same store staales disappointed investors. that does it for us today. right now, time for "squawk on the street." good monday morning. welcome to "squawk on the street." i'm carl quintanilla, jim cramer and david faber at the new york stocks exchange. what a jam-packed week. the s&p at record highs. we have a flood of earnings. an apple ipad refresh. take a look at the ten-year yield. we keep an eye on fixed income as well as equities. look at oil falling below $100 a barrel for the first time since

just before the fourth of july. our road map begins with jpmorgan this morning. the banks set to pay pay record-breaking $13 billion justice department fine to settle lawsuits at the height of the financial crisis. the markets pointing to a mixed open after the s&p closes to an all-time record high as they wave some better than expected earnings against some budget uncertainty. the stock falling in the pre-market as global sales fall in sim september. starbucks in hot water after being accused of charging china markets higher than others. jpmorgan close to reaching a tentative settlement. kate kelly caught up with jamie dimon as he arrived at work this morning. good morning. >> reporter: this $13 billion

settlement na jp organ more beg hammering out with justice. what happens in light of the settlement? i asked mr. dimon about this just momenting as as he came into work. here is what he said. >> we're going to try to resolve everything we can and then we're going to move on and serve our clients. i am so dam proud of this company. that's what i wake up thinking every day. >> reporter: i hear you. >> these other things, i know we have to fix. >> reporter: carl, you can hear a lot of pride in the company. jpmorgan is reaching some peak performance levels. the legal they added to a tune of $9 billion. this most recent quarter swung it to a lost. some still yet to be resolved. we do think we will have some

closure on the civil aspects of these housing issues within the coming days or a week or so from what i'm told. it is the biggest civil find in history. it is half of last year's profits. >> i think it is a win for both sides. i think the american people cannot feel that they got ripped off by jpmorgan. shareholders might feel that way. this was a jihad against jpmorgan. it was on every month. the justice department was going to sue them everywhere. this was going to go on for many years. the legal bills were going to mount. if you get this behind them, you have a bank that trades at a 17% discount to its peers. i think it will get to that 5%. i cannot believe they only have to pay $13 billion given the fact there were a lot of people thinking it was going to be 20 or 25.

the reserve is 23. the criminal thing, it is paid for somewhat under the bus. unfortunately, that's the way it works in america. >> you never know if there is going to be more litigation to follow. i think the market will take this, as you point out, as nonrecurring. you move on. that being said, having followed the mortgage crisis and written a book about it, jpmorgan were the least. bear stearns an washington mortgage were the worst, both of which they bought. whether it was sydney or goldman, there are plenty of bad actors so to speak. i do wonder whether we are going to be revisiting that. eric holder has said as much.

we'll see. is this a blueprint for getting further fines and penaltying out of the rest of the crew. >> they would have spent $40 billion. it is difficult to define where the money has gone it or what it is a result of. >> to some degree, it seems wrong that jpmorgan has to bay for what happened at bear. at the same time, this is america. the justice department feels like they need some scalps. those guys have all gone. >> talk about going, nobody has gone to jail. >> send a guy to jail, a lot of this wouldn't happen. the justice department has been, i think, shaking down. that's an appropriate word for what was happening. >> what happens next time if there is a federal crisis. they are encouraging a large group, such as jpmorgan.

the proof is in this. will the justice department next week come out with a new thing about dime mon. i don't know. if you are a banker, you say, the government is my enemy. i am never going to do what the government wants again. maybe the government says, they will never be in trouble i think jail time would have alleviated a lot. not jpmorgan. personally finding some real culprits. >> this is share holders. nobody's house was taken away. nobody really suffered. we never really heard about this. there was a ceo of washington mutual. where is he? he probably has some island somewhere. there are a lot of islands for sale. we know elson bought one. i really feel like those guys did great. dimon recognized the futility.

they were going to sue him, every single city. the justice department plays for free. michael core leone says, don't ever go against anyone that plays for free and just cares about the cause. >> buffet's talking about the number of licenses you need to operate. the traffic cop who is going to follow you for 500 miles. people talking about whether or not dimon hangs on to the chairman role even though we already went through that exer sides this year. is that connected to your 5% premium you think it is going to get back to? >> i think there are whole groups of people that do nothing but talk about and deal with the justice department. if you could have them actually do banking, it would be extraordinary. we don't talk enough about this. he picked up the phone and called holder. every lawyer in that room would say, if you dare do that, if you dare do that, that is the end.

i think dimon said, you are going to negotiate my banking to the ground. i am going to make a deal. it is going to be more than you guys are willing to pay. i know you think we could litigate and get away with less. our share holders need to move on. they have ended up paying a lot of money. my charitable trust owns this. >> this is the feds and the justice department. let's not forget the putback location where they reached a for fortuitous settlement. talk about countrywide and merrill. >> i'm sure some people at homer saying, you know, all i ever hear about is that we almost ran out of monday last wednesday. some of this money must matter. is it all just in the ether?

when you get $4 billion to go there, $11 billion goes somewhere. does it really go anywhere? does it go for 15 minutes worth of interest? where does it go? >> it goes to the treasury. >> does treasury ever have a plan. does jack lew say, this is going to go towards -- jack lew could come out and say, we had a couple more days than we realized or maybe jamie dimon waits because maybe he was a tea party member. honestly, these numbers are so high. i think the people at home will have to be saying, when does it matter? does $11 billion not even matter? >> given the sort of pays of federal spending right now, you could argue, maybe not. you can -- ted cruz would want less? i don't know.

is he pro banking? he is pro texas. >> and texas is pro him judging from some rallies. >> they don't like the texans. they can like the cowboys. >> mcdonald's is falling. the dow says it earned 1.$1.52 the quarter. revenues were in line for the quarter as well. take a look at comps. .9. the estimate was .1. october is trending flat. they are guiding some pretty weak margin figures, jim, for q-4. >> carl, they had some great innovations. you were out there visiting them. we know the wings initiative was supposed to be great. stock, practically nothing happened. they seemed to have a lot of innovation. it is not making them money. >> europe, one of the brighter spots. they are up against -- it is not a pepsico thing about these

guys. it is a plethora of options. it is a pot belly, a deli, a burger king. >> noodles. afce, popeye's is doing better, chipotle is doing great. wendy's has made a major comeback. is it at the expense of mcdonald's? does mcdonald's have an issue which is, i don't want to go to mcdonald's, because i don't regard it as healthy. even though they have done a lot of healthy initiatives. >> you are referring to the mel in linial issues. >> can you operate a mcdonald's in a whole foods world? >> we used to sneak to mcdonald's. now, people would proudly sneak to chipotle. >> when was the last time you waited in line at mcdonald's? >> it is a quick line. that's the point. the point is to have quick

service. >> maybe it is because they have no customers. i like my mcdonald's. i do. i love the new egg mcmuffin with the egg whites. i feel like i'm the only guy. >> i have met some parents that proudly say they have never taken their kids to mcdonald's. >> mcdonald's is regarded as the enemy of healthy eating. chipotle is regarded as the friend. the food with integrity. you go into that. you better be careful eating at the other guy. we actually care about what goes into our product. >> they do see expenses down 3% or so. food costs coming in a little bit. not enough to offset some of the weaknesses. can it offset that? >> it is not a growth stock. growth is what it is. solar city is up huge. i am switching metaphors for a

moment. >> they missed my eye roll. i'll do it again. >> you want growth? netflix reports -- >> yes, they do. >> this is a company like solar city where you don't really care about what they earn. you care about subscriber growth, about buzz, about new subscribers. if you have growth, ala solar city, if you have growth netflix, there is no price people won't pay. >> you are a $95 billion marketing cab company with 17 p.e., to your point. that's mcdonald's. >> if i want that, i will go buy parker. i will go by general electric. >> add it to the focus list. >> g.e. i went line by line over the weekend while you were having fun with your kids. >> yes, i was. >> don't rub it in. you could have said nothing. >> you have great order growth, margin expansion.

i like that. you have a company going from not so hot to good. mcdonald's, a company that is good, consistent. i think this mellinell issue is not going to away z. >> china is crying foul. plus, lee, timber and a four in one split s eric weiiseman. we'll talk about what the jobs number may say tomorrow. a lot more "squawk on the street" when we return.

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unitedhealthcare insurance company, which has over 30 years of experience behind it. with all the good years ahead, look for the experience and commitment to go the distance with you. call now to request your free decision guide. after a record-breaking week, what's the best way to go for more green? run with cramer. his mad dash is coming up this week alone, you mentioned netflix and texan, boeing, cat, dupont, travelers, you name it. >> a lot of these companies, we are seeing the industrials do well because of china. turn around, because of europe. also, some of these have not quit. caterpillar has been going up.

united rental zone. caterpillar has failed to execute. boeing has executed so incredibly well. i have honeywell tonight. they did not do well in defense. boeing does have a defense business. it is not going to be as clear-cut this week. >> what about starbucks? we got this story this morning overcharging chinese. >> it feels like the chinese, they have it in for these american companies. >> they claim a coffee chain, they charge as much as 50% more for some of their products. >> they said they have labor issues. one of the things we know is that when the chinese have turned on a company. >> starbucks is a great chinese company. you have to very quickly get this behind you. very quickly. they have to dress and get behind. >> they didn't do anything wrong like glaxosmithkline did. >> yum has been disappointing.

you cannot be in the yum/glaxo category. there was an article about how mercedes did something the government liked. that kept ford and chrysler. the government must be appeased quickly, quickly. >> so what do you do, lower prices quickly? maybe a coupon? i don't know. >> howard schultz is a great american ceo. he will address this. you cannot let this fester. suddenly, you have stories about yourself in every paper, magazine, online. they have to put this behind them so now, tough. >> you are actually going to talk to howard schultz later in the week, i think, on wednesday. >> look, this china came out of nowhere. remember, every time there has been a bump in the china road, it tends not to be just smith. >> no. it is even worse than the department of justice when they want you in china. >> that's a communist. you are equating communism and justice. you are still thinking the

communist power. >> there are still some people that wonder about the rule of law when it comes to contracts. >> look -- >> whether it be fannie mae and freddie mac or the gm bankruptcy or perhaps wa moo as it relates. >> did they did not know it was the most prolabor company? do they read what he says and see how he is so good with the associates? does that not matter? if you felt the prices could come down, you would. there is no way that i think that howard schultz is gouging the chinese people. it is not the style of the company. it is just not. they are not a gouger. you have to pay more. there is an affinity. this is a company that treats its workers well. >> the brand is actually adored in china. it is not starbucks. it is sheen bucka. >> how do you say latte?

