dr. j won the debate on microsoft. start us off with the ticker final trade. >> infinity farmer, infi. >> josh brown. >> tup i'm buying it. >> steve weiss, comcast long. >> have a great rest of the day. "power" starts now. that folks is the sound of a clock and those are the seconds ticking away, tick, tick, tick. another day and a half of those ticks we will, says the treasury, be over the debt ceiling deadline. i think i speak for an awful lot of people when i say, let's go, guys. we will ask tough questions to one republican rep in two minute's time and another big story on our radar, robert shiller, nobel law reyet is talking housing. are we closing in on bubble out but simon is with us.

>> traders spent much of the morning waiting for speaker baner to emerge from the meeting with the house republican s. he same out and said they made no decisions at all. is it fair to say speaker boehner doesn't have the votes to get whatever they have on the table through the house? >> yes. the situation is in flux right now and it was surprise because yesterday was all about the senate making progress, harry reid and mitch mcconnell on a plan that they were going to send to the house and count on the house to pass it. john boehner had a meeting with his caucus, came out, and when he spoke to cameras it was clear that caucus was badly divided. they aren't sure which way to turn. >> there have been no decisions about what exactly we will do. trying to find a way forward in a bipartisan way, that would continue to provide fairness to the american people under obama care. >> but the very fact that the

house was considering passing a bill and sending it over was a blow to the talks between harry reid and mitch mcconnell, limited mitch mcconnell's freedom of maneuver as the republican leader of the senate. harry reid came out after that house press conference and lit into john baner. >> we felt blind sided from the news of the house. extremist republicans in the house of representatives are attempting to torpedo the senate's bipartisan progress. let's be clear the house legislation will not pass the senate. >> i've been talking to members since then. the house proposal is still being tweaked to figure out how they could get the votes to pass it. on the senate side, democrats and republicans say the talks between reid and mcconnell could be restarted this afternoon. right now members of both republican and democratic caucuses are having their weekly lunch. we expect them to come out to cameras at about 2:15 and then we're going to learn where we are exactly at this moment.

still some hope that senate process will resume, result in a deal that could be passed tonight or tomorrow. >> thank you very much. stay with us. because we're going to broaden out the discussion now, here to discuss the showdown in washington is peter henry, dean of the stern school of business at new york university. first bring in representative marcia blackburn, a republican from tennessee. welcome back to cnbc. good to have you with us. >> good to be with you, thank you. >> i'm sure we'll get to where things stand and all of the toing and fro'ing but i want to ask you a different kind of question. as you and your colleagues in the house deliberate what to do, how much thought do you give to what's really happening and the stakes for individual americans? for example, if the credit of the united states is downgraded, presumably stock markets will go down, bond markets presumably will go down and this will take money out of the pockets of everyday people.

how much thought do you give to those individuals? >> we give a tremendous amount of thought to that. it's top of mind. and we're in constant communication with our constituents. i was looking at e-mails coming in from my constituents before i came over here. i'm doing a couple coalition calls this afternoon, last friday evening i did a telephone town hall and had about 13,000 of my constituents on it. so constantly we're working with them, we're talking to them, we're very concerned about being here at the last minute and still trying to negotiate a deal and i think it's fair to say that those of us in the house are tremendously disappointed that the senate has not met us at the negotiating table and we are hopeful and that before we're out it today, that we will -- we will have them at the negotiating table and not only will they work with us on the debt ceiling but also on the continuing resolution and on the budget, the long-term spending

issuing have to be addressed and you cannot continue kick the can down the road. >> i want to bring john harwood back in and peter in just a moment. i don't want to not ask this question. who's got the worst job in washington, the coach of the redskins mike shanahan or john boehner? >> well, you know, i think that could be up for debate as to what you think is best and worst, but i have to tell you this, i really am just humbled that i can be here and be working to find a long-term solution to our nation's spending problems. we cannot continue borrowing $2 billion a day. we can't do it. we've got to find a way around this. >> i think everybody in the country would love to see a long-term solution. >> yes we would. >> seems, john harwood, the debate is focused on short-term changes to obama care. >> well, right. the real question is whether we can get over the finish line in the next couple days. i would like to ask congresswoman blackburn, there's been tremendous criticism of the

