Transcripts For CNBC Closing Bell 20131009

A few minutes. Get a cnbc first interview with him after yellens official nomination. This was, of course, expected. Market reaction, nonetheless. Lets take a look at where we stand as we approach this final stretch. One hour to go to the closing bell. Dow jones up 68 points here. This is actually near the highs of the day. Nasdaq and the s p 500 also showing mixed reviews here. Nasdaq in negative territory, although it, too, off the lows as there is wide expectation that Janet Yellens leadership will be a continuation of ben bernanke and the stimulus in place. Standard poors up 6 1 2 points on the day. The announcement from the white house gets under way in ten minutes, we are told. So, just a few minutes from now. In the meantime, lets talk about this market and its response to the shutdown in washington, maria. Joining us now on our Closing Bell Exchange peter anderson, Keith Fitzgerald and bob pisani and rick santelli. Good to see everybody. Lets start with the reaction in the markets, peter. Would you say that this is basically in step with Ben Bernankes policies and thats why we are seeing some further buying in this market after so many weeks of uncertainty and negative reaction . Well, you took the words right out of my mouth, maria. Actually, that is exactly what i think is happening. You know, it would be a different story if it were somebody else that were nominated. I think that has cast a little sigh of relief over the market now. Of course, were not through all the other issues that we have to contend with. At least that gives us time to catch a breather, say one uncertainty is ticked off, but we still have a couple of other things, as you know, to take care of. Those little thins going on in washington. Keith fitzgerald, youre not exactly excited about janet yell yellen, why . Shes a bernanke clone. Clones dont think clearly. A good thing is the market is beginning to come terms with this probably means more stimulus. That generally speaking is the best we can hope for. You know, in terms of best we can hope for, when you consider the facts we have this dysfunction in washington, you consider the facts that may very well take some of the oomph out of this recovery, do you need the fed to stay in place . Maybe this is a good thing shes there, clone or not, the stimulus continues at a time perhaps we need it. I think, maria, most traders down here feel that continuity is certainly good for the markets overall. I think the concern here is on the timing. The Senate Banking committee will probably hold hearings on this after the debt ceiling negotiation. Its set up for another slugfest over obamas economic policy. Theyre going to argue president obama now owns qe, qe2 as well as the taper policy. And i think that the overall concern is that its just going to be another ugly fight for another several weeks, right after the debt ceiling negotiation. Rick santelli, whats the i can imagine what you guys are talking about with janet yellen there. What is the reaction to her being the nominee finally . First of all, i would like to congratulate her. First female head of the fmc. I hope im not speaking too soon. People on the floor look at continuity issue in the form of needs and wants. Theres a huge debate whether qe satisfies needs but traders with a glimmer in their eyes and wallet smile, its what they want, so in that regard its definitely a prostock situation. But prostocks may tend to lead to rising rates. I read the minutes to the fmocs last meeting. Other than three sentences there was virtually no talk about the fiscal shutdown. There was a bit at the news conference, which leads me to think that it is interesting in a rearview 20 20 mirror, as we now live the shutdown, to think that was the main fed reason. But after reading the minutes, i just dont think they had any inkling to pull back. And i dont think youll see any pull back well into the first or Second Quarter of next year. Thats interesting. Peter anderson, i want to get your take on this momentum market that has been in place for a little bit. Up until the last couple of days or so, biotech sells off, gets slammed yesterday. Stocks like tesla. All these momentum names that have been catching the bid. Is it over or do you want to go back to momentum today, now that the expectations is in place that perhaps janet yellen keeps this going . I think through the end of this quarter you will start to see a pick up. Im not looking to say draw four aces in this quarter. Id be happy walking away with one or two in terms of earnings results. I think you will see momentum pick up. One thing janet yellen is known for, and i hope everyone is aware of, shes champion of this new communications policy. Ive done some research and shes on record saying why she thinks this new communication is extremely important to bring the fed into the current times rather than just all pieces of paper communicating. And i think theres some good and bad in that, as you know. Well see how that plays out. Dont you think the communication policy failed a bit . I mean, the headlines we were running on, all voting members but one said it was best to wait the taper. The fed was well aware the markets expected a taper. Thats a fail. Absolutely. And i think there is a good