. >>> what's the fed? >> the fed? f-e-d, fed? the federal government? >> what's the fed?> the fed? i don't know. >> most americans don't know. we give the fed enormous power. the fed loiks that. >> americans have always been reluctant to give too much financial power away. that's smart. but we still need somebody to foster conditions for a healthy economy. >> really? your dollar will be worth just as much tomorrow as it is today. >> the dollar lost 96% of its value. >> he said housing prices wouldn't crash. >> pretty unlikely possibility. never declined house prices on an admission wise basis. >> he said, they're not printing money. but they do. now she's going to be in charge. >> it is definitely one of the most important economic decisions i will make. >> it is one of the most important jobs in the world but the people don't know what it is. >> the fed, i don't know. >> the fed is small group of old white people who get to spend trillions of your dollars in secret. >> no secret of our government officials should spend money out of thin air. >> are you fed up with the fe

. >> the fed? f-e-e, fed? john: what is the fed? >> i don't know. john: most americans don't know, yet we give them enormous power. the fed likes it. >> americans have always been reluctant to give too much financial power away. but we still need somebody to foster conditions for a healthy economy. >> your dollar will be worth just this much tomorrow as it is. >> the dollar as low as 96% of its value. >> not everybody likes it. i think it will -- >> is a pretty unlikely possibility. we have never had a decline of house prices on a nationwide basis. >> we have also said that there not printing money, but they do. now she will be in charge. >> the number one most important economic decision i will make. john: probably the most second powerful job in the world, yet people don't know what it is. the fed. >> i don't know. john: a small group of old, white people who get to spend trillions of your dollars in secret. >> no secret to ball of government officials should have the authority to create money out of thin air. john: are you fed up with the fed? th

. >> the fed? f-e-e, fed? john: what is the fed? >> i don't know. john: most americans don't know, yet we give them enormous power. the fed likes it. >> americans have always been reluctant to give too much financial power away. but we still need somebody to foster conditions for a healthy economy. >> your dollar will be worth just this much tomorrow as it is. >> the dollar as low as 96% of its value. >> not everybody likes it. i think it will -- >> is a pretty unlikely possibility. we have never had a decline of house prices on a nationwide basis. >> we have also said that there not printing money, but they do. now she will be in charge. >> the number one most important economic decision i will make. john: probably the most second powerful job in the world, yet people don't know what it is. the fed. >> i don't know. john: a small group of old, white people who get to spend trillions of your dollars in secret. >> no secret to ball of government officials should have the authority to create money out of thin air. john: are you fed up with the fed? th

>> the what, the fed? >> the fed. >> f-e-d, fed?little about the federal reserve even though it has the power to play around with trillions of our dollars. i should report on it but the details are boring and i work on competitive television. if i bore you and you stop watching i lose my job i lose the show which i would like to ep couldn't. i have avoided the show on the fed until now. you don't see any writers put out best sellers about the fed. his latest book is a best seller and it is about the fed. why did you put in this boring institution? >> it is not that boring. the i write thrillers. so my job is to give you a great beach read from cover to cover. but if you walk away from the book having learned more that is good. the fed is fascinating considering how much secrecy it shoruds itself with on purpose. they formed is in secret. federal officials stormed out didn't even use the train station here they went to hoboken said they were going on a duck hunting trip. they went down to jekel island and hatched a plant. >> prooef y

what the fed did was twofold.supplied liquidity, through ordinary open-market operations and through use of the discount window -- very standard techniques of supplying liquidity. but, under the guidance of chairman greenspan, they also sought to reduce the demand for liquidity, in other words, to use what you might call tender persuasion to convince people that they needn't go seeking liquidity, bidding for liquidity, that it would be there. schoumacher: in 1929, the fed tightened the money supply. this time, greenspan did the opposite -- the fed's message was, whatever you need, we'll give you. greenspan had said the magic words, but was anyone listening? on tuesday morning, the market continued its dive, plunging 225 points. by noon, the market was approaching complete meltdown. buying was at a virtual standstill. then, buy orders began trickling in, like water upon parched land. the buying trend accelerated, and wednesday morning, the world awoke to headlines touting the largest rally in the big board's histor

