it's ross westgate. this is "worldwide exchange." ubs and deutsche fall as costs weigh on profits. good news, funds push bp to the top of the stoxx 600. following forecasts and results, we'll be joined by the ceo in just a moment. it

wants to stave off what it calls a rising crisis. >> announcer: you're watching "worldwide exchange," bringing us business news from around the globe. a very good morning to you. it's all about the banks today. let's kick off with the standard charter. the asian focused bank down 1.3% today. it says low single digit growth if both revenue and operating profit was hit by rising impairments in its korean market. lloyd's reported a rise in profits the first nine months of the year. the british financial said it had reduced costs and impairment charges, but it set aside another $750 million pound provision for ppi missed selling in the quarter. those numbers just keep racking

up. deutsche in frankfurt, currently down 2.4%. a 98% drop in quarterly pretax profits from a year earlier, which missed expectations. the german lender hit by 1.2 billion euro increase again in litigation provisions and ubs, the bigger fall here, currently down 5.5% at the moment in zurich. third quarter earnings were above forecasts, but the swiss bank is warning of growing provisions for litigation risks continuing into next year. said it would defer its aim to achieve a group return on equity of 15% by 2015 by at least a year. so we're going to get more on both deutsche and ubs. annette is in frankfurt, but first, let's get over to carolyn in zurich. carolyn, it seems to be more uncertainty. deutsche could put a figure on future costs. ubs doesn't seem to be able to. >> yes, definitely.

and that's a big concern for investors this morning as they learn that the return on equity target of 15% by 2015 is not going to be achievable. that will have to be pushed out at least one year. now, better news on the capital level because while this capital surcharge which is required by the financial regulator, while it will be reducing 130 basis points frrt tier one capital letter, there is an offsetting factor. the s&p staff fund, which is going to be bought back by ubs, that will boost capital levels by 100 basis points. so the net-net effect is a negative 30 basis points. and when i spoke to the ceo of ubs, he told me that the bank is still sticking to its target for a 13% core two one equity ratio over basul 3 next year and that means they're going to be sticking with their 50% payout ratio target after that.

so that should be somewhat reassuring for inest havers, but i think this additional uncertainty and the surprise factor in because no one saw this additional capital surcharge coming. not even ubs. that really is hitting sentiment in the stock this morning. keep in mind, the stock haas a really good run, up 32% year-to-date. but yes, litigation is a big problem, not just for ubs, but for the rest of the industry. ubs says it's been quite transparent about it. >> we are being quite up front about our litigation issues, both in our litigation report and will in our language in the past. we will continue to look at litigation charges for the industry and for us. >> how about we talk about the actual numbers. they don't get much attention this morning. they were actually okay, broadly in line with expectations. net profit at 577 million swiss francs and that was slightly better than forecast.

analysts point out that the capital level of 11.9% was very strong. but profitability and inflows into the wealth management unit is suffering, as well, partly as a result of lower decline activity. annette, over to you. >> here in germany with deutsche bank, it is a similar picture. >> it's not actually a big surprise, looking at what jpmorgan has been down in the united states. and deutsche bank was quited as saying, as well, that they're looking at those issues and as a reference for their own litigation charges. on the one side, we have litigation charges weighing on profit. net profit is actually down by more than 95% compared to the previous year's third quarter.

at the same time, they have low activity and debt trading, which is normally the cash cow for deutsche bank. that trading is down by 48% in terms of revenues and that is, of course, weighing on investment banking. that is really nothing for the likes of deutsche bank, compared to the big u.s. competitors, they had a compounded fall only by 25% in that trading unit. so it looks like deutsche bank is losing some market to competitors. that is perhaps why shares are not tanking as badly as ubs shares is that we see a little bit of a turn around in the problem side unit, asset and welt management. as well, they are betting their profit goes for 2015. with that, back to you, ross. >> all right, annette.

carolin, thank you very much. edmond joins me with his thoughts. what do you think of the ubs story? >> surprising, actually. really surprising. this caught us off guard slightly. we were looking at the underlying numbers. all looked okay. then this bigger management, they're going to have to, you happen, have this litigation on the core tier, 150 basis points, much bigger than -- well, nobody had anticipated this. it's a sproising number. they hadn't and certainly nothing from chris credit suisse. >> and its regulators move in goal posts. continuously, we've seen it for the last -- the past year. we've seen it in the uk. we've seen it internationally with regulators requiring more capital and this goes on to explain that story further. it's a concern for investors. >> and we heard from lloyd's today in the uk, as well. it's another 750 million pounds. there's a cost on that and now i think we're up to 8 billion.