and bad to this whole policy of communications. Thats exactly what were seeing. Some good things, some bad things, and shes also arct articulating it as an experime t experiment, too. We want to take a short break, then take you back to washington and hear president obama make that official announcement. Were sitting near the highs of the session with a gain of 63 points. And we are just minutes away from the nomination of janet yellen, as you said. And then after the bell, bond king bill gross will give us his reaction to the nomination of janet yellen. Youre watching the closing bell, right here on cnbc, first in business worldwide. If youre just joining us, president obama is expected to announce the nomination of janet yellen as next fed chair any moment there in the state dining room at the white house. Well bring you that live coverage momentarily. Were all anticipating that. Well bring in our allstar panel. Diane swank, keith from bank of tokyo and eamon javers and steve liesman. Diane, let me kick this off with you. Is this the right choice . Do you think the markets expecting this . What will the reaction be . Whats your take . It is the right choice, the markets are expecting this. This is important Going Forward because i think i take issue said something earlier, yellen is not a bernanke clone. She was influencing financial policy in the 1990s when he was trying to figure out what caused financial cries in his academic career. Shes going to communicate more clearly without the sausage being made. That will be better. Chris, what do you think the international communitys response will be to janet yellen . How do they view her . I think they feel shes a very, very good candidate. Most of the criticism of janet yellen comes from, well, frankly, congress. Theyre concerned shes too dovish. Admittedly, shes put out her own Research Showing if she had her way, she would not raise the Feds Fund Rate until september 2016, which is another year past what the majority of the committee is saying right now. Eamon javers, whats the talk in washington . Why janet yellen . There was dithering about Larry Summers, so much so he. H to pull his name out. What do you think this means in terms of further stimulus from the Federal Reserve . Clearly the expectation is there is going to be further stimullmulus from the Federal Reserve. Remember when the Federal Reserve decided not to taper, one of the big reasons why was the big concern over a Government Shutdown. Its a a big drag on the fiscal economy. Its going to be a bigger drag on the economy if we reach the debt ceiling. The further thought is shell continue to extend the economy. The democrats on capitol hill will be enthusiastic about this. Weve already seen, however, a couple negative responses from some senate republicans, senator corker sent out a skeptical press release yesterday. Shell face resistance in terms of confirmation, but shell keep her foot on the gas at the Federal Reserve. Steve, knowing she was not the president s first choice, i cant wait to hear this introduction. How about you . It will be interesting. I think the president will have to finesse that. My guess is he may make a joke about it, if he talks about it at all. I think whats interesting, what was said earlier, the market is okay with this choice. Its not like hes hoisting somebody on the market thats not the markets first choice. All of our cnbc polling has shown the market preferred yellen. It was really the president was, in a sense, the market having a tougher time introducing summers than yellen. On the sensitivities here real quick, there is sensitivity about the Larry Summers name. Its not a name youll hear during this ceremony but i asked the white house, for example, when did the president actually make the offer of this job to janet yellen, did they speak in person or on the phone . When did that conversation take place . Theyre not giving us the details of when the offer was made or anything else vouning it at this point. The white house seems a little sensitive about the terms of this deal and when it was made and how its happening. As you can see, they just put the remarks on the podium indicating the president is going to be walking out imminently. Very quickly, chris, knowing who the next chairman of the Federal Reserve would be, would you put new money to work in stocks right here . I think whoevers going to be in there well, we know whos going to be in there. I think, you know, youve got to be careful. Theyre probably going to come with a cut back in qe in december. October 30th, that decision date, they wont have the payroll jobs data. But theyve got to stop qe. Look, theyre buying over500 billion treasury. Theres only 600 billion. You cant buy 500 billion of 600 billion being offered. I would look for qe to go away. My real beef is the markets should be focussed and emerging markets are on the firstrate hike. That sounds like a no, you would not put money to work in this market, knowing qe will begin to end . No, im all in 100 . When do you think tapering begins, then . I think the earliest we see it is january. Could be later than that. It will be tough for the fed without enough data and without certainty about how strong the economy is in the wake of this shutdown to do it much sooner. Heres the president. Lets listen in. Hell have ben bernanke and janet yellen there with him there. Good afternoon. Over the past five years, america has fought its way back from the worst recession. Weve passed historic reforms to prevent another crisis and to protect consumers. Over the past 3 1 2 years our businesses have created 7. 