await speaker boehner, for whom we're told now is close, a few minutes before 11:00 a.m. eastern time. if you're just joining us among the news here, the house republicans will today introduce a bill to extend the nation's debt ceiling and reopen the government. it takes the debt ceiling to february 7th. takes the government to january 15th. they will stop extraordinary measures from being used by treasury to extend the debt limit, meaning when we have this discussion again, the deadline will be a little bit more firm. not as much wiggle room, something that steve liesman has been covering a lot today.

it does delay the medical device tax for a couple of years and takes away the obama care subsidies for the house members, the president, the vice president, and members of the cabinet. and we'll see how the speaker characterizes not just the proposal, guy, the bill, but the chances that it has in the house. >> or in the senate. will this -- i mean, could this pass through the senate? presumably -- why would obama sign up to that -- to a hard deadline on the debt ceiling in january? i mean, that's -- that gives them so much power come january. he will be -- oh, i don't know. i don't know. it just seems very unlikely, doesn't it, as just an objective statement? >> it does. it does. there is this thought, john harwood has introduced, that it's just trying to apiece -- appease -- boehner is trying to appease the tea partiers with this. but then you come back with a bill that will be able to pass, one that already has perhaps passed the senate, which may take it up by tomorrow.

that is their bill. >> right. john harwood does join us in washington. john, anything you've been able to gather in the past hour as we've been waiting? >> reporter: no, the only other point i'd make about the house bill is john boehner himself does not favor the vitter amendment, doesn't want it to become law. and so, i think the fact it's included in this bill is a pretty good sign that the bill is a gesture rather than a serious attempt to have something pass the senate, could not pass the senate on the basis of the vitter amendment. it couldn't pass on the basis of taking away the treasury's extraordinary measures. those are pretty clearly things that are designed to tell members of the tea party, we fought the good fight, we pushed it as hard as we could, and like the other things we sent over to the senate, that got roadblocked, this will get roadblocked, too. >> all right. i think we might be getting somebody coming close to the microphone here, john. interesting that a lot of the moderate voices -- you know, bob corker has been consistently giving some of the most

interesting sound bites, john. today is, house members have been focused on a shiny object that was never going to happen. how much water does that carry? how far does that message travel? >> reporter: well, that is what pretty much all of the mainstream republicans on the hill think right now. they're angry at ted cruz and mike lee. they're angry at the tea party faction in their caucus for putting them -- taking them down this rabbit hole, damaging the party's reputation in pursuit of a goal that was not achievable. and so, now i think the influence of that faction is lower than it has been in the past, and people like bob corker are going to have more clout moving forward than they did at the start of this process. >> all right. as we see some staffers coming here closer to the microphone, we'll -- i guess we'll take this live shot in washington, assuming someone is going to speak. just as -- just as by way of mechanics, john, we've seen

delays in scheduled press conferences. is there anything special about this one and the fact it has gone on for more than an hour? >> reporter: well, i think members are -- were doing a lot of soul searching in their private meeting there. they kicked the members of the staff out. and this is really crunch time, and it's difficult. you know, mitch mcconnell has delayed his caucus with his republican members, because this adds a complication to his life. even if john boehner's only doing this to placate hardliners, it makes it more difficult for mitch mcconnell to stand up in front of his caucus to say, i've struck this deal with harry reid. i still think he intends to do that, both reid and mcconnell have expressed notes of optimism about their capacity to reach a deal. but this makes it more challenging, and it's another hurdle for them to clear. i still have the idea that they will clear it. but, you know, we've seen a lot of things not go the way i expected in the past. >> we have -- one thing we haven't addressed with you, john, is the -- is the elimination of the extraordinary

measures from being used by treasury. is it your view the next time this discussion comes around it will be more firm, that the stakes will be higher? >> reporter: i don't think an administration -- this white house or any white house -- could accept that limitation on the treasury secretary's freedom to maneuver -- an ability to maneuver. especially given the difficulties that we've seen getting congress to raise the debt limit. so i think it's an attempt by republicans to say, "we're not going to let you play games anymore." you know, there's been some disbelief on the part of republicans -- and some have even expressed the view that of reaching the debt ceiling might be a good idea, because while they pay the interest on the bond, but they'd have to budget and balance the budget, as rand paul said, for other things. they don't believe the warnings from christie and lagarde and