>> i have no idea we look forward to wednesday and you sitting down. >> this is amazing. this company is the most service-pro company we have in this country. >> we'll get jim's mad dash after a short break. bny mellon combines investment management & investment servicing, giving us unique insights which help us attract the industry's brightest minds who create powerful strategies for a country's investments

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every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) ranked highest in investor satisfaction with self-directed services by j.d. power and associates. we are 6:30 away from the opening bell. another week here on wall street. time for cramer's mad dash ahead of the opening bell of the week. here we are on monday. where do we start? >> at&t is selling its towers to

crown. what's interesting about this? att is trading up. crown trading down. i think it should be the opposite. there is a consolidation of the tower business. att is sure that maybe they can take the money and get a down payment on vodafone. >> this is an industry that has consolidated its american towers. anything it consolidates is -- >> another 7 1/2 shares of the mandatory convertible. >> you want to be in that. >> being raised to pay for the castles. >> you want to be in the equity offering is what i'm thinking i think it is a good equity offering. i like this group. american tower had some short sellers spreading some things, saying that last deal wasn't from brazil. he came on "mad money" and i thought the stock was up a quick ten from when he was on. i like this group very much. this is a real estate investment

trust group. they just coin money, david. >> they do. particularly as services continue to prolever rate for all sorts of mobile devices. let's move on to a research call this morning. >> this is general mills and kellogg. kellogg lowered to underperform, general mills to neutral at bank of america and merrill lynch. >> if the economy were really slowing because of all the things in washington, you would be upgrading these, not down grading these. they see no catalyst. this soft goods group has done quite poorly as if there really is an industrial movement that is doing much better. these companies, their biggest ingredient is often oil. yet, they are not going up. they are going down. even the oil is under 100. i think this has to do with the giant feeling that the united states is not doing as badly as you would think from washington. the rest of the world, kellogg, kellogg is a big worldwide company. people do not want these

recession-oriented stocks, david. they believe in a worldwide resurgence in the economy. let's move on. the opening bill, just a few minutes away. "squawk on the street" right back. will we set another record on the s&p ♪

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"squawk on the street" live from the financial capital of the world on a monday morning. the opening bell is about to ring in about 60 seconds. there is a lot to get to today. we are going to be a wash in earnings all week long. jobs number tomorrow. in addition, an ipad refresh that cantor at least thinks will bring some good things. >> have you noticed apple creeps up. we talk about apple all the time. i'm looking at apple and saying to myself, it is just too inexpensive and too many new products and i don't know about you guys with the new eye of the operating system, i discover something new every day about how great this operating system is. i am ready for a new ipad. i'm explored my ipad. if they have new things, i'm ready for a new one. >> i love my mini. >> i love mine too. >> stock does raise it to a buy.

they raise their forecast for iphones to $34 million for the quarter. then, there is some indications to them, anyway, that android and samsung may be slipping. their competitive advantage slipping. maybe that means good things for margins. >> one company has the momentum and it is apple. it is not samsung. samsung meets with a payment on the cell phone and leaps into the camera. apple has the momentum. this is a very good time for an ipad for the hol adiday season. i am critical of apple when i don't feel they have any mojo. they are setting themselves up for good numbers. >> there is a look at the s&f. down here, the american-israel friendship league hosting its seventh annual israel day. at the nasdaq, the department of homeland security and fortune 500 ceos marking national

cybersecurity month. always good. >> be aware, very, very aware that everything you have is conceivable b conceivably stolen at this moment. >> salesforce.com did a 4 for 1 split. the american people like splits. i know it is fak tuous. salesforce.com has been percolated. the vf corp. that's north face. eric wiseman is a sensational man. his kids are terrific. quietly, he has made the vp corp into a worldwide company. tremendous success. people keep shorting the company. they say weak is weak, apparel is weak. this is not an american story

tichlts . it is an international story. >> s&p has rose after mattel did beat last week. big hugs elmo is the toy to have for the holiday season. they talked more about strength in europe upsetting strength in the u.s. >> salesforce.com does better because they are getting out of the particular competitor at the same time s.a.p. doing very well. if they do well, salesforce is supposed to do badly. bill mcdermott was on this morning. s.a.p. doing well versus ibm. >> some stock that is not doing well is jcpenney. it always moves these days quite volatile. down another 3%. that's a new all-time low, i

believe. >> did anybody read jim stewart's article? >> no, no.basically, asking theo make up whatever you can to make this deal work, right? >> i thought that the violation of contracts that were in that piece, jim stewart, great lawyer before he became a great writer. that was a piece where you said j.c penny was run by a rogue. he wasn't listening to anybody, including his customers. >> just voice in his own head. >> maybe multiple voices. >> maybe steve jobs' voice. he would have probably given him good advice. you mentioned g.e., citi adding it to the list. >> going over that quarter, what you see is that ge capital has gone down as a swing factor.

the company is beginning to look simple. it was a very solid quarter. it had margin expansion and orders and the possibility of future revenue growth. there is a november meeting where they are going to talk about the financial side of things is in control. >> i haven't seen 26 on that stock in a long time. >> citi's target is 29. they talk about the november analyst day, the december 15th. >> that's jeff. >> jeff immelt, december. the finance, the capital division is november. capital being slimmed down. ipo perhaps of finance. ge was into a lot of businesses that people didn't understand. the more they get out of them, the more we focus on power and water. the more we focus on lo

locomotives. >> you mentioned some of the defense players earlier this morning. we are going to get a lot of them this week. the journal takes a crack. they outperformed when we thought the sequester was going to kill them. they have restructured a lot. a lot of cost savings embedded in them. what if a january sequester is better. >> i was disappointed by honeywell. david on the show tonight, "mad money." you really had to continue to scale back. mcinnerny from boeing took all of what he thought were going to be the costs out ahead, because he was forward looking about the is sequester. boeing has doubled in the last year. >> because of the commercial side or the defense side? >> you start getting these planes. it is about the yield. the planes cost less and less

and he has partners for success where the partners have to eat some costs. periodically, we hear boeing uses orders to airbus. they have more orders than they can handle. soft good stocks are not going down. people are not betting reception but worldwide acceleration. >> one new stock, abercrombie, the teen space, lack of a big fashion trend, lack of demand. they expect the company to warm before this analyst day in november? >> i think we are all tired of the scantily clad teen ads. i'm tired of it. i don't know about you. the ripped stomach. if i want a six-pack, the heck with it, i'm buying a coors light. six-packs belong in beer, not advertising. i look at their advertising, it is like between game of thrones

and this. is your surrounded by soft born. >> it's about 30% of the traffic on the internet. >> not that crazy about that either. a lot of the video problems is that advertisers don't want to be matched up and it comes out everywhere. i am not a big porn user but i know it when i see it to quote potter stuart. >> i think we should move on. >> let pisani handle that. >> good morning, bob. we are once again record highs on the s&p, dows down, financials weak, tech, industrials, material, generally on the plus side this morning. the earnings is what i want to watch. this is the big week for earnings. this is going to make or break these earnings expectations. one thing very important about today. no earnings warnings today. we have seen that a number of times last week. i don't see any today. it looks like they are doing generally better than expected.

take a look at vf corp. they confirmed their 2013 full year guidance. that was better than expected. they raised the low end. hasbro also helping offset some of the disappointing commentary from mcdonald's. vfc sitting at a historic high. l lennox right near a historic high. trading on the down side. over in europe, akzo nobel, one of the big painting companies, they did better than expected. phillips, lighting, health care, consumer products. the most important, s.a.p., a big competitor to ibm. a lot of people worried about ibm and enterprise software. sap did very, very well. this may be a particular problem with ibm. the most important earnings report we have gotten today. it follows on somewhat better

than expected earnings reports. google did better, general electric did better. parker haan any fin raised theirs. morgan stanley did better. the bottom line is, they have lowered the numbers rather dramatically. earnings will probably be a little bit higher. we are going to get 3% or so. it is probably going to get a little higher than that. for the fourth quarter, everyone was worried the numbers would come down aggressively, because companies would be citing the problems with the government shutdown. the worries may be a little bit too strong. most analysts are expecting to come down to 4%, 5%. if it goes to zero, i have said the market is going to have a problem. the important thing, no earnings warnings overall. we did have honeywell talking

about slightly lower numbers on their business jet delivery. no earnings warnings. keep an eye on t this is going to be the make or break week for earnings and fourth quarter commentary. so far, off to a decent start. guys, back to you. thanks very much. later today, netflix is going to report the stock was at last look up sharply this morning. the company will report its earnings after the close and as jim spoke about, we will be focused on the metrics of growth, the key being subscriptions to the streaming service. i want to come back to a story that was moving through the markets last week. it helped contribute to a significant rise in the shares. a big move up last monday when it was reported by the wall street journal that various cable operators were considering a move to try to include netflix on their offerings on the set top box in some fashion or

other. it contributed to a move up. it would be a positive for netflix. in speaking for the people that run the content companies and various context within the cable companies and people that follow the stock on the research side. it is worth noting how difficult this might be, how long it might take and even question whether or not it really will happen at all. it would throw the ecosystem of cable into something of a dif different realm if you will. consider an hbo or a showtime, they are subscribing more than netflix. some is going to the cable providers themselves. they have a long relationship with those cable providers. if you were to allow netflix to come on. they would have to give them something. there would have to be some price concession or money given to the distributor of netflix, that being the mso, to enable them to do that.

i am not sure what that would be. you have to imagine that hbo would not be particularly happy with that. they might consider their own service or a showtime. then, there is the question of video on demand as well, something that the cable companies benefit a great deal from in terms of movies, for example, and have a very high profit margin on and then you get into usage pricing, whether or not it would be introduced. i raise all of this simply, jim, to introduce the idea that, hey, stock moved up a lot on this idea. it may happen one day. you have a number of people saying, not so fast. it may not be a rights issue, in terms of the content companies that have delivered content to netflix saying you cannot actually go around us and deliver that same content to the cable operators via the set top

box. >> that's a big story, david. i had tom rogers on last week, ceo of tivo. i have been resuming this deal was in the works. this is kind of a reputation of what was pretty certain as being not a done deal. >> in trying to understand it, it would take quite a bit of time and there would be a lot of resistance within, again, a long built ecosystem that currently exists. will it happen? maybe one day it will. for those that are believing that that is a near-term thing, i think you have to take another look. >> apple, we all thought that apple might be in the room making the same deal. >> we work for comcast but repeatedly, when you hear someone is about to make a major move in agreement with the cable companies, we ought to be talking about the cable companies. it seems like the companies themselves that are trying to

make deals with the cable companies often talk a big game behind the scene about dealing with the cable companies. >> do you think the cable company, comcast or any or the others, is that a sign people believe cord cutting is less likely or more likely? >> i think there are so many different ways for cable companies to make money. exfinity, hbo. that's time warner cable. i'm just saying this business has a lot more resilience. this cable cutting, when you look at the ads, cable cutting is not really playing much of a role. >> one thing it this netflix idea does is introduce the idea of usage-based pricing. you can build in a lot of profit margin if you were to try to do that on the broadband. broadband is the key product.