5 million new jobs. Our Housing Market is rebounding, manufacturing is growing. The Auto Industry has come roaring back. Since i took office, weve cut the deficit in half. I think everybody understands we still have a lot of work to do to rebuild the middle class, but weve made progress. And we shouldnt do anything to threaten that progress. For these hardwon gains have made a difference to millions of americans and, in part, we can thank the extraordinary grit and resilience of the american people. In part we can think the dynamism of our businesses. A lot also has to do with decisions we made as a nation to create jobs and growth. One of the most important contributors to this whole process has been the Federal Reserve under the strong leadership of ben bernanke. For nearly eight years, ben has led the fed through some of the most daunting economic challenges of our lifetime. For some time now hes made it clear that he intends to finish as Services Chairman at the end of his term, which is this january. So, today i just want to take a minute to pay tribute to ben for his extraordinary service. But i also want to announce my choice for the next chair of the Federal Reserve. One of the nations foremost economists and policymakers, current vice chairman, janet yellen. You know, after i became president , i was proud to nominate ben for a second term. And while the fed is and must always be independent, i want you to know, ben, im personally very grateful to you for being such a Strong Partner in helping america recover from recession. Perhaps its no surprise as the son of a pharmacist and a School Teacher that ben bernanke is the epitome of calm. And against the volatility of Global Markets hes 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 and creativity. He took bold action that was needed to avert another depression, helping us stop the freefall, stabilize Financial Markets, shore up our banks, get credit flowing again. And all this has made a profound difference in the lives of millions of americans. A lot of people arent necessarily sure what the chairman of the Federal Reserve does, but thanks to this man to the left of me, more families are able to afford their own home. More Small Businesses are able to get loans to expand and hire workers. More folks can pay their mortgages and car loans. Its meant more growth and more jobs. And id add that with his commitment to Greater Transparency and clarity, hes also allowed us to better understand the work of the fed. You know, ben has led a new era of fed speak, and been a little more clear about how the system works. And that is good for our democracy. And i have to tell you, as i travel around the world, you know, the job of the fed chair is not just, you know, our top Monetary Policymaker. The world looks to the american fed chair for leadership and guidance. And the degree to which ben is admired and respected and the degree to which, you know, central bankers all across the world look to him for sound advice and smart policymaking is remarkable. He has truly been a stabilizing force not just for our country but for the entire world. And i could not be more grateful for his extraordinary service. So, ben to you and your wife, anna, and your children, joel and alyssa, i want to thank you for your outstanding service. Thank you. [ applause ] now, as ive said, the decision who will succeed ben is one of the most important appointments any president can make, because the chair of the fed is one of the most important policymakers of the world. The next chair will help guide our economy after ive left office. Ive considered a lot of factors. Foremost among them is an understanding of the feds dual mandate. Sound Monetary Policy to make sure we keep inflation in check. But also increasing employment and creating jobs, which remains our most important economic challenge right now. And i found these qualities in janet yellen. She is a proven leader. And shes tough. Not just because shes from brooklyn. Janet is exceptionally well qualified for this role. She served in leadership positions at the fed for more than a decade. As vice chair for the past three years, shes been exemplary and a driving force of policies to drive our economic boost and recovery. Janet is renowned for her good judgment. She sounded the alarm early about the housing bubble, about excesses in the Financial Sector and about the risks of a major recession. She doesnt have a crystal ball, but what she does has is a keen understanding of the markets and how economies work. Not just in theory but in the real world. She calls it like she sees it. She knows how to build consensus, brings people around a common goal. As one of her admirer says, she brings people around her. Shes held in high esteem by colleagues and those around the world to look to the United States and the fed for leadership. Janet is committed to both sides of the feds dual mandate. She understands the necessity of a stable Financial System where we