this is nightly business report with tyler mathisen and susie gharib. >> our dividend stock adviser guides and helps to generate income during the period of the low income rate. we are the street.com. >> deal or no deal? on capitol hill, the meetings continue behind closed doors, on wall street, investors watch and wait, wondering whether softening rhetoric will drive the bargain. >> and the glow back into recession, and china, the largest holder of our debt has

the toughest words yet for washington. and the health of the exchanges, and now that some of the issues plaguing the federal health marketplaces have been identified, are they too complex

>> that is a shorter period of time than republicans wanted because they wanted to preserve the lower sequester spending levels as long as they could. the debt extension level would be through the middle of february, february 7th to be exact, shorter than democrats wanted, there would be a budget, a negotiation at that time. there does not appear to be a rollback or appeal of the device tax that some republicans asked for. there will be income strength and subsidies under obama care, and as a trade for that, democrats are going to get something labor unions have asked for, which is the delay in insurance tax, which labor unions complain hit their taxes too hard. >> hi, john, it sounds like some of the main issues that were on the table in the beginning have been pushed off. this is all about pushing all the problems down the line. is this what it has come down to? there is no credible plan about getting long-term spending under control, right?

>> well, the plan susie is to commence negotiations. you know, this is a stop gap first to reopen the government, second to remove the threat of a debt default. but it is in the service of creating a budget negotiation between the house and senate, accelerating one that was stalled earlier in the year. but yes, the assumption on all sides is that they negotiate some sort of deal, big or small, that relieves part of the sequester, but substitutes longer term entitlement savings. and the longer question is whether it is a small deal and whether there is revenue that democrats have asked for in the form of closing tax loopholes. >> thank you so much, john harwood reporting from washington. and optimism about a possible washington deal sparked a sizeable u-turn in washington today, the dow released a triple digit loss, good things came in big packages for investors, the

small cap stocks and the s&p 400 index of mid-cap companies closing at historic highs. at the end of a breathless day of waiting for any news out of washington, the dow rose 64 points, the nasdaq up 23, and the s&p added seven points. and joining us now to talk more about the latest developments in washington and what the uncertainty means for the washington and the economy is the chief strategist. greg, good to have you with us. you heard what john harwood just said. i would like you to add to that if you know of anything that is different. a week or so ago there was talk we were not going to negotiate anything having to do with obama care as part of any deal to raise the debt borrowing limit or reopen the government. and what john just described is there would be some movement on

income verification as part of obama care, and the tax on unions, that they found objectionable is going to go away. should we just watch what they do? >> absolutely, i hate to be the skunk at the picnic, but i would point out i haven't heard anything from the house, these bipartisan groups are getting closer to a deal. the house will weigh in, it will not be warm and fuzzy from that body. number two, even if we get a deal, guys, all we do is postpone the crisis, we kick the can down the road. there will be another crisis in january on the government staying open, a crisis in february on the debt ceiling. so it is not as if we're just to just wrap it up in a neat little package. >> and i think you just nailed it there, greg, because everybody watching this process, whether you're a democrat or

republican is so frustrated. everybody around the world is so frustrated. who won when we do get the deal, who won and lost, and where are we going with the next round? >> well, you're exactly right. and i would say obviously, there is not going to be a default. chances of default are like 2%. that is not what the market is worried about. i would say, though, if we just have continuing crises, one after another, are we going to shut the government down again? that has a corrosive impact on the government. for business psychology, it is going to be fragile. >> can you imagine a world where we really came to long-term agreements on budget policy and tax policy and on levels of debt and what that would do to business confidence and growth in america? >> amen, brother, what people

want is predictably, and even later in the week, there is still not predictability. we still have a lot of issues to go through. two very positive stories, the fed will have to keep very do s dovish for weeks or months to come, i think the first time they really think about tappering will be in late january, that is a good story. number two, despite the budget deficit, it is plummeting. we get the numbers on the previous fiscal year, these will be shocking figures showing that the deficit is falling dramatically. >> in a few words, greg, does the government open by the end of the week and what if there is no deal, real quickly? >> yeah, i think it opens by the end of the week, but we still have a lot to get done. >> all right, chief strategist at the potomac group research. and with no real deal on reopening the government, companies big and small are left

in the lurch. and they can't make long-term spending and planning decisions. mary thompson has more. >> reporter: as lawmakers battle over the budget, the corporations face a struggle of their own, how to plan for next year. here is the ceo trader, bill gerber. >> i think people are just not able to assess because the markets are so uncertain, on where they should be, the type of environment they should be in. so people get in a wait and see mode. >> reporter: for over a year, americans kept a tight grip on their cash, a grip ligkely not o be loosened. if the deal is not reached, mandatory budget cuts known as sequestration could take everything. here is former city group chairman dick parsons.