approach that house republicans have taken from your colleagues in the senate, some in the house as well. i would be interested in your view, do you think that you in the house have taken the right strategy and do you think it's worked out well for the republican party for the house and for the country? >> well, john, that's something that's going to be debated for months and years. i will tell you this, we have continually sent over to the senate budgets, we have sent continuing resolutions as you well know, i wrote the delay or suspension of obama care for a year because i think it's a fairness issue that individuals would be treated the same as businesses and so i think that as we go through the next few months, you're going to see people come back and look at the fact that we in the house, with bipartisan support by and large, continued to send options to the senate. >> congresswoman, just to follow up your old colleague in the

senate said the strategy was the dumbest idea i've ever heard. john boehner made clear it was not his strategy. was it your strategy from the beginning? >> no. my idea, what i brought to the table, was that we needed -- and we have to deal with the obama care funding issues in the continuing resolution. we've got two different components going on right now. the debt ceiling and the continuing resolutions and, of course, many of us as the obama care bill was signed into law and then the implementation began, we have worked on this nonstop, conducting oversight, looking at what the rollout was going to be, and now we're beginning and will hold next week the hearings on oversight of the rollout and the things that are not working well, reviewing what is taking place right now. so our approach has been in search of accountability, an

accountable cr, accountable spending plans and getting the long-term fiscal issues of the nation addressed, putting those on the table and finding a solution for it. we've got to do it. >> let me bring in peter henry of nyu for either an observation, a question to the congresswoman or whatever. >> my question, congresswoman black blackburn, there's a missing word from the conversation which is prosperity. seems as though the american people have elected congress people like yourself to focus on prosperity and we're in a weak recovery, labor market participation is at an all-time low, in the post-war period and unemployment only down because of that. why are twe not focusing on prosperity, why are we focusing on the issues taking us to the brink and putting nous financial market calamity, a weak one at that. >> jobs and the economy, through all of this, jobs, economy and the impact of obama care or the affordable care act, those are

the top three things that continue to come forward. and you're exactly right. labor force participation rate is at an all-time low and we are seeing part-time jobs increase. and i had an e-mail today from a lady who spoke specifically to this very issue because she's looking at all the dysfunction that is here in d.c. and bear in mind there's plenty of blame to go around and she is seeing all this dysfunction and she is wondering why some employers and nbc's a great example, you got a waiver you're exempted out of obama care, but her employer is going to be faced with this -- >> but the issue isn't the health bill law that's been passed. the issue is prosperity and jobs. >> right. she was moved to part-time work. now this is where it affects an individual's prosperity. her -- she is earning less income, she is no longer

provided health insurance because she was moved to part-time to come under that full-time employment number so this is where they all meet and this is why we as policymakers have to look at the impact of this law because we are hearing specifically from people about how it is impacting their paycheck, their take home pay, the benefits that they are offered and their ability to have a job. i ran in the grocery store a few weeks ago i ran into a woman who she and her husband now both have been moved to part-time status so they are each working two jobs and are in search of health insurance because it was terminated from their employer. that is the real world impact. of what is taking place right now and prosperity is an enormous issue. people would love to go back to having an economy that is a growth economy and my hope is

that we can get this debt ceiling issue resolved and long-term spending problems of the nation resolved so we can put the focus on jobs, prosperity, jobs growth. >> are you prepared to go over the debt ceiling or limit? >> i am confident that we're going to get this issue resolved and i am holding on to that optimism and confidence that we are going to solve this and that we will not go over the debt ceiling. >> all right. congresswoman blackburn, thank you for being with us. >> thank you. i appreciate it. >> peter, we'll see you back here later. john harwood, thank you as well. check in with mary thompson for a market flash. >> taking a look at shares of jc penney. the company said that it has not hired a bankruptcy lawyer, actually come off the 30-year lows, i'm trimming some of its earlier losses. jpmorgan out with a note while