many other people about the impact on markets if we reach the debt ceiling and trying to codify with this measure, and i think it is rejected by the vast majority of people on the hill, the have majority of people on wall street, the vast majority of the business community, and it's another reason why i think the provision won't become law. >> john, let's assume we do get the government reopened, we do increase the debt ceiling. you know, i wonder, though, does this put us in any better position to tackle some of the key things that seemingly are -- have been out of reach, whether it's a farm bill or transportation bill, immigration bill, or anything of that nature if, in fact, there is a resolution to this latest crisis in. >> reporter: actually, i do think so, david. in this sense. the reason they couldn't pass the transportation bill this summer was because many republicans came to the recognition that the spending levels under the sequester were too low for them, right? so even though republicans are

identified with favoring the sequester, democrats wanting to lift it, both parties want to lift it in different ways. and so, i do think that once they get into a budget negotiation, there's a chance for two kinds of a deal -- a small one or a big one. you could have a small one that alleviates part of the sequester. it shifts some of the cuts to entitlement programs, which need long-term restraint discipline. that probably could be done without any tax increases the administration might not insist on then. if they want a bigger deal, one that goes seriously after some of the spending on medicare and social security, then i think the white house and democrats would insist on tax revenue. the latter is much harder to get. it makes sense for the country. so i think -- i'm loathe to dismiss it as a possibility, especially after all of the attention to the issue now. but a small deal, i think, is more likely. >> so conceivably this new -- this new, to a certain extent, the power of the tea party bloc?

>> if, in fact, we get a negotiation that results in a large deal, that would, by definition, be against the wishes of some of the taea part group, because it would include new revenue. a smaller deal? not so sure. there are a lot of people -- paul ryan, patty murray, the white house -- who potentially could get together on a smaller package that would alleviate the squeeze on short-term spending for targeted areas, which ben bernanke and others have said may be restricting economic growth at the moment, and instead go to long-term fiscal restraint, which the consensus of economists in both parties is what we ought to focus on rather than the short term. >> while we're -- while you've been speak, john, the bottom of the screen there, a statement from the white house. the president has said repeatedly that members of congress don't get to demand ransom for fulfilling their

basic responsibilities to pass a budget and pay the nation's bills. unfortunately, the latest proposal from house republicans does just that. in a partisan attempt to appease a small group of tea party republicans who forced the government shutdown in the first place. clearly, a rejection from the white house. >> reporter: yeah, a rejection from the white house. and, you know, as the -- as the republicans get back off of the limb where they were demanding defunding or delaying of obama care, the president's got to slice the salaamty thinner and thinner, because, you know, if he goes along with the senate package, which, of course, he will, it does have a tweak to obama care, which democrats are saying, well, that's offset by a trade that we made. it's not really a concession. but it's harder and harder to sustain that argument, the narrower the distinctions become. >> one last point. we think the speaker's about a minute away, john. you've said a couple of times that you yourself have probably been too optimistic as we've worked our way through these chapters. >> reporter: it's a consistent character flaw. >> yes.

is it occurring to you that thursday's going to come, and either because of mechanics or timing, this is not going to be done? >> reporter: it occurs to me that that could happen. that's right. but i still don't think it will. [ laughter ] >> i mean, there is -- >> reporter: if thursday comes -- >> there is that moment in the fourth quarter where even if you get the ball back, getting it down the field by the time the clock expires is going to be hard. >> reporter: you gotta believe in those hail marys, carl. >> is that where we are, god, a hail mary, huh in. >> said the fan of the redskins with r.g. iii having the troubles he's having in the nation's capital, not being able to catch a break. let's do a quick update. the dow is down 71. the s&p is off 6. still above 1,700, david and simon. you have to hand it -- you talk about whether it's resilience or complacency, that continues to be both support and resistance to a large degree. >> i guess on the judgment from those in the market, given what the white house has just said,