thank you. >> you are the fed owl.got a graduation cap and eating a tootsi pop. >> i'm on the show and he insults me. >> do you think you're safe from the obama care rollout? we'll explain. >> the high price of the tickets to the sox game tonight. love you, steve. i mean that. the american dream is of a better future, a confident retirement. those dreams, there's just no way we're going to let them die. ♪ like they helped millions of others. by listening. planning. working one on one. that's what ameriprise financial does. that's what they can do with you. that's how ameriprise puts more within reach. ♪ 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. usaa. we know what it means to serve. . >>> the chair

the fed mentioning inflation here.en though yesterday said or recently said we could have double-digit inflation. the concern is stagflation. david: i know a lot of people are making money with their investments on wall street, but people saving money, 2% is enough to wipe out all of what they are getting in fixed income. with the low interest rate doing a lot to hurt particularly the retired people. liz: we are well off of our highs of 2007. it is low inflation as well. david: there is one thing that has to be emphasized. when you look at food and you look at oil, which is not in these figures, you are seeing very high inflation. six to 8% as a result of the stuff people have to buy. people cannot afford not to buy gas or heat their homes with oil. tracy: tuition has jumped exponentially. liz: another issue that matters. ashley: time goes so quickly when they are here. david: we talk a lot. ashley: keep it right here on fox business. talking earnings with the cfo of gps defines maker garmin. pathetic. tracy: all right

bursting at risk assets up the wall of worry yes which channel john hilson wrath and dabble in some fed predictions with the help of chris martin since and tom hartman of the big picture dismisses the fray with a unique perspective on the debt ceiling let's get to the. job owning isn't simply the problems of those who work a few hours per week on the capital last week for. at the federal reserve chairman bernanke you sent bond and currency markets into a free for all in april of this year all because he simply hinted that the fed would eventually trim quantitative easing it would capture the world's attention was the two plus week affair with the shutdown that we're calling a debt trench as an whole never mind the very institution charged with funding the nation's purse held the world never mind that at all but fortunately the markets have resumed some level of normality and america's favorite band is being safely webcast to an i pad near you thank goodness to joining me now to discuss it all is nowhere and hello hello now bob before the end of the shutdown you know we took a look at th

on your toes whoa does all of this of the fed's profits. in two thousand and twelve.rofits were about eighty eight billion dollars the fed remits all of its profits to the treasury so the more the fed pays out and interest on these reserves to banks the less it gives back to the treasury or the u.s. taxpayer there was a trick question there. your question i love it now the real question is why is the fed paying interest on answers on reserves and second question more importantly can i keep my money if. you cannot keep your money at the vet only member banks now i did find a two thousand and eight fed press release which stated quote the payment of interest on excess reserves will permit the federal reserve to expand its balance sheet so basically the fed has pumped three trillion dollars into the economy through kuwait and it's now pulled two trillion back out by paying interest on reserves well there you have it thank you just in and bob actually you recently sat down with the stockman to discuss this very subject now yes i did i spoke with david sparkman and he is t

the fed is absolutely confused, therefore the fed is confusing the market. the back end of this is a complete joke they are whispering. when you really think about what is going on here, it is unelected, unprecedented. what we have here is the fed is losing the battle, the battle of volatility. marking time, everybody who has spoken today is figuring out if it is december or march. the fact of the matter is the fed created that bubble. people cannot get out of that bond bubble. it is about as liquid as time. the reality is that is a huge problem they are trying to fight in the face of economic gravity. if you are trying to predict gravity, you are going lose that. ben bernanke will lose that big-time. liz: the fed is confused and therefore the market is confused. but do you feel that way or do you think the fed is following the right process? >> i would have never done qe elect the fed is doing it. i would have started raising rates a while ago. i do agree we are in a bond bubble. i don't know if it is epic or not, but we are in a bond bubble. the fed is con