it likes some of the moves the company has made it's a long-term work in progress. jc penney down about 4.5%. back to you. >> still a lot of money in the bank. thank you. looks like the nobel peace -- the nobel prize winning economist robert shiller is w k walking back on his warning of a housing bubble. recent months dramatic gains in markets like las vegas or san francisco looked bubbly as he put it. joining us now is cnbc's real estate reporter diana olick and sherry owe leafson, real estate attorney and ceo of the carnegie group. welcome both of you. sharon, kick off with you, do you think there are bubbles in the u.s. housing market? >> there's no question, be simon, that we are sort of becoming like robert shiller said, detached from the fundamentals. i think one of the big issues is that the tracks had been greased for higher prices and for folks out on the front line, going to

offer, for example, $250,000 on a home, when the realtor tells them this home traded for $500,000 during the bubble, that's meaningful even though it is detached from the so-called fundamentals. i think we were headed in that direction, but we're seeing a change of tides now and i think i'm pretty confident we're going to be backing off of that. >> interesting. diana, what do you see? >> well look, we are backing off the price jumps in the first six months of the year but there is an argument to be made for say bubble 2.0 and that is that while we're still 22% lower than the peak of home prices in 2006, we're operating in a completely different mortgage environment than we were back then. so back then, if you're buying a $200,000 house, you didn't have to have any money down. you could get an adjustable rate interest only mortgage, you could get a negative amortization mortgage and didn't have to prove you had a job to do it. today the environment is completely different. you have to have 20% down for the conventional loan, even going fha, 3.50% down, paying

higher premiums and it does say even though prices are still lower some of the markets are bubbles. >> we should mention, sherry, one important point, interest rates remain very low and i think i'm right in saying in your industry the rule of thumb is that a 1% move on the mortgage rate affects affordability by about 10%. >> it's huge. it's really significant. as rates go up, the other thing that interest rates have been impacting, this goes to the psychology of housing, is demand. so i expect to see some significant drops in demand from home buyers. a lot of these folks are fatigued. the truth is simon that so far right now, we're down to under 30% of our home purchases are by first time buyers. a lot of the sales we're talking about are cash deals to begin with. diana is right, that loans have been more difficult to get and after june 1st when some of these ability to repay rules come in that were initiated under the dodd/frank act, i

would expect to see it more difficult. three in ten folks will be unable to get a loan, three in ten qualified today. >> wow. sherri, we'll live it there. thank you, sherry and diana olick. mark cuban in court today, our cameras caught up with him. he always has something fun to say. that's next on the show. and she gave up a top job at a giant retailer to become a smaller part of the big team at apple. and that's just one interesting part of the story. robert frank is outside burberry in new york city. robert? >> hey, simon. angela ahrendts didn't just break the glass ceiling she broke the mold for ceos. her unusual success and also why the british press was not always so friendly coming up after the break. if the debt limit is not increased before the extraordinary measures are exhausted the treasury will not

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mark cubanen back in court today, not on the court. he's in dallas as we near the end of the insider trading case against him. cnbc's cameras caught up with him a few hours ago. >> kind of stuff that the mavs lost last night but shawn did play and we'll have jose calderon back on saturday. we've all had a tough scoring night but a lot of confidence.