>> yeah, it seems to be haunting lloyd's down. it's a concern. it's further provision. we kind of assumed that the first half results that there wouldn't be another provision taken. and here we are again. so both rbs and lloyd's trading down. we assume a provision of rbs on this announcement. if you look at the amount of provisions coming through for lloyd's, this is a high number, again. so, you know, very disappointing. >> all right. stay there and we'll come back to you. there's one stock today that's doing fairly well. it's bp, reported forecasts beating earnings of $3.7 billion to the third quarter and it's increasing its dividend as a result. the cap ex forecast 2014, but there's even more cash coming back to shareholders. steve is at the bp headquarter. hi, steve. >> yeah. hi, ross. thanks very much indeed for that. i'm here speaking to bob dudley, ceo of bp. fantastic to see you again.

i'm going to take us back in time. 24 months. two years ago, you and i were sitting in this very office and you said these set of numbers are a watershed moment from bp. the last few years have been a lit of litigation. how far have you achieved those goals that you set out for in 2011 to where we are now in 2013? >> well, it seems like a long time ago. but at that time, we laid out a ten-point plan, five things to expect, five things to measure. we have completed a $38 billion divestment program. we've upped our expiration game. we've got lots of projects that have come on stream. they've come a long way and we have a much less rocky road with a great investment since the last time. i'm pleased to say, you were telling earlier, one of the things i mentioned this morning is bp is still trading at a discount, a forward pe, somewhere in the region of 8 to

8el.5. why is the market not given you credit for the last two years? >> well, i think underlying operations have been going very well. in fact, in the last year, we've had production up 3% on an underlying basis. i think quite frankly there is a big litigation overhang over bp. and we've come to compartmentalize that. we don't want tight be a distraction. i think that's what people don't see. >> we're up to circa 42 in that litigation now. when does it end? i mean, i'm confused. i look at the various judgments and other charges and then the appeal, which you had what was in junction which was successful earlier this month. i have to be honest, i think a lot of investors like me are confused at where we are in this litigation process and how you can cap those costs. >> well, i think a lot of people, it's hard to follow it all. so from the very beginning, we always said we would step up, we would meet our on investigations. and that's why most recently we

said we speak up when claims have been going out the door for claims we don't agree with, we think they're fictitious. we can retool it and make it get back to what it's supposed to be and all we can ask for is a fair hearing in the court. >> i've been reading somewhere that said bob dudley is backing out of his commitment. ed ma a commitment to the gulf of mexico two years ago and thou they're trying to back out of it. how do you reply to that? >> i don't think spending $42 billion to date is backing out. we said we would pay legitimate claims for legitimate business losses and that's what we feel is very cheer and that could take this into a long litigation game. but we need to do that for our shower holders. in the meantime, the operating businesses are doing very well. >> i know ceos don't like talking about their own share costs. they're up today, but still not

at those kind of levels with the highlight of bp. how do you get this stock to 7 pounds from 470? >> well i think, steve, a lot of people have forgotten. we have sold $38 billion of our business. and we are a smaller company. we're about 30% smaller. we're not trying to get back to those levels. but the asset res smaller. so if we can keep the underlying business going, develop new projects, i'm very optimistic. you and i talk a lot about russia and it was where you had some big tribulations a few years ago. you have just under 20%, as well. is it hard to value that from a shareholder's point of view? >> well, we had a troublesome venture, but we've been investing for years. it's a great unexplored poe potential in it that it's working now. it's, i think, going to be a company -- it's 4.5 million

barrel a day oil company. we're on the board. we're looking for projects to work with inside and outside of russia. it's a long-term investment. i'm very pleased with it. the relationship is very good. >> but having 9.7%, you've got all the capital still tied up. they're all great concerns. it's been tough for john brown, tough for tony hayward and tough for bob dudley, as well. but the fact remains is you have a minority position .you don't control the dividends for this company, do you? >> it's not a control, but it's a policy by the government. i've never had a problem with the russian government. my relationship with the russian government has been fine. other business partners have been up and down from time to time. >> you talked about increasing that payout. there have been reports that could get up to 35%. that will help out the major