she's currently number two at the fed. it's expected that she'll likely continue with what we have seen from bernanke, keeping interest rates low continuing with a bond buying program. the big question from her, if she does get the greenlight, when will she scale back the bond buying program. she's no stranger to the fed or to washington. she was a part of the counsel of economic advisers under clinton. and by the way, she will become the first democrat since paul volcker if she is confirmed. will she be confirmed? john cornyn the number two in the senate expressing reservations about her. it's expected that she will get the nod, that she will get enough votes to move forward. as we have seen, of course with this government shutdown, nothing is easy here. so i anticipate there will be to some extent a lot of discussion, a lot of back and forth about her nomination. but it is expected to ultimately she will get confirmed and luke russert will have a lot more on that. luke? >> yes, indeed, kristen, sort of to echo your own c

it's a debate about the current fed policy.nd it's interesting to start with this, the word continuity. i think that you won't see any significant difference between the bernanke chairmanship and the yellen chairmanship. they believe that given all of the information that they have about inflation and expected inflation, and given all they have about the fact that the u.s. economy is performing way below potential as measured by the unemployment rate they believe it's the best fed policy right now is to keep interest rates near their zero bound and use quantitative easing. they've been very clear about that, and they've been very clear about the evidence they will look to when they make the decision to continue or to begin to taper. there is no hiding here in terms of what they're thinking and what they're looking at. >> you would acknowledge there is some danger, some risk to use quantitative easing, there could be unintended consequences. >> i think the unintended consequences are basically alleged to be about the build up of

so how does this work or not work in the reverse when the fed. begins its exit strategy here's what he said. the fed now is going to do the reverse of that they're going to step into a market where they are selling into this market now so that price of these things are going to be falling and the fed's going to say hey pimco wouldn't you like to buy a billion dollars of mortgage backed securities which are going to fall in price here you go and i'll guarantee you they're going to find all kinds of reasons that pimco doesn't have the money or what doesn't want to do that at this point and it makes sense it's easy to buy things from a market where you're giving them a profit it is hard to sell things to people who are going to end up taking losses on those same things so it's not an asymmetrical process we already saw that in june we saw the ten year treasury rate go from one point to one point six to two point six percent of one hundred basis point rise just on the i that they might slow the purchase from eighty five to seventy five billion that's

and currency markets into a free for all in april of this year all because you simply hinted that the fed would eventually trim quantitative easing you know what captured the world's attention was the troops last week affair with the shutdown that we're calling a debt trench as an whole never mind the very institution charged with funding the nation's purse held the world never mind that at all but fortunately the markets have resumed some level of normality and america's favorite band is being safely webcast to an i pad near you thank goodness two joining me now to discuss it all is bob a little wary and hello hello now bob before the end of the shutdown you know we took a look at the evolution of the borrowing costs of the u.s. treasury can you update us on this show only if we can get to the fed right after this only ok ok you got it we showed the start a couple of days ago this is before the shutdown actually occurred was we're still in progress and the resolution has yet to occur at the very bottom we see this is one months three months six months twelve months out and this is how fa

the fed's effectiveness depends on the commencement, ingenuity and integrity of the fed staff and my fellow policymakers. they serve america with great dedication. mr. president, thank you for giving me this opportunity to continue serving the federal reserve and carrying out its important work on behalf of the american people. [applauding] liz: while not yet confirmed, she nonetheless makes history as does the president who called her a proven leader and brooklyn a brown graduate and the professor and longtime fed member who has been called one of the best fed forecasters has been nominated as federal reserve chairman. i guess it will go by chairman even though it is chairwoman. watching this pretty historic moment. the big question comes she didn't give any hint what she would do as bond buying purchases are concerned, so what is the next step? ben bernanke still has a few more months to go. >> about the chairman out of want start the program before i left with the way things are between the executive and legislative branch, i don't know if she will get that opportunity. it will co

that still leaves two fed meetings for ben bernanke to chair which the fed may begin to taper back oney printing they have been engaged in but will they? joining us is "wall street journal" chief economics correspondent, jon hilsenrath who knows ben bernanke very well and former dallas federal reserve senior vice president michael cox who also knows the fed very well. jon, i will go to you. you know ben bernanke. the chairman are solidly with the fed but they worry about their legacy. ben bernanke has two more meetings which he can prove he can do something other than printing money. i'm just wondering if concerned about his legacy he may take that opportunity before yellen comes in to do that, to taper back, what do you think? >> couple of things. actually one is, you know, polite modest correction. david: sure. >> he is actually got three meetings. david: ohing okay. >> one in october, one in decent december, leaves at end of january aad they have a meeting at very end of january. david: thank you for the correction. he has three meetings. >> he has three swings he can take at this

