On the sidelines of an asian summit, treasury secretary assured partners. China is the biggest holder of u. S. Debt. It holds about 1. 2 trillion. Fidelity says it no longer holds any u. S. Government debt that comes due in late october or early november, around the time the nation could hit its borrowing limit. The nations largest money manager has been selling Government Debt holdings over the last couple of weeks. Fidelity says it expects the debt ceiling issue to be resolved. Thats the good news. But passette manager says its taking steps to protect investors. Bill gross says differently. Were doing just the opposite, probably buying what fidelity is selling. I appreciate the problem they have with their Money Market Funds. If, for instance, theres a technical default of a day or even a certain number of hours, then a Money Market Fund possibly has to mark down that debt to zero and it breaks the buck. You know, so Money Market Funds, fidelity Money Market Fund might want to avoid that situation. Pimco doesnt have that particular problem. And on a different note, gross is saying now that the nomination of janet yellen to succeed ben bernanke says the central bank probably wont end its quantitative easing for a year. You know, bill gross says certain thing and the markets have turned against him, but actually with that particular fund, theyve had a nice little run. Interesting listen to go bill gross. I see what hes saying now, that those are different worries. But im glad we ran that whole sound bite. The journal says economists see the nominee as slightly nor dovish has bernanke. And i was thinking about, okay, so slightly more dovish. And then i thought about how dovish bernanke is. And being anywhere even more thats like for you, andrew, thats like saying, slightly crazier than ted cruz. For like for someone on the which when you see i mean, thats what a democrat would you know how crazy they think ted cruz is. I did see some stuff about janet yellen. They pointed out that shes not a constant dove. I know. Liesman has said that, too. But then the journal is a free market. Theres a guy named tobin that she studied under would is a super keynesian. Hes a 50s to 70s, everything is through keynesian measures and shes an accolade of his. So the journal has that to chew on. Well see. Im glad that Everybody Knows who she is, shes been there. And theyre really youre not seeing anything in the market that is uncertain or surprising about janet yellen. Its stable, its continuity. The policy continues as it is. I did see one interesting thing. It talked about how back in the 80s, she and her husband, who were both economists, talked about how they were going to find a babysitter. They decided they wanted to pay their babysitter higher than the prevailing rate for their son because they figured a happy babysitter was that auto Morning Money this morning . I believe it was in the new york times. They figured that family, that two economists and the son is an economy. The president was pretty funny yesterday. He said you can imagine dinner at the yellens. Whew, wow. Theyre crazy. Theyre crazy. So now theyre going to the white house. And im i dont even want to say anything like no, no. Because the white house, they think its funny to say this is not a negotiation. Just because theyve said this will not negotiate. So this is not a negotiation. I dont care what you call it, lets have that conversation. Then the other thing, did you see the medical device thing . If you make up the 30 billion or whatever, then we can do this. So, oh, is it a thaw . Is it a thaw . Weve got a week to go. At least theyre talking and at least theres a plan. Remember, just three or four days ago, we didnt see a plan for how they would be able to come to the table on both sides, feel like theyve accomplished something. There is Corporate News today. Your hair looks wonderful. It does. Thank you. Hes been teasing me about this, andrew. He thinks i shouldnt accept compliments. I shouldnt say thank you when someone said that because all i did was pick the color. She has new color and got rid of the highlights. She said wow, thank you. My response to him is next, tie, joe. Someone picked it. I think andrew is crazy today. Hes like gallagher or something. Thats wild for you. You are stepping out with that one today. Its usually solid. Ive worn this tie on the show many, many times. And i like it. Thank you. In Corporate News, chevron is warning that Third Quarter earn earnings will be significantly lower than last quarter. Due to earnings in the refining division. The downstream stuff. Fuel margins were squeezed and that has been sort of the state of affairs for all companies for the last few quarters. You think with oil way up where it is, these guys you would think gasoline prices would be higher and you think they would be making more money but theyre not because of refining margins. And set rick systems guiding Quarterly Results below analyst specations. I thought this was an orange jooul juice manufacturer. But its not. Its a Cloud Computing softwaremaker. And ruby tuesdays Quarterly Results missing the mark. Warns that samestore sales will be down in the high Single Digits this quarter, followed by improvement hopefully in the coming quarters. And zumiez clothing retailer you might just spell it out. Zumiez. Do you know what it is . Yeah, i know that. Really . To tell you the truth, i dont know much about it. The girls dont shop there, but ive heard of it. Reporting slightly better than expected. Andrew, do you know what i did this morning . Downloaded ways. You downloaded ways . Yeah, i did. And i found a place where you can hit mall and it will show you where the malls are, with the gas price res cheapest. I saw that. I had a hard time trying to get me to be part of the thing, of the you know, do i get points. If youre driving, you should not be playing with it at the same time. No, okay. You dont have that i dont have that problem. But its kind of cool because its a everybody is involved. If dallas traffic jam, you tell someone. And it