i'm excite wed got back into it and play again on wednesday and we'll be back again on saturday. i'm looking forward to a great season. >> looking forward to a great season. mr. cuban is with the dallas mavericks. the group is in court right now and any news we promise to bring it to you. >> simon? >> thank you very much, tyler. the ceo of the fashion house burberry is leaving to head apple's retail business. she's an american from small town indiana, and rising, of course, clearly to become one of britain's highest paid executives. and that's just where the story starts to get interesting. our wealth editor robert frank is live in new york. over to you, robert. >> thanks, simon. angela ahrendts known to americans as the smalltown girl who achieved the ultimate dream but in britain she is called the queen of the ftse known more for her outsized pay. she was the highest paid executive in the ftse 100 with a

total pay of 16.9 million pounds, around $26 million in today's currency. now that included a salary of 1 million pounds as well as bonuses and the sale of more than 11 million pounds of previously issued stocks. the british press reporting a lot on her 12,000 square foot estate outside london as well as the indoor pool, her tennis court, but she has created more than 4 billion pounds of shareholder value. the stock has tripled and sales have doubled during her six years. here's how she's really evolution nized or revolutionized the brand. she's take an brand that was mass marketed, brought it more upscale with higher end, more expensive products. she's taken them into the technology area with a lot of digital and social media and guys, i just want to show you one prop from this store. here's how apple and burberry go together. this is a $300 iphone cover that's part of their new rhythm fragrance series so this is a

$300 cover. i'm not sure how it gets in your pocket with all the studs on it but these are selling well. this is part of the reason why she right now is so popular and successful in the luxury space. >> i'm sure you'll get used to them. we should point out, of course, that the -- that a rain coat in britain is actually called a macintosh by some. she's going from selling macintoshs to macintoshs. roughly. you get it anyway. one thing that caught our attention on angela ahrendts's resume her degree is from ball state university in the great state of indiana, not stanford or harvard and now holds one of the most coveted jobs on the planet which begs the question this lunch time, who needs ivy leaguers anyway? cnbc's robert frank is still with us, john fortt with us and peter henry, noted economist, author and dean of the nyu stern school of business. i'm sure you would have a view

on this, sir. >> absolutely. first of all, nyu stern is in our own league, not the ivy league, but i would say that angela ahrendts is an extraordinary person and i think it goes to show that we have no monopoly on talent. it's great talent can thrive wherever it goes to school. >> john, i suppose we should point out this is retail, not brain surgery. >> well, even brain surgery, look at tim cook, he's from alabama. he went to auburn university, also not ivy league. so i think there's something to be said for people who have talent, doesn't necessarily matter where they start out. they seem to end up a lot of times in great places. >> or people that work hard. she's worked her way through donna karan, liz claiborne, this is the product of decades of work and having a client husband and -- compliant husband and three children who will follow you around the world. >> she's a sign that the meritocracy works not just in

the u.s. but overseas, and on the other hand, harvard still generates more people worth $200 million or more and more billionaires, 52 of them, than any other school and far and away the largest in the country. if you look at self-made wealthy university of virginia is number one. harvard still dominates the rich list. meritocracy works but maybe only so far. >> you know peter, there is actually a real problem, all joking aside, there is a real problem potentially in this country at the moment that an awful lot of people from the middle, the middle of soelts, are beginning to believe that education is possibly too expensive and maybe not worth it. those that already have very well educated parents and a lot of money will probably always go and get their mbas if they're not picked off by facebook or whatever in the meantime. it is those people who should be in a sense climbing upwards who really you would hope had they would get the american dream, that may be discouraged and that is dangerous for this country because it will always be about

education, education, education. >> simon, you put your finger on the key issue. if you're born in the united states, in the top 25%, you have an 87% chance of going to college. bottom, you have an 8% and schools like nyu, and the school of business trying to bring in as you say students from the lower part of the economic distribution into the discussion about how to become part of the leadership class, part of the class that creates value, and we have to do that in order to hold the society together and create a better future for all of us. >> you know, john, technology is a fe nom nal thing for this economy. technology has in many senses misled a lot of people because they believe they can make a lot of money quickly by founding an instagram and an awful lot of people in tech start-ups that perhaps might not should have -- should not have made that decision. help me out here. am i barking up the wrong tree? >> no. i think you're right. i think there are a lot of people who are hoping to build