what would you like the fed to do and what do you think the fed will do?ike to see them do is what we've referred to as the jeremy stein argument. jeremy stein one of the fed governors, harvard professor, expert in financial markets and arguing the fed has to be very careful about the reaction in financial markets and whether or not they're going to foster a bubble or not foster a bubble. the september 18th meeting it seems like what the fed decided was that jeremy stein argts doesn't hold any weight. they're about data dependency, the unemployment rate, they're all about the payroll report, they're all about inflation and gdp and not about whether or not there's an inflation or an asset bubble going on. i'd like to see them bring that argument back and talk about the reaction in the financial markets and not just say that they're ignoring it and just looking at the unemployment rate and gdp to make their decision when to taper. >> all right. we're about ready to get that decision so i want to give you the update. the dow down 28 points right now, the ten-

finally, what is the feds exist -- what is the fed's exit strategy? will they be selling at some point with upward pressure on interest rates? i don't think so. that would defeat some of the purposes of what they're doing. but there has been discussion that, to the extent they need to begin withdrawing some liquidity, they could do it in another fashion, such as what we pose. and if recently saw something in millionr of faith $500 -- order of a $500 million or a $6 billion republics, what will that do further dealers rely on this form of financing? 2009. purchase market has not inclined as precipitously because we do not see the same run ups. the difference here, if you look at the blueline that represents existing home sales, that has continued to go up even though purchase applications have gone up very slightly. a couple of drivers behind that -- >> let me just clarify. the main applications for mortgages to make a purchase. >> application for mortgages to buy a home. jargon.into the we really think this market come in terms of the mortgages to pur

we have an accommodative fed. we think with nowhere else to go, stocks remain in the asset class of choice. we go higher from here. these dips like today are buying opportunities for those on the sidelines waiting to come in. >> but bob just said the market's fully valued. putting this whole bubble idea aside, do you agree it's fully valued? >> i would agree it's fairly valued but we know stocks can move to an overvalued range for quite a while before they correct. we're nowhere near the pe multiples in the 20s at 2007 or 2000, so -- and we can also have, you know, multiple expansion. we're in a decent earning season. we continue to do well. >> peter anderson, we haven't forgotten about you. where do you stand on this issue of valuations? i mean, you -- you're in that camp where bad news still can be good news for the stock market, right? >> absolutely. i mean, listening to all the other comments, it is very hard as a listener to make sense of all this data coming in. look at this calculus going on. now we have th

distrust of the fed among the american people that to have fed chair who can go out there and talk to them and are frank and approachable way i think could be very very beneficial. and that's something that comes from being one of the best teachers here on the berkley campus. >> rose: okay. i'm going to ask you some questions everybody asked and we asked them again of different people because they come at these answers from different perspectives. how is she different from ben bernanke? in terms of her economic philosophy, her use of monetary policy, and her use of the sort of tools that ben bernanke has been using. >> so i think there's certainly a lot of continuity with chairman bernanke so i think had he do share a pretty similar world view and i think a similar concern about both inflation and unemployment. i think she might be somewhat bolder. so many people will say the first word out of their mouth on janet is she's so nice. she's also tough and i would expect her to make forceful arguments and to be pushing for perhaps some different policies as she thinks she sees fit. but i

the bernanke fed, the greenspan fed. it will you-l now be the yellen fed. you heard her talk about the personal -- how she takes this stuff very personally. and the ideas of continuity, trust, consensus building, all very important, and communication. i think you'll see that from janet. i do think you'll see she is committed to stimulus. no question about that. but she does have an entirely different set of challenges to deal with than ben bernanke did. that's not only stimulating the economy, dealing with these external shocks from its own government, washington and shutdowns, but also dealing with the wind down, eventual wind down of the balance sheet. that's very difficult. >> i had a thought while i was watching janet yellen. the fed has not done a good job or been able through ben bernanke able to connect with the american public. i thought janet yellen looked to me like maybe she has a chance. >> she has a great chance. >> to talk to the public and explain what the fed's doing and why they're doing it. over the course of the last five years it's been

