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tv   Markets Now  FOX Business  October 8, 2013 1:00pm-3:00pm EDT

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negotiate. byron dorgan on why no one is coming out of this a winner. adam: the biggest weekly hit since the lehman crisis. ceos are taking notice. lori: k.t. mcfarland joins us about why is now the time to keep our eye on the middle east. let's head to the floor of the new york stock exchange. we find lauren simonetti there. >> down. down about 220 points. down 11 of the last 14 sessions.
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the nasdaq is selling off the most. we are nine days away from a potential that the fault if we do not raise our debt ceiling. adam: president obama is urging john boehner in a phone call this morning to hold a vote on raising the debt ceiling. rich edson is at the white house where we are expecting the president to make a statement and take some questions in about an hour. rich: that is correct.
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there was a phone call earlier this morning. fund the government, raise the debt ceiling and then we will have a negotiation. we continue this impasse. as for our markets, is the method really missing or hitting washing -- washington? this. >> the first thing that will not happen is we will not default on any of our obligations in terms of our debt. that will not happen.
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it seems that this will get rolled into the debt ceiling fight. speaker boehner, the president and harry reid, no real substance there. back to you. adam: president obama will make a statement and take some questions at 1:00 p.m. lori: howard scholz says he is utterly disappointed by the level of irresponsibility.
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they are calling on congress to fix the fiscal mess. adam: with most investors say there is no way that they would allow a u.s. default, what happens if they do? if the impossible actually happened and we had the debt ceiling, just out of curiosity, it sounds like you think markets will be called. >> first of all, we all know that there is no date where we are not in default and then we are in default.
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the worst the market gets, the more pressure. if the unthinkable happens, you will start to see treasury bonds soar and equities collapse. adam: on october 25, assuming no deal, we get the description on yields on treasuries going up. it will not happen before then? >> i think you can see a couple down bad days and a couple hundred points. i do not think you have a big issue in till at least a week or ten days after. whatever date they initially give are not the real dates anyway. adam: we hear a lot of people talking about calamity.
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you have written, we heard the same garbage regarding the fiscal cliff. you point out that did not happen. a lot of economists say we lost a whole% of gdp because of sequestration and the whole fiscal cliff situation. >> i never thought we would go over the cliff for more than a day. i do not think it has changed a whole point of gdp. we are all most of the to it right now.
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you can only cry wolf so many times. adam: you raise a good point. what percentage of your portfolio do you have in cash at this point? >> 50% in cash in certain portfolios. i think we are at new highs above 16,000. adam: i have had analysts say they have very little to decide in cash. are they foolish or are they lying? >> i do not think it is either. it is how you run money. i have no problem taking a large cash position. i have no problem having zero
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cash. i think it depends on your methodology. their are plenty of ways to make money in the market. adam: you do make plenty of money in this market. thank you very much. all the best to you. lori: secretary of state john kerry taking the place of president obama and asia. forced to take a backseat went off to the side, practically out of the picture in the big photo ops of world leaders. president obama canceled the trip because of the government shutdown. oil prices are edging higher right now hoping washington will get it's act together.
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>> the energy information administration said the demand for oil will not be what it was. we will have less in supply. that really got the natural gas to continue to rally right now. for the first time in recent memory, they are saying that if you heed to our home with natural gas or propane, you will pay more than you did a year ago. if you are heating your house with heating oil, you will pay less. that has been the opposite for the last couple years.
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the demand for natural gas is going through the roof. not only here in the u.s., but we are exporting tons to places like mexico right now. lori: i want you to show me gold. >> it has not been explosive. if you overlay the chart, they are eerily similar. if we get a big spike in the vix, then maybe you can get a little worried. lori: thanks a lot, sir. he is not called an activist investor for nothing. karl icahn is back at it again. adam: k.t. mcfarland joins us
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next. the students who are reading the revolution in egypt. lori: getting a facelift. the first look at the new $100 bill. ♪
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♪ adam: it is time to make some money with charles. we are looking at medical products. charles: hello. this is a stock that has been -- recently, they have come under some criticism. they make a surgical robotic device. every doctor in every hospital, they fight over these things. they cost a lot of money. last year they said that they were harming patients and not being used properly. i think that it is overdone. first of all, to be quite frank,
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somewhat of a smear campaign. what is interesting is the stock still traded higher. william boyer had positive things to say about it. it was up $12 yesterday. up $10 so far today. i think a bigger issue for them is getting the medical community to sort of recommit. it has to grow the top line rapidly. i think it will get back there. i think the risk reward is pretty good. make go had about 80% premium.
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i think this is even cheaper. lori: let us talk technical for a second. charles: it was the perfect chart. certainly, i think that the stock is oversold. again, it will be volatile. lori: thank you, charles. great to see you. adam: back to the floor of the new york stock exchange. lauren simonetti is there. nicole: karl icahn announcing two big moves. the first is nuance communications. it is down nearly 2%. they have named two associates to its boards.
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the oil and gas producer, talus man, also down today. back to you. adam: i think the phrase that they fear is karl icahn wants to talk to you. adam: thank you. lori: next hour president obama speaks. which poses the biggest threat to the market and/or portfolio? adam: we have some new twists in the insider trading case. lori: small business optimism. the personal story of a chicago fitness story next.
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♪ >> 21 minutes past the hour.