the next instagram and for the people who have the absolute top flight talent to do that, it doesn't have to succeed. the product can end up essentially being the resume that gets them that job at an apple or google but the issue really is what happens to the most talented, the hardest working young people in this country? what sort of chances do they have? are we the sort of place that gives those people the best chances and so that they end up in a position like your tim cook and angela ahrendts or are we losing that a bit and shifting to something else. that does have implications for the economy. >> that's an important point well made. leave it there for the moment. thank you, robert, john and peter. stick around. we're going to come back with some of you in the second half of the show. back to you. >> thank you very much. the debt limit deadline fast approaching if we go over, what gets paid and what doesn't? well, he's not jack lew but today steve liesman plays him on tv. you won't want to miss that. coming up next.

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if we go past the debt ceiling deadline the treasury will have to start getting creative in deciding what gets paid and what doesn't get paid. here's our own steve liesman now as a would-be treasury secretary jack lew. >> okay. tell me how much is in the account? 4 how many cents? yes. how many cents? 65 cents. okay. . got it. listen, pay the interest on the debt, but delay social security a couple days, okay. until there's $30 billion. hold on a second. good afternoon, mr. president. yes, sir. pay social security right now, understood. don't delay social security. hold on. did you hear that? shut down the justice department and the faa. i know that closes the courts and grounds the planes. okay. all right. okay. good. all right. court is closed. social security paid. interest paid.

not good. not that bad. defense secretary hagel, how can i help you, sir? yes, i'm aware of the military payments due november 1. i'm going to do my best. i understand how important it is to pay the military. yes, defense of democracy sir. lives at stake, i understand. hold that thought for one minute. can you hold on, mr. vice president? yes, i'm sorry. yes, mr. president. i'm watching the market reaction now. right. not good. unemployment insurance i don't know, mr. president. we might. i understand might is not good enough. we'll find a way to pay. i hate to do this, can you hold on one second. i can tell you categorically the environmental protection agency will not be funded. yes. i know the environment is important. hold on one second. hold on. senator cruz, i suppose good afternoon. no, sir. construction on highways in texas will not be funded. why? is because we hit the debt ceiling sir. that's why. hold on one second.

hold on. mr. president, no, sir i was not yelling at you. i'm sorry. if you could just hold on one second. hold on. i'm sorry, i don't have a lot of time for the general council. what is it? what do you mean what i'm doing is illegal? i don't have authority to make these choices? between payments. i can't -- hold on a second. mr. president, i have some very bad news. >> how many hand sdrous? >> i have many hands. >> many hands and make labor light there. >> that's what it takes to do the job. not going -- nobody has been here, nobody knows what they're going do, if there's a priorization plan and the only thing i can think of this ends in a constitutional crisis. >> absolutely. and it's -- it's a train wreck, as that illustrates. >> it's important to point out not only does that -- one is the difference between one spending bill passed and another, and does jack lew as treasury secretary have authority to make those choices. >> all these hands that can

answer the phones. >> i hope we didn't make too much light of it. >> i think comedy sometimes is exactly makes the point. >> thanks. >> steve liesman, thank you very much. all right. simen. >> we are shutting up on gold. in fact, we're now -- this is now the fifth straight losing session we've had on gold. three month low. 1274 as you can see there. silver is down as well. a lot of the commodities are down. oil, gas in negative territory. there's still, tyler, a belief that they're going to get this thing done before everything falls out of bed. back to you. >> thank you very much, simon. even with all the negativity surrounding the government shutdown, the impending debt limit business, the feeling some of the smartest people on wall street seems to be this could be a buying opportunity and the equity markets could move higher. here's what david it tepper said today on squawk box. >> i was a little surprised but not that surprised and understood when they didn't taper why they didn't taper. it was because the economy wasn't quite at their

