the court has attached some real, yachts into the esm. do they succeed in keeping parliament in the political loop when it comes to any for the bailout? >> absolutely. i think that is clear from the conditions the court has set before the treaty can be ratified. these two key conditions -- they say germany possible liability must not rise above the 190 billion euros the authorized capital stock agreed to the initial arrangements without the consent of parliament. references to secrecy and a treaty must not mean the german parliament is not properly informed. what parliamentarians here are trying to work out is how these conditions can be implemented and the talk is of attaching a particle text to the treaty text the german president would sign. what is not clear is whether to do that would require a full debate of both houses of parliament. if so, it could slow down the process of the government is keen to get the stability mechanism up and running very soon. the plan is to do it in october. >> are these conditions enough to satisfy the p

they say the esm -- germany's esm participation will basically be restricted to whatever germany has signed up for now. ly have to see the judgment in paper because they're reading out paragraphs now. >> right. what we're getting is it does not exceed $190 billion without the aprooul proval of the lower parliament. they must assure the liability does not exceed the $190 billion euros without approval of the lower house of parliament. the euro has risen slightly after this verdict. your immediate reaction, mark? >> i think that conditionality is an important one. it tells us why the ecb has gone down the omt route. without actually passing an increase in germany's contribution to the esm, there was no possibility of it being increased. because if germany's not going to increase its contribution, no one else is. >> that caps it around the 400 billion mark. >> exactly. on that basis, someone else is going to have to step up. we've all identified the fact that the sum would never, ever be large enough to rescue either or both of italy and spain, and on that basis, of course, someone else

the budget debate coinciding with the constitutional court's debate on the esm. the inquiry -- and certain future of europe is in states like grease makes things difficult enough. germany says for the fun to work, troubled countries must implement reforms. >> without such reforms, nothing is going to happen in the member states. that is called conditionality. conditionality is an indispensable requirement for every european aid program. that is in that treaty. >> that government says germany's proposed budget for 2013 is solid. revenues are expected to reach 283 billion euros compared to expenditures of 302 billion. that would amount to a debt of 19 billion next year, but that is down from this year's 32 billion. >> germany has become much more shock resistant to. our power of resistance to such events has grown. >> but that is not enough to offset the opposition's concerns. >> your plans assume there will be no crises or downturn between now and 2016. who can believe or assume that? >> they can only hope. if the esm goes ahead, germany will be all -- will be lia

whether the german government is going to aprove the bills for the esm. but finally i think that, the market is going to take, take, get back to calm. in the short term. i think. >> now the bigger question is -- whether this -- this program -- that bond buying scheme is really going to help europe from its debt problems. is it going to help the problem? >> basically, i believe so. the decision made by the ecb is, to support the short term money market. and also, the ecb, esm is going to support the funding condition for the long term maturities. so, it is the esm and ecb takes place, i think that could help the financial markets to calm down. >> now, one final question about the outlook. we still have important events coming up. including u.s. jobs numbers, which are coming out later today. we have -- the meeting taking place next week. what is your focus? >> so i think that -- as long as the labor data, maintain healthiness for the time being, the chance of the qe-3 is not that high. but i basically believe that slowing down of the u.s. economy is very a

and on the legality of the esm, we also do have the election in the netherlands, as well. we're currently at the level of 127.86, euro just up by 0.2% against the dollar. dollar-yen at 78.21. aussie drar bringing back some ground today after falling yesterday. in the asian markets,doll small gains coming through. but let's check in with more detail across the region in singapore. >> quite a bit of a selldown here in asia, although we did see pockets of resistance as you highlighted. and also just a short time ago, we actually got data coming out from china. in fact just about a day earlier, coming in slightly below expectations, plus 13.5%. expectation was plus 14%. yuan lending slightly higher than expected. these figures are quite interesting because remember we had august bank lend figures that boomed way past expectations. the figure in dollar terms coming in somewhere around $111 billion. so i think that the fact money supply growth came in slightly below expectations, probably puts beijing somewhere in the middle ground in temps of easing. take a look at the market a