shareholders on the government side, help them with their budget deficits, as well. any issues with that coming in the short to mead why term? >> that would be completely a policy decision. >> this is a stake where you have an enormous amount of capital tied up and you're saying you don't control the dividend stream at all. >> a year ago, people were saying you don't get any dividends. this quarter we received a 465 million testify depend. it went up last quarter to 8 million this quarter. >> talking about dividends, 9.5 cents a shear, up from 9 cents a share. why have you been upping the dividend and increasing or continuing the share back bye program? >> we raised the dividend today, announced a 576% increase in the dividend. i think our shareholders have been very, very patient with bp and i think it's time for us to do not only keep a progressive dividend policy, and we will continue to review it and in addition we announced td we would sell another $10 billion of assets between now and 2015

and make some of those proceeds available for additional shareholder buyback. >> we mentioned the same issues, russia and mccondo. how do our viewers and investors in bp look at it as a different company rather than just a two-trick pony? >> well, russia is fine. i think that's going fine. and the rest of the operating business, it's a big company all around the world. the litigation gets lots of headlines. we compartmentalize that off. we had two significant discoveries this quarter already. i think they should look at us as a fundamentally sound oil and gas company and the most important things we've heard, we need to management our capital effectively, keep our capital in a range of 24 to 27. i think our shareholders will like that message. >> within that, mike daily predicts high, doesn't he?

which let's to questions now about why bp is acting like a smaller mining company. >>. >> we are excited about expiration. by getting out there and drilling more wells, that begin tess pipeline of your future. $3 billion in expiration is about the right size for us. 16 to 18 wells. we've acquired more acreage last year than we did the years before. that is where value creation happens in our business. >> how do you stay enthusiastic? seven days a week, this job is playing on you, playing on valuations. how do you stay enthusiastic in this job? >> it's a great company. great people around me. everybody is enthusiastic. we have a lot to do. we've come a long way, but

people can still see there's a lot of rewards out there. >> bob, it's always my pleasure speaking to you. bob dudley, the ceo of bp. bp is not the top story. ubs is and deutsche. maybe that's an indictment. actually, the news flow has turned for bp and the bad news of our companies is in the fore today. bp is one of the top gainers in europe today. >> the top gainer, steve, the top gainer. thanks very much indeed to that and to bob dudley, as well. banks are the other big focus in trade right here in europe. we've been speaking to edmond. we talked about ubs and deutsche and lloyd's. a quick word about standard chartered, clearly been hit by tapering talk in emerging markets and one of the worst performing bank stocks in europe, as well. what's the outlook for them

somehow >> so the outlook is this statement is showing improvement. tapering talk has hurt the business. we're seeing costs in line with this growth and expectations offer low to mid profit growth for the year which is obviously much lower than what we would have expected at the beginning of this year. so expectations are lower. >> we've also got this note that bad loans, nonperforming loans on european bank balance sheets are now up at 11.7 trillion bourls kwif lend. is the ecb stress tests come out in the next year, do you think we're going to uncover more ugliness than we want?

i think it's a step along the process to try and get clarity on the issues. do you think that the npr issues we're seeing from the companies reporting them, specifically that the top tier european companies are improving. however, some of the peripheral european banks are still seeing increases in pr ratios. nonperforming loans are increasing and that is obviously a concern. what we did learn from the ecb was that those companies are going to be under stress. that is the perspective we're taking, anyway. >> edmond, good to see you today. thank you so much for joining us. let's bring you up to speed with the markets. the ftse 00 is currently up 0.5%. helped along by bp.