which is an outright rejection of whatever they're about to announce, this becomes the sideshow, then, to what happens later in the senate. mitch mcconnell, of course, absolutely key there. >> yeah. gold has been a little more volatile, as we said earlier on, down to $1,251 earlier this morning, when it looked like the process might be cleaner, it did pare some of the losses. at 1,271. >> everyone wants to seem to buy the dips. >> and there's a headline there, as we see on the screen, too, the president to meet with the democratic leadership at 3:15 p.m. eastern time. and we are working our way here within about 48 hours of the deadline. so when we asked john about whether or not this -- whether or not this could potentially not get done in time, it's a serious question. and here is the speaker. >> good morning, everyone. our leadership team met with our members today trying to find a way forward in a bipartisan way

that would continue to provide fairness to the american people under obama care. there are a lot of opinions about what direction to go. there have been no decisions about what exactly we will do. but we're going to continue to work with our members on both sides of the aisle to try to make sure that there's no issue of default and to get our government reopened. >> good morning. we just talked to our members. and i think it's been very clear all along what we as republicans in the house have wanted. one, we've wanted the democrats to sit down and talk to us so we could work out our differences, and we've been saying since day one that we believe there should be no special treatment under the law, and there should be fairness for all americans. those elected and those unelected. and i'm glad to see that harry reid in the senate finally has begun to sit down and talk with the republican leader there, and we encourage that. we also, though, as the house

republican conference, think it's very, very important for us to stress in whatever proposal we move forward will reflect our position on fairness. that no special treatment for anybody under the law. >> very clear in our discussions that we think individuals should be treated fairly. that big business should not have special treatment, and members of congress should not have special treatment. we are very cognizant of the calendar. we want to find a solution to this in a bipartisan manner that gets us moving forward and gets america back working again. >> okay, for weeks now, the republicans in the house have been leading with solutions, and we believe that this is the time for solutions, and they need to be based upon fairness for all. we recognize that people all across this country continue to struggle and have their challenges, and as the foundation, we want to ensure that laws are written and implemented in a way that provide that fairness for all, whether it's moms, dads, small business owners, seniors, young

people, that are trying to find their way forward. and we in the house -- we remain committed to being a part of a solution to working in a bipartisan fashion to find those common sense ways to make sure that we're doing what's good and right for america. >> mr. speaker -- >> a couple of questions. >> mr. speaker? the changes in your bill to the president's health care law are arguably pretty minor. were they worth a two-week government shutdown? >> listen, we're working with our members on a way forward. and to make sure we'll provide fairness to the american people. >> mr. speaker? can you guarantee the american people, congress will not go past the deadline and -- >> listen, i have made clear for months and months that the idea of default is wrong. and we shouldn't be anywhere close to it. >> last question! >> mr. speaker? >> will there be a vote today on the -- >> -- vote today on the plan that would make some changes to the senate bill and -- >> we're talking with our

members on both sides of the aisle to try to find a way to move forward today. thank you. >> all right. trying to read some relatively obtuse language there. the dow did pop about 40 points on the very brief -- typically brief presser by the republican leadership. john harwood, no mention of a vote today. should some read that as a good sign? >> reporter: well, i thought what -- the news from this press conference was the speaker did not say, "here's a bill that we've agreed on." he said, "we're still working on it, talking about it." that indicates that the republican caucus is divided. they're not sure about a way forward, and that strengthens the hand of the house and mitch mcconnell, as he's doing negotiations with harry reid. so i think the complication potentially posed by a house bill moving in a parallel track at the same time is somewhat diminished if the speaker is not setting that in motion right

now. he said, "we're looking to have a way forward and act today," but if you don't have a bill, you're not movin'. >> right. i assume that if they -- you would tell us, clearly, if the speaker thought he had the votes to move ahead on this bill today with a vote, he would have said so just now? >> reporter: i think that is right. i think it's both a matter of, one, the potential votes. and, two, what do you want to present to the country as the house's alternative at this point in the process? and i think the division revealed by the fact that they didn't come out with a bill, despite all of the reports that they were going to move a separate bill, is a sign that it's not as easy at this point with just two days left to set something else in motion, and that, again, strengthens the hand of the senate. >> we're going to work you hard today all day long, john. thank you so much for the pass couple of hours. our john harwood in washington, as we got that long-awaited press conference. let's bring in david and larry,

