Alcoa kicking off earnings season. Europe was missed and the nikkei was up about 1 . Our road map begins with history in the making. The president set to nominate Federal Reserve vice chair janetijanet i yellen to be the new chairman of the Federal Reserve. If confirmed, shed be the first woman. Young, costco and Family Dollar all down after issuing disappointing results. First up, though, history is about to be made in washington. The president will nominate fed vice chair janet yellen to replace chair ben bernanke. If confirmed, shed be the first woman to head any major world central back. The official announcement taking place at 3 00 p. M. Eastern time in the east room. Jim, its been said theres one less uncertainty that we have to worry about. Breathed a sigh of relief. I felt a sigh of relief because its just nice that something came out of washington that, well, just happened and immediately we saw reaction that, well, corker, my love because he comes on squawk might be against. This is what people want in congress so maybe something happens thats predictable. Corker did vote against her in 2010 saying he hasnt seen anything to suggest shes any less dovish than she was back then but also said shes probably going to get confirmed anyway. Bernanke said, listen, im not tapering. Great. You know what . If people get scared about our bonds, like say the chinese, which very rarely ever make these public announcements, well, we got a ready buyer, which is bernanke. We may need bernanke. He may be par bid for 100 billion. Ive been there par bid for a million but never for a billion. You mentioned, say, tbills for instance. You were on with Walter Isakson this morning on morning joe talk about how china never meddles in affairs. They never do. Thats earth shaking they came out and basically lectured us. You may not like the chinese but theyre usually very pleasant about these issues. They werent pleasant. The tbill yield is getting up to 08 levels. Banks can now borrow cheaper than the government. Certainly apple can. Im now putting it at 20 technical default. Im up from about 0 three weeks ago, 5 on friday, 10 on monday. After the president s speech, i think its 20. I think a technical default could likely happen if we dont get an answer by friday. This reminds me of lehman where everybody says dont worry, its going to be rescued. If you dont get started in the rescue process, this game of chicken, somebodys foot might get caught in the train. David . We have a number of managers of equitybased portfolios but also fixed inkcome portfolios. At this point there still seems to be a little more complacency than you might think. People pointing out last people we spent a lot of money on hedges, none of which we ended up needing and that was a waste. But they did note the number of people do you see the bank there were a few things that started to move. The bank cds started to blow out as well and that was worrisome perhaps and perhaps a sign of more to come here as both people figure out is there a hedge i can take that makes sense for me and what should i be doing . I also sense that risk is going to start to come off from those who do run equity based portfolios. One of the things that really helped us is my friend put a fantastic piece out, an eye on the market which really just talks about what really goes on in the treasury market. And many people dont understand, thats my commentary not his. Theres just lot of repercussions. 4 trillion wont work in the repo market. Thats unfathomable to me. The president hasnt explained that that well and also talking about how its main street that really gets hurt. Its small and midsize firms that cant get credit. This wipes out a lot of Small Business. When you get these republican congressmen who have been against this, do they know its Small Business that gets hurt . Its not big business. Its not even jamie dimon. Then ears wearhouse rejecting that unsolicited bid. They dont like the way that bid looks. Had to do that, im sorry. It took me a second. Ive been waiting for that all morning. We have seen this flurry of retail m a, within a Little Pocket of m a in general. Theyre looking for something a little sweeter. Yeah, sachs comes to mind. This is an interesting bear hug. They dont have a staggered board. Unclear what joseph a. Bank is willing to do in terms of trying to mount a proxy fight or at least the threat thereof to get them to the table. The letter was sent on september the 18th. Theres been some time for mens warehouse to contemplate and joseph a. Bank. It is the smaller bank but they do seem to have financing lined up with Goldman Sachs and brought in partner with golden gate. Mens wearhouse whose chairman, as we know, was no longer interested in any go private transactions but at this point all we have is a rejection. Well see what joseph a. Bank chooses to do. Watch the stock. My guess is it will be up. If it is