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the usda has issued -- officials say 278 people have become sick and 18 states. the infections were caused by eating undercooked or improperly handled chicken. major league baseball has filed a motion to move the lawsuit filed by alex rodriguez from state to federal court. he claimed that the commissioner and major league baseball overreached in its 211 game suspension. he was suspended in august for violating the league's drug policy. diane naiad has a new goal. she will swim for 48 hours straight in a specially designed pool in the heart of new york city. the money raised will go directly to superstorm sandy
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victims. back to lori and adam. lori: thank you. she is something else. with all the dysfunction in bc, how is americans jobs creator feeling about small business? while the economy could use some pumping up, jeff flock is getting a firsthand look with the owner of a fitness studio in chicago. suit and tie, really? jeff: i am already pretty fit. besides, this is just for women. it is called barbie fit. this mess in washington, you don't care. >> we are not letting it affect us at all.
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they come and they will get the best workout they can in 60 minutes. jeff: let's break the numbers down for you. small business does not think the economy will improve yet they are increasing employment. >> welcome to owning a small business. that is part of the struggles that we face. when the economy is down, right could be lower. jeff: you opened this place in the midst of the recession. you had lower costs. >> we did. we opened in 2010. we decided to take a chance and provide a service that we knew people would want and pay for. jeff: appreciate it.
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always good to see people who are in shape. lori: thank you so much. it is great to see small business owners taking risks like that. you do want to stay tuned, and the next hour tracy byrnes and ashley webster will interview bill dunker berg. adam: a blue seaney ribbon and a color shifting ink. will make it harder to counterfeit.
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lori: did you get one of those bills yet? can i borrow it? adam: no. lori: if you have a few of those $100 bills to spare, you may want to think about purchasing one of those new gold iphones. just $10,000, you can have one of your very own. the product was originally intended as a joke. the company has already sold several of these cases. they have warned it is more just for looks. adam: the dow down triple digits right now. we are awaiting comments from the president.
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lori: first, we will hear from byron dorgan. adam: what will the credit rating agencies actually do if the government fails to get a deal done. we will have the bottom line from elizabeth donald. ♪ mine was earned orbiting the moon in 1971.
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adam: it is time to check stocks. we'll go back to the floor of the new york stock exchange to do that. lauren simonetti is there. we're off the lows of the day. i'm looking, yes, we are. >> off the lows of the day but still broadly lower at this moment. i like to look at the advance-decline line to see how
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many stocks are up compared to down. right now here at the new york stock exchange, one is up for every five that are down. certainly a broadly lower market. even alcoa, that's where i'm standing right now, is down. this used to be a dow component. it trace additionally the first major company to report on the quarter, and they will do so today after the bell. the expectation for the aluminum giant is a nickel a share on revenue of 5.$63 billion, adam. investors like to watch alcoa. it's a bellwether, an indicator of the global economy. as you know yesterday morgan stanley downgraded the company to equal weight from overweight. they're concerned about lower aluminum prices. there is also concerns about demand out there. so we're watching alcoa. we'll bring you the full earnings report, everything you need to know, to trade on "after the bell", later today. back to you. adam: all right. we've got alcoa and yum brands reporting. lauren simonetti will be all over it from nyse. thank you. lori: the government shutdown continues of the while the clock ticks down to a possible default
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but is washington any closer to compromise? here's what house speaker john boehner had to say earlier. >> i want to have a conversation. i'm not drawing any lines in the sand. it is time for us to just sit down and resolve our differences. >> and we will hear from the president at the top of the hour but now former democratic senator of north dakota, byron dorgan says the latest d.c. stalemate is a quote, pox on everybody's house. senator dorgan pleased to welcome you to our show. >> thank you. lori: where do we stand with all of this. so much talk, little action, correct? >> well, you know, i was there for 30 years in the congress and i imagine there were a couple hundred continuing resolutions to fund government and that moved and most of the dispute was always about spending levels. that is not the case this time, the spending levels, republicans won on that. it will be sequestration levels. this dispute is about policy or
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defunding obamacare. this dispute is a mess. i look like from the outside doesn't look pretty at all. people's business is not getting done. lori: that is you a unique perspective you give us, senator. the people are getting anxious. you've got stocks down 11 of the last 14 sessions. the fear index, this vix, is at its highest level since june. the latest gallup economic poll saw the second biggest weekly decline since 2008! >> right. lori: do you agree washington is not listening to main street? >> they're not listening to anybody much. nobody believes we ought to be shutting down the government over these issues. nobody believes we should default on the debt. yet we're on that precipice right now. you know, this economy works on confidence. if people are confident about the future they take a trip, buy a suit of clothes, buy a car, buy a home. they do things that represent their confidence. if they are not, they delay the trip or delay the purchase. that is the expansion and
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contraction of the economy. it is very hard for the american people to look who is minding the store here in public service in washington and think, i'm really confident about the future. this really erodes confidence. i'm really concerned, they need to get this resolved and soon in my judgment. lori: what advice would you give your democratic colleagues? we know the president is holding firm. he called the house speaker this morning and refuses to negotiate on these things. what advice would you give other democrats right now. >> as you know i'm a democrat so i have a view of this in the sense i mean i think they should just fund the government with the cr, the continuing resolution and then, you know, deal with this issue, the debate over obamacare or the affordable care act, that is the law of of the land. they can have that debate whenever they want, but let's not shut down the government over it. certainly not threaten default on the government's debt. you know, some of the new people, and i would mention senator cruz because he would probably want me to do that. he has been in the forefront, they called a play that ran them
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into a box canyon and they don't have a way out. there was not an exit strategy for them. so it is a very difficult circumstance. i was one of the negotiators in the late 90s when there was a shutdown. at this point, at some point there has got to be a decision on behalf of the american people is to do the right thing. the right thing is to pass the continuing resolution, pass the debt limit and put together a larger -- lori: the republican strategy, whether or not you agree with ted cruz, it is flawed. they had the october 1st debut and all kinds of glitches with the system. add to that the president's own waivers. why not strip it out and deal with it and just fund the government without it? what is so wrong with the republican proposal to defund or at least delay it until it is fixed? >> what is wrong with it, it will not happen. the president won re-election. it takes 67 votes to override a veto. the president said he would veto something that abandons or delays obamacare.