and, guys, we appreciate your time today, as well. good morning. >> good morning. >> good morning. >> you know, you can't blame an investor for saying, you know what, i'm just going to sit and wait until this is all over, david. even as we have to report on the tiny moves back and forth. what do you make of this morning's action? >> yeah, i mean, certainly, there's lots of twists and turns in the story, and we're still waiting for the details. but our bottom line has been pretty consistent all along, is there will be no default on treasury debt. the disruption to the economy is likely to be fairly minimal. we'll get more color as we go through earnings season, and investors should really look through this noise and focus on the fact that earnings growth is accelerating, monetary policy is still accommodative. and if you look at the budget deficit in the short term, things have actually gotten a lot better. we're still pretty constructive on equities. >> and i think you probably are in the same mind as david, larry, in that a default isn't likely.

you seem to be a little more pessimistic once you do look through the political machinations and look at the market fundamentals, look at the economy? >> yeah. absolutely, i agree with the first half of what mr. lefkowicz. there will be some kind of deal. there won't be a default. we're sanguine on the prospects of the stock market once investors actually start focusing on the fundamentals. >> well, what do you do, uri? with that as a backdrop, you must need to put assets somewhere, and if you feel like the market doesn'tequities, whe you go? 2.7 on the 10-year? >> well, bonds are equally unattractive, if not more so. i think what you need to do is actually look for alpha opportunities, places where you think you can make money, and then hedge out the beta risk in the market so that you're not reliant on higher markets to inflate your investments, but rather the quality of the

investments themselves. >> david, your point about earnings acceleration. some might disagree with -- obviously, we're just barely into earnings season, but it's not like we're being overwhelmed with stellar reports from either the big caps or the smaller companies. i mean, do coke and citi reflect where the economy is right now? >> i think it's a little bit uneven, especially in terms of the consumer side. you know, coke's numbers were, you know, a little bit better than where they were in the prior quarter. but i think if you look at the big picture, the headwinds that we are contending with over the last -- in the first half of the year, were a european recession, a slowdown in asia, and a stronger dollar. and all of those are now reversing. we have europe coming out of recession, asia stabilizing, and the dollar has moved in favor of u.s. multinationals. i think that's going to lead to an acceleration in earnings growth. it will be moderate. we're only looking for 7% or 8% growth, but that's better than what we saw in the first half,

which was 5%. >> that's true. our expectations are relatively low. david, uri, thank you for your time, on a busy news day. appreciate it very much. >> pleasure. >> sure. >> s&p back to 1,708. the nasdaq has gone green. it's been about two week since the exchanges under obama care went live. people are facing technical problems when they sign up for insurance. what will it take to get everything up and running properly? we'll ask the man who ran the state program in massachusetts, better known as romney care, to find out when we come back. opportunities aren't always obvious.

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today marks two weeks since the obama care insurance exchanges opened, bringing with it some frustration for those trying to enroll. our next guest expected some glitches as he has seen this before, just on a smaller level. john kingsdale oversaw the insurance exchanges for romney care in massachusetts. he joins us this morning from boston. john, good to have you with us. >> good morning, carl. >> it sounds like you were impressed with the way some states have performed, but on a federal level, this is a -- this is a lot to swallow all at once. >> yes. i think we expected glitches, frankly, across all of the exchanges, and some of the states have done a great job. the level of interest has been huge, but it's clearly getting time for the federal-facilitated marketplace to get up and running and start enrolling people. >> where do you think the fly is in the ointment, jon? what is wrong with the federal effort? >> well, clearly, one of the -- and i'm not an i.t. person -- but one of the problems, even

