Also on todays agenda, we have key Economic Data. Last months reports show price gains slowing in 14 of the 20 cities that were surveyed. Chrysler filing paperwork for an ipo up to 100 million. The ipo will be underwritten by jpmorg jpmorgan, coming more than four years from the automaker emerging under management. Bill fight going on between the unions there which led to this. Well talk about that. Also, the Justice Department now reportedly preparing to sue jpmorgan in the mortgage bond it sold in the run up to the financial crisis. We should note, as we should whenever we talk about some of the mortgage related sales precrisis, some of that came from bear stearns and from Washington Mutual when they acquired. Bank of murk now must pay more than 2. 2 million for 1100 black job applicants. The decision awards back pay and interest to former candidates for teller and entry Level Administration and clerical positions in the banks hometown of charlotte, north carolina. Joe, over to you. Andrew, lets check on the markets this morning. Swirl, all this fed speak, which were going to talk about a lot more. Fascinating. But the turchs are not doing much. There was a weak point yesterday. It was the Third Session in a row, though, the markets were lower. And with Goldman Sachs and mikey and visa, it should have been higher. Crude, 103. Pooej people talking about 100 to 120 is where were going to stay. A 6 1 2 low yesterday. And gold is all the way back down. For a while, i thought that it meant that they were going to taper in october. Now im reading everything, you know, from dudley and others and it sounds like the roach motel that were never going to check out of. But well see. And the other thing that kills me is fisher. I love the stuff fisher says. But theyre so collegial. Fisher was pretty out there. Yeah, he was. Yellen would make a great chairman. Shes dead wrong on all her policies, but she would make a great chairman. Well, why would she make a great chairman if shes dead wrong . Because its about creating consensus. Right now theyre like blind mice. So were never going to get out. The dollar is like 1. 35 now, liesman. I blame you for like 90 of this. You meet and talk to all of them all the time. Talk some sense into them. Tell me what to tell them and ill tell you what taper. They should have last time. I agree, joe. That was a huge f up, i think. I agree. I dont know what f stands for there. I guess its fouled up. Fouled up. Youre right. Youre really it was that english degree coming in handy. Yes, it is, for the first time i can remember for you. Your russian usually comes in more handy. Time for the Global Markets report. All this merkel stuff, too. I saw in this morning. Its a huge victory, 41 . If we tried to run a country like that over here, 41 and its a huge victory. You cant run a country like that, ross, you cant. Its proportional voting, proportion i cant tellal representation, joe. The idea that you could get a majority in one of these Foreign Countries you know, the constitution, the anniversary is september 17th. My daughter wrote something about it. 100 Different Countries have copied our constitution to get it right and some of these major constitutions still havent seen the light. Although germany is not going to were not doing so well over here, joe. We know its messy. Weve said that before, that its messy, but the results speak for themselves. Theres a good piece in the journal today about what now you really have in germany. The gilt is status quo. The hallmark of the german consensus is an all providing state that taxes, spends and regulate. Well see. Not saying i want to trade up, thats for sure. This is the best place, but we have a problem, too. Well, this is the way it works. And theres another piece in there with warren hatch about how many times previous administrations and its been the way that it works. You get to a debt ceiling. You get some concessions. You get some revenue. You change some things. Its not no, im never going to negotiate. Its never been like that before. Its not never shut down the government. Yeah, but its not auflt table. This is the way people talk, but theres no talks going on at this point. Wes, hes over there just like you know, it makes your job easier, doesnt it . You kind of just stand there. Thats what governments do, isnt it . I just have to work out in what proportions. How much of those things . Thats all there is. We are, joe, ahead of the u. S. Open right now. European equities, there you can see. A little firmer on the advancers versus decliners. Were about 6 to 4 at the moment. So slightly weighted to the upside, as well, on those individual numbers. Theres a couple of bits of data out today. The german ifo sentiment is probably europes most important sentiment. The Ifo Institute survey. It did tick higher, but not by as much as we thought. 107. 7. The Current Conditions index did fall, so some disappointment about that. Essentially, though, German Growth is on a fairly solid footing. I played a key part in Angela Merkels victory, as well. She wasnt only two or three feet shy of getting an overall majority. But we did just see the euro come off as a result of that data. Lets show you where the sectors stand right now in this breakdown. That mirrors what we saw on the full screen there. Technology, utilities, all firmer. Resources are down again today. Food and beverages and chemicals. We did hear incredibly bullish contracts from airbus, as well. The stock eads is now up, boeing up, as well. Theyre talking thousands i havent got the numbers in front of me, but over the next 20 years, huge aircraft expansion. In 20 years time, aircraft orders from asia why will be bigger than those from north america. Back to you. Thank you, ross westgate. We appreciate that very much. Were now going to calk to mr. Liesman for real this time. In the wake of the controversial decision by the fed not to reduce its stimulus to the economy, he sat down with one of the fomcs most powerful members. He