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so you know, in politics you have got to understand what is possible and what is not and they have embarked on a strategy that is not possible. they are not going to, while this, while president obama is in the white house, they're not going to be able to, to eliminate this signature accomplishment from the first term in my judgment. one other point. i. i would say to all of those and who don't like, to upend obamacare, what is your plan? there is no alternative plan but there should be. lori: i'm not saying that or suggesting that the republicans should try to just get rid of obamacare. we agree that the supreme court did uphold the law. the key issue is, it is flawed the way it is in existence right now. what will make either side budge? polls as you know for both republicans and democrats in congress are rock bottom. the president's own approval rating is at a historic low. what do lawmakers have to lose at this point? >> yeah. let me be quick to say that
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shows that have strong opposition in the affordable care act don't have the right to be involved in this debate. i say it ought not to be leverage of shutting down the government and defaulting on the debt. that is my feeling. >> yeah. >> so my hope is, there has to be somebody blinking here at some point or perhaps the parties deciding they will each give each other a little something. i'm not quite sure how this ends but it has to end and end soon because we can't bust through a debt ceiling extension. we have to meet that deadline. lori: we shall see. we appreciate your take on this. former senator byron dorgan, democrat from north dakota. thank you again for your time. >> thank you. adam: lori, we'll shift gears on a different subject. latest on mark cuban's insider trading trial. the federal judge denied the his request to dismiss the sec case against him leaving the case decided by the jury. cuban's second day of testimony has him contradicting himself. sec main witness acknowledged in phone conversation that
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information he received was confidential, he allegedly said, this is a quote, now i'm screwed. i can't sell. cuban claims he never said that and that the witness is wrong. but initially he said he didn't remember the whole conversation. lori: okay. we do want to remind everybody, moments away from the president's statement from the white house and he will take questions or at least he is expected to do so. we'll bring you all that live at the top of the hour. adam: while domestic issues are dominating our attention, kt mcfarland joins us next with why we absolutely need to keep an eye on the mideast, particularly egypt. announcer ] once, there was a man who found a magic seashell. it told him what was happening on the tradg floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell.
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>> i'm cheryl casone with your fox business brief. jury selection has begun in the fraud trial of former employees of convicted ponzi-schemer bernie madoff. madoff's long-time secretary and four ex-employees were introduced to 200 perspective jurors. all five pleaded not guilty. the trial is expected to last up to five months. the ima is warning that failure to raise the u.s. debt ceiling would quote, severely damage the global economy. imf cut the global outlook to 2.9% down from the july estimate of 3.1% that would make 2013 the slowest year of growth since 2009. shut down could delay health service payments they provide services for the defense health agency. they could be liable for
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17 million worth of claims if the payouts don't come through. that is the latest from fox business, giving you the power to prosper.
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lori: violence in egypt escalating as the military-backed government and islamist dig into their position. how will the u.s. react after several failed attempts intervening as you know? fox news contributor kt mcfarland just returned from meeting leaders in egypt. we're so honored to have you. >> thank you. lori: some trip. >> i was part of first american delegation with the westminster institute. we met senior leaders across all of society. we met business executives. we met the coptic christian pope. we met sunni muslim leaders. we met former government leaders and members of the student movement which actually launched the revolution. i spent two hours with general
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assisi. lori: look at wonderful pictures. >> these are the student leaders. >> what is the most common misconception among americans about the current situation in egypt? >> that is a great question because there is a huge misconception. the accepted knowledge this was a military coup to remove an elected leader. yeah, but, here was the thing. mohammed morsi and the muslim brotherhood were elected a year ago. then they wrote the constitution and they wrote a constitution that did not, deliberate did not allow for impeachment. what they were planning to do, one man, one vote, one time. s.: 33 million did. you know what that is equivalent? 150 million americans going to protest. that was encouraging. that is the good news. the bad news the muslim brotherhood is al qaeda. i have no question. they have no question. lori: last we spoke a few months before this trip the economy in egypt was in tatters.
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any better? >> a little bit better but when i talked to general assisi, they understand, they have got about six months to get it together. they have gotten sort of a bridge payment from the wealthy sunni-arab states, you know, saudi arabia, united arab emirates, kuwait. they have 12 billion to tide them over. unless they establish security in the streets, make conditions that are required for the tourists to come back, for foreign investment to come back, then they spiral downward. they have to reverse that and spiral up. lori: did you feel safe being there? obviously it is so dangerous for journalists and western people covering the arab spring and subsequent upheaval. >> that is good question. lori: what would you say to someone, kt, i am interested in visiting valley of the kings this summer? >> granted i had military escort and guest of government so to speak. i wasn't in any particular danger. i was in tahrir square 24 hours before they had another round of demonstrations. the muslim brotherhood is not
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giving up. they have ak-47s. they're fighting. i think be cautious but i wouldn't mind booking my trip yet. lori: what does egypt want from the u.s. at this point? >> interestingly general assisi said to me, we would like the aid but we would like the moral support. it wouldn't cost you a penny. if you gave us that, it will help us stablize the situation. so go for it. if we don't do it, the russians are there they're knocking on the door. we would like to take the americans replace. lori: we love to have part two. >> part two. lori: conversation on u.s. foreign policy in the region thank you very much. >> turning our conversation back to the debt ceiling we'll check as we do every 15 minutes with traders and investors. alan, the dow is holding looking on the board, triple-digit losses. the president will speak at 2:00. whatwhat do we need to hear froe president around is this pressure some analysts say to get congress to act you're 100 percent right we need
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pressure to get congress to act. not only here but the polls. republicans are used to lower polls but but if the president is going lower, maybe we'll hear from the president. maybe he will start to negotiate with the republicans, get things moving. that's what we want to see. adam: i hear different analysts say, no way, not going to happen that impossible which would pass the october debt ceiling deadline from the treasury. do you agree with them or you say impossible or foolish. >> i don't think it will happen. i think there is zero chance of us going over the cliff. the consequences, look at this way, when lehman, when lehman went with their debt, it was 500 million. if we go it is 12 trillion. so it is not going to happen. it is not going to happen. adam: alan valdez from the floor of the new york stock exchange. thank you very much. >> thank you. lori: we are just minutes away from the hearing from the president, from the white house and he is expected to take questions too. we'll bring you all of that live at the top of the hour. adam: first a big fat zero. that is how many ford automobiles "consumer reports"
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ranked with above average reliability. the new concern about the future of the automaker. edmunds ceo joins us next.