projections. if it wasn't quite at their projections before this nonsense it's not at their projections now. >> tepper on the taper. he is not alone. omega advisors leon cooperman says there's still room for stocks to move higher. >> the third phase of bull market normally is the like the exuberance phase, silliness phase, people forget about the mistakes of the last cycle and we're not there yet in any broad sense. >> not in the exuberance zone just yet. are they right with their assessment? welcome to "power lunch," mike wilson, chief investment officer at morgan stanley wealth management. you heard what those two noted guys said. smart investors both seem more room for equities to move inpresuming we don't run off some cliff. >> i think that's correct. the bottom line is we have a perfect template for this in 2011 and i think that's what david probably was referring to last time this happened, it ended up being a buying opportunity and stocks took off. that was the time when u.s. stocks really started to outperform the rest of the world

because when you raise the debt ceiling limit, that's actually a pro growth strategy. what's happened now because of 2011 people are front running that to some degree. while we agree this will probably end up being a buying opportunity, some may be priced in. >> is the united states strong enough to support rising stock prices? are the earnings there? are the es there to support the ps. >> we've had massive multiple expansion in the last couple years and stocks anticipate good news. they were telling us all along the economy was going to be fine. we believe the economy is going to be fine as well and the global economy is healing. but you're right, multiples have expanded and now stocks are more likely to kind of progress with earnings growth, not more than earnings growth. >> 12 months from now, presuming we get some sort of resolution and we muddle through or whatever we do, where do you think the s&p trades? >> for u.s. stocks like i said it will probably migrate between 6% and 8 %, probably a good target, plus a dividend.

internationally we could get more multiple expansion as they're coming out and a bigger growth impulse in some parts of the world. >> that leads me to believe you have your eye on japan and europe. >> absolutely. >> you like those two? >> we like both. >> as long or intermediate term plays. to politics, janet yellen nominated to be the next chairman of the federal reserve. do you have an in-house observation on that? do you think she will be any quicker or less quick to pull some of the easy money out of the system? >> generally speaking the consensus view she is more dove ir than ben bernanke is or was. >> more focused on keeping employment going. >> correct. optimal control which we've heard about. she will allow things to -- inflation to maybe get a little higher before they begin to really tighten the screws on monetary policy and we share that view. we think janet yellen is going to be careful with how they remove policy. >> thank you very much. >> appreciate it. >> hope you will come back. mike wilson of morgan stanley.

simon? >> tyler, let's check the markets at the moment. treasury on the back foot as a result of what is happening in washington. ticking lower today, there was fairly weak demand for the three and six month auction. the yields are slightly higher. at the short end where you the t bills, october and november, there you've seen a little bit of a recovery overall. as you can see, that's where we stand on the treasury market. while congress does whatever it is that congress does, clearly some real americans are getting badly hurt. "power lunch" has offered many of those business people, men and women, a forum. when we come back we'll talk to a bank that's been hit hard in the crossfire. we're back in two. going past the deadline without a deal will lead to delays of payments for government activities and possibly to a default on the government's debt obligations. peace of mind is important when you're running a successful business.

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that clock says it all. one day, ten hours, about 20 minutes away from hitting the debt ceiling. the predictions are dire. jay is customers bancorp

chairman and ceo. he and his clients have already started to feel the brunt. simon with us as well. jay, how are your customers feeling, feeling the effect not only of the government shutdown but of this impending debt ceiling issue? >> we are a business bank. i'll tell you who specific examples. one is a customer of ours, ready to make an investment. in a small community, 28 jobs is very good. he said the reason they were holding off was uncertainties on health care. well, he was hoping that uncertainties in health care would go away. right now, he has turned off the spig spigot, not making the investment because he's saying i have no idea what's happening to america. another client of ours was making a purchase overseas. he's put everything on hold. and ourselves as a bank, we are a large small business administration lender. we are unable it to get those

loans approved. we are unable to get the credit out to the small and medium sized businesses we are serving so we are directly affecting local business on main street. >> we have heard many an it tech dotes just to your point and it that is about small business administration loans, people who intended to exepapdsexpanned, o locations for their business, they have put those on hold and have had in some cases reduced hours or stop hiring or furlough people because they can't get the paperwork moving forward at the sba. >> absolutely right. we are doing this to ourselves. for example, everybody knows and business people know they have to manage the revenues, they have to manage their expenses and here we are as a country, when president clinton left office, 55% i think of our debt was 55% of gdp. president bush leaves office, it's about 68%.