and that is the best performer, we said, as well. the xetra dax, deutsche is on the negative side. the cac 40 is up about 0.25%. the mib outperforming up about 1.25%. a recap of the asian markets, the nikkei bounced back from friday's losses, down slightly today. up 0.5%. the shanghai composite down 0.25%. hang seng up 0.2%. asx 200 down 0.5%. the rba chief was trying to talk down the aussie/dollar. show you where u.s. futures are currently trading. then the dow just don't a point yesterday. the s&p up two points. up at a first record high. right now, the dow is somewhat 30 points above fair value. and the s&p 500 is around about 3 points above fair value. the fed starts a two-day meeting today. they didn't want to do anything

until they hear from what the fed has to say. in the light of that, yields have been around 2 many 75% yesterday. still kind of there. 2.15%. that means the dollar is firmer today from levels that we have seen. euro/dollar, 1.3833 was that two-year low. we're currently at 1.3764. above the two-week low of 96.94 is the dollar/yen at 97.54. still to come, continuedan central bank raises rates for the second time in as many months. we'll be heading to dubai shortly. jpmorgan's top executives are in london to discuss how cities can better compete in a local economy. we'll talk exclusively to jpmorg jpmorgan's corporate bank. and apple sold nearly 34 million iphones last quarter, a

record roughly in line with analyst expectations. why have shares fallen after hours? we're going to review the tech giant's performance coming up. "worldwide exchange" continues. ♪ [ male announcer ] when we built the cadillac ats from the ground up to be the world's best sport sedan... ♪ ...people noticed. ♪

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has raised its repo rate by another quarter of a point, to 7.75%. it's warned that inflation is likely to remain elevated for the rest of the fiscal year. sonia has more for us from cnbc's tv 18 in mumbai. hi, sonia. what's the market reaction been? >> well, you know, surprisingly, the market reaction has been quite good. this is because the market was going into the policy quite cautious, expecting a 50 basis point hike. but in effect, the results the governor has hiked by just about 25 basis points. also, the research bank gn has gone ahead and scaled back some of the currency stabilizing measures. so it has gone ahead and separated the margin of standing by about 25 basis points. but the market has given a

thumbs.. the market has its eyes squarely focused on the global liquidity. in fact, we're just about one percentage point away from our all-time highs. that's because foreign investors have put about $2 billion into the indian markets in the last one or two months. now, you mentioned the hawkish stone that the reserve bank has. it feels like there could be more rate hikes going forward. the next reserve bank meeting is on the 18th of december and there are expectations that there will be another rate hike to the tune of 25 basis points, purely because the rbi governor has inflation, you know, inflation on his mind so he will make sure that they taper down to the 5% mark by the end of 2013. back to you. >> sonia, thanks very much indeed for that. that's the latest out of mumbai. identities yet to settle a civil resolution with regulators over

visa discrepancies. if true, the penalty will be the biggest immigration fine ever. they're accused of manipulate b travel documents to enable indian workers to serve long tenures in the u.s. with allegations they got travel permits as opposed to work visas. shares of the tech firm are nevertheless just up slightly in india today. still to come, the head of global corporate bank for jpmorgan will join us for an exclusive interview. the next part of "worldwide exchange" continues right after this.

it's a bad day for banks. shares of ubs, deutsche fall as legal costs weigh on profits. bp is at the top of the stoxx 600. the oil giant ceo has just told cnbc they're going to return more cash to shareholders following those forecast popping figures. >> the shareholders have been very, very patient with bp. i think it's time for us to do not only keeping progressive dividend policy and we will continue to review it. in addition, we announced today

we will sell another $10 billion in assets between now and 2015 and make proceeds available for an additional share buyback. >> profit and revenue beat, but apple still faces questions about margins. >> announcer: you're watching "worldwide exchange," bringing us business news from around the globe. and you've just joined us stateside, a very good morning to you. we're going to get into apple's numbers fairly shortly. a lot of things to get through, as well. right now, as far as the futures are concerned, on the first of a two-day fed meeting, the dow currently trading somewhere, 23 points above fair value after dipping just a point yesterday. the nasdaq at the moment is around about 6 points above fair value and the s&p closed tat another fresh record high, up around 2 points, 3 points at the close last night. s&p 500 at the moment is about 2.8 points above fair value. european equities have been really focused and driven by

alternatings that we're seeing. now despite banks weighing, you can see we've got green on the board. the ftse 100 is up about 0.3%. bp performing very well. more cash for shareholders and the underlying profit better than expected, as well. the cac 40 is up just 0.1%. we're up about 1% for the ftse mib, as well. these are the banks that are in focus today. standard chartered is down just under 1% at the moment. it saw low single digit growth in both revenue and operating profit in the third quarter, hit by rising impairments in the career market. it's hurt, of course, by all the tapering talk in emerging markets. lloyd's bank in the uk reporting a rise in profits in the first nine months of the year. it says it reduced its cost and impairment charges for the stock down because it set aside another $750 million pound provision for the ppi missed selling in the quarter. that was insurance misselling scandal we've had in the uk.