>> i still don't want to leave netflix as a cult stock. >> we'll take a look and see. on this one area and gichbt market's response, certainly worth sharing some thoughts. >> i thought there was something going to happen on the horizon. in the meantime, the president is going to address the glitches, to use one word, that have plagued efforts by consumers to sign up for health insurance. he will do so in a white house statement at 11:25. we'll bring you live coverage when that happens. also ahead, former office depo chief, steve odd land, we will hear what he thinks the president and lawmakers need to do, to win back the confidence of american business. the dow is off and the s&p. we are back in a minute. bny mellon combines investment management & investment servicing,

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cnbc is taking a closer look at drilling and fracking. brian sullivan is traveling to some of the biggest oil and gas fields. today, he is in midland, texas. good morning. >> reporter: good morning. we wanted to come here and see what this fracking boom is all about. i no he that jim talks all the time about pioneer natural resources, lynn energy, apache. we came out and took a tour and went out to one of the drilling rig sites for pioneer. we talked to locales here that

are profiting, guys. in a world of hyper bolly, cannot cannot express to you what is happening. people want to take advantage of it. they are a little bit concerned about it. the boom is real. here is the most startling stat, guys, that i heard over the weekend. the per capita income of midland, texas, is now higher than in silicon valley. this is the second richest zip code in america behind greenwich, connecticut. put that in your cowboy hat and smoke it. >> i remember the days when that area was so depressed, you could go in and buy real estate for nothing. i betcha that real estate sits on oil, brian. >> reporter: you have two different types of players as you know very well, the people that came in when things were bad and bought cheap.

pioneer was one of them. they bought much of their land from the big majors that decided to go internationally and sold on the cheap. then, you have the new players like the diamondback energies that are going public, because they need the capital to pay the high prices for the land. very different costs of production for a lot of the players. >> it is a story that has made people lots of money. pioneer, incredible stock. second largest oil field in the world brian is standing on right now. >> can't wait for more. i just want to say, guys, go online. we have an explainer. i went out to one of the sites. i showed people in one minute how the drilling works and what exactly exactly happens. it is kind of a primmer. on a day where crude did fall below 100 for the first time since july. >> they don't seem to be related, the stock and the price

of crude. jpmorgan chase as we said earlier, close to reaching a tentative $13 billion settlement with the justice department and other government agencies over the financial crisis mortgage loans. what does jamie dimon write on the memo section of that check? tweet us at "squawk on the street" and we'll air your responses later on this morning. >> i rarely use the memo section. >> just a remind he. >> i pay most of my stuff electronically now. >> in the meantime, here is what's coming up next on squawk in the street. coming up, launching into a market like this can be tough but we have someone here who can help minimize the damage. jim cramer and six stocks in 60 seconds. he may just give you the lift you're looking for when "squawk on the street" returns. a confident retirement. those dreams, there's just no way we're going to let them die.

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s&p once again ticking into record territory. let's get 6 in 60.

start with good year. >> good year has been a red hot stock. tough to expand. i don't know. this has been a good one. >> merrill does cut first horizon. >> this has been a bank. i like this bank very much. they missed the quarter. most banks are going like this. this is going like that. unclear why the quarter was as big. >> price target on sim arex. >> this is where they are. you can see this company is worth more than it is selling for. >> upgrades to dean foods. >> a lot of different views about the food group. dean foods, big mill many company. >> you mentioned slp. >> you have to remember that slumber jay is a giant worldwide company. >> bernstein says don't worry about aler again. >> i don't want to give up on it. it used to be much, much higher. >> tonight, honeywell. >> that is in my charitable

trust. very disappointed in the last quarter. there may be no reason to worry. people are selling honeywell and moving into g.e. they are selling the great and going into the not as good going into great. let's see what dave has to say. >> would you go long, netflix into numbers tonight? >> oh, jeesh. i was hoping. i thought maybe david story kind of changed. i was looking for a one-two punch. netflix is like solar city, like tesla, like amazon. if i like the product, i buy the stock. >> see you tonight. >> thank you, buddy. >> existing homes after a break. don't go away. [ horn honks ] [ male announcer ] once in a while, everything falls into perfect harmony. [ engine revs ] and you find yourself in exactly the right place at the right time. just be sure you're in the right car

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allergan welcome back to "squawk on the street." i'm diana olick. existing home sales in september, down, 1.9% to a seasonably annual adjustable rate to 5.2. there was a big revision, 5.8 million down to 5.39. the realtors are calling the summer the cyclical peak.

sales are up 10.7% year over year. the annual paces are slowing. that's the slowest pace in five months. median and existing home price, $199,200. that's up 11.7. that is also moderating. sales of homes priced under $100,000 were down 7%. sales of homes priced over $500,000 up 40%. inventoriri inventories unchanged. more homes coming on to the market. a 5.0 month supply. looking at all cash. 33% of all sales in september were all cash. that's an increase. we continue to see all cash buyers in this market, because of tight mortgage lending. again, 1.9% lower for sales in september. back to you, simon.

>> how serious is that for the home builders overall? >> how serious is what? >> we are looking at the stocks falling because there is some disappointment? how would you gauge how serious the overall report is? >> we were expecting a decrease in home sales with the downward revision to the august numbers. we do see this was a cyclical peak. ask for the home builders. there is such little supply. it is not unexpected. we did expect to see sales tempering in the fall specially as we see continued higher mortgage rates and continued higher lending. the mortgage lenders are going to put new rules into effect. that will tighten mortgage lending even further. >> thank you for that. let's turn it over to jpmorgan. the bank is close to reaching a tentative $13 billion settlement with the justice department and other government agencies. our own kate kelly speaking with the ceo jamie dimon as he

arrived at work. as we now learn from the "times," not only chief cheerleader for the bank but also chief negotiator. >> reporter: that's right, simon. interesting. this deal has not yet been finalized. it cob a couple of days. there is a chorus of criticism about this record $13 billion fine jpmorgan is expected to pay. among other things, you brought this up in the past, these are issues related to jpmorgan's acquisition. they issued in the heat of the housing boom and later caused problems for those. they bought those partly as the government's urging. some believe they are being penalized with the wall street journal calling this a shakedown. i asked jamie dimon about this very question as he walked into the office this morning. here is what he told me. >> i want to get the problems

resolved. that's what we are working hard to do. we can focus on that. >> he is obviously serious about that commitment, kelly. this is such an enormous check he is prepared to write. as we all know, he expanded the size of jpmorgan's legal reserves in this past quarter by $9 billion, a move that took the pain a bit early. at the same time, swung jpmorgan to a quarterly loss. >> kate, that's right. a lot of people just wonder whether there is going to be more to come. kate kelly doorsteping jamie dimon outside of headquarters. kate, thanks very much. the delayed september jobs report in the meantime is come out tomorrow. the s&p 500 setting a new all-time high in the meantime. question is whether to take profits ahead of that release. chief economist and senior managing director. good morning to you both. >> good morning. >> i want to pick up first on

that home sales report that just hit. you were saying before that release that you think housing peaked over the summer. how serious is the slowdown in your opinion. >> i think it is a real problem for first-time buyers with an overhang of student debt. you overlay with the higher debts. some of it was the result of the federal reserves and the rising rates we saw last spring. that said, this is essential for the self-feeding momentum as we move into 2014. >> how does it play into the expected roles for tomorrow? does today's report give you pause? >> the consumer is the critical question mark going into the fourth quarter. you have holiday season, critical. mixed news given the shutdown about where it is. it is a really important caveat to focus on. >> you mean what happened with

the housing data? >> what our clients are focused on. so many other things look so good. >> are you taking down your estimate? what would you say if the whisper was kind of high, 180s, 190s? where do you think we are no you? >> we have been in such a tight band. no reason to think we are outside those bands. we are probably smack in the middle. >> we have a note out from jpmorgan coming into the weekend where they say they couldn't see a lot of risk for the market. it is one of the reasons why we have had extraordinary flows. it is often captured down here on the volume and the price action that we see on the new york stock exchange. if you look at the etf flows, june, july, august, a lot of money coming owl. thundering back through september and october. this real spike in volume last thursday when we got a deal on capitol hill. despite the concerns that you have for the consumer, both of you, diane, can the stock market kin to rise simply because of that wall of money?