right now it's about 100%. it doesn't matter whether it's republicans or democrats, we are not partisans but the fact of the matter is, that we've got to do something and just stopping the government from functioning, stopping the country from functioning is hurting our revenues and that is not good for america at all. >> simon, jump in here. >> why can't we -- >> i mean, i get it, jay. you know, obama care is going nowhere it would appear because the president has his veto and seems to be quite clear on that. is there anything else that we can do apart from them obviously reopening the government and getting back to work that would actually push your entrepreneurs into investing in jobs and growth, get capital spending going? is there anything else that could be done? >> oh, definitely could be done. how do you -- how do you get to consensus? you get to consensus by having win/win negotiations.

driving over here i was thinking about president lincoln's speech, we are the government of the people, for the people, by the people. we are sort of like government of the politicians for the benefit of their politics and not for the people. let's have common goals. very clearly, the health care problem is a real problem in america. why not admit that yes, we can make it better, i think there will be consensus over there. on top of it, the deficit problem, the spending problem is a real problem. why not admit it. we have simpson-bowles, say all right, let's work on simpson-bowles and try to do something about it. the private enterprise believes and i was in a ceo retreat last week in phoenix, we really believe that american economy can grow by 3% next year. that solves our revenue problem. why not attack that? why not ask private enterprises, tell us how we can do it. you know, you have common goals, create common vision, creates consensus, president reagan did it with tip o'neill, regarding the tax reform.

president clinton did it with newt gingrich regarding well fare reform. why can't america get their act together and do it now. >> you should get involved in politics. we had the ceo of starbucks on the network on friday. you guys have to get more involved in politics and push the process along. it's that simple. >> i agree with that simon. i think that some of our best leaders unfortunately are so repulsed by what they see in politics that they stay away. but here jay is very eloquently articulated what so many of us in the private sector see as the common problems that we have to solve. for one thing, jay, we made too many promises for too long to too many people and we're coming up against that and we've got to address that question among many, many others. jay, thank you very much for being with us today. >> thank you. >> simon. >> good luck. >> mean time, how the government shutdown is impacting the performance of your mutual funds on the program. surprising new numbers ahead on the show. plus, is this the beginning of

the end for land line phones? we'll explain in the power rundown. you can live with a government shutdown. even that gets to be resolved. but a debt ceiling really can have catastrophic results. i know what you're thinking... transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business.

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welcome back to "power lunch." i'm seema mody. how mutual funds are impacted by the government shutdown. keep in mind mutual funds on average have been outperforming the s&p 500 in 2013, however deutsch bank indicates just in the last two weeks, this trend has reversed. according to lipper funds the last time we saw an outflow was in 2012 around the fiscal cliff

negotiations. analysts say this clearly indicates that d.c. dysfunction does have an impact on mutual fund activity. a majority of mutual funds are owned by retail investors. ici reports that in 2012 roughly 44% of u.s. households owned mutual funds. analysts write this recent underperformance suggests mutual funds are highly exposed to the momentum players, many of which are in the biotech space. while momentum stocks have rebounded recently deutsch bank says the fact that mutual funds have outperformed so much since july suggests that a momentum unwind could have further room to run as mutual funds trim their outperformers. simon, back to you. >> thank you very much, seemap. in the meantime applying for college got a lot more stressful. that ahead on the show. plus, why would a ceo of one of the top fashion houses leave to take a lesser title at a big tech firm? it doesn't happen every day but it's happening burberry to apple

for this woman. is it a smart move?