move ahead with the reforms weve begun. To protect consumers, ensure no institution is too big to fail and ensure taxpayers are never left holding the bags because of the mistakes of a reckless few. At the same time shes committed to increasing employment. She understands the human costs when americans cant find a job. She said before, these are not just statistics to me. The toll is simply terrible on the mental and physical health of workers, on their marriages, on their children. So, janet understands this. Americas workers will have a champion in janet yellen. Janet, i thank you for taking on this new assignment. And given the urgent economic challenges facing our nation, i urge the senate to confirm janet without delay. Im absolutely confident she will be an exceptional chair of the Federal Reserve. I should add shell be the first woman to lead the fed in its 100year history. I know a lot of americans, men and women, thank you for not only your example and your excellence, but also being a role model for a lot of folks out there. So, its been said that janet found love at the Federal Reserve, literally. This is where she this is where she met her husband, george, a celebrated economist in his own right, and their own son is an economist as well. You can imagine the conversation around the dinner table might be a little different than ours. In fact, ive been told their idea of a great Family Vacation is the beach with a suitcase full of economics books. But this is a family affair. We thank george and robert for their support as janet begins this journey. Again, i want to thank ben bernanke for the outstanding work hes done. Hell continue to help keep our economy moving forward during the remainder of his tenure here. Well probably have occasion for additional goodbyes. I know that janet is very much counting on him to give some good advice to her as she moves into the chairman spot. But with this, i would like to give janet a chance to say a few words. [ applause ] thank you, mr. President. Im honored and humbled by the faith that youve placed in me. If confirmed by the senate, i pledge to do my utmost to keep that trust and meet the great responsibilities that congress has entrusted to the Federal Reserve. To promote maximum employment, stable prices and a strong and stable Financial System. Id also like to thank my spouse, george, and my son robert. I couldnt imagine taking on this new challenge without their love and support. The past six years have bennetebeen tumultuous for americans and challenging. While we agree more needs to be done to strengthen the recovery, particularly for those hardest hit by the great recession, we have made progress. The economy is stronger and the Financial System sounder. As you said, mr. President , considerable credit for that goes to chairman bernanke, for his wise, courageous and skillful leadership. It has been my privilege to serve with him and learn from him. While we have made progress, we have farther to go. The mandate of the Federal Reserve is to serve all the american people. And too Many Americans still cant find a job and worry how theyll pay their bills and provide for their families. The Federal Reserve can help if it does its job effectively. We can help ensure that everyone has the opportunity to work hard and build a better life. We can ensure that inflation remains in check and doesnt undermine the benefits of a growing economy. We can and must safeguard the Financial System. The fed has powerful tools to influence the economy in the Financial System, but i believe its greatest strength rests in its capacity to approach important decisions with expertise and objectivity, to vigorously debate diverse views and then to unite behind its response. The feds effectiveness depends on the commitment, 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. [ applause ] so, there you have president nominating janet yell. Were back with our blue ribbon panel, with diane, chris, our own eamon javers and steve liesman. I can remember when we first heard the president s comments about ben bernanke and we suspected he wouldnt he was effusive about Ben Bernankes term in office this time. Do we think it was his idea or ben . It took the president time to warm up to make the comments. The comments he made very offhanded, didnt sound well thought out. Clearly, i think this is a speechwriter or somebody who decided to take the time to thank ben bernanke for his work and for the president to say, in a more formal way, how he felt. Interesting to note that janet yellen comes into the job with probably one of the most important jobs at hand, and that is this debacle going on in washington. She said more needs to be done. I wonder if that suggests more stimulus or more fiscal policy or at a minimum, some end to this dysfunction happening in washington. Diane swank, whats next . Absolutely. I think youll hear more from the fed. The fed has said already the fiscal policy is a drag on the u. S. Economy. We saw the personification of these people. They often become. The bernanke fed, the greenspan fed. It will youl 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 youll see that from janet. I do think youll 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. Thats 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. Thats 