the fed was well aware what the markets expected. said several times in the minutes and several members say the decision on the taper was a, quote, close call. i want to go through each side here. supporting a taper, the economic data consistent with -- was consistent with taper from new. cumulative progress in the labor market, the credibility of the fed at stake and concern that no taper would send the pessimistic be message on the fed's economic outlook. on the other side those saying the data had been disappointing, the debt ceiling debate loomed, interest rates were up and they actually were specific about concerns about the effect of rise in interest rates on net interest margin and a risk management approach saying the better part here, the more prudent approach was not to taper. but we also learned in these minutes is that the federal reserve staff gave what i consider to be a very -- series of pessimistic warnings to the fed including concern about the effect on mortgage rates and mortgage applications. the effect of financi

you don't fight the fed.ace to be right now is the equity market. >> is that where you are? >> that is where i am. i don't see any justification unless you're a very old retired person to have any exposure to the bond market. i don't understand it long term. especially any kind of long term investor. you have to have exposure here. even utilities of all places seem to be giving me an indication of interest. >> they pay interest. that's why. thanks, ben. so we're going out. again, the story today, the s&p 500 at a new all time high. the dow down about ten points. blame ibm. get ready. here comes google's earnings as we get ready for the second hour of the "closing bell." >>> look at that. it's a fresh closing high for the s&p 500. the dow jones industrial average just shy of turning positive after being down triple digits at the open. welcome to the "closing bell." kelly evans in for maria bartiromo. bill griffith with me. two greens. a far different picture than how things looked a few hours ago this morning.

live by the fed, we die by the fed. when the fed spoke today there was the usual panicked selling by the very people who bought stocks because they like what the fed's doing. don't worry. it rights itself in a couple of days. just stay the course. "mad money" will be right back. >>> coming up. silver spoon? from the breakfast table to taco night, b&g foods has the menu covered. do these brands belong in your portfolio as well as your shopping cart? find out when cramer speaks to the ceo. ask later, savor the flavor. buffalo wild wings is up big this year, and a piping hot earnings report has its stock up again today. but as it takes beer, wings and sports internationally is the real growth story still coming, or is it ready to cool off? don't miss cramer's exclusive. plus, electric slide. american electric power ran out of juice as wall street turned its attention towards interest rates. is that decline offering an opportunity to plug into its outsize dividend, or will regulation hold it back? cramer's talking to the ce

huh divided was the fed?ost important event, that's president obama nominating janet yellen to be the next fed chairman. yetten was appointed as vice chair in 2011. if she's confirm as expected by the senate, they will be the first woman to lead the fed in its 100 year history. everyone seems to be fairly happy. is this the most qualified fed chairman ever? >> i think certainly relative to the other potential candidates that remain in the race, she's very qualified. you can see that the market is happy with her nomination coming up today. i think in terms of the market, that had a big market impact and that's why you're seeing less of an impact now. the other thing i would say that we've had a very dovish signal from the fed when they didn't taper. and the market has postponed expectations for when the tapering will happen next next year now. therefore, we have a dovish back drop and the appointment of yellen is less impactful than it otherwise would have been. >> well, the fed minutes are going to be rather

at what point is the fed no longer assisting the market, but at what point is the fed the market? so the fed is no holding roughly one-fourth of mortgage-backed securities outstanding. they have purchased about 30% of all the mortgages originated since last summer. that's not securitized. that's total mortgages originated, and that unless we see some tapering through 2014, they will be by more than half of all the mortgages originated. again, not just securitized but those originated. i think that raises the question then, what happens if the mortgage market tapers and the fed doesn't? do we want the federal reserve to have that size role in purchasing this many of the mortgages it originated? and i would defer to my colleagues here as to say, what would happen if we saw similar behavior in greece or some of the other countries, if a central bank said we will making this purchase for such a large share of the lending that takes place. finally, than what is the fed exit strategy from this? are they in fact been going to start selling these at some point with upward pressure on inte