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adam: there has been a lot of talk about the comeback of the american automobile industry but is that really the case? there are some signs that point to the contrary. edmund.com ceo joins us and there are troubling signs for a carmaker that has really, i thought, done terrifically well, ford. none of their cars earned an above average reliability score and seven cars had subpar rankings in the latest "consumer reports." is that shocking and is it accurate? because i've driven ford products and i have been impressed.
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>> yeah, i think i'm with you, adam. so i think that what we're seeing is a situation where the relative scores, you know, are certainly important but i think if you compare it over the last, say, 10 or 20 years, all of the vehicles out there in the marketplace have gotten much better. so the competitive set is quite a bit more competitive and, in the case of this report from "consumer reports", the folks at ford didn't do quite as well as they would have liked but they still have some great product out there. adam: the new ford fusion, the hybrid, i had that on the road for work a couple times. it won awards, an incredible car but isn't the issue really hurting ford and they're trying to rework it is ford sync. the whole electronic platform in the dash can be confusing but they're getting rid of that one and going to a new one, are they not? >> my ford touch is one of the issues and the ford sync product has really been the stumbling
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block for them but that is something they're completely focused on and we're hoping as the newer versions come out they're able to lick some of those issues and make it more intuitive for consumers using those types of audio programs in the car. so that is certainly is something that is important to them. adam: are american consumers, are we just naturally biased against american-made automobiles? toyotas and nissans and they get recall notices too. we announce them when they happen. we keep hearing american cars are getting better but are we on par with american-made cars than foreign automobiles? >> a number of american cars, are, american cars as well as the, whether it is european or asian cars are actually manufactured here in the united states. adam: honda in ohio. nissan in tennessee. >> misnomer to say, exactly. and so, i think that the perceptions that have built up over many, many decades are hard to work through but we're certainly seeing the americans
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take, you know, the right step forward and the products are getting much better. and are certainly competitive, whether it is from ford, from gm, from chrysler. so, i'm betting for the domestics, and i think they will do well. adam: is ford takeing a hit because of its divorce from mazda? i mean the fusion used to be a mazda 626. now it is an all ford product. is that part of the problem? >> well, that, you know, i think that's something that happened a while ago. the engineers at ford are top-notch as well. so i wouldn't, i wouldn't hang that just on a mazda-related issue. the folks at ford did, you know, divest a number of their, their luxury brand a number of years ago in order to make the company that much stronger and more sustainable. and so, i think they, while they certainly have challenges, i'm not sure i would hang that just on a mazda-related issue because they still have quite tight relationships with the folks over at mazda.
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adam: sorry we have to cut it short. i'm a car geek. sometimes i will actually look at edmund.com and prices to see what things sell for on the used market. appreciate you being here. it has been a pleasure. >> appreciate you having me and come back early and often. >> you got it. we're minutes from the president's statement, expected at the top of the hour. is a resolution to the shutdown close? with us to try to barter a deal to avoid breaching the debt ceiling the big question on wall street what will ratings firm do if washington does not budge? lori: liz macdonald with "emac's bottom line." this is really, really important this whole debate because it affects state and municipal debt which are closely linked to federal. so a downgrade could come first hearing out of the box from fitch. it could come even as a debt ceiling is reached. remember s&p cut the u.s. in 2011 even when a debt ceiling agreement was leaked. remember they kept extending it and at the 11th hour, august 2nd, the president
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signed a debt ceiling deal and s&p cut on august 5th. what we're hearing, fitch is saying if we exhaust extraordinary measures, if we miss a payment, of course there will be a downgrade, also from moody's. but the key here, bank of america and merrill lynch are saying fitch could cut even if negotiations get contentious and even if a debt ceiling agreement is reached. that is so key what will happen to the u.s. credit rating from one of these guys. you could see some action. then you will see the bond market getting roiled if there is a downgrade. lori: absolutely. so that downgrade could happen perhaps the october 17th deadline, is that the bottom line? >> possibly and even after that because remember there will be some leeway up until halloween when the markets start to get spooked, meaning extraordinary measures are being exhausted and you could see a downgrade from fitch even if there's a deal. watch out, you could see another downgrade. lori: consider ourselves warned. adam: thank you, emac. >> sure.