do you have ya posting a 98% drop in its prequarter profits a year earlier. that missed specations. the german lender hit by a 1.2 billion euro increase in litigation. the real underperformer is ubs off nearly 5%. third quarter earnings were just above forecasts, but the bank has warned of growth provision webs as well, for litigation risks. ubs said it would defer its aim of achieving a return on equity of around about 15% by 2015 by at least another year, as well. now, litigation charges were only some things common, the european banks weighing on earnings elsewhere. and we've heard quite a lot from jpmorgan. we've been speaking to some high profile executives from the biggest banks. h

herria. good morning, ross. i sat down with jpmorgan yet. the bank has set aside $23 billion, but he said it was still doing business well. but as you mentioned, it has been the focused on intense regulatory pressure at the moment, lit by a $13 billion type, a record breaking fine. and many in the banking industry are now watching to see how negotiations up fold because they want to see how regulators have come up with that number and how that will apply to other u.s. banks who have also been accused of misselling mortgage-backed securities. when i sat down with mr. dimon yesterday, he said the u.s. bank was not a fair weather friend, hasn't left places like greece and spain, and really believed in the european project. now, that's despite saying that he still felt that there was a long way to go because problems in the eurozone were fixed. mr. dimon was here in london

because of jpmorgan's global cities initiative when brought together the likes of tony blair, the lobbed mayor and lord koe. i'm here now with another one of jpmorgan's executives, jose menarres. head of the corporate bank. jose, can i ask you a bit about the global cities initiative? we've had hear from today that london is very competitive in europe in terms of entrepreneurship, business friendliness and innovation. how does that stack up against the rest of the world and what will it mean if the uk decides to leave europe? >> well, helia, welcome to our headquarters here in london. london is a global leader, right? it's a renaissance city. if you look at the way it's managed to attract best in class people, capital from all over the world and infrastructure -- and by the way, when i talk about infrastructure, i mean the

rule of low. i mean predictabilities, stability, and very important common sense from its leaders. it's, as i said before, a global leader. now, on top of that, you'll put great art, sports, schools, it's hard to beat. we don't think that that is going to change. now, if the question is what happens if the uk leaves the eu, first of all, that's a question for the british people and the politicians and leaders to resolve. the financial markets don't like change. from that perspective, the market would prefer the stability. having said that, if you look at what i said before about london, and if you look at its history, strong history of resilience and its ability to re inveinvent it over those years, we're very confident that london will continue to be a global leader. now, we have 18,000 people in the uk.

two-thirds of that are not in london. we are the largest private employer in bor did he meau. we would like that to continue and we want to stay here. >> if i could take you back to some of the comments made about mr. dimon, what are your thoughts about the risk? you obviously interface with clients all the time. it's been seen as one of the biggest risks, but that seems to be changing. all of a sudden, people want to buy into european stocks. yes? are people more risk averse now or are they less risk averse? >> the eurozone risk has come down. let's be -- european equity markets are up 15% to 19% year-to-date. that includes madrid, milan and obviously it includes the dax, the cac and the ftse.

if you look at the euro, it's trading probably at the best level that it's been trading all year long. finally, if you look at the yield spreads of government bonds, they're at very tight levels. so they haven't seen knit a long time. to answer your question, has the risk come down? of course it has. are we out of the woods yet? probably not. if you look at the real economy, you stau number of the uk that was posted last week, probably the best in the last five years. we see some of that evidence happening through countries like spain. but, obviously, there is a long way to get out of the euro crisis. what seemed like the end of the tunnel is a ways to go. >> we know companies are sitting on $1 trillion of cash. are they going to spend this? and how are they going to spend it? >> it's improving. confidence is progressively coming back. you said it. corporate balance sheets are in

great shape. they haven't been in such a great shape in a long time. you still have the first initiatives happening a couple of months ago with transformational transactions, right? whether you look at vodafone, verizon, whether you look at nokia with msn and with microsoft, you are beginning to see that change. some of the ceos were taken advantage of a very low rate environment. they all thought that the fed was going to act and that interest rates were going to go up. over the next year, that's going to happen, right? so to me, the real question is what happens when interest rates go up? they're going to continue to be aggressive. so me, the important question is, if interest rates are going up for the right robe, which is the economy is coming back and confidence is coming back, that means that they are going to be aggressive in going after