and the constitutionality of the esm. but particularly after we had a lawmaker complaining about the bond buying plan, comments coming out from a spokesman of the german finance ministry saying that they are still convinced that the esm and fiscal pact are still constitutional and nothing has changed regarding the constitutionality of the esm after that complaint about the bond buying plan. >> and it's also worth mentioning moody's this morning saying little new in the ecb bond buying plan, it leaves a number of uncertainties and will not rehe solve tsolve the can d. certainly playing in to the argument playing out across the world is whether the ecb has finally gotten ahead of its debt crisis this time or not. we'll see that there is not much action if you take a quick look at how u.s. futures are doing as we head to break. investors clearly on the sidelines this morning as they wait all of the major events later this week. we'll ask ben liechtenstein about that and more about that fiscal clive. with the spark cash card

julian, does the esm matter anymore? >> i think it matters hugely because the esm really is pivotal to unlocking the ecb buying. but as well the the along end of the market. so we need to assess exactly what it will be doing. and this report that you mention is quite interesting because it's rez renktsisurrecting an i didn't come to much with regard to the esfs, which would be that there would be a form of partial insurance. in other words, the authorities would take some of the loss, but only some of the loss in terms of whether there was a default in the country's debt that was being insured. the markets didn't like the original idea to have the esfs providing that partial insurance because there was concern the esfa wasn't strong enough as an entity because effectively it is reliance on government guarantees. but now the esm, the key difference is it is going to be formally capitalized. 80 billion euros. so therefore it could have a lot more credibility as a kind of mono line in this respect. and that's why the offici

above all, the optimism, the hope that the csn would be given the go-ahead -- the esm would be given the go-ahead by the constitutional court on wednesday by germany. what would happen if there was a no from the constitutional court judges -- people would rather not think about that. probably it would come to a severe downward correction, a severe slide that nobody really knows about ahead of time. >> let's get a closer look at the numbers. in frankfurt, the dax is not doing a lot on the day. unchanged. similar story for the euro stoxx 50, seven at 2528. in new york, the dow jones industrial is down just fractionally, 13,290. euro-dollar is trading $1.2759. >> we cannot go away from business. french president francois hollande says he has a plan to turn around the country's economy in the next two years. >> outlined the details of the plan, which includes a major hike for the country's rich. he wants a 75% tax rate for those making more than 1 million euros per year. >> french's resist -- france's biggest man is -- france's richest man is being accused of leaving to pay fewer taxes.

an important court ruling allows the european stability mechanism or the esm to go forward. esm bailout fund will be able to buy sovereign bonds to keep grate operate low for struggling countries. one may not need or want to use the fund as i sat down when i sat down with the prime minister of italy, mario monti. >> if this eurozone market comes down because of the announcement that this new instrument is available, probably the interest rate on italian government securities will go down, gently and nicely and we will not need to use the instrument. >> reporter: now the accounting people want to know what's next? talk to us about your priorities for 2014 and how much longer the italian people will have to face these austerity programs. >> the austerity part of the program will, i'm confident will gradually subside. it concentrated need of debt reduction was needed, and once italy next year, reaches the objective of having a balanced budget in cyclicly adjusted terms it will have to stay on that course and another thing, which i hope will begin to materialize in 2013 is to ha

. >> the european union's permit bailout fund, the esm, has cleared its final hurdle. the german president has signed the bill ratifying the fund. it will become law on october 8. ratification was delayed because of a challenge before the constitutional court, but in its ruling, the court did uphold the fund, but it placed limits on germany's contributions. it also strengthened the right of parliament to receive controversial information on the esm. other eurozone countries have accepted these conditions as well. >> in germany, the job market has been weathering the eurozone crisis relatively well. new numbers show that unemployment dropped in september, down to almost 6.5%. the head of the german employment agency warns that the pace of job creation is slowing. >> let's turn our attention to the day's market action. european shares rebounded thursday, following a steep sell-off during the trading session on wednesday. our correspondence sent us this summary from frankfurt. >> the german labor market stays in very good shape. this is a good sign, one of the few positiv