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adam: coming up live we have coverage of president obama's statement and take on the government shutdown and more. tv you can't afford to miss. peter barnes has an exclusive interview. one of the so-called hawks at the fed. philadelphia fed president, charles plosser. when will they begin to taper? he thinks they are too late. tracy byrnes and ashley webster next
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s. tracy: good afternoon, i'm tracy byrnes. ashley: i'm ashley webster. government shutdown, the president's view. president obama about to give us his view on all of this d.c. stalemate and showdown. we'll bring it to you live of course and fill you in on house speaker boehner's latest version. plus, how is it all playing with small business? we'll go one-on-one with nfib chief economist bill dunkelberg. tracy: you don't want to miss this. peter barnes with an exclusive interview with one of the so-called hawks at the fed, philadelphia fed president charles plosser.
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so when will they begin to taper? that is an interview you can not afford to miss. our twitter question of the day, the fed or d.c. politicians, which poses the greatest risk to the markets and your portfolio right now? tweet us at fox business #mkn. that is something you can't afford to miss. ashley: do we get the option of both on that question? tracy: all of the above. ashley: all of the above. top of the hour. time for stocks. let's get straightstraight to lauren simonetti on the floor of the new york stock exchange. wall street down on the government shutdown and debt ceiling fears. down 110 or there abouts on the dow. >> government shutdown, day number eight and nine days away from the potential government default if we don't raise the debt ceiling. near the lows of the session. the nasdaq, look at that, down 1.8%. some big tech names that have done so well this year like netflix and trip advisor, they're all down pretty sharply, better than 5% and the s&p is
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down nearly 1%. jcpenney shares are a rare bright spot today. they are sporting a green arrow. they gave september same-store sales and they showed a big improvement over the month of august. also jcp.com, their web sales are trending to the upside as well. there is your winner. the stock is down 60% this year but it is certainly up 3.75 -- 3.25% today. tracy: jcpenney shareholders, god bless their souls. we have break news as we await a statement from president obama. we go right to rich edson at the white house. hey, rich. >> hey, tracy. president obama will speak in the briefing room, the schedule says should be coming any minute now although we're not always on time here at the white house. president obama in the briefing room will take a couple questions according to the white house after the president and the speaker were on the phone the speaker and the president, white house and speaker's office both
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acknowledging they didn't break any new ground here the president stressing that he wants the house to pass a bill that funds the government to raise the debt ceiling. he is willing to negotiate on all the fiscal matters. republicans say those two proposals are their leverage points. so they're not giving them up and get nothing in return. house speaker john boehner, meanwhile and house republicans pushing a new super-committee. you remember this, this committee is made up of democrats and republicans to iron out fiscal issues. that proposal would likely pass the house. that would have to pass the senate to establish anything like that. that is not a done deal. d.c. tries to figure it out with leaders of their party, house speaker, senate president, harry reid around speaker not having any substantive discussions to pass bills to fund small pieces of government. the senate says no thanks, fund all of it or none of it. tracy: rich, where are they going with the obamacare debate? are they willing to give up and move on?
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>> the white house isn't going to budge very likely on the president's health care law. and, you know, republicans, there are many of them who are still sticking to that, who want either a one-year delay or full repeal. very unlikely that is the conclusion in this. one place you could see a compromise in the end as you roll the debt ceiling debate with the government spending debate is the medical device tax. that is something that has yet to be repealed bit congress. it is something that has wide support in the house. it actually has wide support in the senate. so the president would have to do a little bit of a reverse there. he says he is not willing to make any changes to the health care law. but that is something with bipartisan support that could get through both houses of congress and end up on his desk. any potential agreement on the spending and the debt seeing. we're not even at the point yet where they're discussing that. tracy: not a lot of money at the end of the day so it is kind of a moot point. rich edson, thanks for the details. >> thank you. ashley: thank you, rich.
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we're moments away from president obama's statement. it was set for 2:00, but with this president who apparently will be late. nfib economist, bill dunkelberg joins to us talk about survey of small business attitudes if you like for the month of september. bill, before we get to that what do you think small businesses would like to hear from the president in a few minutes? >> they would like to hear that we have a deal and a path forward that ordinary folk can make sense and be more confident about the future of the economy. if you're confident in the future, you spend more money and sum that up over 300 million people. press stow the economy starts moving forward. right now so much uncertainty. when there is so much uncertainty don't put your money on the table. so everything we see is kind of minimum. maintenance mode, not expansion mode. tracy: what about the number, it
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wasn't too hot, too cold but there had to be stuff that bothered you. >> the index didn't change too much. it was dropping .2 of a point which is statistically nothing. we can't get the index above 95. average of index going into the recession was 100 and change. in good times you expect 105. so we're way off of that. the one move we had in the 10 components that go into the index was expected business conditions. we asked owners if they think business conditions will be better six months from now or worse than they are today? and we had 8-point deterioration in that. so we have even more owners saying hey, i things aren't going to look too good six months from now. if that is your view, you don't hire or order inventories. >> that is my next question. obviously the labor market is critical to this economy. small business plays such an important role in that. but you are not getting any sense why would anyone want to
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hire in such an uncertain environment? >> if you're in north dakota, hey we'll hire. we're short of labor. ashley: yeah. >> but not a very big space. we did have at one point deterioration in the plans to increase jobs. that is to increase total employment. that is not a bad number. a high recession number where it has been. we had a one point improvement in the job openings number. again not where you would expect to see it in a growing economy. so those numbers didn't fade. they're about the same numbers we had in august and so we would expect, if we had gotten a number on friday which we didn't, it would still be 160, you know, so -- tracy: do you worry, i remember when you and i talked about the payroll tax cut, we didn't see it in the numbers for a couple of surveys. are you worried that like coming down the pike this whole government nonsense is finally going to hit and they actually, the number could fall lower? >> it takes consumers a long time to respond to something these things sometimes. tracy: yeah. >> we did see the savings rate
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has not really done well. it has deteriorated a little bit which means we're saveing a little less to keep consumption up now that we're paying another two points in taxes every month. that certainly didn't help support spending but again you've got lots of consumers who have a lot of discorrection and they could spend more money if they were more confident about the future and their jobs, but instead of buying a new car, they will drive, it is 11.4 the average age of a car. 11.4 years, a new record, partly because they last but also people are waiting. so they're very cautious. there is no exuberance in spending. so that doesn't translate into more inventory demand or hiring. that is what we need to see. ashley: we talked a lot about access to credit. that is not really an issue, is it? why do the fact they want a loan? they don't want to borrow money right now. >> exactly. only 2% of the owners said, financing was their most important problem compared to the 20% range for taxes and