from a consumer-retailing and marketing perspective, let alone i.t., is the requirement -- the decision they made to require that you create an account, go through the identity-proofing process before being able to even browse in the new insurance marketplace. and that's been a huge bottleneck. and the problem with that not only is that that itself is a bottleneck, but there's a set of gates downstream that we don't get to test -- or they don't get to test -- with high volume until you get past that bottleneck. >> so you have to literally deal with the hundreds of insurers down there who have to get their own information straight before they can pass it on to consumers. that's your point? >> exactly. that's not the only gate, but that's probably the most critical one. >> yeah. you also talk about the timeframe for enrollment, as we compare the federal effort to what happened in massachusetts. they're trying to compress this into a much shorter time period. >> that's right. and they're doing a lot more,

you know, to be fair. this is not only a national effort, in very -- again, swimming against strong oppositional currents -- but it's far more ambitious. we in massachusetts simply used the existing eligibility determination system. we literally subcontracted to our medicaid program, mass health, whereas this national health effort is to install a new eligibility-determination system for the exchanges, for medicaid, and eventually for food stamps and other subsidized programs. >> what will conversations sound like as we get closer and closer to the end of this window? is it possible it gets extended? i'm just trying to understand how the status quo could continue well into the next few weeks. >> well, you know, october, i've always thought, was a browsing month, if you will. the millions and millions of visitors, we don't know the portion of those that are really interested in buying.

and our experience in massachusetts was that folks got on the site and shopped many, many, many times before they actually bought. and relatively small percentage of the browsers, if you will, actually did enroll. so i think that october is kind of a look-and-see month, but november is when the real volume of enrollment we should expect -- i would expect to see it begin, and that's when we really need to see the i.t. systems up and running reasonably flawless. >> that's a good point. you think about how you buy a car. you don't log on and buy right away. do you take your time and try to find the best deal. we'll see what november brings. jon, thank you for your insight. hope to have you back. >> thank you. my pleasure. >> jon kingsdale, joining us, talking about the obamacare effort. in the meantime, apple's ceo, tim cook, hiring the first woman to his executive board, right there, coming over to apple to heck the tech giant's retail operations. does the move mean luxury

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taking a look at the market board. the s&p is one to watch. it's 1,710. getting awfully close to the 52-week high, 1,729. we're once again holding above some of the critical levels. apple shares, meantime, rising today on news that the company is adding burberry ceo to head its retail operations. we'll talk to a top editor at "women's wear daily" to help explain whether the move will help apple's style. i love having a free checked bag

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welcome back. bob pisani back on the new york stock exchange. call it yoyo trading. stocks rose and then dropped as mr. boehner came and said he wouldn't introduce a bill of his house, and then he and others had a press conference saying they're trying to find a bipartisan way forward, although no mention of any bill actually happening. the bottom line, the stocks are near the highs. the s&p actually did go positive on that news. let's move forward and talk about some of the things that are worrying people, like the deal might get done. a lot of concerns that that january 15th deal, reopening the government, it will cause its own problems. remember what happened back in january of this year. remember the delay in refund checks after the fiscal cliff

fiasco and walmart saying sales were a mess because people didn't get their refund checks? the worry is that's what will happen again. the tax refunds may be delayed because of a fight over the sequester and the budget into december and january, and that this may impact christmas sales because everybody is aware of the fight coming and may spend less. this is some of the knock-on effects, not surprisely, retailers are underperforming. consumer discretionary is weak. retail names there. ralph lauren, coach. the usual suspects towards the downside. 3-to-2 declining-to-advancing stocks even though the major indices are on the flat side. speaking of retailers, walmart has got its investor day today. some headlines. the ceo saying we're in a tough and unpredictable global economy. now, i have been waiting for some guidance in terms of 2014 earnings numbers. they normally will do it today. i haven't heard them yet. i'm sure the cfo will give an update later in the day, will probably give some kind of guidance.