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 feds doing and why theyre doing it. Over the course of the last five years its been up and down. The fed has been variously demonized and a lot of bad press. I dont know if that was bernankes fault or, perhaps, unavoidable. I thought yellen was striking something of a populous tone in those remarks. You know janet like i do, steve, shes very warm. She always comes across very genuine. I think thats important. Not that ben didnt, but he faced a different set of times, which i think made it more difficult. There is this sense that he was somewhat detached from the economy and that maybe came from his academic side. Janet never gives you the feeling that she doesnt care what the American Public is thinking about. I think she can touch them and appeal to them, i dare say it, in a feminine way. I dont think thats why she was named chairman of the Federal Reserve but theres a grace in the way she handles things and comes across. I think thats important right now. By the way, shes a local girl whos done good you like her just for that girl. Shes from brooklyn, like me, raising the roof for bay ridge. Go, janet yellen. There you go. I was waiting who had 3 31 for maria to mention that, to get that in there. I love it. Thank you very much. Appreciate it. 30 minutes left in the trading session in the market. Up 58 points so far. Yeah, theyre called debt limit deniers. We have one here. Alabama congressman says the u. S. Has enough money to satisfy u. S. Debt holders and it wouldnt be the end of the world to miss some other payments. Wow. Why dont the markets seem to agree. Well talk about that coming next. First, how are worried about this mess . Im here today. Ill ask the leaders of Societe Generale, were on their Trading Floor right now. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back. Generally a positive day, although the nasdaq has still suffered. Technology has not done well during this Government Shutdown the last week or so. Thats been one of the weakest sectors. Thats taken a toll on the nasdaq. Today the dow is up 64 points. Thats about the high for the session right now. The s p up 6. 25 right now. Thank you. As i mentioned, were coming to you today live from Societe Generales brand new Trading Floor in new york city. Were broadcasting from their equities and xhadties floor. This floor is in the top five on the New York Stock Exchange trading volume. Joining me is Craig Overlander and dan fields, global head of trading. I guess we should start with whats going on in washington. Janet yellen. Craig, any surprises here . No. I think we were just discussing earlier, i think janet yellen was expected once Larry Summers stepped away. I think this is an important step for moving forward, announcing who the fed chairman is going to be. And janet is a trusted hand and people have confidence. And i think continuity is important. You have to have backup plans given the upset in washington. What are you doing in terms of preparation . I was talking with one banker yesterday and he said, look, were all recreating our war rooms we had back in 2008. Is that what youre doing here, too . I think we think about all the contingencies when you think about Something Like this. You hope washington is going to come back with a resolution and not bring us to the brink. But have you to plan for the worst and expect something better. And thats what were all doing and were all thinking about, all the potential contingencies. I think you saw some of that yesterday in the tbill market. I think you saw people, you know, certain markets starting to react on just a very shortterm technical base. Its not a fear of the u. S. Government, not a fear of u. S. Financing. Technical issues. And i hope it stays that way and i hope washington resolves this. I want to ask you what you are doing specifically to prepare. I think our viewers would get great value out of that. Dan, let me turn to you for a moment. Youre on the Trading Floor, seeing the flow. What are clients doing . Clients are holding back. Theyre very concerned. They dont know whats happening in washington. What weve seen in the last week is less conviction there will be resolution in washington. Theres a move down to 6 since the highs, but thats a relatively moderate move. Clients are reducing risk, as we are. Theyre starting to, as you say, put together the war room. Theyre looking at what are the ultimate contingenciecontingenc hedges they need to place but ultimately pulling back on risk. One of the things youre seeing is more interest in europe. So, you know, i know youre here in the americas, running the americas, but what are you seeing in terms of alternatives to the u. S. Right now . What weve seen over the last six months, and its been an ongoing trend, has been a lot of trends national flows. Seeing money move across borders in a way thats healthy that we havent seen in the postcrisis period perform of late theres a concern in the u. S. , meaning people are looking to put money in alternative spaces, european markets, debt markets and emerging markets as well . Emerging markets is its own concern because of the potential tapering meaning risk premium will impact emerging markets specifically. A lot of uncertainty around emerging space