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regulation and red tape. around 17% said weak sales is still a problem even though it is down from 33 which was the peak back in 2009. ashley: right. >> so, we asked them if all the credit needs were met. 6% said no. that is lowest since 2000. 30% said yes, and everybody else, 2/3, who wants a loan? what do i do with the money i have to invest it in an activity that pays back the bank. tracy: that goes to the pace of inventory reduction that is still continuing. i don't need a loan. i don't need raw materials because i don't think anybody will come buy it. >> that is exactly right. 8% more owners are cutting inventories than increasing them. net percent planning to order new inventories is zero. as many said i'm going to cut as many will -- tracy: going into holiday season is not good. >> not good. we would like to send orders for manufacturing and they will need
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it because foreign demand for their stuff is going down i believe so heart to fill job openings, 20% of owners reported job openings they couldn't fill, ironic in the era of unemployment. >> there are a lost reasons for the mismatches but are too many amazing. too many apply for the job, don't know how to dress, don't know how to talk. don't take a bath. they don't have to go back to school to learn something. they could just straight straighten it out themselves. charles liked that. >> you know i do. just too jump in the empire state, you know, from the fed. >> yeah. >> they do a survey every six months or so, supplemental part, it is amazing. coming to work on time, a huge problem with that. getting along with others? a huge problem with that. >> exactly. >> just absolutely amazing. today in the post where you saw we're probably the dumbest country in the world. i say that half in jess because
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we -- jest, because we rank so low waa the economic countries out there. tracy: does that go to the youth unemployment rate is so low? many small companies -- ashley: you mean so high. tracy: so high. they would rather hire senior citizens because they show up. >> that is the work ethic. >> i don't know if you guys notice, 16, 19-year-old white teenagers, john participation rate in the last number was 35%. in august of 1978 it was 63%. i mean --, almost half. >> almost half. there is something going on. there is gigantic crisis. we see it in japan, they have partial adults or, partial, they live off their parents, you know. there is one group that just totally withdrawn. another group work part-time, get enough cash to buy cigarettes and hang out. ashley: buy xbox. >> some go to college that probably shouldn't be going. one reason for the participation rate of 16 to 19-year-olds is drifting down more go to college. >> that is part of that.
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tracy: they shouldn't. >> they shouldn't but also lots of them aren't. a lot of them are standing on street corners. higher we make minimum wage the harder to get them into the first job. ashley: the answer, bill, may be old-fashioned trade schools. germany does this and very, very successfully. they learn a skill they can use and a job for. >> that would be great. i remember, when the college prep came into school when i was in high school. we, we bifurcated the group. we said there are favored people and then there are the slugs. and we didn't make them feel good about being, you know going to shop and learning electricity and learning to fix cars. we made you feel like you were inferior person and that shouldn't be the case. ashley: no. tracy: i will make you feel like a hero if you help me figure out what is wrong with my car. i have know nothing. >> we really need to fix that. we have shouldn't be favoring -- ashley: it is an attitude of mind, would you agree?
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>> i would agree although i'll tell you i think a bigger issue, plumbers do well but if we add another million they won't do well. we don't embrace knowledge. we don't appreciate it as a country. ashley: what do you mine? >> intellect, guy who can throw the guy furtherrest will get the prettiest girl, not the guy with highest i.q. ashley: the guy with the highest i.q., he should and he will later and be the rich guy. >> exactly. >> you know what though? more people to get higher i.q., to embrace intellect or intelligence i don't know know we have that kind of society. those jobs going begging, a lot are stem jobs, science technology, engineering and math. you have to embrace knowledge. ashley: we have to end the conversation there. charles, thank you. bill dunkelberg thank you very much. i want to bring in rich edson, we had the two minute warning that the president is on his way. more like 90 seconds now. rich, what will break the
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stalemate because clearly neither side is giving ground? someone will have to give in. is it the republicans? >> time will eventually break this if it will break at all. republicans are playing to their base. democrats are playing to their base. they don't want to seem like they're giving in too early, ashley. that's why we're in a holding pattern. >> so we hear about these conference committees and so on. it is all good verbiage, isn't it rich? but is there any sign from your perspective of a a little bit of light at the end of the tunnel if you like that this will get resolved? will we see a grand bargain with the debt ceiling debate rolled in. >> if we can. this will be a two-step progress i hate to say it, like a super committee. you can sign legislation the tax reform will garner this much revenue and have this much savings from chain cpi, the way benefits are calculated for social security and cuts to
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medicare and medicaid providers, things like that. some of the things the president identified in his budget. that's all out there and could possibly be in a deal. as far as rewriting the entire tax code that is something you can't really do in a week. you can set up a process whereby congress would work on later, almost like the failed super-committee. so that is the problem in that as well. doesn't necessarily mean we'll solve the budgeting problem and bridge the gap between democrats and republicans by the end of october 17th. we may have another series of this, or possibly a short-term debt ceiling increase to continue negotiations. that is not a definite that woo make it ever through congress. that is also another possibility. >> rich, the president has taken the podium. we'll jump in and listen to the president. >> i'm eager to take your questions. i will try to be brief at the top. this morning i had a chance to speak with speaker boehner and i told him what i've been saying publicly, that i am happy to talk with him and other republicans about anything, not just issues i think are important but also issues that
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they think are important. but, i also told him that having such a conversation talks, negotiations, shouldn't require hanging on the threats of a government shutdown or economic chaos over the heads of the american people. think about it this way. the american people do not get to demand a ransom for doing their jobs. you don't get a chance to call your bank and say, i'm not going to pay my mortgage this mon unless you throw in a new car and an xbox. if you're in negotiations around buying someb don't get to say, well, let's talk about the price i'm going to pay and if you don't give me the price then i will burn down your house. that is not how negotiations work. that is not how it happens in business. it is not how it happens in private life. in the same way members congress and the house republicans in particular don't get to demand ransom in exchange for doing
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their jobs and two of their very basic jobs are passing a budget and making sure that america's paying its bills. they don't also get to say, you know, unless you give me what the voters rejected in the last election, i'm going to cause a recession. that is not how it works. no american president would deal with a foreign leader like this. most of you would not deal with, either coworkers or business associates in this fashion and we shouldn't be dealing with this way here in washington. you know i have heard republicans suggest, well, no, this is reasonable. this is entirely appropriate. as i said before, imagine if a democratic congress threatened to crash the global economy unless a republican president agreed to gun background checks or immigration reform? i think it is fair to say that republicans would not think that was appropriate.