growth. it's a whole game of confidence. it's coming back. >> and just quickly, you're not worried about there being a credit bubble? >> you never know whether you're in a bubble until the very end. that's the problem with bubbles. it goes back to the fundamentals of those companies. the corporate balance sheets are in great shape. is credit flowing to mid corporates, to small businesses, etcetera, etcetera, and the answer is probably not as much as we would like to see. so, look, i think like any of those credit bubble is in the past, we need to be extremely careful about those. we all need to be very cognizant that interest rates are going to be going up and we're all going be very careful. all the market participants, whether it's bank to make sure that they've managed their transitions. >> thank you very much, jose, for your time. >> a pleasure.

>> ross, back to you in studio. >> thanks for that. that's the latest view from jpmorgan in london. don't forget, we've got more banking news later today because maria will be speak to go lloyd blankfein later today on closing bell. it's been one year since superstorm sandy made landfall on the new jersey shore. when we come back, we'll be out at seaside heights for an update on what's happened in the year since sandy struck. mine was earned orbiting the moon in 1971. afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote.

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more from the states, proxy firm tells microsoft not to for for a new director. they've noted a possible conflict of interest because thompson is ceo of the cloud computing firm virtual instrument which sells software and licenses back to microsoft. the company's next shareholders meeting is november the 19th. microsoft stock pretty flat in frankfurt. facebook is getting slammed in a new report. it's claimed the social net,

woulding site creates less business opportunities than any other dij at that time tall marketing venture. the brand's post is only being seen by an average of 6% of users. facebook says it's advertising strategy works. facebook's stock is down 0.5% in frankfurt. and google is sed to begin the rollout of its technology. only around 10,000 products have been given out so far. but it will introduce dprally gmail. it will allow existing owners to invite small groups of friends to buy the device. google stock today, pretty flat, as well, in fact. from going toll apple, investors taking a bite out of

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bringing the power of investments to people's lives. invested in the world. bny mellon. we're going to gel of have into appear eps earnings shortly, but first, it was one year ago today that hurricane sandy made landfall in new jersey. the storm would kill at least 125 people. it knocked out power to around 8.5 million homes and businesses and caused more than $62 billion in physical and economic damage, most of it is new york and new jersey. joining us now from seaside heights in new jersey, nbc's jay

gray. jay, one year on, how has the restructuring and rebuilding efforts gone? >> hey there, ross. good to talk to you. and look, this iconic boardwalk in seaside heights, new jersey, really in the days following came to represent so many computers that were splintered. it was battered and beat and now 12 months later it represents the region, some areas completely restored, but others really still struggling here. there is debris, there is damage that dots the landscape along the eastern seaboard. in some areas, in fact, it looks like -- and residents will tell you -- like it happened just yesterday. there's really been nothing done in the wake of this storm. there has been some recovery here and the work does continue. but there are a time of people frustrated here. a lot of families out of their home. some living in trailers by a shell of what's left. that frustration center on the red tape they've had to go

through to get government funding and the fight that many have had to deal with trying to get insurance money to begin their recovery, still, they are vowing to rebuild. though some computers worry that many families, hundreds can't hang on long enough to see that through. so this becomes a pivotal time. a year after the storm, there are a lot of people that say they've got to get something done. as we move into the winter months here, some still without heat, some still without homes, as we've talked about. so, ross, this is an effort that's ongoing and is one that's going to continue, many fear, for much more than another year. >> jay, thanks for that, joining us from seaside heights in new jersey one year on from super storm sandy. u.s. spy chiefs are going to face congress today amid the growing risk with leaders.