we had good news in terms of headline risk this week with the german decision on the esm.nd dutch elections. but there's still plenty of instability to come and i think draghi's actions put the onus now firmly upon the peripheral country leadership. >> and on that point, it's interesting to note the german parliament is preparing to invite mario draghi to address t the budget committee. that shows you sort of the political tension. t t tina, thanks so much for that. >>> and coming up next, trichet says the eurozone must make painful adjustments. >> we cannot ask the rest of the world to finance us eternally if we spend more than we earn. as simple as that. >>> markets get the bernanke bounce as the fed goes all the in on qe. >> marc faber tells cnbc that the fed is doing nothing for the man on the street. >> and trichet tells cnbc the central bank's program to save the euro should be subject to conditions. >> while we're looking reaction to the fed announcements, still keeping an eye on the euro. draghi apparently going to be invited to address the german parliament on the

the esm will be operating as of the eighth of october. the budgetary process is such, and to discipline associated with it by way sanctions, penalties, are in place as well. but there's more to be done. clearly. and the european common banking supervision is going to be a testing case. how will it be done? how encompassing will it be? i think there is no debate now that the european central bank will be right in the middle of that and will have the authority to supervise the major one, and elevate to its level any of the other banks that it would like to scrutinize and supervise better. how fully operated will be and how soon, all of those will be a test of the desired -- and the want to affect. i hope there'll be a middle point do make sense for the europeans themselves and for the european banks. i just happen to think that actually organizing that, organizing it soundly with appropriate bulletin and review and test of the banking system itself will actually be a significant improvement for europe. >> let me ask you one of the question

can borrow as much money from the ecb as esm wants to. that would mean monetary policy would effectively handed over from the ecb to the esm. that can't be. >> we'll get to kent in a second. we have a german auction where 1.5%, bund average at 1.42%. this bund auction technically uncovered. i did see that flash. it was technically uncovered. yeah, bund auction technically uncovered. we had one back in april as well which caused quite a lot of excitement. if you're only offering -- if you're getting 1.4% for ten-year money -- >> it appears -- they say the bid to cover was 1.8% at previous bund auction and this one technically uncovered. the average yield went at 1.24%, in line with market expectations. lloyds saying they expected demand to be bolstered by market participants saying in the case of downside protection out of ecb tomorrow, maybe this would be paper we want to hold. >> 1.1. germany is having problems -- >> getting people to show up on this low. this come on a day -- yes, we've had a better run in the market lately. we've seen

that's why italy's not going to access the esm fund. listen to mario monti because i asked him long-term growth in italy, where does it come from and what's the significance of this esm fund? >> reporter: talk to us about how you see this growth happening over the longer term? >> well, i see this growth happening, first of all, and this is not so much longer term. i hope it is short and medium term, through a decline of interest rates. because these unduly high interest rates on italian government securities, not yet reflecting the new and better fundamentals of the italian economy and public finance as interest rates hopefully -- as they started already, do come down, this will create more space for investment and for growth. >> so, rick santelli, there it is. here's a leader italy now saying that it is the threat of ecb intervention that's bringing rates down to more manageable levels because he felt that rates were too high and didn't fully reflect the fundamentals of his economy. what do you make of all that? >> well, i agree with h

the esm does need to be very much involved. now, in terms of exactly how it's involved, is it going to buy the purchases or is it some form of credit line? also, what role does the imf have? the imf could be issuing a credit line under these circumstances. but we don't know about that. it would certainly help, i think, if that were available. so, there's a lot of detail that really the euro group does need to specify inspect. >> it did seem to be a fairly detailed statement but still a lot of question marks on what was announced. thank you very much. >> thank you. >> julian, thanks for coming back to finish that discussion. kathleen brooks here on set with us as well. we appreciate your thoughts. want to get out now to ross, who's not here. he's at the ambersitti convention at lake como. what's coming up? >> we'll be joined by the co of eni and the ceo or eli lilly. >>> welcome back to the program. glencore taking the market by surprise delaying shareholder vote on xstrata merger saying there were developments overnight. >>> re