>> well, one of the things, it can. one of the things i'm worried about in a more broad sense, profits in the fourth quarter may not be as good as they were thi thinking. we have seen warnings. it is a tough quarter to quar. once we get to the first quarter, there could be some second thinking of all the run-up we saw in the first. there is an assumption the fed will always be there. there are a lot of questions about what they can do on the margin at this stage of the game. >> let me pick up that with you, nick. we all constructed an argument that said because of a possible shutdown in january and february, the fed is going to continue qe through march and possibly the summer. we are talking about the possibility of half a trillion dollars being added to the balance sheet. that was the assumption we had. it is quite reasonable that that assumption is wrong. a, because the politicians do a deal or secondly because janet

yellen may not believe in qe once she takes over. she may go, let's scrap that and try something else. what would that do to the market? >> that would be a very surprise given that we all think yellen is somebody who is going to continue to pump liquidity into the system? >> she is going to be dovish. she has warned about the cost of qe, hasn't she? >> here is the beauty part. we all think she is so dovish, if she does pull back, she has the credibility to do so. everybody knows her to be somebody who is very willing to pump liquidity in. if she says things are okay, things may be okay. >> would you agree? >> i think there us a more subtle debate about what's the most effective way to stimulate the economy. janet is very firmly committed along with many other members of the fed now to what they call forward guidance. we have already seen some legal room on that when chairman

bernanke has said, listen, 6.5% when we raise short-term rates is not a hard trig gorger. it is a threshold to get through. i think you will see much more focus on that, how long they are going to leave that punch bowl out there. >> thank you both for your views. really appreciate it. >> in the meantime, shares of mcdonald's down this morning, following results that did miss expectations. they beat on the eps number. a company known for their golden arches blaming the golden economy. dreblth to good morning to both of you. >> good morning. jeff, obviously, bulls somewhat disappointed. a lot of people asking, if it hadn't have been for europe, this would have been more disastrous. >> as you mentioned, the earnings came in modestly ahead of expectation. if you strip out the cost savings side of things, the cost was definitely disappointing

across the globe. a lot of pressure from the international side of things. the u.s. actually came in relatively in line with expectation. obviously, a disappointing result from mcdonald's. >> rj, all summer long, people have been wondering how long of a type horizon do you need to take a flyer on mcdonald's? october is trending flat. are you beginning to think that window is going to need to be extend snd. >> that is probably the right way to think about it. the company is guided toward a flat top and more disappointing margin results. i think the company will probably give some guidance on innovations and the analysts come up in a couple of weeks. given what we are seeing, you do have to extend that time frame on when to look for stabilization for mcdonald's results. >> jeff, r.j. has written that the promotional activity in the

industry has been aggressive and at times irrational. how do margins rebound when you are up against competitors that are willing to splash prices more than you are? >> in the margin side of things, it is going to be difficult. inflation hasn't been as significant as people thought. everyone has a little bit more flexibility in terms of discounting. it is important to note that mcdonald's is by far the leader in the category. most of the peers tend to respond to what mcdonald's does rather than lead the charge. >> susquehanna has a research today. they think they will take market share but they are quite pessimistic on the sector as a whole. they think everything is going to worsen off earnings. we have weak consumer demand, they argue and also because of the discounting. they pick out cheesecake and panera as being particularly

bearish. >> i think it will be. what we will see between the macro environment and competitive reasons, it is going to be difficult. from the fourth quarter guidance and possibly 2014 guidance, a difficult outlook with the exception of a name like starbucks will hold up pretty well and those that scale to a splitly mother affluent customers. we are in a challenging situation. >> jeff, over the weekend, the journal asked a more profound question about mcdonald's. in an article, they say, have they focused on being healthy or all things to all men. the article suggest they have not had a major innovation. wendy's got the pretzel burger. taco has the dorito rage. is that a major problem for mcdonald's? >> new product is important. for mcdonald's it is a little more difficult to be as nimble as some of the smaller competitors. we thought they had new product

news with the mighty wings that got launched recently. we'll get an update this morning. new product is good to drive the business. we could really use some new product news finally, r.j., where would you be putting money if not in mcdonald's? is chipotle still a buy here? >> i think the markets have exceeded the expectations on that. i don't think the growth rate applied. i think a name like starbucks, i think there is a very visible, 10, 15-year plan for this company in terms of channel, e geographic and brand of diversification. >> we'll see what happens to them later on today. jeff, r.j., thanks so much for your insight on the quarter. speaking of the fast food sector, cramer with howard schultz right here on squawk on the tree. when we come back, president obama holding an event about

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welcome back to "squawk on the street." the newspaper business is getting tougher and tougher. gannett is an example. revenues declined because of a drop in ad sales at the newspaper division. gannett owns usa "toda tod"usa other newspaper chains. kelly, back to you. technical difficulties still plaguing the obama care signup. as people seek applications online, what is being done to fix the issues. president obama is set to speak on it later this morning. the administration saying it is

consulting the best and brightest for a fix. bertha coombs is back at headquarters. sounds like a bit of a brain trust being scrambled together? >> that's what it sounds like. by some reports, they actual tli flew some people in. listing outside experts. admission that they are putting their target of enrolling 7 million people over six months in jeopardy with 71 days until january 1st when people are enrolling. at this point, we haven't gotten any numbers from enrolling. the numbers we have gotten have come from the 14 state built and run exchanges, including connecticut and colorado. they suggest at this point nearly 16,000 individuals and policy holders, which could include families, have actually completed their enrollment applications. the numbers we are getting from the fed are big.

they aren't giving us enrollment numbers. they had 19 million unique u users. 475,000 have completed applications. they are also including the state numbers in the 475,000 which tells you not a whole lot is happening on the 36 states that are operated on the federal exchange. the only numbers we have right now are about 16,000. industry consultant, roger la chefsky says those may be lower when it comes to commercial enrollment. i am hearing that name brand insurance companies have received enrollments in the dozens or a few hundred over the three-week period. these are health insurance companies that are going to have to enroll 2000, 3,000, 4,000,

5,000 people. >> the government is missing another deadline, online enrollment on the spanish language po language portal was supposed to start today. the administration would like to enroll some 10 million latinos. that cob a big deal in florida and texas. >> let's get to our chief washington correspondent, john harwood, who is live outside the white house. talk about what we might expect the president to say. >> it is not often that this administration or white house admits error. president obama is going to try to do that. he is going to try to defuse the criticism. he considers it unacceptable, the problems they are having with the exchange website. he is going to site the numbers bertha just mentioned. no disclosures so far of the number of people that have

actually successfully signed up for health insurance. that was a dodge to allow them to wait for a while until they report the numbers, until at least november 1st. the real question nobody can answer right now, including people inside the white house, i talk to, is when these exchanges are going to be functioning in i am a minimally acceptable way so that the 2014 year can be the first year for obama care and they can avoid a delay by technical prob represents that the republicans tried and failed to achieve through the legislative process. we're going to have to wait and see. they said they told me the problems were going to be fixed last week. i don't believe them. that's the problem. these are very deeply rooted problems, very complex computer

system. we are going to watch it play out in real time as they try to fix it. >> thank you very much. >> if you have seen a challenge in washington, a roll of the dice case on the wording of the law which suggested you could only get subsidies if established by the state. so many are not playing in the federal system. many could go up. drilling down on america's revolution. brian sullivan is in the lone star state. >> reporter: the only problem here in texas is how to get the oil out of the ground fast enough. coming up, i'm going to tell you how big the basin is. you have heard about the others but per me an is where it is at. we are going to give you the scope when it comes up. we have the power.

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it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you open an account. texas is getting energized thanks to a recent flood of investment into shale fields resulting in an economic boom for the lone star state. our own brian sullivan is in

midland, texas with more on this country's energy revolution, the size and the scope. over to you. >> reporter: thank you very much, simon. appreciate it. as we told carl and jim, the median income in midland, texas is higher than silicon valley. this is the second wealthiest zip code. we are about 300 miles or so west of san antonio. size and scope. you have heard about the eagle shale and the bokken in california. we went out and spoke with the ceo, pioneer natural resources, ph.d. and we asked him, just how big the permian basin is. >> the difference between the other two fields is that we have eight bokkens on top of each other, just like a layer cake. we have a lot more potential. we're in the middle of the second largest field in the world, 50 million barrels

recoverable. >> reporter: think about that. eight bokkens layered on top of each other. they not only go down by horizontally. that's what we call fracking. cushing, oklahoma, the ceo of pioneer told us what he needs oil to be to remain profitable and where he thinks oil will be. >> there is a break-even price we use, called disappointed at 10%. pv-10. we feel like oil prices are going ton 85 to 100 for the next several years. >> he thinks it will be 80 to 100 for a number of years. he needs only $50 to remain profitable. we spent the day with pioneer. we are going to show you some of the companies you may not have heard about. this is literally a land rush. everybody is talking about it.

to be out here is pretty incredible. >> $50 oil, brian. i don't know if it could actually fall that low. even halfway would be totally transformative. >> because they bought on the cheap. exxon, chevron, a number of big players used to be here. when things went down, they sold on the cheap and went international. companies like pioneer came in, bought the land rights on the cheap. that's why their cost of production is solo. we are going to show you how they drill down. straight ahead. after several legal problems including the tentative $13 billion settlement with the justice department, jamie dimon still seems pretty solid as ceo over at jpmorgan. the question is whether times could be changing. more on that when we come back. ♪ ♪ here we are, me and you