talked no sense into him, we dont know. Steve joins us for the first part of his interview with bill dudley. Always . Always dovish or new dovish . Pretty dovish. We knew him when he was an economist at Goldman Sachs. But ive known him as a central banker during the crisis. Its been a time when a lot of people who maybe you learned to be dovish. Earned it during the crisis. So in this wide ranging entry, bill dudley defended last weeks decision by the fed and says the markets should not have been surprised. I began by asking him how he would now make a decision to taper. I cant speak for the committee, but i can speak for myself. My mind, beginning to decide to reduce the pace of asset purchases from the current 85 billion pace requires sort of two things, in my mind. Number one, improvement in the labor market and number two, confidence that the economy is Strong Enough to support that improvement in the future. Is that new . And if its not new, why is it that the market didnt understand that beforehand . I dont think its new. I think that what we did is completely consistent with what the chairman laid out in his press conference. Its data dependant, depends on how the economy is actually performing. The chairman said we were going the reduce the asset purchases in september. He said later this year. That framework is still intact. We have to see that confidence in the laesh market and twoo, confidence that that is going to condition. So its suggested you thought there was improvement in the labor market and continued confidence in growth. Where did the market get the assessment wrong . The economy has been weaker. We havent seen an acceleration in economic activity. You look at the feds forecast, it looks for acceleration of economic activity. The problem is that is still a forecast. And if you look at projections in september relative to june, you can see that were actually expecting somewhat slower groepth in the second half of 2013 than we remember back in june. So if i can go back, do you have a reason for why people appeared to be surprised by the decision on wednesday . I think my own personal view is that people jump to cliegzs. I think were trying to be very clean speaking, were trying to be transparent, but sometimes people think were hinting at so something. So the chairman talked about the pass, and he said later this year if the economy evolves with our expectations. And people said, oh, he must mean september. But i think were trying to be very plain spoken and sometimes people exaggerate. So is it possible there wasnt enough communication with markets in the lead up to the september meeting . Well, i think its hard to communicate if youre not exactly sure, you know, wa youre going to do at the meeting. I mean, thats one reason why you have the meeting. You know, the data have die verged from our specations, but only modestly. Only a little bit waeblger than expected. You repeated the marks of chairman bernanke from june saying that a taper was likely to happen later this year. Is that your opinion at this point, still . I certainly wouldnt want to rule it out, but it depends on the data. The thing that we have not to emphasize is that its driven by data, not by time. So when the chairman said later this year, that was conditioned on the economy behaving in a way in line with the feds forecast. So if the economy were behaving in a way aligned with the feds june forecast, then its certainly likely that the fed would begin to taper later this year. But whether thats going to happen or not remains uncertain. The next time well bring you dudleys answer to the question on whether the fed is perhaps targeting Interest Rates and how the feds may decide on its next move. Joe. Thanks, steve. Well get to michelle in just a second. Meanwhile, theyre calling it a merger, but when one company gets 68 , implied materials is basically combining with Tokyo Electron in a deal that will create a country with a 29 billion market cap. Amats market cap is 29 billion there. Tokyo electron share holers get 3. 75 of the shares. 68 of the xwand. And Tokyo Electron shareholders will own 32 . Thats about 63. 350 if you were to do it based on applied material is now. Right. Techo electron, we dont have a chart on that. Stock is trading higher, Applied Materials. It closed at 1599. Its actually up 26 cents on this. Really, its more of a in bike Tokyo Electrons, more or less. Yes. Joining us now, michelle gerard. And where is ed . There you are. Three times so its up that much . 3. 25. Oh, no, im sorry win did it wrong. I was looking at the all time highs. They dont know where Tokyo Electron is trading. And its in yen, anyway. Youre right. How many yen . About 52 bucks a share. How many yen . I dont know. I know what the yen is in market caps. You do . Yeah. Because they put it in here. 2. 8 trillion dollars, yeah. Should we taper . No. Yeah, yeah, they cant shoot straight, can anyone here play this game . Some people saying this was just horrible, that we have no idea what the fed if youre a fed watcher, youre just going to say the stock market is going higher. I know already. But really, theres 20 of them. Theres too many and they all talk too much. Thats to some extent true. Arent there some other ones . What about you and ipp . What about them . Theres 20. Now weve been talking no . Im sorry, you and ipp. As much as they talk, nobody coming into these six weeks leading up to the meeting mentioned the fact that, oh, the Economic Data are somewhat different than our expectations. Oh, were, you know, not being as much of the acceleration as we thought. I mean, the one time there was a lot of quiet going into the meeting. But i will say, you know, for the most part, most of the Bank President talks and seem to be on board with the idea that at least some amount of tapering. Thats why all of us stud watchers, for the first time even the hawks say maybe a small taper here would be appropriate. Its just that after you got the back up in rates and you took the