the german president can now sign the esm treaty and the esm can go ahead as planned. but, of course, it's never quite so simple. the devil is in the detail. the constitutional court also said they allow the esm, as it were at this stage, provided the $190 billion euros that germany signs up for as liability are really the limit, the lid, no further money from there. how cast in iron that is going to be remains to be seen, but this is the string that's attached to it. you'll be talking to michelle a little later on about the prospects of a spanish bailout. of an italian bailout. at that stage, the moment another country runs into bailout territory, of course, the german chair would go up and that's when the interesting bits start, because then we see how much the ecb program with outright bond purchases that are spoeds to be combined with purchases in the primary market by the esm, how that still works, or whether the ecb is going to be left with one leg standing and falling over and picking up again the tap for what politicians can't deliver. >> silvia, thank you very

the fact that italy is not going to access that esm bailout fund right away.uld monti's comments, along with the bond-buying program introduced by the ecb last week, instill confidence for u.s. investors in italy? what do you think, anthony? >> i think it does. and i think the reason why either mr. monti or even mr. van rompuy, the longer they wait, the thought is conditionality might be less severe. i think it's in their interest to sort of wait until the last minute. i think the good news is this program n an unlimited form, has as mario draghi has indicated, does reduce the left tail risk of financial markets. that should be good not only for europe but certainly for the rest of the world. >> the announcement alone pushed interest rates down, you know, the yield on the ten-year for spain, back below 7% italy, around 6%. so, it was just the announcement alone a positive. but, brian, he did leave the door open for later. he said, you know, look, if we decide to access it at some point, there's no drama, no stigma attached. we could but right now we don't need

there have been many rumors and speculation that the euro area members could leverage the rescue fund, esm, to 2 trillion euros. germany's finance inister said this would not be very realistic. on the other hand, the euro has been weakened by these rumors. >> the dax fell by one half of 1% to finish at 7413. euro stoxx 50 was down by 3/4 of 1%. the dow is trading slightly higher, 13,586 points. the euro is trading at about you of 1.2930. -- at a value of 1.2930. >> another big discussion is the pros and cons of genetically- modified food. proponents say it can help eliminate allergies or grow food stricken by drought. >> others argue that gm crops and foods can have a very harmful effects on the human body, including causing cancer. >> this rat is riddled with cancer allegedly caused by genetically-modified corn feed developed by the biotech giant monsanto. french scientists say their research proves dell inc.. eu agricultural ministers gave a cautious -- approves dell inc. -- french scientists say their research proves the link. the u.s. agricultural ministers gave a cautious reply. -- th

the big deal will be the court reeling on the esm. and then on the 14th, the euro group meets in cypress. now, let's supposing that the constitutional court goes well and the ecb lays out a plan, will that be the meeting in which spain says, we're now ready, can we agree on the continuelty of any bailout? that might be the way it works. and then on the 22nd of the month, germany's angela merkel meets fran's francois ohlaholla. what do you think, in september, will it all be in play? will we have a plan functioning that will get yields at below 6%? >> we may have a plan to get yields to around 6%. but i don't think we'll have the grand plan or the eurozone. >> that's an entirely different thing, right? >> entirely different thing. i think the purpose here is just to buy some time to see what can be achieved in a more practical fashion. in terms of reforming the eurozone, in terms of having a turn around in the weakest economies. and it looks like from the latest economic indicators, we are not there yet at all. >> that's the point, act

esm is buying primary issues. they're buying secondary issues.hey get around the legal requirements. tracy: a lot of jargon but they will do it? >> yep. tracy: krishna, thanks for being with us. a lot of stuff going on and europe apparently getting it to together. ashley webster will join us live from frankfurt throughout the hour. >>> back home, president obama fine-tuning his critical speech tonight at the dnc. what will he say about the economy and our massive $16 trillion debt? will it be as long as former president bill clinton's speech? one can only hope not. we're live from charlotte coming up. but first as we do every time at this day, at this time of day we'll look how oil is trading up, about 36 cents. $95.72 a barrel right now. ♪ ♪ i can do anything ♪ i can do anything today ♪ i cano anywhere ♪ i can go anywhere today ♪ la la lla la la la [ male announcer ] dow solutions help millions of people by helping to make gluten free bread that doesn't taste gluten free. together, the elements of science and the human element can solve anything