they're expected to discuss the nsa's programs and potential changes to the foreign intelligence surveillance act which governs electronic eavesdropping. senator dianne feinstein who chairs the senate intelligence committee is calling for a review of the u.s. government's entire intelligence operation. healthcare.gov is back up and running after a data outage this weekend prevented people from signing up for insurance. but there may be other nontechnical issues plaguing obama care. seema is with us in the states. what else is going on? >> well, ross, in the period leading up to the launch of the affordable care act this month, president obama repeatedly said if americans liked their insurance plans and their doctors, they would be able to keep them under the new law. but nbc news is reporting the obama administration knew for several years the majority of people who buy their own health

coverage wouldn't be able to keep this happen their policies under obama care. nbc says those forced to buy new insurance may experience sticker shock from higher premiums. when the law was passed in march of 2010, it was supposed to grant grandfather in existing policies, even if they didn't comply with the rules. but that same year, the department of health and human services rewrote some regulations essentially getting rid of the grandfather exemption. now, the white house isn't disputing the report, but tells nbc most individual policyholders should receive better health coverage that's more affordable thanks to government subsidies. the administration says no policy will be canceled due to pre-existing medical conditions. now, congress will get the chance today to grill the top

administration official closest to the rollout of the troubled obama care website. medicare chief marilyn tavenner will testify before the house ways and means committee about wa went wrong with healthcare.gov and whether she saw any of it coming. some democrats have now joined with republicans in calling for a one-year delay of the law's penalties for people who remain uninsured. ross, back to you. >> all right. seem ma, that story is going to run for now. have a great day there. apple, profit down for the third straight period in its fiscal fourth quarter. revenue easy rose 4%, boosted by sales of the new iphone 5s and 5c. growth margins slipped, even though am sold 33.8 million iphones. analysts were hoping for a bigger sales beat after revenue margins would come in at the high end of guidance. analysts at william blair and

co, thank you for joining us for now. i like the fact, it always amuses me when we get a beat. therefore, it's not a beat. anyway, that's just the way expectations work. look, what pleases you about these numbers and how big a problem is getting a partner in china? >> well, you know, you bring up an interesting point. the overall results were good. no huge surprises. so, therefore, not a huge feat. from my point of view, there were three key points. that actually made me come out incrementally positive. the first thing was the core business, which is about 75%, about 50% of the revenues come from iphone. and about 20% comes from ipad, that core business. they did show some up side over what the street estimated. the second thing was, after five consecutive quarters of sequential growth margins

declines, we saw an uptick in the september quarter and more importantly, the december quarter looks better. now, the numbers look weak, but remember, there's a hundred bits impact that you have to add to what they guided, 36 1/2 to 37 1/2 because of the way they're recognizing revenues. there was almost $900 million of impact on the different revenues. and the third thing is, if you look at their commentary, the booking trends are solid. supply constraints a little bit, but they are bringing in more supply online and the channel inventory is pretty lily. so all these signs are pretty good as we get into the holiday season. so these three key points led me to believe that the results were not a huge surprise over what we were estimating, but stabilization and gross margins, core business being stable and getting into the holiday season is good for the company. >> that's interesting. revenue growth, as we say in america and europe, flat lined. in japan, they were up, what,

41% year on your. that's because we had this tie up. is that just to highlight how important it is to get a deal with china mobile? if we don't get a chinese teal, are they going to be out of the market then? in what is the world's biggest mobile phone market? >> you highlight a very important point, ross. which is apple is a hundred plus billion dollar revenue company. subscribers china mobile, we have been seeing some coming to the what people are willing to stick out. you may be absolutely right. >> thanks for that.

plenty more reaction coming up on "squawk box." whatever happens, we hope you have a profitable day. good-bye for now.

good morning. our top story -- i'm not going to say this. hopefully you're not fed up with the fed. i know i look well fed. anyway, the fed is set to meet today. the central bank has a two-day policy meeting in washington. elsewhere, whenever apple reports, it's huge deal. so much conjecture swirling around. the shares were under pressure after the failed to excite investors. but it was up 7.5% since the last report. other headliners this morning include pfizer, archer daniels,

nokia and jet blue. and is there a doctor in the house? nbc news reports that the white house knew that millions would lose their plans. you can't keep your plan under obama care. some, anyway. it's tuesday, october 29th, 2013 and "squawk box" begins right now. good mortgage, everybody. i'm becky quick along with joe kernen. andrew ross sorkin is on assignment today. he'll be back tomorrow. on the fed news, ben bernanke will be gathering with other fomc members for a two-day meeting. a policy meeting is set for tomorrow. economists say this is likely to be more of a strategy session with no action from the central bank. the senate banking committee is considering holding a hearing on janet yellen's nomination on december 14th. the panel needs to vet the