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welcome back to squawk on the streets. we just got the eia's number of crude inventories, 3.99 million barrels for the week ended october 11th. that was above expectations, a hair under the 4 million mark. traders looking for a number around 3 million barrels. oil prices trading lower, below $100 for the first time in 3 1/2

months earlier in the session. if we get a close under 100, it will be the first time we have seen that since july 2nd. meantime, west texas, intermediate, $113 per barrel. interesting note. we are watching to see the oil prices translate to the pump. the lund berg survey out earlier saying gas prices have fallen another two cents in the last two weeks. the national average $3.36 a gallon. kelly. justs in time for the holidays. jpmorgan in a tentative $13 billion deal to settle many of the u.s. investigations into mortgage bonds that were sold to investors. should investors stick around to find out what it means to jamie dimon? chris joins us good morning. >> good morning. >> how sure are you that jamie dimon stays in place and how much does it matter to the share

hol holders? >> i think most of the institutional investors i talk to view jamie dimon as a victim of government overreach on this case. if you look at jpmorgan itself, it was a relatively good actor in the whole financial crisis. they have a 10 or 11% share of loans and deposits in this country. by my calculations, they only made less than 5% of the bad mortgage loans out there. so relatively speaking, on their own, they were a good actor. >> i guess, chris, we should broaden the discussion a little bit so people know we are not just talking about the mortgage settlements here. they have had set manymentes wi settlements of a number of different agencies. if you look at some of the allegations about the energy price fixing that happened in california, the question perhaps either becomes, is there a pernicious culture that jamie dimon should be held responsible for or is this bank simply too

big to manage? >> i don't think either of those things is the case. there are lots of other employers in the country who manage organizations of this size. for the most part, they have performed extremely well. you know, i think there are what i would say is there are probably trading practices in many different areas that should be reviewed but what we find in most of these cases is that at the time things were done, for the most part, they were not illegal at the time. like, for example, the best cases like the goldman abba cuss case, we can debate whether there should be instruments like that out there. at the time, it wasn't against the law and at the time, the regulators didn't have a problem with it. it was only when they were caught asleep at the switch did

they try to come back and extract these settlements. >> there are some cases where that may be true. part of this goes back to whether or not they manipulated credit markets when the london whales incident happened. other international governments have looked at jpmorgan as a bad actor. is there a tucultural problem wh this bank that the ceo should be accountable for? is it a bank that needs to be smaller in order to be better and more closely managed? >> i think you are wong on both counts. clearly, the regulators should be much more proactive in looking at practices on trading floors. again, only in retrospect do they come back and say, gee, you shouldn't have done this four or

five years ago. they basically extort these banks with a big giant threat of a settlement. is warren buffett said it beautifully. if a cop drives behind you for 17 lun miles, sooner 1700 miles later you are going to get a ticket. >> you started off by talking about regulatory overreach. you just used the word extort. the wall street journal says it is an important moment for american capitalism. as the journal puts it, simply because they can, because they want to appease and they are talking about the government here the left wing populist allies. they go on to make a very important point. within this $12 billion, $13 billion, whatever it will be, there is a $4 billion chung that's supposed to go to compensate the victims of the

allegations. they are actually institutions around the world. so we will know the nature of what the government is doing as to whether they give that $4 billion to institutions around the world or they pump it, let me use the words the journal puts, they pump it towards their favorite advocacy groups as a wealth distribution scheme. what would you say to that? >> i agree with that editorial and i agree with the editorial by richard parsons in the journal this morning too. parsons said, you know, jpmorgan was trying to be a good actor here. and took over washington mutual and bear stearns when the government asked it to. four years later, you get held up on it. nobody in the future is going to want to buy a troubled institution from the government. >> that's a point that goes back to washington mutual in this case, which i think would have almost exhausted the fdic at the time that it collapsed. got to leave it there for now. final point. what's your price target on the

shares? >> i forgot, 71, 72. >> so it is still a significant up side. that tells you a lot about how the street is looking. >> 71, chris. 71. you have got it as an outperformer. >> chris, thanks so much. chicago present speaking out in an exclusive interview. find out what he said about when we can expect a taper on the qe and why he is concerned about consumer spending. that's when we come right back. - - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis.

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welcome back to "squawk on the street." analysts there say apple is a buy-rated stock from a prior hold rating. they are citing good sales momentum from the new phones. they are up 30%. chicago fed president,

charles evans , sitting down fo an exclusive interview with our very own steve liesman. steve joins us from chicago with some highlights. good morning. >> simon, good morning. charlie evans saying it will be tough for the fed to taper in october. in our exclusive interview, suggesting that maybe even december would be too tough because of uncertainty over the fiscal situation and lack of clarity overgrowth in the economy. october is a tough one. december. i think we need a couple of good labor reports and evidence of increasing growth, gdp growth. it is probably going to take a few months to sort that one out. it is very difficult to feel confident in december given that we are going to repeat part of what just took place in washington. there was a lot of fiscal drama which, i think, caught everybody's attention. business people that i talked to or still concerned about how things are going to play out. so december will be pretty tough and we could, you know, in fact,

get more restrictiveness. >> evans said that the government pushing ahead, the fiscal fight until january could give the fed and businesses pause. it will give him time to figure out how that will play out. he is concerned about greater physical jag. convincing markets that interest rates and quantitative easing are on different paths. the fed is not going to raise rates. short-term interest rates capable of adding an awful lot of acome digs during those periods where things might be turning down. that's our number one risk that people think we are going to step back and somehow add restrictiveness to the economy.

you can see more of this interview with charlie evans. we did a part for the web guys. that will be up in about 20 minutes or so. >> he is one of the most aggressive known for that on the fomc. where does this leave us overall, do you think? >> i think he wants to take his time. i think that's a big part of where, a wing of the federal reserve open market committee believes. i think what he says, simon, just makes sense, if you think about that they have pause in september. why would they go ahead in december when the same thing would happen? >> it is not just uncertainty about the government shutdown. greater fiscal drag. they want confidence in the economy. they want momentum. they are not going to see that.

>> are you really going to add to the balance sheet if it doesn't work. hang on, the emperor has no clothes and they reverse the policy. >> the fed and specially charlie evans, would dispute that greatly. they would point to the market's reaction in june and september to prove there is a big market reaction. a big effect on interest rates and equities from the fed's quantitative easy. >> we moved 40 basis points on the tenure. >> that's not huge. >> if i told you i would give you 40 basis points, what would you do, walk away. >> it is a lot. 40 basis points is a lot.

also, you would argue the counter factual on that. that would create economic growth. charlie evans argued very strongly, that government policy has taken away from that growth, that we would have reached velocity from this lackluster growth. >> great stuff this morning. thanks to you. steve liesman in god's country. >> now that the long fight over the government shutdown and debt ceiling is over for now, congress has a lot of ground to make up with business. former office depo ceo, steve odland will tell us a good place to start in just a moment.

while a debt crisis was is

vert for now, winning back u.s. businesses and restoring confidence will be a challenge. treasury secretary, jack lew, talked about the impact of the shutdown on the economy. unfortunately, we learned in 2011, that when you get even close to the edge, it does do some we have a resilient economy. i'm confident our economy can recover. the american people have been working hard to come back from the worst recession since great depression. we need to make sure that government does not go tu another round of brinksmanship. this can never happen again. >> steve odland former ceo of office depot and autozone, ceo of committee of economic development and joins us in washington. good morning. >> good morning. >> we're sort of dusting ourselves off from this whole mess. we have seen the biggest decline in consumer confidence since lehman but also business ceos who were told are frozen with indecision because of what the unknowns that were going to face

in 90 days. what's more important to tackle? >> this consumer confidence number is terrible. it dropped two points in september and that was before the government shutdown and everything that happened in october. so i can't imagine the numbers next week getting better. this is a harbinger of consumer spending and confidence in the economy. it doesn't look good right now. we're sitting around an 80 level which is about the level that we sue in the post-9/11 years. we need to be above 100 to have confidence this is going to to go forward in a positive way. we're heading into the critical holiday season for retail, when they make most of their profit. i think people are worried. >> i know we've talked about this a lot, you are a surrogate for romney during the president. campaign, i'm sure you've read the reports that business leaders are losing touch with the gop, right? the republicans are take the lion's share of the blame, at least from business, from the

national retail federation, and others. do you agree with that? >> you know, we at the committee for economic development made up of democrats and republicans, we're nonpartisan. i think increasingly, business and ceos are very nonpartisan and looking for our government leaders to work together to craft long-term solutions. we have a trillion dollars in debt that we're adding every single year. we're up to 80% debt-to-gdp, which is double levels we've seen historically. we need long-term reforms, tax reform, medicare reform, social security reform. and it's not going to happen in the next few months with the theater continuing to happen. so i think businesses are worried and they want our politician and our lead to deal with the long-term issues. >> is this a call to action generally or is there a specific course of action you'd like see taken? >> no, i think it's a general call to action and it has been for some time. i think business is getting very

frustrated with washington. you get outside the beltway and talk to people, they will tell you what's going on there? our businesses are getting killed. our levels of employment that are being added are very shallow and mostly part-time jobs. so you've got the aca act hitting that level. people not investing in business. so we need long-term reform. i know people say, they're not going to get to all of that, but these are real issues and we need a framework and we need some commitment to going forward not just more spending. >> so it's not happening, steve, is what your basic message is. what point and how does business, then, step up to the plate and make a change in the country? you can't all stand at the edges go, isn't it awful, i tell you what, let's keep buying back our own stock and raising the dividend, there have to be a point which you guys invest in jobs and growth, move the economy forward, and take on the politicians who may or may not today be shaking down, for

example, jpmorgan. what point do you take action? >> simon, you are absolutely right. businesses need to step up and citizens need to step up and say, enough, we need to be the adults in the room here. and ask for long-term and demand for lo for long-term reform. >> by what mechanism? how are you going to do it. >> we at the committee for economic development are focused on this. we cannot get people to listen to us and start acting in the next few months, i think people have to take to the ballot box here. ultimately, our elected officials need to understand that we have put them in place to address the honlong of it he issues of the nation and they've got to work together regardless of party to make sure that happens. >> are you suggesting they're going to get their hands dirty in a polarized, political environment? it seems unlikely. look at the roundtable last time it wouldn't get involved at all

in case it angered the conservatives or left wing of the democratic party. >> yeah, simon, you're right. nobody wants to anger anybody. but at the same time, we have to convince leaders to move forward. when you talk to them behind the scenes, our elected official nose what the issues are, and they know what needs to be done. it takes not necessarily major reform in the next couple of months, which we don't think is going to happen but it takes steps to move forward, pick an issue here. begin to take baby steps. anything to give us a little bit of confidence because then businesses can start to invest again and jobs can start to be created. >> well, we'll see if baby steps include funding the government more than a few months out. steve, always good to talk to you. see you next time. >> thank you. steve odland. >> jpmorgan is close to reaching a tentative $13 billion settlement with the justice department and other government agencies overfinancial crisis

mortgage loans. what does jamie dimon right on the memo section of the $13 million check? ♪ nice car. sure is. make a deal with me, kid, and you can have the car and everything that goes along with it. ♪ ♪ so, what do you say? thanks...