german constitutional court paving the way for the esm.see stocks hanging in there at 14-month highs in the european continent. our road map today starts with what could be the most critical tech announcement of the year. we're just hours away from the unveil of the iphone 5. will we get news of a new ipad, too? >> mark zuckerberg says the ipo of facebook is disappointing but they will not make a phone and will enter search at some point. is that enough to turn the stock around? >> now the german constitutional court decision is out of the way, we're waiting for the fed. will it deliver on new qe as stocks hang in here at multi-year highs. >> all the news around apple, in four hours apple's ceo tim cook is expected to unveil the iphone 5 at a media event in san francisco. it's expected to have a larger screen and offer 4g wireless and believed to be thinner and have a smaller dock connecter. the watch is on to see if apple debuts other products today, such as a mini ipad. the iphone alone, jim, analysts are expecting 10 million units sold

the esm bailout fund will be able to buy bonds to keep interest rates low for struggling countries.ne of those countries may not need or want to use that fund as i found out this week when i sat down with mario monti. >> if the you were ozone market comes down because of the announcement that this new instrument is available, probably the interest rate on italian government securities will go down. gently and nicely and we will not need to use the instrument. but now the italian people want to know what's next. talk to us about your priorities for 2014 rand really how much and how much longer the italian people will have to face these austerity programs. >> the austerity part of the program, i'm confident will gradual lly subside. because a concentrative need of deficit reduction was needed and once italy next year reaches the objective of having a balanced budget in cyclically adjusted terms, then it will have to stay on that course and another thing which i hope will begin to materialize in 2013 is to have beginning of an up turn in the economy. so stay on a disciplined fiscal cou

. >> we need to be patient and wait to see how effective the esm is before we talk about pumping more funds into it. >> the ecb president wants to go further. he tried to reassure german industrial leaders over his plans to buy of eurozone government debt. >> i too will help stabilize conditions in other markets, such as those for corporate and bank bonds. we look at the credit flows -- that is the most important objective of our policy action. >> german politicians say they would have liked to have heard more about the ecb strategy as well. draghi is set to address them on his plans to buy eurozone debt very soon. >> all right, let's find out more about what mario draghi has been saying here in berlin. for that, you're so joined by our correspondent. thanks for being with us. as we saw there in the report, draghi defended the approach to business leaders in berlin. how is his message received? >> that has been the big question today -- how does mario draghi defend the ecb policy of buying up possibly unlimited quantities of bonds from struggling eurozone economies, and his answer was

nobody believes that it is going to fail and that the esm is not going to forward, martin. >> i hopening us tonight. >>> back here in the u.s., if you're in the middle class, the richest americans are now 2 # 8 times richer than you are. we'll explain that. ♪ [ "the odd couple" theme playing ] humans. even when we cross our "t"s and dot our "i"s, we still run into problems -- mainly other humans. at liberty mutual insurance, we understand. that's why our auto policies come with accident forgiveness if you qualify, where your rates won't go up due to your first accident, and new car replacement, where if you total your new car, we give you the money for a new one. call... to talk to an insurance expert about everything else that comes standard with our base auto policy. [ tires squeal ] and if you get into an accident and use one of our certified repair shops, your repairs are guaranteed for life. call... to switch, and you could save hundreds. liberty mutual insurance -- responsibility. what's your policy? >>> as president obama and mitt romney hit the campaign trail battling over ho

the gsm -- esm is due to come into effect in october. high-frequency trading is a practice which involves enormous numbers of transactions carried out in a matter of seconds, using high-tech computer programs. >> high-frequency trading increases volatility and can cause severe aberrations and generally destabilize markets. because of that, the german cabinet has agreed on draft laws aimed at ending the practice. >> once again, chancellor angela merkel's conservative government is pushing for financial regulation. the draft legislation agreed to by the german cabinet would contain potential market instability caused by high- frequency trading. that is when computers buy and sell millions of euros of securities within seconds. the proposed rules would clamp down on a rapid, dramatic fluctuations in the market in several ways. >> registration requirements for high-frequency traders, transparency that would allow regulators to recognize abuses faster, the ability four market regulators to suspend trading if there are recognizable aberrations