that's what everybody has been waiting for the the earnings estimates are aggressive, about 10% higher next year compared to this year. keep an eye on that. rates are continuing to climb. we're at roughly one-month high on the 10-year at 2.7%. that's impacting some rate-sensitive groups -- homebuilders are having a tough day today. some of the big names down about 2%. guys, back to you. >> a lot of information, bob, thanks a lot. >> we're keeping our eye on d.c., as well. we expect house minority leader pelosi to speak in a moment. apple is making a fashionable acquisition, tapping burberry's ceo ahrendts. we're outside the burberry store are more. good morning, robert. >> reporter: good morning, carl. a lot of people are looking at this, wondering will this work, a maker of very expensive trenchcoats going to a tech company? but this is really all about apple, as a luxury brand. a recent survey in london called cool brands ranked luxury brand, apple coming out at number one

followed by astin martin and ro, and it's about quality, performance, authenticity, at buttes that apple has strived to keep here. another survey, looking at -- especially true with the younger consumer, younger affluent surveyor in the u.s., looking at rankings of the brands. number one was apple. it was followed by bmw and ralph lauren. so apple, again, really more of a luxury brand now. so what can she do for apple? well, these are really the same consum consumers, the apple consumer is the burberry consumer. the young, the affluent, and, again, trying to restore a sense of cool. she's been very good at creating up-market products. she's expanded overseas and a lot of technology. back to you. >> robert, thank you for that. let's take you to the senate floor and harry reid. >> -- nothing more than a blatant attack on bipartisanship. the past several days we've been

engaged in productive bipartisan negotiations in the senate. everyone knows that. we've been working across party lines and making steady progress to achieve an agreement that reopens the government, protects the full faith and credit of our great country, and opens talks to put this country on a firm fiscal footing. everyone needs to know that the measure under discussion in the house is no part of what we've negotiated here in the senate. mr. president, the debt is here. the deadline is looming. rating agencies are talking about downgrading us as early as tonight. again. i know i speak for many of us who've been working in good

faith when i say that we felt blindsided by the news from the house. but this isn't the first time. extremist republicans in the house of representatives are attempting to torpedo the senate's bipartisan progress with a bill that can't pass the senate -- can't pass the senate and won't pass the senate. the house measure would take away the president's fundamental authority that's been in existence for as long as political science can remember. it's been in place for decade after decade after decade to prevent a catastrophic default on the nation's bills. out of spite, tea party republicans are trying to take authority away from president obama. they would never, ever consider doing this if it were president romney, president bush, or president bush, or president reagan. never.

but as they've said -- and they've cheered over there -- the government's closed. "we don't mind defaulting on the debt. it's good for the country." that's what they've said. their legislation would also make unacceptable major changes to obamacare. house legislation doesn't even include a process for bipartisan negotiations on a sensible long-term budget. they just throw out these numbers and think magic's going to happen, and somehow come january 15th, everything will be hunky-dory. there's still processes we have to follow. they set no pattern, no sched e schedule, no routine to do that. for weeks, republicans have claimed they want to negotiate, but their legislation completely ignores the need to work together to craft a budget and put our country on a fiscally

sustainable path. for years, mr. president, they've complained about, "why don't we have regular order?" they complained about a lack of a budget. now, they don't even want us to negotiate a budget. hard to comprehend this logically, but, mr. president, the tea party-driven part of the republican party doesn't follow logic, or why would they want to close a government for 15 days, have us default on our debt? introduction of this measure by house republican leadership is unproductive and a waste of t e time. let's be clear. the house legislation will not pass the senate, and here is what the white house said just a few minutes ago. quote, the president has said repeatedly that members of congress don't get to demand ransom for filling their basic responsibilities to pass a budget and pay the nation's

bills. unfortunately, the latest poll of the house republicans does just that in a partisan attempt to appease a small group of tea party republicans, will force the government to shut down in the first place. i am very disappointed with john boehner, who'd once again tried to preserve his role at the expense of the country. i've worked hard to rise above partisanship, to find common ground in the senate. mr. president, we've done that together for the good of the nation. this is much bigger than the senate or who's presiding, from the state of hawaii or the assistant leader who's to my side. this is much bigger than that. it's much bigger than me. it's much bigger than two senators who are here from

connecticut. senator from -- we have the senator who's chairman of the budget committee, murray. it's bigger than her. it's bigger than the senior senator from new york, senator schumer, who's on this floor. mr. president, we have to start working together for our country. that's what we've been trying to do. this is so disappointing. on the eve of financial destruction for this great country, and that's what it is. to appease a small group of people over there. i'm so disappointed. >> senator neil for a question. >> i would be happy to. >> i'd like to ask the senator, majority leader, through the chair, one of the key elements in this new proposal from speaker boehner is to diminish this president's authority to deal with a default on our national debt.