up, one would think it gives a little more fuel to their opportunity. Mesh greenberg, who is to me expert on joseph a. Banks, though i dont think he wears joseph a. Banks or mens wearhouse. Joseph a. Banks literally will be doing better if they can get this deal done. Does matter. We do have a flurry of earnings to work through this morning, jim. Probably the biggest mover this morning is going to be yum, 85 cents does miss 93. Not only was china samestore sales down 11, september was down 13 and they say its going to take longer to turn around than thought. Charitable trust did buy some. The ceo did let people down. 2014, its now a showme story. I still believe china can turn around. Why buy it . There is a longer term history of it working. On these dips making so they get it right. Im not going to sugar coat this. The only reason my trust is buying it is because its down so much of where we had it. Jpmorgan saying people should take advantage of what they call shortterm dislocation. Its a chicken bone caught in the throat or the colonel was overruled by general cho. Theyre not having this stuff right now in china. But do i believe they can come back. However, i feel they could come back before and i feel very compromised on this. As much as i like david novak, we both share the same address, we both lived in our car. He should shut be quiet. I almost said shut up but my mom would yell at me. Be quiet on guidance here. He let a lot of people a couple weeks ago know things were good. This is not right, not right costco has had some bumps coming into the center. September was worse. Sold at 118, buying it back. Why buy . The comps are 5 . Who else has comps at 5 . I simply believe this is the most to buy costco. Its drifted all the way back down from 118. At 109, 110, you buy it because no one has those kinds of comps. That is some culture, as you know better than anyone. In terms of buying tequila, where do you buy it cheaper . Costco has tequila. Alcoa beats by 6 cents, the First Quarter reporting after being booted from thedown for 54 years. Nice things to say about trucking, aerospace about Global Growth. Hes using a terrific number, clause kleinfelt. He took his growth rate up from 12 to 16, to 17 to 20 . China goes from 7 to 10 to 9 to 11 for autos. So he raised european growth. This is the quarter that rodney danger field oops, clause kle kleinfeld should get some respect. Take a look at what he said to play with this giant taser is irresponsible. I spoke with clause after the Conference Call. He promised me he wouldnt use that line, that i could have it. Hey, claus hey, klaus, when you give a guy a line i guess i laughed so much. I do think if you listened to this call, hes talking about china being better. He has lowered his break even, he has got free cash flow, much better than people realize but there are still people who hate this stock. They remember it was in the 40s. I think klaus is doing an amazing job but they make aluminum. Beverage cans down 2 to 3 . What does that i a about cocacola . Im worried about cocacola after im on that call. Interesting. All these things are going to play in your interview. What else can we look forward to later on today . You know, we were going to also talk to kyle about jcpenney, by the way. Dont forget that, one of the largest holders there. And well talk port uerto rico. There are a lot of guys here talking about reaching the 17. They say it really wont be until november 17th. Do you think the market wont react until we get past the 17th or does the volatility start to really move up . I think it starts ramping. We went from being unthinkable, meteor hitting washington to thinking, okay, if it happens i think what well do next week at this time, it will be when it happens. I think the president and congress dont understand exactly the ramifications of this, even though the president said it could be chaotic. If i dont start getting a deal done now, youre going to up the percentage of the chances youll default. I go to the leman analogy. Everyone thought it was going to work out and the koreans were going to buy them. Everyone thinks this is going to work out. David, Everyone Wants to know if theres going to be any horse riding tonight. I dont think so. I think i convinced Larry Lindsay to come out in a cowboy hat but what do you think about jim, its a little hard to pick up some of the audio. Youre talking about the new addition to the board of jcpenney . Thats right. I think it very positive i think. Just on mad money basically told you never worry about sachs and we never worried about it. Though he did sell me a jacket when i was there and i did look at the price tag when i was there because i was embarrassed. Holy cow holy cow i dont like the way i look or feel. Davids exclusive interview with Hedge Fund Manager kyle bass with hayman capital. And a lot more squawk on the street live from post 9 at the nyse when