. >> germany's constitutional court struck down appeals to brock -- to block the esm, giving the german president the green light with restrictions. >> at the markets have clearly been happy with a seal of approval. stocks have been on the upswing in recent sessions. >> but will the euphoria hold? another move to prop up the euro credit -- remains controversial. >> the european central banks's recent efforts to stabilize the eurozone are controversial. they're raised concerns among the constitutional judges with the announcement that it could buy unlimited and bonds from troubled eurozone companies. the german government had been dead set against this rule, but berlin says it is not worry. >> the mandate are a set from printing money to finance countries. -- bars it from printing money to finance countries. i'm convinced that ecb has not crossed the line and will not cross it. >> but if the german constitutional court sees things differently, it could turn things over to europe's highest court. some opposition members are in planning on it. >> the european central bank actions go beyond

this week, also the decision by the constitutional court in germany to give a green light for the esm pleased investors. there were also still pleased by mario draghi's performance, the president of the ecb, to buy the bonds of government -- of your countries. and it was a big day on the dax. we say in frankfurt for those figures. over in new york, trade is still under way for the dow jones industrial average, and it is high of 5.25%. 13,573. the euro trading above the $1.30 mark -- that has not happened in a while -- at $1.3016 pierre the past two weeks have been make or break time for the eurozone. >> that is right. the european central bank announced its unlimited on buying program. germany's constitutional court gave the green light for the permit. >> these are considered big steps for the euro, but they do not lessen the immediate problem for countries such as greece and spain. we have more from the meeting of eurozone finance ministers in cyprus. >> the delegates appeared relaxed as they arrive for the conference. for once, market pressure for immediate action to solve the crisi

they'll not buy until the esm -- >> you could get a rate check on thursday but people's expecting as that would be disappointing. >> i think you'll see a rate cut on thursday. >> a rate cut. >> and rhetoric saying we are prepared to enter the market and buy debt. expectations have been ratcheted up it's probably not going to disappoint. >> mixed economic data out. the ism number showing manufacturing below the expansion level. more important to you, those auto sales figures were pretty good. >> i don't know if there's been much talk about the auto sales numbers. two reasons i like car sales. one, it's a real number. it's not a survey. they don't revise it except for seasonals. the second thing, it's a big ticket item. if people are buying cars even if they say they feel lousy, they must be feeling okay about the future to buy cars. car sales numbers do look pretty good. >> are you expecting the vibrancy to come back to this market any time soon? you have volume that remains pretty deadly here. back from the summer holiday and yet, same focus as before people went away. >> i look at i

it will go on display esm, but it was retired last year. it will make stops in texas before landing at los angeles internatigtional airport on thursday. >> the rover found small iron rich objects that researchers are calling blueberries. this cluster is more dense and seems to have a different composition than past blueberries. they're very, very cool, very crunchy on the outside, soft on the inside. >> ewe not supposed to eat them are you 1992. >> no, they're just talking about the composition of them. >> it would probably not be any good by the time it got back out here. >> no, there's a lot of great things around the area. the fair in bluemont fair. they always send us a nice si . shirt. it's going on rain or shine, but rain is not a concern today. if you have a chance to get out there. >> awesome, you have to see el mer the big. >> we'll pass along his greetings. outside for us today, cloud cover is on the increase, but they will hold off for a little while. we'll take a check from our city camera, there is breaks of blue, and peaks of

esm made no impact and the debt crisis not solved yet, risk for economic activity do remain. remember, this index actually shows you what people that are seriously claim the market working are thinking about the action being taken in order to pump liquidity into the economy and get out of the crisis. what we've seen as of the august numbers was actually the worst in 2012. now with this new set of numbers, we really have to see especially now what people think the gtp for the third quarter will be. >> that's right. looking through the details, pa vish that, thapatricia, thanks . not too much movement in the wake of that survey. dow jones industrial average is expected to open lower by about a 35 points. nasdaq pointed lower by about 7. s&p 500 also looking to shed a couple of points. quek lo quick look at the theme broadly consistent. global 300 lower down by about 0.3%. european bourses, we'll see how the major ones are trading, red is the theme. ibex 35 down 1.5%, so we're actually seeing what started off as a muted risk tone now pick up momentum. >> good news for spain, tho