this authority -- so-called extraordinary measures, or emergency measures -- gives to presidents, going back to president kennedy, the wherewithal through the treasury department to try to avoid an economic disaster, which could impact families, businesses, jobs, and the reputation of the united states in the world. i ask through the chair of the majority leader, now that we have seen the republican party bring us so close to the precipice on a default, it is unimaginable to me that any president, including president obama, would surrender this authority to keep america safe in light of this type of threat. is this one of the key elements in terms of the problems associated with the boehner proposal? >> mr. president, to my friend from illinois, senior senator, we've seen what's gone on these last few months. this whole year.

with a group of people who are out giving press conferences, holding demonstrations. they want the government to stay closed. they wanted it to close in the first place. the hardship we have all over this country is really, really awful. and then, if that's not good enough, they're out boasting that they want the country to fail its obligations to pay its bills. these are not new programs. these are obligations we have. and then -- i mean, that's one of the things. the proposal they have would not allow -- for example, my friend is the chair of the most -- some say the most important part of the whole federal government, protect the safety and security

of the united states, subcommittee, dealing with defense. it was led by many, many decades by the late senator dan inouye. this proposal they've sent gives the president of the united states, the chairman of the joint chiefs of staff, no flexibility whatsoever when sequestration kicks in on the 15th. we're not asking to change the numbers. we agree to those numbers. we've voted here to approve those numbers. but they won't even allow flexibility to allow the department of defense to shift that money around. i do not know how the defense of this country can go forward if they don't have flexibility with losing $22 billion beginning january 15th. they don't even give authority for that. this bill that they're sending over here is doomed to failure. it's doomed to failure legislatively, and it is so awful, awful, awful, awful for our country.

>> senator from new york. >> i'd just like to underscore for a brief moment what our leader has said. you know, default will be devastating to this country. closing the government is awful for our country. and, yes -- >> all right. senate democratic leadership in the senate talking about the bill that was floated today on the house side. reid saying that it will not, cannot pass the senate, saying he was blindsided by the hou house -- not the first time, in his words many also talked about various ratings agencies portending downgrades as early as tonight, something that comes as some news to us, but he may know something we don't. john harwood, your take on what reid just said. >> reporter: i have to say, carl, listening to harry reid complain so much about what happened in the house makes me wonder whether it complicated mitch mcconnell's life and, therefore, harry reid's negotiations with mcconnell more than i had anticipated. because if he could simply brush it off and ignore it and proceed

with the negotiations, i'm not sure he would have been talking about how disappointed he was, and john boehner putting his position above the country and all of that other stuff that he was saying. so i haven't talked to people yet, just listened, as you did, to harry reid. but i wonder whether or not that might have a serious effect on those negotiations in the senate. >> really? so you don't necessarily think we're back to where we were before the market opened today, in that we're looking at an emerging senate plan and trying to handicap its chances in the house? >> reporter: i would assume that we are, but i -- i am not as sure of that as i was 15 minutes ago. >> all right. john, thank you. obviously, challenge to keep pace with all of the very quick-moving action out of d.c. by the way, minority leader nancy pelosi was just speaking on the house side, as well, said that boehner's performance today was the look of a speaker who does not have the votes. when we come back, a

surprisingly weak treasury auction causing some concern in the markets. we'll get details on that. the dow hanging in with about a 44-point loss. back in a minute. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