>> if they had confidence they knew what the landscape would be doing, they would start to invest again. >> reporter: given that washington kicked the can down the road, that is a big if. now, a director at sprint, honeywell and prudential said it is likely they don't know when to spend because they could step on a bomb. firms like the new jersey based flex line, a maker of metal hoses. in an e-mail, the president wrote, the temporary fixes don't allow us to plan, it makes revenue streams and planning chaotic, the blanket orders go out the window, lead times get cost, and it is a mess, a mess a temporary fix wouldn't clean up. for nightly business report, i'm

thompson. and word thatçó another company will be idle. boeing, the aerospace giant says they may furlough workers at their security unit because of stock work orders and installations where some of the employees work, funding cut's with washington and a shortage of government inspectors. some top bank inspectors are worrying about the dire consequences reaching the borrowing limit, something that never happened before. they described a bleak situation, saying as you get closer to it the panic will set in, and something will happen. i don't know personally when that problem will start. deutsche bank has been making contingency plans in case of the default, adding you don't want to go into all of it. this would be a very quick spreading disease. and the managing director of

the monetary fund speaking on nbc's "meet the press" sunday. lagarde warned about the disastrous impact of a default on the world and the country. >> if there is a degree of destruction, that lack of certainty, the lack of trust in the u.s. signature, it would mean massive destruction the world over. and we would be at risk of tipping yet again into recession. >> lagarde also said that creative accounting would not be the solution. that the u.s. has an obligation to the rest of the world to preserve its safe haven status. but perhaps the most critical word on keeping the government open came from china. the nation called for a de-americanized world, along with the u.s. american dollar and the currency issue.

the spokesperson said the destinies of the people around the world should not be left to those in a hypocrital government. and what they see in washington, at the government, we take a closer look. >> reporter: the political grid lock in washington is almost as big a topic in china as it is in the u.s. that is what happens when your country is the largest foreign holder of your debt. i hope they can talk it out, one man says, that is our hard earned cash. china is frustrated that the u.s. is playing what it sees as a political game with the global economy. if american lawmakers can't reach a deal by an october 17th deadline on raising the debt ceiling, the united states could default on its debt, potentially hurting the world and china. the u.s. debt ceiling debate is in all the chinese papers. this one says, the clock is ticking, china urges the united

states to clean up its debt problems, and this one says that the us debt ceiling is ruining america's credibility. in one editorial, the news agency called for a new de-americanized world order. but america is not the only one being blamed. people here are angry at their own government, too. chinese politicians need to do something about this, he says. china maintains controls on its currency, helping to support exporters here. so it has ammassed huge dollar reserves and can't do anything about it, other than invest in treasuries, $2.3 million worth. they are looking at the surprised public. america sees itself as a super power, he says, now we know they're injury like everybody else. for nightly business report, in

beijing. >> still ahead on the program, why the government shutdown is forcing one rural family into a more expensive mortgage. paying more for a new home than they ever expected. first, we'll look at how the markets closed today. >> well, if the government shutdown stretches into a third week, time may have run out for some home buyers. a small but critical program for home buyers is still on hold, leaving the would-be homeowners in the lurch and costing them thousands of dollars.

>> reporter: the good news is, the couple were able to sell their small home. the bad news is the government shut them and their kids out of a home. >> we get the call, you're approved. but the government is shut down, and your government-backed usda loan can't be processed so therefore you have to wait. >> reporter: the malloys had planned to use a department of agriculture loan, 30-year fixed product designed for families like them. but with their current home sold, and them scrambling, they couldn't wait any longer. >> we were earither looking at e contracts or move to less desirable loans. >> reporter: the family switched to another loan, which required a $10,000 payment, and higher fees. their payment is $150 more than

it should have been. >> my wife and i are just middle class working americans, and to have a fighting match between congress and the senate and the white house cost my family their home. and my family $10,000. that is a lot of money to us. you know, we don't normally have that. >> reporter: the usda program is small, barely 2% of the market, but it is a big deal to rural communities who rely on this type of financing for more than just loans. but for real estate, construction, new jobs, even updating infrastructure tell telecommunications. >> reporter: for the family, it meant putting a hold on new furniture and other items for

the family. >> it sure affected all seven members of this house, costing us dearly. >> reporter: diana oleg, nightly business. and we begin tonight's market focus, netflix is in talks with the cable company about building new cable boxes. it could include comcast and suddenlink. the news sent netflix to $324.36. shares of whirlpool dropped, customers were delaying big ticket purchases in the last week of september and into october because of the approaching debt ceiling deadline. but it is not all bad, the research firm also expects purchases to rebound once a deal has been reached in washington. meanwhile, stocks fell today.