absolutely. Because emerging outflows and will continue to zoob what does the rest of the book look like going into 2014 . Im talking business here the next couple of months. Weve had a great corporate calendar. Weve seen it slip down with uncertainty but we see huge demand. The deals priced this week, four to six times. I think theres a willingness to continue to look for income and alternative investments. Until we get past this technical glitch, theres a hesitation. I dont think its a pull back away from markets. Its a pull back to understand what does this mean if we take it all the way to the cliff. Another report from Societe Generales Asset Allocation team which calls for a 15 correction in the market in the First Quarter of next year. And that it will take years to get back to where the market is today. Talk to us about that. Thats a market call that says the market is basically underestimating the impact of a rising rates environment. There could be a reAsset Allocation movement with possible risk premium associated if we move into a new paradigm with rates going up. That assumes well see significant economic growth, which will drive the rate up and the move up will be quick to head off any potential inflation behind it. There are other alternatives and scenarios much more moderate. Were talking about longterm rates moving higher. We know the fed is controlling shortterm rates. Real quick, craig, what does that mean for you, for this firm, higher Interest Rates . What do have you to do . Look, you get yourself in a position and we know rates are going to be moving up. Were not going to be at this level forever. The question is timing. You have Asset Allocation and preparation for it. Its not a surprise to anticipate rates moving up over the next six months to a year. The question is the timing we thought with the fed speak would be coming sooner is now coming later. We dont think, i dont think, well see anything until jan 2014, maybe december, before bernanke officially leaves. But i think certainly with the furloughed government, department of labor out, were not going to have enough statistics we dont even have the data. To form information. I think weve extended this tapering not tapering, the qe is going to continue for the time being. Well see that continue. I think at some point we step away from the punch bowl and we have to be anticipating it. Thats what we do. At some point in 2014 the tapering happens. Craig overlander, dan feelgdz, thanks for having us on your Trading Floor today to gauge the reaction to janet yellen firsthand. Bill, over to you. 20 minutes left. Dow 51 points, Holding Steady here as we head toward the close with 20 minutes to go. Up next, shutdown enters day nine. Debt crisis looms. One congressman says october 17th dooms day date, its just a myth. Its as simple as this. At bny mellon, our business is investments. Managing them, moving them, making them work. We oversee 20 of the worlds financial assets. And that gives us scale and insight no one else has. Investment management combined with investment servicing. Bringing the power of investments to peoples lives. Invested in the world. Bny mellon. I have a big meeting when we land, but i am so stuffed up, i cant rest. [ male announcer ] nyquil cold and flu liquid gels dont unstuff your nose. They dont . Alka seltzer plus night fights your worst cold symptoms, plus has a decongestant. [ inhales deeply ] oh. What a relief it is. How old is the oldest person youve known . We gave people a sticker and had them show us. We learned a lot of us have known someone whos lived well into their 90s. And thats a great thing. But even though were living longer, one thing that hasnt changed much is the official retirement age. The question is how do you make sure you have the money you need to enjoy all of these years. To enjoy all of these years. Acso 45 states and then District Of Columbia have voluntarily decided to raise the bar with consistent educational standards. Now, students in those states will have a better chance to succeed in college and careers and to compete in the global economy. Which means a Better Future for our students and our nation. Join exxonmobil in supporting the common core state standards. Lets solve this. Welcome back. One week until we hit the debt ceiling. Our next guess is downplaying the consequences of reaching that debt ceiling. He says with 2. 5 trillion in revenue, Interest Payments around quarter of trillion, he says theres no reason to default. Congressman brooks joins us. Thank you for joining us. Lets listen to something the president said about this yesterday. Theres no business person out here who thinks this wouldnt be a big deal. Not one. You go to anywhere from wall street to main street and you ask a ceo of a company, or ask a Small Business person, whether it be a big deal, if the United States government isnt paying its bills on time. Theyll tell you its a big deal. It would hurt. You add in the markets tbill have skyrocketed, japan and china have issued warnings not to let this happen, but you feel this is not a big deal. Do they have this wrong . Absolutely. I dont know who shared that information with you, but its inaccurate. Not raising the debt ceiling is a big deal. However, continuing to be financially irresponsible