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so let's lift these threats from our families and businesses and let's get down to work. it is not like this is a new position i'm taking here. i had speaker boehner and the other leaders in just last week. either my chief of staff or i have had serious conversations on the budget with republicans more than 20 times since march. so we've been talking all kind of business. what we haven't been able to get are serious positions from the republicans, that would allow us to actually resolve some core differences. and, they have decided to run out the clock until there's a government shutdown or the possibility of a default, thinking that it would give them more leverage. that is not my, characterization. they have said it themselves. that was their strategy from the start. and that is not how our government is supposed to run.
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it is note by the way who has taken the position we're willing to have conversations about anything. senate democrats have asked to sit down with house republicans and hash out a budget but have been rejected by the house republicans 19 times. at the beginning of this year speaker boehner said what we want is regular order and a serious budget process. so the senate should pass a bill and the house should pass a bill and then a committee comes together and they hash out their differences and they send the bill to the president. that is exactly what democrats did. except somewhere along the way house republicans decided they wouldn't appoint people to the committee to try to negotiate. and 19 times they have rejected that. so even after all that, the democrats in the senate still passed a budget that effectively
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reflects republican priorities at republican budget levels just to keep the government open and the house republicans couldn't do that either. the point is, i think, not only the white house but also democrats in the senate and democrats in the house have shown more than ample willingness to talk about any issues that the republicans are concerned about but we can't do it if the entire basis of the republican strategy is, we're going to shut down the government, or, cause economic chaos if we don't get 100% of what we want. so my suggestion to the speaker has been and will continue to be, let's stop the excuses. let's take a vote in the house. let's end this shutdown right now. let's put people back to work. there are enough reasonable republicans and democrats in the house willing to vote yes on a budget that the senate has
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already passed. that vote could take place today. shutdown would be over. then serious negotiations could proceed around every item in the budget. now, as soon as congress votes to reopen the government it's also got to vote to meet our country's commitments, pay our bills, raise the debt ceiling, because as reckless as a government shutdown is the economic shutdown caused by america defaulting would be dramatically worse. i have want to talk about this for a minute because even though people can see and feel the effects of a government shutdown, they're already experiencing it right now, still some people out there who don't believe that default is a real thing. we've been hearing that from some republicans in con -- congress, that default would not be a big deal.
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so let me explain this. if congress refuses to raise what is called the debt ceiling, america would not be able to meet all of our financial obligations for the first time in 225 years and because it's called, raising the debt ceiling, i think a lot of americans think it is raising our debt. it is not raising our debt. this does not add a dime to our debt. it simply says you pay for what congress also heart authorized america to purchase. whether that is the greatest military in the world or veterans benefits or social security, whatever it is congress already authorized, what this does is make sure we can pay those bills. now the last time that the tea party republicans flirted with the idea of default two years ago, markets plunged, business
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and consumer confidence plunged. america's credit rating was downgraded for the first time. and a decision to actually go through with it, to actually permit default, according to many ceos and economists would be, and i'm quoting here, insane, catastrophic, chaos. these are some of the more polite words. warren buffett likened default to a nuclear bomb, a weapon too horrible to use. it would disrupt markets. it would undermined the world's confidence in america as the bedrock of the global economy and might permanently increase our borrowing costs. which of course ironically would mean that it would be more expensive for to us service what debt we do have. it would add to our deficits and our debt, not decrease them. there's nothing fiscally responsible about that. preventing this should be simple. as i said, raising the debt ceiling is a lousy name which is
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why members of congress in both parties don't like to vote on it, because it makes you vulnerable in political campaigns but i had does not increase our debt. it does not grow our deficits. it does not allow for a single dime of increased spending. all it does is allow the treasury department to pay for what congress has already spent. but, as i said, it is always a tough vote. people don't like doing it. although it has been done 45 times since ronald reagan took office. nobody in the past has ever seriously threatened to breach the debt ceiling until the last two years. and this is the creditworthiness of the united states that we're talking about. this is our word. this is our good name. this is real. and a government shutdown millions of americans face inconvenience or outright hardship in an economic shut down, every american could see their 401(k)s and home
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values fall. borrowing costs for mortgages and student loans rise. and there would be a significant risk of a very deep recession. at a time when we're still climbing our way out of the worst recession in our lifetimes. you know the american people have fought too hard and too long to come back from one crisis only to see a handful of more extreme republicans in the house of representatives precipitate another one. now the good news is over the past 3 1/2 years our businesses created 7.5 million new jobs, our housing market is healing, we cut the deficit in half since i took office. the deficit is coming down faster than anytime in the last 50 years. america's poised to become the number one energy producer in the world this year. this year, for the first time in a very long time we're producing more oil than we're importing.
