Double digit losses. At this point, up until now, you really didnt see much of an reaction that people were somewhat complacent. We arent seeing the reaction we saw in august of 11 but getting closer. Well talk about investing in this market, my exclusive interview with Julian Robertson. Well get his opinion on how to play this market, against specific names he says will make money right now. Including ones you may never have heard of. Wait until you hear what he has to say about apple and the late steve jobs. I have to say, bill, i was taken aback by his comments on apple and why he would not be putting money in apple today. I was shocked when i heard about it myself. I just ran into him recently. Hes 81 years old. He is he looks terrific. Stronger than ever. Very vigorous. Very much focused on this market, investing. Absolutely. Glitchgate continues for the new health care law. You know its bad when even saturday night live makes fun of the website problems. Well show you that. And also get into what the broader impact of these massive rollout problems could be, still to come. That was a good snl, i have to say. Dow jones industrial average off the lows but still down 80 points. Dow at 14,992. Nasdaq under selling pressure. Also off the lows, nonetheless down 21 points and 0. 5 . A decline of seven points on the s p 500. What are they saying on the floor, is john boehner bluffing . They dont think hes bluffing. They think hes trying to hold the right wing side of his party together. Its going to go right to the brink. One things for sure f you look at the s p 500, weve been here all afternoon, a decline right at the open. We were down around 1674. 1670 as the low on thursday. Low volume. Three to one declining to advancing stocks. Major sectors here, cyclicals being damaged a little more than the rest of the market but not dramatically so. Down 0. 7 on average. Financials are some of the weaker spots in the market. Somewhere rate sensitive stocks doing better. Rates have come down so utilities, riets were on the upside, but some of the other ones like Telecom Stocks doing a little better as well. Take a look at the banks because im interested in banks because theyll be starting earnings this week. Well get wells fargo and jpmorgan reporting on friday. Alcoa is tomorrow. More importantly is the banks. We had a couple problems with the banks this quarter. The first one, of course, being the trading activity has been generally down, particularly on fixed income. Mortgage activity is down. A lot of talk that big banks like jpmorgan, mike have higher legal reserves. Most of us already know that. While banks may have underperformed a little bit this quarter, at least most of them seem to be having expectations theyre going to hit their numbers so far. Again, numbers will start coming in on friday. Guys, back to you. Bob, thanks so much. Lets talk about putting money to work here. If boehner is bluffing, is this your opportunity to get into the market . Joining us on closing bell exchange, john manly from wells fargo fun, bob kizer and our own rick santelli. Thanks for joining us. Bob, i want to kick it off with you. We want to talk about the debt ceiling and john boehner commentary and also about earnings as we approach this season. What are you expecting in terms of Third Quarter earnings . Current expectations are 3 . If you extrapolate usually the street beats expectations, we should be at 5 or 6 . Expectations have been coming down. But thats a normal tendency. Thats just the way the game is played. John manly, whats your view of washington and where this thing goes and the impact it will have on the markets . I dont think anyone is really bluffing. I think theyre serious. They have to demonstrate, put up a good show. I think it comes down to who gets hurt first. Republicans, democrats or stock market and the american people. Thats going to make this happen. Does this go long enough that we do come up against the debt ceiling . I mean, the bond market, what would that thats a scenario we dont want to go to. I dont think it goes that far. You have to go to the brink. You have to demonstrate youre serious on this position. Its going to be a rough week or two. What about that, in the face of all the uncertainties, how do you want to allocate capital. What if rates skyrocket around october 17th around that debt ceiling . The consent is exposure to the u. S. Has been an asset so far to global companies. However, it may come under pressure and become a liability. The reason is because of this uncertainty, it may actually discourage companies from deploying capital. Thats what investors want. They want cashrich companies putting their money to good use. Rick, are yields going to generally march higher the closer we get to october 17th if theres no deal by then . Why havent they done that to this point . Do they expect there not to be some debt crisis . I think they think the president s bluffing. You know, i dont see any indication in a dow jones up 14 , a nasdaq up 25 , an s p up 28 18 , and tenyear note yields, most hugely affecteded after federal reserve, 260 and 265 of late, its interesting to debate what you do with a Lottery Ticket should you win because the odds are probably higher that were going to not default, meaning we i just dont see it. The market doesnt see it. People i talk to dont see it. I think when it comes to washington, our channels are having a field day whether boehner is bluffing. Last i looked under Barack Obamas name its president , not the head of the Democratic Party or the head of the senate. Its a good point but what im trying to get at is how you allocate capital. Gemma, thats what i asked you. We know the uncertainties and whats happening in terms of the back and forth in washington. What do you do in the meantime . Would