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squawk on the tweet.

jpmorgan close to reaching tentative $13 billion settlement with justice and other agencies over financial crisis mortgage loan what happens does jamie dimon write on the memo section of $13 billion check? in the comment section i would write, for a whale of a time. renney, jamie should write, my bad. and bill writes, uncle, i think it's an american thing. >> surrender. >> please, make it stop. other things would have been unprintable. >> yes. >> we'll see if they can get to the premium jim was talking about, the premium it's historically traded at. >> if you believe this is nonrecurring and more or less it, many would say, let's talk about a multiple on next year. but the question, though, continues to be, on the criminal side and what may still be coming not just for jpmorgan but its peers as well. >> bank of america, prospect of

$6 billion even. if we continue like this we wouldn't have to tackle entitl entitlement reform we'll just balance wall street. >> j.p. negative. that gives you some indication how they're playing the news from the weekend. here what happens you missed earlier you. >> welcome to "squawk on the street." here's what's happened so far. >> we haven't had a lot of data since that meeting because they stopped publishing data. december, a couple of good labor reports and evidence of increasing growth, gdp growth, and it's probably going to attack a few months to sort that out. >> do you feel this is a shakedown. >> i'm not going to there. i want to get up on the job that we're doing and go focus on the main issue. >> i cannot believe that they only have to pay $13 billion, given the fact there are a lot

of people thinking it was 20, 25, reserves 23. the criminal thing, okay, you know, throw someone under the bus. that's the way it works in america. >> you say, it's not starbucks, it's -- you say star bucks in mandarin. >> how do you say latte? >> vie no idea. >> we all think she is so dovish if she does pull back she has credible to do because everybody knows her, if she says things are okay, things might be okay. >> jpmorgan was trying to be a good actor here. and took over washington mutual and bear stearns when the government asked it to, and then four years later you get held up on it. nobody in the future's going to want to buy a troubled institution from the government. >> good morning. live here at post nine at the

new york stock exchange. let's start with the check on the markets. the dow's off by 25 points at this hour. s&p 500 has turned negative, after closing friday at a new all-time high of 1744. the nasdaq slightly positive on the session. another tough day for jcpenney. shares of the troubled retailer sinking again falling one point to the leest level since december 1981. that may have come after imperial lowered the price target to a dollar a share. shares of hasboro are up, the third quarter profit revenue beat analysts' expectationed aided by strong performance overseas. >> the state of obama care is not healthy. glitches are affecting people across the country. as they try to sign up for health insurance. the president will address the problems head-on in about a half hour. but will he have any concrete solutions. $13 billion, that's how much jpmorgan i expected to pay.

after the deal goes down, what's next for jamie dimon? we'll try to answer that question. the parent company of north base, other brands, rallying after a strong third quarter earnings number. we'll talk to the ceo to find out what is working in a few minute. start in washington. in a half hour president obama will hold an event in the rose guard tonight address all technical problems with sign-up systems under obama care. john harwood live outside the white house with more. good morning. what do you expect to hear from the president? >> reporter: what i don't expect to hear from the president is we've got it fixed because they don't have it fixes and they don't know how long it's going take to get it fixed. they're trying to pull together tech experts work 24/7 with internal people, bringing in outside brains and figure out a which to integrate the very complex system so there's a smooth user experience that isn't messed up with the delays and multiple enrollment, identities, and all of the

back-end difficulties of getting information to insurance companies that have to be solved to work in 2014, as the rollout year. the president's going to say it'sen acceptable, the problems they've had in the exchange, that 475,000 people have gone online and enrolled, which is different from purchased coverage actually and they won't tell us how many have purchased coverage. why? there's so few and it's an embarrassing small number. they'll do it by month and we'll get the number the at beginning of november. the more important thing to get this solved in time for the december 15th cut-off for when you have to have signed up so that you kget insurance january 1st. if they do that and get back to people that dropped off the system trying to sign up so far, we may look at this in the rear view mirror and say not that big a deal. right now it's a huge deal for

obama care. >> what do you expect will happen with kathleen sebelius here? >> reporter: i don't expect kathleen sebelius to be fired soon. that could happen down the line if this is not solved. the president is not one who is inclined. we've seen by his record to go firing people at the spate of bad headlines. but she's going to have to get it together and she's going to have to testify before congress. i see that she's not going to testify before this house hearing on thursday, at least that's their position so far. but of course, it's not sustainable for her not to talk to congress. there will be a hearing soon thereafter where you can bet she's going to show up and have to answer the questions. >> thank you for that. we'll see you in a few minutes when the president does come to the microphone. as the president gets ready to address problems in obama care we're starting to see some numbers from enrollments across the country. bertha coombs has more on that. >> reporter: the administration

launching the tech surge and listing best and the brightest including outside experts to help fill -- fix the federal exchange. 71 days until coverage begins january 1st, glimpse resulted in enrollment getting off to a slower start. only numbers that we have to gauge are coming from some of the state exchanges like colorado. actually built by the same contractor that built the federal exchange. cgi. they're executing smoothly. they report of the 163,000 people that have visited the site, 226 policies at this point completed, representing more than 300 people who are actually enrolled. connecticut, also reporting robust numbers, its exchange built by deloitte. they say to date they have completed almost 2400 insurance policy enrollments, that covers 3800 people. the administration has targeted 7 million people over the next 6

months. they need to do tens of thousands a day. tallying numbers that we know we are at least 16,000 in the first three weeks, low numbers for enrollment. those are policy holders that have completed enrollment. what happens going on on the 36 states that are on the federal exchanges? well, the administration won't say. hhs, at this point, only says that nationally some 475,000 applications have been completed but that includes state numbers. among the key questions, who's enrolled? they're not saying that. here's some of the five questions we would like to see the president tacking in the next half hour. what's the extent of the technical issues on the exchange? both the front and the back end. have they zeroed in on the exact problems? how long will it take to resolve them? at this point it doesn't seem that they know. how much will it cost to fex these problems? how much more are they going to have to spend already? how many people are enrolled the

administration says they'll report some time in november. we need to know what the demographic is, who is enrolling? only sick, older people, people who have been enrolled in other plans? are there uninsured getting enrolled? the big overarching question, who will be held accountable for this troubled start? >> bertha coombs, resident health care expert. pc tablet market expected to rise 4.5% in 2013 from a year ago. driven by lower priced devices, according to gardner research. apple is expected to announce a new line of ipads tomorrow. question is, will apple yield to customer demand? carolina joins us. good morning. >> good morning. >> i keep reading about these metrics showing that apple tablet users use their tablet more often than those who own other kinds of devices. are they doing this refresh from a position of strength?

>> they are doing this from a position of strength in the market where they have the application side. but when you look at the worldwide numbers and look at emerging numbers in particular, if you look at the beginning of the month, as you would expect competitions are better. >> there -- it may be tough for our viewers to hear you. you're saying that the ipad still is the benchmark but again, in emerging markets in particular there might be a shift towards lower price devices. this remains me of the argument going into the iphone launch where there's the sense of look the 5c is what's necessary, you've got to do a lower price model but since then it's the higher end that's been selling. >> absolutely.

the reasoning is the problem with the 5c and the 5s, the 5c wasn't cheap enough to get the consumer in the emerging market to pay attention to it. there's competition coming from white box on the android side that is similar from the perspective. the 5 was more about apple fissioning margin issues and not expanding the market share server. >> people worry about what's happening to the pc space. different vendors approach tablets differently, microsoft tries to make it more of a cross between a tablet and a pc. car carolina i wonder whether a refreshed ipad adds a nail in the coffin for the personal

consumer. >> there's the low end of the consumer part of the market where the ipad minnie is successful. but consumers are buying this devices for consumption. and that's where the price matters, what the ecosystem matters. then the enterprise, the enterprise are slightly larger sizes, keyboards. and something they can use both in pc and tablet. >> sorry, we're losing your sound. we'll let you go. christina joins us now with perspective on this as well. christina, thank you. good morning. >> good morning. >> to recap, it sounds like there's an interesting moment for apple they're going to introduce a low cost tablet trying to figure out where and how customer demand is shifting and having the experience of launching the cheaper iphone

that isn't necessarily selling like hotcakes. >> great point. one area is they've been selling the ipad 2 for last two years. so if they continue to sell that for a year and a half after bringing out the third generation ipad. if they do what we're expecting now lower the price of the existing ipad, and introduce a new model at higher resolution screen, they can do quite well and compete on the lower end of the pricing scheme but have the fact it's ipad and takes advantage of the great ecosystem. >> if this does not include retina, and there's a lot of indications it won't, will that be seen as a disappointment? >> absolutely. absolutely. i've been bullish on the fact that apple needs to come out with the retina ipad mini if only they've got it on the rest of the lineup and all of the competitors including amazon have it in their small form factor devices. if apple doesn't come out with rhett etina ipad mini it's a

disappointment. >> thank you. >> christina warren, thanks to carolia. julia boorstin, breaking news on facebook. >> facebook has told us the service is back up to 100% after service outage this morning. facebook was working and you could access photos and news feed, but it wasn't possible to post status updates or a like on other people's comments or photos. restricted service. so facebook says they're back up 100%. we're waiting for a statement which we should have any minute. back to you as soon as we get it. >> all right. thank you very much. shares down about a half percent. not taking it too hard. $13 billion, that's how much jpmorgan is expected to pay in a record settlement with the u.s. government. of the at deal, what's next for the company and its ceo jamie

dimon? more on that when "squawk on the street" continues. [ male announcer ] once, there was a man who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. [ dings ] ♪ [ male announcer ] every thought... every movement... ♪ ...carefully planned, coordinated and synchronized. ♪ performing together with a single, united purpose. ♪ that's what makes the world's leading airline... flyer friendly. ♪

welcome back to "squawk on the street." shares of tesla, carmaker down to market lows in the session. this, on the heels of a report in the german magazine saying, citing tesla manager that growth in europe could be one of the big hurdles that tesla faces going forward.