we return. Thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. Join the millions who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. And provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. With all the good years ahead, look for the experience and commitment to go the distance with you. Call now to request your free decision guide. Its been about a month since hp was taken out of the dow. Meg whitman, the ceo of hp said when Hewlett Packard was removed from the dow a month ago she told employees i hope every hp employee took todays announcement personally, it was a blow to our brand. Interesting for a ceo to come out so candidly and say this is embarrassing. Klaus also said were going to show you how good we are. Some people took it a little personally. It was business. And Michael Eisner talked about godfather earlier. Sort of interesting touchstone in hps narrative, along with dell and everyone else for that matter. We will be getting new guidance from Hewlett Packard for 2014 at the end of the day, or at the end of the day pacific time. I should say at the end of the day here, about 1 00 pacific time. And importantly its 2014. This is the key year. This is the year that meg whitman has told us in the many times shes appeared, both good and bad quarters, by the way, that thats the year thats going to really determine whether this turn around is sticking and whether its working. And one wonders, of course, if it doesnt work what the other plan is, whats the break the glass plan, to break the Company Apart and when would they make that decision . Its beginning with the guidance for 2014 and the execution on that guidance and whether that turn around is really working. About the on company in the dow are former analysts. Nike is having theirs today. Remember last quarter . What a different story. Nike very strong, china very strong. Nike is everything that we export that people like. Absolutely. This will be nikes which already reported earnings season. We talked about whether that was the beginning of earnings season. A couple of big names to look for in terms of guidance and a view of the court of the coming. Im very concerned about Hewlett Packard. C. K. Sold some big chunks of samsung. I get concerned when i hear about pcs. Im not concerned about apples pcs because i still think that mac has some momentums. But pcs in general, like the one i took to college. On the day we against this announcement on an event that apple may have the next generation ipad. When we come back, well see. Cramers mad dash is next. Futures rebounding a bit. Janet yellen nomination coming this afternoon. A lot more from the nyse and squawk on the street straight ahead. Here we are, me and you on the road and we know that it goes on and on [ female announcer ] youre the boss of your life. 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I see the if you want gas mileage lower, you have to put a lot more aluminum in cars. Klaus owns that market. European car numbers going up good for gm and good for ford. I think gm could go higher here if we didnt have the taser pointed at us. Thats the credit yes. Family dollar, 85 cents, beat by 2 cents. Operations matter. The operators doing well in that segment are Dollar General and dollar tree. Family dollar will snap back. Think about Dollar General big in california, think about dollar tree as just a fabulous place to shop. Fabulous, one to watch with samestore sales roughly flat. After two Straight Days of selloff, will we see green arrows to return to wall street and hold hopefully . Opening bell in three and a half minutes. World thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. 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If you believe that theres going to be credit market worries and jpmorgan does not necessarily speak with one voice but michael has a fabulous piece today about the possible credit worries, the last thing you want to do is recommend a company that has anything to do with housing. Youre going to see Mortgage Applications go down here. I think this is a premature call. Id wait for the quarter. A lot of retail moving back and forth today. Piper, coors hold to buy if people stop shopping, everything goes down. Im concerned about the psyche now. The consume confidence numbers have dropped rather rapidly. Im not trying to be a doom sayer here. Stocks are saying go with Bristol Myers. Over today credit suisse. Pfizer a buy. Pfizer works here. Merck, they were going to do this gigantic headquarters in new jersey where i live. Merck is scrapping a lot of plans in order to save money. Thats not how i want my quarter made. I understand the merck hold call. They announced layoffs and people are starting to realize, what were they doing building all those buildings in summit. Do they have a clue . Im not sure they have a clue. Im not sure that merck knows where its future is and that is worrisome. Jcp