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bids ended up being the rates. you can see spikes in the one-month t-bill. i'm told this reflects growing nervousness -- it's the first time we've seen the spike outside of what they call the zone of potential default. these four-week bills and six-month bills essentially are beyond when the market believes there would be a default problem. that's where the spike has been. now we're getting a spike outside, which one trader described to me as just general nervousness, general risk aversion, now taking hold on the dawn of the debt ceiling breach here, guys, and now affecting, going out beyond the concern of the actual default into broader u.s. treasury bills. and what you see here is a .2, which is not big, guy, but a big number for where we've been on the one-month t-bill. >> yeah, we're looking for every empirical data to see how the market is behaving. steve, thank you. big day for earnings. we'll bring in the earnings squad next when we come back. coming up -- [ siren ]

"earnings squad" in color, starring melissa lee and also starring tayla tausche, and today's earnings for coke.

welcome to the "earnings squad." we have the earnings stories everyone is talking about. i'm melissa lee. joining me is kayla tausche and stephanie link.

let's get to the top story for the squad session, and that's a controversy surrounding jpmorgan's earnings, because there's a dispute about how legal expenses will be treated and have been treated in the quarter. >> well, in the report on friday, melissa, legal expenses were considered a one-time item, and without those jpmorgan said it had profits of 142 a share. but analysts on wall street had been forecasting 117, and they've now come out and said, our 117 estimate actually had the legal expenses in it, so, therefore, we are not going to exclude that from the estimates. they're now saying it's a 17-cent-per-share loss, and that's dragging down the growth estimates, 1.6% is the earnings growth forecast now, including jpm, and without it's 4.2%, even worst effect on the financials. >> is this a big deal, because a lot of the financials are facing legal expenses and will continue to face legal expenses, because it will change the way we look at whether or not they're beating estimates. >> it certainly is.

as a p.m., you look at earnings revisions all the time. from that point of view, yes. you look at the core operations to see what's happening with the companies, and jpmorgan had a very good core earnings number. if you look at advisory up sequentially, and their business down with citigroup, and the equity trading business up 20%, much better than expected. so i'm okay with that. >> so the bottom line is that that is just noise at -- >> i think it's some time one-time. >> so we heard from citi, from jpmorgan, wells fargo, tighter cost controls are really helping to offset weaker revenues and also the mortgage businesses are very slow. >> right. the thing that citi said that i think a lot of people were expecting was the fact that fixed-income trading was down, and it was down in a pronounced way because of the uncertainty about whether the fed would taper in september. we know now they didn't. securities and banking revenue for citigroup down 31%. it looks like citi was overexposed to that certain trade there. but it's interesting, because if

you look at main street, charles schwab, for instance, actually benefited from some of the uncertainty. investor net new deposits up 107% from the last quarter. so even on main street, people are feeling good and wanting to put their money in the market, but on wall street, they're really pulling back on some of the activity. >> let's talk about main street and specifically consumer discretionary. we got a read from domino's pizza, and it was a rare miss for this one, because this company hardly ever misses on earnings. >> second miss in two year, right? >> yeah. >> disappointing, but really the operating margin that was disappointing in my view. if you look at revenues and comps, they were basically in line. this stock, though, melissa, is up 58% year to date. >> 29.9% versus 29.5% in the operating margin. >> but if you look at some of the trends, the stock needed a beat and a raise. >> mm. >> and up 58% year-to-date. >> right. >> you wouldn't get it -- and it's 25 times earnings, few expensive. you can get this in the low 60s. >> all right. that does it on the "earnings squad." if you want to join us, tweet

us. we'll be back more. straight ahead, momentum stocks shrugging off the latest back-and-forth out of d.c. this morning. we'll show you the moves. into my mantra?

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upgrade with some survey results showing good market potential for the generation 3. potbelly, though, some comments out of lee cooper on "squawk" calling it one of the overvalued name, down more than 7%. let's get you to headquarters, scott wapner, and "halftime report." >> all right, carl, thank you so much. here's what we're following on "the half." why a guest on our show says congress wants the dow to drop a thousand points. overdrive and upgrade for tesla has shares upgraded. the traders take the wheel. we begin with the top story. day 15 of the shutdown showdown, just two days now from the debt-default deadline. just when you thought a deal was imminent, the dysfunction in d.c. takes a rather unexpected turn. it's "halftime. "let's get to john harwood in washington with the very latest. john, it certainly seems as though the house and the senate are on