knows on its own, as well, because it knows that your car has slowed down. Does it do it on gps, too . Yeah. What if you pull over on the side of the road . Then it wouldnt know whats going on. But what its looking for is two or three cars all at the same place, so it knows everyone is slowing down. But it has three different routes with hugely different times. Did you follow it . Yes. Was it right . It was. And unlike google maps, i dont believe the have you ever noticed it will say how long to your destination . And it will be 20 minutes and 15 minutes later, it says 20 minutes and its like, thats not fair. Though i will tell you, going the because ways. Occasionally if youre on google maps, it will show you a thing, if you say on it, it will say ways is reporting that theres a delay. So its all going to come together. They the to get to the Global Markets report. It is time to get on to the Global Markets report. Carolin roth is standing by in london this morning. Is ways a big deal in london . I dont even know. She may not mow what were talking about. I dont think so. I dont think so, to be honest. But hey, lets move on to the european markets. Were seeing optimist here on our side of the ponds on hopes of a debt deal between republicans and democrats. Thats why weve moved off those onemonth deals from the stoxx europe 600. Just off session highs. By and large, seeing gains for these european core markets. Were seeing the ftse up by 1 . Keep in mind we have a boe decision coming up in less than an hours time. The dax is gaining 1. 3 , bouncing back from three days of losses. The cac adding 1. 5 and the mib in italy, its been outperforming the rest of the pack over the last couple of days. And that continued today. Uk yields were at a sixweek low on the back of disappointing data. All eyes on the boe has it comes out with its rate decision. Many people say its going to be a smooth transition. Were not speccing any change in terms of asset purchase. The italian yields falling to 4. 3 . This auction tbill, that was successful. Back to you. Carolin, thank you very much. Right now, we go to washington and to john harwood. John, the markets seem to be buying into this entire idea that there is some potential buying, there is something in sight. Are they right to hang their hat on this . I think theyre right. I think weve gotten to the point of the Football Game where were no longer throwing incomplete passes, where theyre moving the ball towards the goal line. We havent scored yet. Havent resolved the situation, but it appears that were moving in that direction. Republicans are essentially conceding that the end defund delay obama care effort is not going anywhere. And they are moving towards an alternative strategy to get to some sort of deficit negotiations. Which is a good thing. Which is administration can engage in. And i think so long as the outcome of the negotiation is not deck tated in advan dictate then the administration can talk about the negotiations theyre talking about setting up alongside the shortterm raising of the debt limit and reopening the government. Youre bringing tears to my eyes. Maybe thats not so bad. People say how ugly everything is. And then i was looking up that churchill quote, which i dont like about the americans finally do you know, they finally do the right thing. You know, shut up. Youve got a lot of stupid things in the uk, as well. But, you know, i hate to say its kind of true. Did he just tell becky to shut up . No, no. But i mean, i dont like dont you ever say that to becky quick on our air. He wasnt. I knew what he was saying. You know, your dye job is nice. Your job looks nice. John doesnt color his hair. Do you think i put that gray in there . I think it gives you a lot of credibility. It otherwise might be gravitas. Now, being 35, now it looks like you know wa youre talking about. I refer to it as premature gravitas. You know what we talked about . I dont want to get no, im not going to get into it with you. I love the redskins. I dont know what to do with it. I think if it offends one person, you probably need to do something about it. I dont know what to do with that, john. I know youre a huge fan. You know, its a tough one. So dont even answer. But im im going with the name that i grew up with. It doesnt need to offend you. If it offends anyone, then it probably is something you know, goodell is in a tough spot. Thats his problem. Im a fan. Its not my deal. They were going to change the name of the Washington Redskins because they didnt want to be associated with an offensive term so they were going to change it to the baltimore redskins. How about the blackhawks, the chicago blackhawks, f the famous native american seminoles. But i saw a Washington Post article this week that said its not a question of if, but when. Youre not native american. Actually, i am thats wa goodell said. I am like an eighth native american, cherokee. Im not even kidding. Really . Yeah. You are, becky . Yeah. Maybe my mom is an eighth and im a 16th. So i can say it, there. Wow. So are you offended . No, but i dont think its fair because i dont really you know. Which eighth . My moth is an ath and im a 16th. All right. John, dont screw this up, okay . You know, well see. Youve got about 20 republicans. I think 18 to be exact going to the white house today. To try to discuss what the potential solution might be. You know, democrats continue to hang firm with a little bit of initial internal squirming amongst themselves about their strategy. Resisting the piecemeal funding of the government. You had some tension between the District Of Columbia officials and democrats over rejecting a republican bill to restore funding for the District Of Columbia. But it does seem that theyve been Holding Together by the fundamental elements of the democratic strategy. And i think youve got the members of the Republican Leadership who are now really searching for a solution and i think theyre going to find it. John, do you think this goes down to the 11 hour . Are we waiting until wednesday of next week . Well, it takes some time for all this stuff to process, but the republicans are talking by the end of the week of moving a bill that raises the debt limit for a short time and sets up this negotiation. I guess one question is going to be a potential hangup is do you both raise the debt limit and reopen the government with a similarly shortterm continued resolution at the same time . Is that one vote . Is that two votes . And then do you have the faction thats been pressuring boehner insisting on unacceptable conditions from a democratic or senate or White House Point of view on one of those bills . You know, there are plenty of land mines. I dont want to be overly rosy about it. But i do think that were in the if a phase where theyre looking for a way out and a its good. You look at david just quickly because we have to go, but pointing out, we all know this, that 250 billion a month, 80 of the spending is already spent. Its on auto pilot and the president knows that and democrats know that. So i mean, in the end, everybody has the same end goal, just different ways of getting there. Its unsustainable and it robs from it gives to the current generation and robs from future generations. Is there anything positive about this episode, and i hesitate to say that there is. It is the fact that it is the ultimate recognition that cutting the budgetary part of the government is out of gags. Now it is time to look at the entitlement side of the budget and the administrations positive is look at it open to both ends of the solution. Theres a bit about youre spending too much and theres a bit about the revenue coming in is too little. Republicans are going to resist the latter part. The administration is going to insist on it. And i think the zone that were in is that if you have a small deal, a very, you know, shortterm deal to alleviate the sequester, move to entitlement cuts, my guess is the administration will take something without revenue of any significant size. They have some user fees and call that revenue, whatever. But the more ambitious attempts that you make to reign in Social Security and medicare, chain cpi means testing all those things. The bigger you go, the more the democrats are going to say we have to close some tax loopholes and get some revenue. If the republicans are committed to not doing that, smaller deal. But this is where the conversation needed to get to and we seem to be finally getting there. John, thank you for that. We are going to go all the way from washington to china. As is often mentioned, china is the biggest holder of u. S. Debt and eunice yoon joins us with perspective from there this morning. Good morning, u. S. Eunice. Good morning, guys. The chinese are definitely hoping that the people in washington work this out. Even the chinese premier has been weighing in on the sidelines of a summit here in asia, the chinese premier was speak, secretary of state john kerry and said beijing was paying great attention to the goings on in washington. Xhien hes officials have been boasting their concerns about whats happening in d. C. Theres one official earlier this week who said that the clock is ticking and that the u. S. Really needed to safeguard chinas investments. As you guys have said, china is a major holder of u. S. Treasuries. It has 1. 3 trillion in u. S. Tbills and whats interesting is the way its been playing itself out in the state press. Because a lot of times in washington has a misstep, that gets played up in the chinese press. But this time the reaction is much more muted. It appears that the government is sensitive to the Public Opinions here. Because over the past couple of days, theyre saying quite a bit of anger online about whats going on in washington. But a lot of that danger is not directed as washington but its directed at beijing. There are many people who have been questioning the government here and asking why beijing have you put so many of our eggs into one basket . Guys. Great question. Great question. I guess the question would be or the point that the government there might make is where should they put it instead . Do you find a more stable market somewhere else . The u. S. Has been the safe haven and it just so happens that china has a lot more money to plow into a market than anybody else does. Well, thats definitely true. And so if you talk to but a lot of people on the ground dont really understand that. In terms of whether or not were seeing any selloff or anything like that with u. S. Treasuries in china, i was telling a lot of people because i was curious about this myself. So far, we havent seen any signs. But a lot of the triggers that ive been talking to said that they are sensing triggers. And theyve been point to go some of the data that came out of japan recently, some of the data out of japan showed japanese investors have been selling foreign bonds at record levels last week. And just a couple hours ago, the Hong Kong Exchange issued a statement oh, yep. Is this headlines news . Is this front page news in china right now . Yeah. This is it, this is the biggie . No, no, its front page news. Yeah, it is a biggie. But the way its playing itself out is very, very straight. And the sense is that the the government doesnt want to draw criticism itself for having so much of its own money in u. S. Treasuries. But one pointed i wanted to bring up with what happened in the Hong Kong Exchange, they issued a statement saying theyre valuing u. S. Treasuries lower. They are now going to apply, tledz, a haircut to the valuation of u. S. Treasuries used as collateral. So the bond traders i was talking to said that is already a sign. Youre starting to see an impact, people getting more nervous out here about whats happening over there. Eunice yoon, thank you for that report. Its become ago geopolitical issue, not just a domestic one. We appreciate it. The taliban, have they weighed in on this . They own tbills . No. Theyre making fun of us. They said were sucking the blood from our people or something. I dont know. Ill give you the quote. When we come back, if