and price cut to $51 a share. the firm believes expedia will decree increase competition here in the u.s., the stock lost, and shares of micro devices. web bush updated that company to out-perform for neutral. they say the chip maker will trade higher if sales of new gaming consoles grow. the stock up more than 3 and a half percent to $3.97. >> so how long do you think that you will have to keep working? a new survey says longer than ever. that is because of the recession's impact on retirement investments and home buyers. a new poll shows that nearly half of respondents over the age of 50 now expect to retire later

than they previously planned. and many say they will have to keep earning money even after they officially retire. if you're looking for a size building increase in your social security check or veterans benefits it is not likely to happen. they suggest the year's increase will be about 1 and a half percent, the suggested boost since the benefits began back in 1975, the main reason, consumer inflation as measured by the government has not risen over the past year. it is almost two weeks now since the rollout of those health care exchanges. computer problems stopped millions of americans from signing up for the new insurance plans. but is there any progress in fixing those problems and can they be fixed? >> reporter: government contractors are continuing to make fixes to the federal exchange. last week, health and human secretary kathleen sebelius says that the problem will be

resolved, but couldn't say when in the future. >> that is what we're aiming for, no wait time. >> but analysts and insurance executives say the on-line flaws in the way the insurance market was constructed are more complex than a simple glitch. it could take longer to solve them. >> we're in a place where there is so much wrong, you just have to get more of it fixed. we have to plow through it. >> it is early in the enrollment process which runs for six months. but the obama administration has targeted covering 7 million people under the affordable care act through the exchanges, amounting to an average of 39,000 people a day for 180 days. industry analysts say that insurers have so far seen a few thousand enrollees make it through the bottle neck, and

there were many mistakes. it required manual correction. >> right now it is not that big of a problem, because the carriers can do manual intervention and clean it up. but again, once we get it done in large numbers there is no way they can handle it. >> the obama administration compared the rocky start to the federal exchange to the launch of medicare part d in 2006, which was doubled with problems, fixed in months. but this could be more complicated. in no small part because of the complications. and coming up, how the three winners of the nobel prize make you a better investor. and the bond market was closed for columbus day.

>> price of crude oil ended slightly higher today, but gasoline prices are falling fast. gasbuddy.com says that consumers in 16 states can now find gas for under $3 a gallon from new jersey to mexico and ten more states seeing prices dip that low later this week. a national average for a gallon of gasoline would right now, 3.e cheapest found in texas, just $2.70 a gallon. and three will share the nobel prize for economics, not peace. more on the winners for today. the university of chicago,

nobel prize winners, determining what the price of stock value is, eugene fama, called the father of modern finance, says that all new information is immediately priced into stocks value. and after the news comes out, it is folly to try to predict it. according to fama, they can't do it. but the american from yale says that markets can sometimes behave irrationally, depending on human psychology, going through missed periods of pricing. think of the soaring housing boom, and now the long bust. >> i have a certain belief, that i tend to think of my own work as a minor addendum to a huge body of work that others have

generated. >> the third winner, swede lars peter hansen, found that mis-pricing because of irrational behavior is at issue. the nobel committee could be saying the state of modern financial theory is that both schools have merit and need more study. ultimately they're awarding the ground-breaking research from these three that have stood the test of time. they are looking at buying because they can't predict the future, or investing. they talk about changing over time. >> congratulations to the three of them. it is really interesting that they can't really predict the short-term direction of the stock market, but they can predict the long-term. and that is why the index funds

came into existence. >> i think they give you the best bang for your buck, the index funds. >> i think they do. and that is it, i'm susie gharib. >> and i'm tyler mathisen, have a great evening, we'll see you back here, deal or no deal. >> nightly business report has been brought by street.com. tools for ever-changing world, our dividend stock adviser guides during a period of low interest rates. we are the street.com.