everybody is clear what the esm is going to do.on't allow direct purchase of support for banks without sovereign guarantees and a banks license for ecb is ruled out. on issue of ecs as a body agreed by the eurozone governments, i think that the injectiunctions be rejected. >> why are we getting a better response in equity markets? >> i think equity markets -- since also we've had buying volumes are low, people are back to work and people are saying, what's the picture? is the euro cries -- is there going to be action from ecb? what they said -- >> doesn't it seem like the answer is yes? >> yes. >> i'm surprised we're not perhaps seeing more of a bid here people aren't trying to front run activity they expected throughout the fall. >> i think that the longer the equity markets don't recognize that, in europe and elsewhere -- >> in spain, right, so spanish equities up 20% -- >> and other issues apart from europe. >> that's what i mean. i wonder if it doesn't tell us the fact china is slowing, the shanghai tests new lows is significan

september 12, german court rules on the esm. if they rule that that is an illegal bailout fund, then you definitely want to own these puts. spain is a problem but pair doxically, the worse spain gets the closer they get to a bailout. and spanish yields jacked up but the u.s. markets didn't even react to that. they shrugged it off. >> 4,000 points since qe 1 was announced. >> we have got a fed at the ready. i don't agree with it. >> we discussed it about diminishing returns. you're looking at these levels here. there is lack of liquidity. it does tell you the conviction among the buy side, they are not falling in. it's some place that they want to see how the market plays out for the next month or so. look at pandora. these are names that you want to be buying. names that have figured it out. >> i think we're right to be cautious for no other reason, the markets have been up almost eight% this summer. that is a dramatic run without a lot of great news coming out. for that reason alone, which is formidable. the problems they have

then we have the ruling on wednesday on whether that esm, the bailout fund, is constitutional.ays, on the play. cheryl: the euro is that $1.27. ashley: the fed will go with qe3. cheryl: ashley, thank you. ashley: you're welcome. dennis: it is quarter till. every 15 minutes we have stocks. nicole: fusion fanatics certainly. ford now is having to add workers to make more fusions. they are adding 1200 workers. this is to a detroit factory. it is basically a sign of confidence that the fusion is a big seller. the president told workers at a flat rock plant there that the market that they have seen for the fusion is going to times faster than the rest of the auto industry. when you talk about a hot car, the new fusion actually goes on sale this fall. they have gone so well with the pickup trucks. there is a look forward. right now up .25%. back to you. cheryl: thank you very much. we will see you 40 minutes from now. the united states has the highest u.s. corporate tax rate. presidential candidates are tackling these taxes with different plans. scott joins me now with what he thinks

adherence to the commitments and the esm has to be fully fulfilled. we don't have it. nobody has actually applied for anything so there's no commitments to be fulfilled and the esm is not functioning yet so this is sort of a program that's sitting on the shelf right now. there's another new piece of information we did just get. draghi said there would be no bond buying of portuguese or irish bonds. that's an important piece of information because a lot of people said, all right, spain and ireland -- spain and italy have it applied, but there are agreements and bailout agreements with portugal and ireland. maybe they will apply first. that's apparently not going to happen, mr. draghi says, or at least not happening this year. now, i've got to ask a couple of questions, two questions on the floor that everybody has been asking this morning. number one, why didn't mr. draghi actually cut interest rates, and he didn't say, and i think the answer is, number one, he raised the inflation forecast to 2.5% and now at the high end of the comfort range that they have had at 2%, b