those things and more coming up top of the hour, guys. back to you. >> thank you very much. why applying for college just got a lot more stressful for students and creating a huge headache for colleges too. plus the ceo of the fashion giant burberry leaving to join

apple as we've been talking about it all hour. senior vice president doesn't happen every day, you leave the ceo job for that one. smart move to take a lesser title? power rundown is next. hing we all share. but who can help you find your own path? who can build you a plan, not just a pie chart? who can help keep your investments on course, whatever lies ahead? that someone is a morgan stanley financial advisor. and we're ready to work for you.

a one-on-one power rundown. peter henry dean of the new york university stern cool of business is with me. maybe you know about this story, an on-line version of the common application is apparently on par with the obama care website, ie it ain't working well. hundreds of colleges are still using it. what are you hearing at nyu? i realize this is an undergraduate entry level application. >> things have gone well. we've had over 1,000 people successfully submit the common

application. for us it hasn't been an issue. >> this application has been out there some years, right? this is a new version? 3.0 or something? >> technology has its blessings but sometimes there are glitches and when there are glitches people get upset. i think in -- what we know is that technology, the benefits outweigh the costs and i think this is something we'll get through. >> it helps you. >> yes. >> generally speaking. >> that's right. >> not all schools use the common ap? >> that's right. >> most of the big ones do? >> that's my understanding. >> let's move on to another question this move from ceo to senior vp. burberry ceo angela ahrendts taking a step down to become apple's on-line and retail store head. is it a step down or not? she's going from the corner office to something a little lower, but she's going to a very high profile bigger company. >> here's the key thing. angela ahrendts has always been ahead of the curve in redefining things. she took burberry from $2

billion market capitalization to $7 billion market capitalization through innovation. you have to assume somebody as smart as she is knows what she's doing and in her view is a new challenge. she's breaking the mold yet again. >> if you were looking at apple today would you say this might put her in line or in the running to succeed tim cook at whatever point he decides to move on? >> i think whenever you bring somebody at that level you're thinking about potential -- >> do they fit. >> think about apple's market and think about what angela ahrendts has done in china it makes sense. >> very interesting. let's move on to parts of new jersey where we live. verizon has stopped laying down traditional copper line for its phone network and recently the ceo said it's no longer concerned with land lines. do you have a land line in your house? >> we have a land line in my house. >> i do too. would you give it up? >> i like the security of the land line during difficult times. >> during a storm or something. you wonder about the cell service. do you think we're beginning to see really the end of the land

line? >> i think we're moving to a new frontier. i think the land line is going to become increasingly less utilized. but i think the key is striking the balance because some people will still want to have that security and companies have to think about how do they anticipate the future and give customers the future while allowing those people who are still wanting to have access to land lines to transition them. >> my problem with the land lines has been that all of my phones are electronic phones anyway, be they're cordless phones. they depend on electricity. when the electricity went down for eight days during sandy it doesn't matter. my cell phone was my land line. >> we have cordless and the old. >> do you have a dial? >> no dials. >> peter, great to see you. >> thanks. >> biggest stock winners when we return. (vo) you are a business pro.

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and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it. down 55 points on the dow. everybody watching what's happening in d.c. winners charles schwab, u.s. steel, fedex and e-health on a program dominated by discussion about the ceo of burberry going to apple let me point out that tim cook's four direct reports

at apple last year had incomes each of between 68 to $85 million. >> we're taking a look at the podium on the senate side where we expect the senate leadership to speak at some point. and we will bring that to you as we continue to watch this ongoing drama down there. that will do it for "power lunch." >> oh, yes. "street signs" begins right now. >> it is now 2:00 p.m. on wall street and in washington, t-minus 34 hours until america cannot pay all of its bills. a live look at the white house where president obama is expected and that's key to meet with house democrats at 3:15 p.m. eastern time today. >> in the meantime we are waiting for senate members to break from lunch. they are expected to make some comments. we'll bring them to you if and when they happen. in the meantime the markets you can safely say are fed up right now you can see on the board behind us