pain of the beginning of the taper, once you got that priced into the market, you should have done it because you already paid for it. And except for the surgery and they said no, well come back and do it again. And what surgery, joe . Think about it. Yeah. I also thought ks a want on the first day, i thought maybe theyre lowering costs. But i only have one issue now. The fed controls expectations. I felt like you could sort of see the incoming data before i maybe the call. But now its like, i dont think they taper until bernanke says so at this point. And he says so explicitly. If they say its data dependant, they mean it. And it could be data dependent if they get a bad number the day before theyre supposed to taper but wa data is dependent on what . Not tun employment rate. Its a broader range. This is what shes talking about about trust and credibility. The fed doesnt need the market here, but the fed is going to need the market to do its bidding to bring forward other Interest Rates and economic activity. And if it doesnt have that trust, its going to be difficult to achieve. So we went down 180 on friday. We were down yesterday. And i thought gold was back to 1500 again. For a while, i thought that would mean until october. But now october might be off the table . It might be off the table until next year. I think the fed is haunted by the spectra of 1937. They didnt want to do anything if the economy wasnt Strong Enough to stand on its own two feet. I think we will see a taper this year. Whether it will be next month or not, i dont think anybody knows at this point. But i think that the emphasis will shift. First we have to get through the whole debt ceiling issue. Eventually were going to shift back to the fundamentals. It will accelerate. Have we been conditioned to think its all about the fed . Do you remember historically periods where we were at 2 growth for a year or two with unemployment higher than it should be . Do you remember periods where we worked through that in the past without 85 billion a month . Oh, of course. Then when did these guys get the idea that its all on their shoulders . And i guess do you not even question the efficacy of it. Weve had so much stimulus and the economy is markedly different. But they would say why not do it if inflation is so cautious, anyway . We dont necessarily know the time of whats being reported. You know what i think theyre thinking now . The last two surprises to them are proof of how good qe is. What were the last two surprise ones . June, where the fed was more hawkish than the market expected. Right. But that would surprise and then in september where it was more dovish. When they see both of those surprises and they see the Market Reaction to both, they say it shows how effective qe is at least in the bond market and the stock market. Now for now. Whether or not that translates into Economic Growth is a different story. But the fed would argue, well, those are the things we can effect. Steve, these are 1 and 2 moves. Youre micromanaging a 1 and 2 move in the stock market . They started to make it sound like its not about the markets, its about the economy. He pushed back a lot at that last press conference saying are they not paying as much attention to the press market at this point . I think theyre paying a lot of attention to the market. I think thats what spooked them and to a large extent. But the problem is, its so circular now. Im sorry. Bond markets are paying attention to. Yields go up, so theyre not going to taper. I asked that question. His answer to that question in the next hour. I asked him that very question that michelle is talking about. Whats the answer . He lays out something of a framework for where Interest Rates are okay to taper. Oh, ill tell you, its 10 billion. Geez. They set us up for it and they dont to be in that meeting, it seems totally bernanke, god love him and hes a great public servant, but i see him scared of his shadow. I have to tell you, the comments of fisher and george go further than other members of the fomc go. Theyre clearly very frustrated. Frustrated with bernanke . With the way the board went, yeah. And you can hear that in their language. We know Richard Fisher to be open speaking and plain speaking, but he was unusually open and plain when do we get the minutes . October 5th or 3rd. Its right at the beginning of october. He didnt like this ridiculous the way it has been political with yellen and summers, either. But the problem is, the markets, we have no markers. Its exactly like you said. Its hard to even say when will the fed taper . Is it politicized . The fed is more political now in the post crisis trade. But they wanted their guy in. The fed . No. Why not just pick yellen right away . They wanted a guy in there, a white house guy. Sure. It was much more political. Its always political. Sometimes they who appointed bernanke . He was appointed by bush. Joe, let me just the first bush lost the election. But obama wasnt always obama liked bernanke only because bernanke b. Its not like you get a treasury secretary to serve with their to implement your policies. And i would action that ite not arguing its a good thing that its practical. Can you guys remember a time when more people had more opinions about the Federal Reserve than it is now . No. Thats why the fed is so important. Because of whaift did in this post crisis period, the fed became more political. I dont know how the wouldve done it differently. Volcker was a big deal back then, too, remember . But theyre doing it to themselves. Mean im all for transparency, but Transparency Creates the conversation. No, youre right. You have that wrong, andrew. Im sorry. The policy creates the need for the transparency. Can you imagine in a democracy that we are, the Federal Reserve enacting these policies and maintaining the closed door policies you had in the volcker era . That would be more outrageous. And youre not for transparency . Right, right. Have you figured out your salary vers