the fed will be there to rescue. that theme of the fed put experienced a bit of wrinkle over the past quarter. you all recall that prior to the fiscal crisis in the u.s. to analysts to talk about nothing but the fed decision to take the . chairman bernanke into it in may it was a virtual certainty just before the fed's september 17th meeting. the fed decided to not to upper. and they observe a couple of things. they observe in their written statement that you can easily look upon the fed website where chairman bernanke's press conference. one of the concerns was that interest rates have gone up over 100 basis points. the affordability of housing had been sharply reduced. some people were rather column about it, but a move in interest rates from 3% to 4% on a typical mortgage -- i think i did the math. two under and $50,000 mortgage would be a couple hundred dollars a month. for many households that's a problem. the best the fed thinking about ending some of the cut dependence. a preposed bernanke burro. and i think w

the fed has been put in a very difficult position. if i look at this broadly, i kind of see an oscillation, which american households that are trying to preserve and store wealth are running to the stock market, to the housing market and back to the equity market. .. >> the fed was very accommodative, and we started to build a housing bubble which we burst in 2008, and now i think arguably in 2013 we may have created or at least started to create another equity bubble that in some areas, perhaps many some real estate markets, is also turning into a bubble. new york city, toronto, we were talking about this at lunch, other urban centers, especially those attractive to foreign buyers are seeing very rapid increases whereas in more rural areas that's not happening. so how do we, how do we respond to this, and what does this tell us about the future? one of the things that's emerged here is that the financial and real estate markets have in the united states and perhaps elsewhere have developed a kind of uncomfortable codependence with th

in other words, the fed can print money, the fed can produce money but the fed can't produce jobs andt's a fundamental issue. jobs are about regulations and taxes and things of that sort. inflation is about money. i think what rand paul will say which is what his dad always said the fed should stick deep dollar steady, keep the inflation rate down. a narrower mandate. i don't think paul believes he's going to stop the nomination. he want as conversation, john. i think that's a productive conversation. >> sure. it is. we should expect one. i agree with you. i doubt he has the votes to stop yellen from becoming the chair but this is an opportunity for him to bring up a lot of the issues you talk about. you know who agrees with a lot of what you just said? ben bernanke. he's been saying all along that the fiscal mix is not right for the economy we're in and the policies he's offering are a pancea. janet yellen, i think, would agree with you too. she might disagree with you on your fiscal ideas but she would agree with you that the mix right now is wrong that the problems are on the fisca

i wonder what your effect it will have from transition from ben bernanke fed to janet yellen fed. >> she was a disciple of ben bernanke. chairman last four years of bernanke bernanke's chairmanship. when the the fed buys money out of the thin air and bonds $180 billion worth of bonds every month. lending the government will $85 billion into the economy, she is in favor. that, so you are likely to see next to no change. failure of the federal reserve who believes it is the job job of the federal federal reserve to create cass out of thin air and stimulate the economy because those wrings are loans. they will cause inflawnsenned everything waste wily seen as frontrunner for this job. complaints about a lack of diversity in the president's close-toes and all of the sudden larry summers dropped out of running. >> i'm not a fan of larry summers. however, he probably was a better understanding of the way the free market works and what it is like to make a payroll than any other chair of the federal reserve in the modern era. you know that upset some people on president's left. that is why

the fed wants that closer to 2%. we're close to the target but it's a tale of two inflation metrics. if we divide that into goods and services, the goods component is extremely weak and it's in negative territory right now. that's holding down the overall metric. it's making it look misleading it low. >> even though it's a broad measure. >> exactly. the reason that's happening is because the dollar has been strengthening. it's up 5% compare to most of our major trading partners. the strong dollar means that import prices stay down and import fries ar prices are fall. it's a sign of a strengthening dollar. and the service sector where metrics are going up about 2.5%. >> the fed was concerned about the affect of washington's dithering and debating on the economy. they weren't entirely clear about it, because the feds are never entirely clear on anything. but they did imply if you were thinking about pulling out $85 billion a month, the stuff in washington caused them to be in that business a little longer. >> absolutel