believe there's a sense in the market that once the number can be agreed to that there will be this esm money that will come in and backstop it. that would be a major blow to europe's efforts to right itself if they back off this money. >> thank you, steve. i agree with that. lots of reasons. we're talking about spain. lots of reasons to worry about china as well. take a look. greece is higher by 8% while shanghai is low r by 5%. are the concerns about china overblown? let's welcome the head of economic china research at uvs. good to have you here. we can't hear her here in studio. >> i can read lips. she said it's great to be with you, michelle. there she is. told you. >> everybody is worried about whether or not there's going to be a hard landing in china. is there? >> yes, indeed. i think there's a lot of worries in china. we think china has landed as hard as it can. we're looking for a sequence shl recovery in the coming couple quarters. >> you're looking at gdp? what drives you to that conclusion? >> we're going to look at the gdp growth. so we're looking at industrial production.

with what has happened with the esm being approved this morning you start down this path of debt monetizationnd look at a 2009 moment like the u.s. had if you can get growth and currency to valuation, as well. the way i'm playing it is via the german names. you want to be in a lot of german industrials and exporters. it is in either the dax futures which i'm long or your etf. this is run up a little bit in the last week or so. be a little careful here. i don't know if i would get a huge position here. >> we said currency to valuation are you talking about to cut rates? >> not to get too wonky but when you have more inflation your exchange rates starts to converge. germany will have to tolerate inflation. i think they can do that. that requires them having a little more inflation in germany. >> completely counter to the way i approach the markets but the euro dollar today i don't believe any folks talked about this it settled for the first time since october of 2011. that is significantly but i don't think it sticks. i think it is a tremendous sale and goes to what bk and brian are talking abo

secondly, the fulfillment by the efsf/esm of their role? there is no esm. it is not in existence. the german constitutional court to rule on it. the two conditions, draghi told us last month are necessary for a bond buying program do not exist yet. that's why there's not going to be a bond buying program announced. here is what i think will happen. he'll announce details of what the program might look like. that's why this phrase unlimited is very interesting and sterilized. it's sterilized, carl, i think it is going to be a disappointment. it is not inflationary, not ex-pantding the money supply. that will be a disappointment. you might get a rate cut, lower economic forecast. they'll tell you inflation is subdued. most likely, collateral rules are going to be relaxed and finally you might get into lending facilities but i think it is unlikely. they announced them december 1, announced another one in february. i think it is a little early. the collateral rules, the most likely. >> right. as you've laid it out would the markets see that as a disappointment or ready for that? >> th

. >> i'm toure, andneli esme y l hav a frank talk about vulnerability. i feel scared already. >> all that plus talk about putting yourself out there. i' show you the precise moment when mitt romney lost the presidential camcampaign, and i not what youk. re in "the cycle" for thursday, september 27th. >> for all you political and baseball fans out there who knkow the game is played eve ur h on "the cycle," i have news for you. it's raining. so we're in a delay until next thursday. the incumbent is leading into october in the debates. they're both in battleground virginia, my home state today. we'll have more later. r presidential football.'s te >> personal foul, number 93, red. >> the officls lost control of the philadelphia/baltimore game among others. >> yes, unless you areurie r ouwhefl has kicked the replacement refs to the curb. >> the packers playing at the goal line. as wilson scrambles t keep it alive. the game's final play is to the end neic fed tate with jennings simultaneous. who has it? who do they give it to? touchdown! one guy goes on touchd

the esm is incredibly important, that's all the rescue efforts for europe and for its debt crisis.was deciding whether or not it would be illegal to participate to this level. why is this so important? you're not hearing anything about europe on the campaign trail. and i'll tell you why. because whoever is going to be the next president is going to be watching very closely as other people have a very big say in the future of the american economy. here's why. the european union in the u.s. is the number one trading partner. we have a trillion-plus direct investments in the e. nuchlt. $2.7 trillion in financial commitments. it is remarkable the close ties between these two. and most of the countries in europe are in a recession, some in a double-dip recession. this german court ruling critical on the eu and its bailout. that's why futures and stocks are at this point because this potential legal hurdle has been crossed. >>> thank you. 26 minutes past the hour. the water came without warning. coming up, whole neighborhoods swamped after a dike holding back a rain-swollen pond bursts.