you put money into stocks right now in the u. S. . Were taking a breatheralloc. What were looking for is stability. So, if you look at the environment, in an environment where there is instability, uncertainty, investors will reward companies that have reliable revenue streams. I dont mean utilities or defensives that have rallied hard. Were looking at expensive defensives. I mean, companies where you can clearly see the client base, where theyll generate their revenues from. Those will be the interesting plays going forward. Bob, you were nodding your head. Do you invest based on good old fundamentals and earnings expectations or do you have to invest based on what you think the governments going to do down the road . Yes and yes. But let me explain that. Default is not going to happen. Its unthinkable the United States is going to default on its debt. We need to get past this brinksmanship. President stated his position, he wants a clean resolution. Boehner said hes not going to get one. Now we know their positions and we can move forward. Consumerary sec sore stor one of the best performing and expected to be one of the best two sectors for the Third Quarter. As long as brinksmanship doesnt get out of control, were watching u. S. Sovereign credit default swaps closely. They more than doubled in the past two weeks but beneath 50 basis point. If it gets above 50 bips youll see a lot of anxiousness in the stock market. Is there a safe investment as rates go higher . Yes. Nothing is ever perfectly safe in the stock market or anywhere on earth in the future. Still like cyclicals. I think the economy is starting to get better. I think well go to the brink but not beyond the brink and i think it will be hard to kill the animal spirit as the World Economy is starting to get better. Would you buy bonds . For a while i would. Theyre not going to go down in price right away. At some point in time theyre going to go down an awful lot. Theyll price us by taking longer to happen. Theres no inflation. No reason for the fed to tighten. Bonds dont go up in yield that way. But its been a long run. I was a young man when this thing started, bob. Thanks, everybody. We appreciate it. Well leave it there. We go to a market under pressure but well off the lows, we should point out. 151 it was down 151 points. One trader was telling me how busy it was on the open this morning before things cooled off. Well see how we do going into the close. After the break well talk to congressman Tim Huelskamp of kansas, what he will and will not compromise and how serious he thinks john boehner said were on the path to a default. Dont miss my exclusive interview from tiger funds, Julian Robertson. Hes very candid. Heres a bit of what he said when i asked him why he doesnt own apple anymore. 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In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Investors getting jittery that we could reach the. Dennis debt ceiling which could happen in a week. And china is warning us. John harwood has all the developments for us. You expect to hear from your creditors at a time like this, bill, but whats happened with both sides dug in with the speaker not willing to bring a government funding bill, clean bill for the whole government, or a debt limit bill to the floor. Its left to the administration to put pressure on the congress, which is exactly what jack lew did yesterday in his appearance on meet the press. We want to know the last minute to act, last dollar, getting close to the line is dangerous. We saw in 20 11 there was no default in 2011. It hurt the economy to get close to the line. We saw it in the stock market. We saw it in confidence. We saw it in investment. If we cross the line, were going to a place weve never gone. Its very dangerous. As you suggested, china added is voits to those putting pressure on congress saying the United States has to act to protect investors in this situation. Did have one glimmer of what i considered an opening at the White House Briefing today when jay carney, when pressed on whether or not there could be any sort of Side Agreement to a debt limit increase said seemed to draw distinction between ideological concessions when democrat as greed the senate would pass a budget or not get paid. You could have some sort of a sidecar agreement that would involve a process for a budget negotiation. Again, the two sides together dont see to be joining that conversation with each other, but i think that jay carney left that door open. We could hear more about that in the next few days. Thank you so much. Joining us from capitol hill is kansas republican congressman Tim Huelskamp, a member of the tea party caucus. Thanks for being on the program. Thank you. Theres word the white house would be open to a shortterm debt limit increase to prevent a debt default. Would you accept that . Well see what the president is proposing but weve been sitting here weeks, months, waiting for any type of offer. Im certain the president would love to get his way for a short term. The real issue sheer we have a c. R. He wants to keep the government shut down. The dlebt ceiling is past that and were looking for real offers and we have not had that from the senate or president. Youre saying you will not accept that . The question is, would you accept a shortterm debt deal . The problem in washington is too much spending. The president would like to ignore that. I see no reason to raise the debt ceiling until we solve the problem. Our out of control entitlement spending and the president suggests we need to push obama care, which will make the problem worse. The fear is we get to the debt ceiling, we breach it, and the government cant pay its bills come october 17th, yet the markets dont seem to be anticipating that. Interest rates and