the fed is and must always be independent. i want you to know that i am very grateful to you for being such a strong partner in helping america recover from the recession. it is no surprise as the son of a pharmacist and schoolteacher -- isben bernanke has the the academy of death is the opec to me -- is the academy --is the epitome of calm. he has been a voice of wisdom and a steady hand. at the same time when faced with potential global economic meltdown, he has displayed tremendous courage. he took old action that was needed. he helped us stop the freefall and stabilize financial markets. thiscredit flowing again. has made a profound difference in the lives of many americans. a lot of people are not sure what the federal chair does. but more families were able to afford new homes and businesses could hire workers. more people could pay their mortgages and car loans. it meant more growth and more jobs. i would add with his commitment to greater transparency and clarity, he is also allowed us to better understand -- the work

a fed meeting starting tomorrow. ten-year yield above 25, we have some twos, fives, and seventh on deck. the uk being hit by the strongest storms of ten years. massive disruptions over there. our road map begins with the major indices at or shy of new highs as we begin to cross the halfway point of earning seasons. >>> it is trading lower in the free market. earnings beat. revenue was a bit short. >> apple set to report before the bell. a chance to see how the newest iphones are really selling. >>> a clash of titans. mcdonald's dropping heinz catsup. >>> the s&p coming off a record high close for the fifth time. dow chasing history within 1% of its record closing high on september 18th. investors will pay attention to a bunch of earning numbers. a two-day meeting of federal policy makers concludes on wednesday and the fed is not expected to cut back on the bond-buying program due to the neck tiff economic effects of the 16-day government shutdown. the day that flow is going to be very heavy this week. no jobs number

when you go back to this fed statement the fed doesn't mention taper. it says adjust monetary policy. adjustment doesn't imply a direction. i think what the fed is getting ready to do is increase the amount of qe not diminish it it. >> andy bush, consumer price index is slowing down. twhafs today? a year on year, 1.2% and something like that. it's an odd thing that the reserves the fed has printed has not yet been converted into the money supply hence causing inflation, but i think they're going to hang in there and that's why i think they're going to keep buying bonds and keep hoping that somehow the inflation rate goes up. i think that's the policy and i don't care what the fomc statement is today. they want a 3% or higher inflation rate. >> that's right. it's shoulding that certainly would make chicago fed president charlie evans very happy because he's advocated that, but the fed is like the rabid dog chasing its tail. if it lets the market know it wants to taper then rate goes up and then lo and behold, financial conditions grow tighter, and they m

the fed has 22,000 employees.it clears your checks and your atm withdrawals and provides economic forecasts. but one of its most important responsibilities is regulating the nation's biggest banks, to be the watchdog. you're supposed to keep them out of trouble, so how did all this happen? >> well, a lot of mistakes got made, no question about it, but, you know, this was a much bigger thing than any single firm or any single individual. over the last dozen years or so, enormous amounts of savings has flowed into the united states and some other industrial countries. that savings has come from china and east asia. it's come from oil producers. and it has--hundreds of billions of dollars has come into our financial system. and, you know, that would be great if we took that money and invested it wisely and got a high return. but instead, our financial system didn't do a good job. we had a regulatory system that was like a sand castle on the beach. when you had little small waves just lapping up against the sand castl

first woman ever to lead the fed what does this mean? >> it means a lot on what the fed will do.he a new yorker born in brooklyn. she met her husband while working at the fed in the 1970s. he is a nobel prize-winning economist. they have done work together. >> speaking of the markets, the fact that they are relatively flat right now seems that we might be looking at consistency when it comes to janet yellen. >> correct. and that's one of the things that the markets value. she has been a huge supporter of bernanke especially when the feds were loaning banks money when no one else did. interestingly she also has vice chair helps manage the process by which the fed gives advise so investors about which way interest rates will go. >> thank you very much. >> you're welcome. >>> the white house is expected to officially nominate yellen at 3:00 eastern time. and al jazeera will cover that event live. the obama administration also moving forward with plans to close gitmo in cuba. the pentagon has named a special envoy. >> reporter: nearly five months after the president renewed his promi