tesla shareholders have enjoy a great run. weakness on the article in "manager" magazine. >> thanks, dominic. jpmorgan meantime reaching for the record books and not in a good way. the bank is close to reaching a $13 billion settlement with the government to end investigations of bad loans sold before the financial crisis. kate kelly spoke to the ceo, jamie dimon, on his way to work this morning and she joins us with more. kate. >> reporter: karl, thanks so much. the $13 billion settlement, as you mentioned, would be a record for regulators in general and the justice department. there's a lot of concern, though, among those that follow jpmorgan and investors about the size of it and the fact it leaves unfinished business on the table, including the possibility of criminal charges related to the mortgage-backed securities at issue here. one question i'm hearing a lot of this morning, were some of the acquisitions that jpmorgan made during the financial crisis actually worth it? just to refresh your memory, in june of 2008, finalized a deal

to buy bear stearns for $1.2 billion with a backstop from the fed tprotect the assets. under stress conditions it bought washington mutual $1.9 billion at government's urging. now it's looking at landmark settlement. i asked jamie dimon today what he thought about the ongoing issues and where he stood on resolving all of this. here's what he said. >> i'm going -- try to resolve every matter we can and move on and serve our clients. i'm so damn proud of the company, that's what i think every day. these other things i know we have to fix. >> reporter: so, obviously he's taking it seriously, he's not going to get into details of a pack that's being inked and could be announced in coming days. analysts say take a look at broader picture. jpmorgan has done very well in fixed income over the years. bear stearns acquisition gave it a prime brokerage unit that's

been successful, gave it commodities exposure, it's selling commodities unit. there have been many benefits, washington mutual added $300 billion in assets to its balance sheet, et cetera, carl. there have been advantages despite the legal headwinds. >> everybody keeps talking about the continuing threat to would-be criminal charges. how big of an overhang do you expect that to be over the next six months? >> reporter: you know i think it will be aan overhang, absolutely. this is something we have not seen a lot in of recent past. criminal charges against these banks and hedge funds, i'm thinking of sac indicted in july. what hime hei'm hearing individ probably pursued and part of the settlement at issue here is whether or not jpmorgan might agree to assist with investigations. of course, it has been cooperating as much as it can. but it could get ugly especially amid things we heard there's a

whistle-blower related to the mortgage-backed securities investigation and that could be aiding the criminal inquiry. >> great coverage today. kate, thanks so you. kate kelly in midtown on the jpmorgan story. this morning's squawk on the tweet. what does dimon write on the memo section of the $13 billion check? tweet us at squawk street. >> we're wouldn't did away from the first jobs report since the government shutdown. question is, how much it will tell us about the state of the economy now. we'll get you the answer when we come back. peace of mind is important when you're running a successful business.

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(vo) meee-ow, business pro. meee-ow. go national. go like a pro. welcome back, keeping a close eye on markets here ahead of tomorrow's jobs report, it comes on tuesday. john riding, good morning. >> good morning. >> john, first of all, these are the september numbers. and from all accounts, they

sound like they should be pretty good. why is it that expectations here are relatively high for what this number might be? >> well, we have seen very low numbers on jobless claims, perhaps not as low as we previously thought because of other computer glitches, not obama care but california did a major computer you grade and that messed up some of the claims. the data from adp okay. we've had other signs from private reports like the conference boards consumer confidence numbers that consumers have a about thor perception of the labor market and i think all of that reflects an expectation of a decent jobs number around 200,000 on private payrolls we think. >> hang, that raises the question of how relevant it's going to be with the october report looming right behind it. also, of course, everything that's happened in the economy since then. so, how much do you expect investors to read from tomorrow's number? >> i think anytime you get a monthly jobs report, whether it's on time or little bit late,

it's a big major report. so i think there will be reaction to it. but i don't think it's going to change how investors perceive u.s. economy and that is, one that is stubbornly stuck at a below average rate with very little chance of dipping into a recession and very little chance of accelerating to an above-average environment. here we are, i think we're living in this environment for several years to come. >> one of my favorite stories in the paper today, in the journal about david rosenberg, famousou rech perma bear. he thinks the case for 3% is not far off. are you seeing stubborn colleagues join you in a bullish camp? >> i don't know about that. 3%, talking about gdp growths a takenable next year. the private sector is doing that

and the government sector's -- i don't mean physicfiscal drag bu about what goes on with inter-drucing health care and other uncertainties, maybe a small impact from the closures of the government for 16 days but i don't think that's going to be particularly consequential. i see as we go into 2014 that we can see some better growth numbers. but what's interesting, is the jobs numbers have been speaking as if gdp growth has been close to 3%. given the kind of payroll numbers, close to 200,000 over 2 years. >> at the same time the revisions have shown more of a slowdown over the summer than what was originally reported. in terms of payrolls, thinking about the july number in particular, then we get the housing data today that wasn't great. i guess if we got 2,000 tomorrow, it would be the highest since, what, april? so we haven't been that close to

sustaining job growth that's that strong. >> we've of course got the get the annual benchmark provisions which the number, confusing, but will show higher job growth through march of this year than previously reported. although this time perhaps from more technical reasons. so truth of the matter is, the numbers aren't accurate enough to be able to look on a month-to-month basis and say, this is what job creation really was in the month. you have to look at the trend. the trend's been decent. >> hang, that said, how are you positioned into the end of the year, as we start to take out a lot of the benchmarks, people thought we'd be lucky to hit in january? >> yeah, so we're fully invested in our equity portfolios and we're bullish on the markets because equities can do well in a below-average gdp growth environment and we're balanced between high quality cyclical issues and high quality

defensive issues with continued emphasis on companies that pay better than bond yields and also offer a growth of dividend income as well. you still have this opportunity today, 160% above the lows, plenty of stocks, generous dividend yields. so that you can get your income from equities, you don't have to go to the bond market for income. >> you know, income from equities help the income people aren't getting from the market. hopefully we see pickup tomorrow. vf corp, rallying after third quarter earnings. we'll talk to the ceo eric weissman in a meant. a speech by the president in a few minutes, he'll address the gives on the obama care website.

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long from now. >> let's bring in simon hobbs as we count down to the close. >> let's see how far we can get through this before the president starts talking. we have major inflows last week into european markets, riding higher up to five-year highs. europe reports with a lag on the united states, the big guys are beginning to come through. phillips electronics, beating expectations. the maker of deluxe paint in the netherlands akzo nobel doing well. oracle and s.a.p., today we thought in germany s.a.p. might disappoint the market but it's not. it beat earnings and indeed sticking to its full-year forecast. >> let's take you to washington, d.c. >> i can do that.

>> hello, my name is janis baker. i have the privilege to say that i'm the first person in the state of delaware to enroll for health insurance through the new marketplace. like many -- [ applause ] like many consumers out there, it took me a number of frustrating attempts before i could apply for and select my plan. i kept trying because i needed access to the new health care options. i applied to three private insurance companies only to be rejected due to preexisting health conditions. i was able to find a policy i am thrilled with, saving $150 a month and much lower deductibles than my previous policy that i held through my small business. i'm here today to encourage other people like me who needs access to quality, affordable insurance and to tell them to

have patience with such a new system. without the ability to get this insurance, i know that a single hospital stay could have bankrupted me and my business. thank you all. and i am now honored to introduce the president of the united states. >> thank you. >> thank you. >> thank you. thank you, everybody. thank you, janis. thanks to everybody here for coming on this beautiful day. welcome to the white house. about three weeks ago, as the federal government shut down, the affordable care act's health insurance marketplace is open for business across the country. well, we have now gotten the government back open for the american people, and today i want to talk about how we're going to get the marketplaces running at full steam as well. and i'm joined today by folks who either benefitted from at fordable care act already or who

are helping fellow citizens learn about what this law means for them and how they can get covered. of course, you've probably heard that healthcare.gov, the new website where people can apply for health insurance and browse and buy affordable planned in most states, hasn't worked as smoothly as it was supposed to work. the number of people who visited the site has been overwhelming, which has aggravated some underlying problems. despite all of that, thousands of people are signing up, and saving money as we speak. many americans with a preexisting condition, like janis, are discovering that they can finally get health insurance like everybody else. so today i want to speak to every american who is looking to get affordable health insurance. i want you to know what's available to you and why it may be a good deal for you. and for those who have had some

problems with the website i want to tell you what we're doing to make it work better and how you can sign up to get covered in other ways. but before i do that, let me remind everybody that the affordable care act is not just a website. it's much more. for the vast majority of americans, for 85% of americans who already have health insurance, through your employer or medicare or medicaid, you don't need to sign up for coverage through a website at all. you've already got coverage. what the affordable care act does for you is to provide you with new benefits and protections that have been in place for some time. you may not know it, but you already benefiting from these provisions in the law. for example, because of the affordable care act young people like jasmine and jessica and ezra all whom are here today,

they've been able to stay on their parents' plans until they're 26. millions of other young people are currently benefiting from that part of the law. another part of the affordable care act is providing seniors with deeper discounts on prescription medicine. billions of dollars saved by seniors already. that's part of the law. it's already in place. it's happening right now. already because of the affordable care act preventative care like mammograms and birth control are free through your employers. that's part of the law. so there are wide range of consumer protections and benefits that you already have if you've got health insurance, you may not have noticed them, but you've got them. and they're not going anywhere. and they're not dependent on a website. here's another thing that the affordable care act does.

in states where governors and legislatures have wisely allowed it, the affordable care act provides opportunity for many americans to get covered under medicaid for the first time. so in oregon, for example, that's helped cut the number of uninsured people by 10% just in the last three weeks. think about that. that's 56,000 more americans who now have health care. that doesn't depend on a website. now, if you're one of the 15% of americans who don't have health insurance, either because you can't afford it or because your employer doesn't offer it or because you're a small business person, you have to go out on the individual market and buy it on your own and it's too

expensive, october 1st was an important date. that's when we opened the new marketplaces where people without health insurance or who can't afford health insurance or who aren't part of a group plan can finally start getting affordable coverage. and the idea is simple. by enrolling in what we're calling these marketplaces, you become part of a big group plan. as if you're working for a big employer. a statewide group plan that spreads risk between sick people and healthy people, between young and old, and then bargains on your behalf for the best deal on health care. what we've done is essentially created competition where there wasn't competition before. we have created big group plans and now insurers are really interested in getting your business. so insurers are created new

health care plans with more choices to be made available through these marketplaces. and as a result, of this choice and this competition, price have come down. when you add the new tax credits that many people are eligible for through the law, then the prices come down even further. so one study shows that, through new options created by the affordable care act, nearly 6 in 10 uninsured americans will find they can get covered for less than $100 a month. think about that. through the marketplaces, you can get health insurance for what may be the equivalent of your cell phone bill or your cable bill, and that's a good

deal. so the fact is, the product of the affordable care act for people without health insurance is quality health insurance that's affordable. and that product is working. it's really good. and it turns out there's a massive demand for it. so far the national website, health care.gov has been visited nearly 20 million times. 20 million times. and there's great demand at the state level as well because there are a bunch of states running their own marketplaces. we know that nearly one-third of the people applying in connecticut and maryland, for example, are under 35 years old. they understand that they can get a good deal at low costs, have the security of health care, and this is not just for old folks like me, that

everybody needs good, quality health insurance. all told, more than 500,000 consumers across the country have successfully submitted applications through federal and state marketplaces. and many of those applications aren't just for individuals. it's for their entire families. so even more people are already looking to potentially take advantage of the high quality affordable insurance that is provided through the affordable care act. so, let me just recap here. the product is good. the health insurance that's being provided is good. it's high quality and it's affordable. people can save money, significant money, by getting insurance that's being provided through these marketplaces. we know that the demand is there. people are rushing to see what's available.