the bond market are still very low. Does the market have it wrong . Would you allow the government to stop paying its bills in order to get across your point on the budget . In the next five weeks theres only one major interest payment. I think the markets understand that. Theres a 6 billion payment due at the end of the month. There are no other major interest rates. There will be no default. Joe biden said as much in august of 2011. Dave stockman with the Reagan Administration said as well. I think lew tried to manipulate the market over the weekend. It did not work. But at the end of the day, there will be no default. Theres a question, can we get our spending under control . Thats the real issue in the debt ceiling. Let me ask on this procedural issue, are you not working toward an october 17th deadline then . Do you anticipate going beyond that date that secretary lew has identified . I think thats entirely possible. Again, there are no Interest Payments due between now and october 17th. The idea well default when there are no payments due, that is what a default is. The real issue on the c. R. Is obama care and the rest is entitlements. We need a tenyear path to balance, thats what congress agreed to in january. The president offered no planned solution to this overspending problem. Something has to give here. Somebody has to blink. Are you concerned the u. S. Will default . You said thats entirely possible we go beyond october 17th. Does it concern you in any way if the u. S. Defaults . I dont know about blinking. Its been seven straight days. The u. S. Senate hasnt taken a vote yet. We have the Government Shutdown still going on. In answer to the question, i do not believe there will be a default on october 17th. We dont have any payments due to our creditors then. We have one on october 31st and a major one on november thats not a real date for you, october 17th. You dont care. Youre looking toward the end of the month, then. This could go october 30th, 31 st . I think so. We have time to resolve the c. R. , the president and harry reid can come to the table. If you look back in august 2011, same thing. They had two weeks left after they said there would be a default. As joe biden said they never planned on a default. It was an attempt to manipulate congress. One of the questions out there is whether or not there are enough votes to pass a clean bill in the house right now. Do you believe there are . I do not. We had that discussion in conference, in the republican conference late last week. The president would give the president what he wants, and continue to spend at the rate of 700 bill deficits. We cant do that. Thats why we have a debt ceiling problem is theyre spending too much money. Theres not the votes for a clean c. R. , but there are the votes there to actually continue to open up everything from our parks to nih to numerous other things. The senate hasnt had a vote in seven straight days. I dont know what theyre doing. I think its time they come to the table and negotiate. Why not have a vote on the debt ceiling right now, then, sir . We havent had one presented from the president. But it comes from the house. The president has no proposal. Why do we have to raise the debt ceiling is the fundamental question, were spending more than were taking in. We have to get our spending under control. Thats an entitlements issue and obama care makes it significantly worse. Thats what were looking from the president and the senate, do you have a plan to deal with our spending problem, whether its the c. R. Or debt ceiling debate. Right now theyre two different issues. Hopefully well finish the c. R. In the next few days when harry reid is ready to bring the senate to work. Youre saying theres too much spending. Where would no doubt about it. Putting om care aside, where else would you like to see spending care . What are your proposals . We need serious entitlements reform. The house passed a budget in april to get us to balance in ten years. The president s budget never balanced. Same with harry reid, they have a budget that never balances. At the end of the day you have to balance some time. Most merndz agree we should balance some time in washington. We should do that in less than ten years. Thats our proposal from the house. Were waiting for something from the senate and from the president. Are you not concerned about the warning from china, our largest debtor creditor nation, that were well, they are not our largest creditor nation. The largest creditor nation today is japan, china is number two. When you only have one significant debt payment between now and november 15th, we can handle a 6 billion payment. The question is what are we going to do about obama care and all the other spending that continues to grow. What about rollover risk . Im getting an email here wonder being your familiarity with rollover risk. What we see coming out of the treasury, and its difficult to get the full answers. They have all the books. They have all the numbers and some of those folks have been deemed nonessential twrig to get those answers. Based on the current information, theres one 6 billion payment due on october 31st and nothing until november 15th. We have five weeks to continue to discuss the future of this country. The president would make it about one single issue, default, given his additional borrowing authority. Republicans say, no, the question is spending too much money. We need to talk about that. We need to have a solution. And the president s presented none to answer this problem. Congressman, thank you for your time, sir. Appreciate it. Thanks very much, sir. Thank you. Heading toward the close, about 40 minutes left in the trading session here. Well off the low, but were still down 8 8 points. Pretty tough day once again. You have ne