and racking up more and more debt long term will result in insolvency and bankruptcy of the United States government, and thats a bigger deal and thats what we need to address and address it quickly. Let me ask you this, congressman, because the nations largest manager of money market funds, fidelity investments, is taking it is no longer holding any u. S. Government debt that comes due around the time the country could hit the borrowing limit. This is one major money manager. What if we see more . Is this going to cause massive dislocation in these markets . The fact you guys are going back and forth and unable to come together . Actually, we havent been going back and forth. The president , as you well know, has shut himself into the white house and refused to negotiate with the elected members of the United States house of representatives who are trying to be financially responsible. As you know my position is real simple as you know, house leaders are going to the white house tomorrow, sir. Boehner and cantor and company are going to the white house tomorrow, at his invitation, and meeting with Democratic Leaders today, so there is some back and forth. The question is wait a second. Wait a second. For eight days there has not been this back and forth. Theres been one meeting thats true. In which the president said there will not be negotiation. Tomorrow there will hope so. If they dont negotiate, we get nowhere. Fidelity says they feel if they were holding tbills come due this month or next month, they wouldnt get paid. Theres a fear out there we will not be paying our obligations when the time comes. Thats a big deal, dont you agree . You use the word obligations different than the president uses the word obligations and different than i use it. Are we going to quibble about the word obligation . Absolutely. Because the president is distorting the way in which Financial Markets normally look at that word or look at the word default. Default in the Financial Markets primarily consist of whether we, United States government, are going to pay our creditors. We have plenty of money to pay our creditors. Tell that to fidelity. Tell that to japan. Tell that to china. Theyre all worried come this october 17th deadline, theyre not going to get paid. They should be worried because this president may decide not to pay our creditors. Thats the risk. Its not whether we have enough money to pay our creditors. Its whether the president of the United States will violate the 14th amendment to the United States constitution and not pay our lawful debts. Its where the president of the United States is not going to allocate out of that 2. 5 trillion revenue in our annual basis, the hundreds of billions of dollars it takes to pay the interest on the debt. Thats the issue. I cant control the president in that regard. The house has passed legislation that would force the president to pay our creditors first and foremost, but unfortunately harry reid and the Senate Democrats and the white house have blocked it. Now, congressman, i guess what were trying to get at is the fact that, you know, in any scenario, we are relying on investors from all over the world to buy our bonds. Every thursday the country rolls over approximately 100 billion in u. S. Bills. Are you worried about this rollover . If u. S. Bondholders are deciding they want it to be repaid rather than to continue to roll over, what are the ramifications . The president said he is not going to negotiate at all. What do you want to hear from the president . I want to hear something from the president that indicates hes going to be financially responsible. Thats the battle here in washington between people who are financially responsible and people who are financially irresponsible. Its not a battle between republicans and democrats, although its often portrayed that way. And to be financially responsible, when we raise the debt ceiling, we have to address the cause of the problem. The cause of the problem are these out of control deficits. We need to either cut spending in association with raising the debt ceiling, or pass a balanced constitutional amendment that will prevent us from having to debate this crisis again. In the meantime, you have these rollovers. Thats going to, perhaps, eat into any money thats there. If investors decide they dont want to roll over any more, they want to be paid now, what are the ramifications . Are you thinking about that . I am thinking about that and a number of other things. Thats why its important to raise the debt ceiling. Its more important to do what is necessary to prevent an insolvency and bankruptcy of the United States of america that would be debilitating to our country and would be, quite frankly, utter economic chaos and destruction. Thats the Bigger Picture we have to look at. Im so willing to raise the debt ceiling as long as we take into account the financial risk of blowing through the 17 trillion, 18 trillion, 19 trillion debt mark without doing anything thats financially responsible to minimize the risk of this debilitating insolvecy of this country that took years of our ancestors to build. Thank you, congressman. Were losing ground. The dow with ten minutes to go, up 19 points right now. The markets are gaining a little back today. Has the drop in recent