and those who have already had a chance to enroll are thrilled with the result. every day people who were stuck with sky-premiums because of preexisting conditions are getting afordable insurance for the first time or finding they're saving a lot of money. every day women are finally buying coverage that doesn't charge them higher premiums than men for the same care. every day people are discovering that new health insurance plans have to cover maternity care, mental health care, prepreventative care. so you just heard janis' story, she owns her own small business. she became the first woman to enroll in coverage through delaware's exchange. and it's true, it took her a few tries, but it was worth it after being turned down for insurance three times due to minor preexisting conditions. so now she'll be covered.

she'll save $150 a month, and she won't have to worry that one illness or accident will cost her her business that she's worked so hard to build. and janis is not alone. ire recently received a letter from jessica sanford in washington state. what she wrote, i am a single mom, no child support, self-employed, and i haven't had insurance for 15 years because it's too expensive. my son has adhd and requires regular doctor visits, and his meds alone cost $250 per month. i've had an ongoing tendinitis problem due to my line of work that i haven't had treated. now finally, we get to have coverage because of the aca for $169 per month. i was crying the other day when i signed up, so much stress

lifted. no now that is not untypical for a lot of folks like jess 15 who have been struggling without health insurance. that's what the affordable care act is all about. the point is, the essence of the law, the health insurance that's available to people, is working just fine. in some cases actually it's exceeding expectations, prices are lower than we expected, the choice is greater than we expected. but the problem has been that the website that's supposed to make it easy to apply for and purchase the insurance is not working the way it should for everybody. there's no sugarcoating it. the website has been too slow, people have been getting stuck during the application process, and i think it's fair to say nobody's more frustrated by that than i am precisely because the

product is good. i want the cash registers to work. i want the checkout lines to be smooth. so i want people to be able to get this great product. there's no excuse for the problems. and it's -- these problems are getting fixed. but while we're working out the kinks in the system, i want everybody to understand the nature of the problem. first of all, even with all of the problems at healthcare.gov, the website is still working for a lot of people, just not as quick or efficient or consistent as we want. and although many of these folks have found they had to wait longer than they wanted, once they complete the process, they're very happy with the deal that's available to them. just like janis is. second, i want everybody to remember we're only three weeks into a six-month open enrollment period when you can buy these new plans.

keep in mind the insurance doesn't start until january 1st. that's the earliest that the insurance can kick in. no one who decides to purchase a plan has to pay their first premium until december 15th. and unlike the day after thanksgiving sales for the latest playstation or flat screen tvs the insurance plans don't run out. they're not going to sell out. they'll be available through the marketplace throughout the open enrollment period. the prices that insurers have set will not change. so everybody who wants insurance through the marketplace will get insurance. period. everybody who wants insurance through the marketplace will get insurance. third, we are doing everything

we can possibly do to get the websites working better, faster, sooner. we've got people working overtime, 24/7, to boost capacity and address the problems. experts from some of america's top private sector tech companies who, by the way, have seen things like this happen before, they want it to work. they're reaching out, they're offering to send help. we've had some of the best i.t. talent in the country join the team and we're into a tech surge to fix the problem. we're confident that we will get all of the problems fixed. number four, while the website will ultimately be the easiest way to buy insurance through the marketplace, it isn't the only way. i want to emphasize this. even as we redouble our efforts to get the site working as well as it's supposed to, we're also redoubling our efforts to make sure you can still buy the same quality affordable insurance

plans, available on the marketplace, the old fashioned way, off-line. either over the phone or in person. by the way, there are a lot of people who want to take advantage of this who are more comfortable working on the phone anyway or in person. so let me go through the specifics as to how you can do that if you're having problems with the website or you prefer dealing with a person. yesterday we updated the website's home page to offer more information about the other avenues to enroll in affordable health care until the online option works for everybody. so you'll find information about how to talk to a specialist who can help you apply over the phone or to receive a downloadable application fill out yourself and mail in. we've also added more staff to the call centers where you can apply for insurance over the phone. those are already -- they've been working, but a lot of

people have decided, first, to go to the website. keep in mine these call centers are already up and running and you can get your questions answered by real people, 24 hours a day in 150 languages. the phone number for these call centers is 1-800-318-2596. 800-318-2596. wait times have averaged less than one minute so far on the call centers. although i admit the wait times might go up now that i've read the number out loud on national television. but the point is, the call centers are available. you can talk to somebody directly, and they can walk you through the application process. and i guarantee you, if one thing's worst the wait it's the safety and security of health care that you can afford or the amount of money that you can

save by buying health insurance through the marketplaces. once you get on the phone with a trained representative it takes about 25 minutes for an individual to apply for coverage, about 45 minutes for a family, once you apply for coverage you'll be contacted by mail, e-mail or postal mail, about your coverage status. you don't have to just go through the phone. you also apply in person with the help of local navigators. these are people especially trained to help you sign up for health care and they exist all across the country. or you can go to community health centers and hospitals. just visit localhelp.healthcare.gov to find out where in your area you can get help and apply for insurance in person. and finally, if you've already tried to apply through the along the way, do not n stuck

worry. in the coming weeks we will contact you directly, personally, with a concrete recommendation for how you can complete your application, shop for coverage, pick a plan that meets your needs, and get covered once and for all. so here's the bottom line. the product, the health insurance, is good. the prices are good. it is a good deal. people don't just want it, they're showing up to buy it. nobody's madder than me about the fact the website's not working as well as it should which means it's going to get fixed. and -- and in the meantime you can bypass the website and apply by phone or in person. so don't let problems with the

website deter you from signing up or signing your family up or showing your friends how to sign up because it is worth it. it will save you money. if you don't have health insurance, if you've got a preexisting condition, it will save you money and it will give you the security that your family needs. in fact, even with the website issues, we've actually made the overall process of buying insurance through the marketplace a lot smoother and easier than the old way of buying insurance on your own. the challenge here is that a lot of people may not remember what it's like to buy insurance. the traditional way, the way we've set it up there are no more absurdly long application forms. there's no medical history questionnaire that goes on for pages and pages. there's no more getting denied

because you've had a preexisting condition. instead of contacting a bunch of different insurers one at a time, which is what janis and a lot of people who are shopping on the individual market for health insurance had to do, there's one single place, you can go shop and compare plans that have to compete for your business. there's one single phone number you can call for help. and kinks have been ironed out it will be easier. in the meantime we will help you sign up because consumers are want to buy the product, and insurance company want to tell sell it to you. let me close about addressing the politics that have swirled around the affordable care act. i recognize the republican party has made blocking the affordable care act its signature policy idea. sometimes it seems to be one

thing that unifies the party these days. in fact, they will willing to shut down the government and harm the global economy to try to get it repealed. and i'm sure that, given the problems with the website so far, they're going to be looking to go after it even harder, and let's admit it, with the website not working as well as it needs to work, it makes a lot of supporters nervous because they know how it's been subject to so much attack, the affordable care act generally. but i just want to remind everybody, we did not wage this long and contentious battle just around a website. that's not what this was about. we waged this battle to make sure that millions of americans

in the wealthiest nation on earth have the same chance to get the same security of affordable, quality health care as anybody else. that's what this is about. and the affordable care act has done that. people can now get good insurance. people with preexisting conditions can now afford insurance. if the launch of the website proves anything, it's that people across country just don't need that security, they want that security. they want it. and in the meantime i've said many times, i am willing to work with anyone on any idea to make this law perform even better. but it's time for folks to stop rooting for its failure because hard working middle class families are rooting for its success.

and if the product is good, they're willing to be patient. i got a letter last week from a self-employed man named john meyer in leets dale, pennsylvania. he used the new marketplace to get himself and his wife covered and save a lot of money. and here's what he said. because it pretty much sums up my message today. yes, the website really stank for the first week. but instead of paying $1600 per month for a group insurance plan, we have a plan that will only cost us $692 a month, a savings of $900 per month. john said that, while he saw --

when he saw what they'd be paying he turned to his wife and told her, we might just pull through, we can afford this. and john eventually predicted that the website will work like a champ. so john, he was frustrated by the website but he's feeling less frustrated once he found out he was saving $900 a month. on his health insurance. and john's right. the website's going to get fixed. and the law works. that's why we fought so hard to pass this law, to save folks like john money. to give people who don't have health insurance the chance to get it for the first time, to lift from the american people the crushing burden of

unaffordable health care, to free families from the pervasive fear that one illness -- i'm right here. i got you you're okay. this happens when i talk too long. you'll be okay. good catch, by the way, whoever was here. but that's always our goal to free families from the pervasive fear that one illness or one injury might cost you everything that you've dedicated a lifetime to build. our goal has always been to declare that in this country the security of health care is not a privilege for a fortunate few.

it's a right for all to enjoy. that's what the affordable care act's all. that's its promise. and i intend to deliver on that promise. thank you very much, everybody. god bless you. >> you've been listening to president obama in the rose garden giving an update on some issues facing the rollout of the affordable care act, no secret that it has not gone as smoothly as the president or really anyone would have hoped for. the president saying we're working to make it better, that the issues were caused by large