weeks been a buying opportunity or will d. C. Cause more pain before its over . The folks making real money . Those bets are chiming in in a moment here. And after the bell, a few people know the challenges facing house leadership and the debt ceiling and Government Shutdown standoff as well as dick gephardt. He lived it in the 90s. Hell join me to talk about what Congress Needs to do to get this solved. Nker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the allnew fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Get 200 free trades when you open an account. Welcome back. Real reaction as we approach the close. Were giving up much of an early rally as we approach the last few minutes, bill. The Dow Jones Industrial average at its best, up almost 70 points earlier. Were off that high right now, thats for sure. Joining us to talk about the markets, rob, john, and jonathan. I mean, what do you do . With all the crosscurrents going on right now, the uncertainty about the debt ceiling next week, fidelity selling all their treasury bills, nearterm bills, what are you doing right now . Were trying our very best to tell our clients to try our best to ignore the noise out there that this too will pass and ultimately well get through this. We think at some point theyll come up with some form of a compromise. At that point stocks should be higher. Do you sit it out in the meantime . I would take advantage of these selloffs. Opportunistically buy up cash. What are the implications going into next week, going into that october 17th deadline, jonathan . I mean, how bad can this get . I understand having a buying opportunity, but am i going to have a much better buying opportunity next week . You might, maria. You might. I think the key danger right now isnt stocks. Its bonds. Were applauding janet yellen. I think thats awesome a woman is chairperson of the fed. Its great. But shes a dove. I would worry a little about longterm bonds. I think investors have been given a huge gift here with low Interest Rates and they should get out of most of their bonds now. Thats where the risk is, not stocks. Rob lutz, what would you do right now . Im going to agree with jonathan. Im very bullish here. I would use any selloff as a buying opportunity. If you look at the fundamentals of our economy and the markets are actually very strong. This is a great opportunity to add to positions. Its a guess as to when we actually resolve this issue. And i think its pretty silly on the case of fidelity to say theyre not going to buy treasuries and those types of securities. Financial condition of the United States has not changed at all. In fact, were getting more financially secure due to the fact were talking about these issues. I look at it as a fundamentally positive debate. Wow. Glass half full all of a sudden. Feel a little better right now. Thank you both. See you later. Heading toward the close with five minutes left, heading toward the close countdown. After the bell, Societe Generale ceo frederick oday will join me to talk about the economic reaction to stalemate. Youre watching the closing bell on cnbc. First in business worldwide. Moments away from the close right here. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. [ cows moo ] [ sizzling ] more rain. [ thunder rumbles ] [ male announcer ] when the world moves. Futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with papermoney to testdrive the market. All on thinkorswim from td ameritrade. Fredrik frederick. Frederick oe daye. Heres the snapshot of the market. Dow up 45, middle point of the range. Nasdaq Technology Still suffering in this market since the Government Shutdown. S p up a fraction right now. The onemonth bill were keeping a close eye on, fidelity announcing they sold all shortterm bills to come due this month and next month just in case, because they didnt think they would get paid. Look at the yield. It has skyrocketed, maybe in part because fidelity sold. That could be part. We saw that yesterday, too. The one month was higher than the libor rate. Are you buying this stock market . We just had two guests say this is a gift to see this selloff in this market. I think so. We have been nibbling here. We believe we never thought it was going to default anyway. We believe the tape is telling you theres going to be a deal coming soon, besides yellen. Ill leave it at that. Thank you for your thoughts on that. Well gutg out mid point of the range. Bill gross is coming up in a minute. Well find out what hes doing with shortterm tbills. Does he sell Like Fidelity or not . And Frederic Oudea on the Trading Floor with maria for the second hour of the closing bell. Ill see you tomorrow. And it is 4 00 on wall street. Do you know where your money is . Hi, everybody, welcome back to the closing bell. Im maria bartiromo. Today coming to you live from Societe Generales Trading Floor in new york city. Washington gridlock continuing to cast a shadow over this and every other Trading Floor in the country. The shutdown now in day nine as we get another day closer to that october 17th deadline to reach a deal on the debt ceiling or risk financial chaos across the globe. Take a look at how were finishing the day on wall street. Were finishing off the best levels of of the afternoon. Nevertheless, we saw gains