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so we got a lot of good things going for us but the uncertainty caused by just one week of this nonsense so far has caused businesses to reconsider spending and hiring. you've seen consumer confidence plunge to the lowest levels since 2008. you've seen mortgages held up by thousands of homebuyers who weren't sure about the economic situation out there. and all this adds to our deficits. it doesn't subtract from it. so we can't afford these manufactured crises every few months. as i said, this one isn't even about deficits or spending our budgets. our deficits are falling at the fastest pace in 60 years. the budget that the senate passed is at republican spending levels. it is their budget. that democrats who wanted to put votes on to make sure the government was open, while negotiations took place for a longer-term budget. and what's happened, the way we got to this point was one thing
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and one thing only, republican obsession with dismantling to the affordable care act and denying health care to millions of people. that law, ironically is moving forward. so, most americans, democrats and republicans agree that health care should not have anything to do with keeping our government open or paying our bills on time. which is why i will sit down and work with anyone of any party, not only to talk about the budget, i will talk about ways to improve the healthcare system. i'll talk about ways that we can shrink our long-term deficits. i will also want to talk about how we're going to help the middle class and strengthen early childhood education and improve our infrastructure and research and development. there are a whole bunch of things i want to talk about in terms of how we'll make sure everybody is geting a fair shake in this society and that our economy is growing in a broad-based way and building our
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middle class. and by the way, if anybody doubts my sincerity about that, i put forward proposals in my budget to reform entitlement programs for the long haul and reform our tax code in a way that would close loopholes for the wealthiest and lower rates for corporations and help us invest in new jobs and reduce our deficits. some of these were originally republican proposals. because i don't believe any party has a monopoly on good ideas. i've shown myself willing to go more than halfway in these conversations. if reasonable republicans want to talk about these things again, i'm ready to head up to the hill and try. i will even spring for dinner again. but i'm not growing to do it until the more extreme parts of the republican party stop forcing john boehner to issue threats about our economy. we can't make extortion routine
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as part of our democracy. democracy doesn't function this way. and this is not just for me. it is also for my successors in office. whatever party they're from. they shouldn't have a pay a ransom either for congress doing its basic job. we got to put a stop to it. last point i will make. already this week i had to miss critical meetings in asia to promote american jobs and businesses. and although as long as we get this fixed that is not long-term damage, whenever we do these things, it hurts our credibility around the world. it makes it look like we don't have our act together. that is not something we should welcome. the greatest nation on earth shouldn't have to get permission from a few irresponsible members of congress every couple of months just to keep our government open or to prevent an economic catastrophe. so let's pass a budget, let's end the government shutdown, let's pay our bills, let's avert
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a economic shutdown. let's drop the gimmicks. put aside what is good for any particular party and let's focus on what is good for the american people because we know they have a lot of work to do. all right, with that let me take a couple of questions, i will start with julie pace of ap. >> thank you, mr. president. obviously if congress does place a clean cr and debt ceiling bill those may just be short-term measures. if that happens, does your offer to negotiate with them on issues like melt care and spending and deficit reduction still stand in the intervening weeks or just six weeks or two months long ? the truth is the parties are pretty divided on a whole bunch of issues right now. by the way, voters are divided on a lot of those issues.
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i recognize there are some house members, republican house members where i got clobbered in the last election. they don't get politically rewarded a lot for seen as negotiating with us. that makes it harder for divided government to come together. but i'm willing to work through all those issues. the only thing that our democracy can't afford is a situation where one side says unless i get my way and only my way, unless i get concessions before we even start having a serious give and take, i'll threatethreatened to shut down e government or i'll threaten to not pay america's bills.
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i will not eliminate any topic of conversation, and i've shown myself willing to engage all the parties involved, every leader on any issue. >> do you d know how long the timeframe that they would pass this? president obama: the only thing i would say is we are not going to pay a ransom for america paying its bills. that's something that should be nonnegotiable and everybody should agree on that. everybody should say one of the most valuable things we had is america's credit worthiness. this is not something we should even come close to fooling around with. when i read people saying this wouldn't be a big deal, we should test it out, let's take default out for a spin and see how it drives.
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i say imagine in your private life if you decided that i'm not going to pay my mortgage for a month or two. first of all you are not saving money by not paying your mortgage, you are just a deadbeat. you can anticipate that will hurt your credit. which means in addition the debt collector is calling, you're going to have trouble borrowing in the future. if you can borrow in the future, you have to borrow at a higher rate. was true for individuals is also true for nations, even the most powerful nation on earth are you if we are creating an atmosphere in which people are not sure whether or not we pay our bills on time, that will have a severe long-term impact on our economy and on america's standard of living. that's not something we should even be in a conversation about.
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that is not something that we should be using as leverage. okay. giuliana. >> thank you, mr. president. he laid out the consequences of default, but if we were to get to that point, do you prioritize and pay bondholders first? or social security recipients or military service men and women. how would you make that determination? president obama: i am going to continue to be very hopeful that congress does not put us in that position. i think if people understand what the consequences are, they will set that potential aside. i do know there have been some who said if we just pay
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bondholders, just pay people who bought treasury bills that we really won't be in default because those interest payments will be made, and to them or have remind them is we have a lot of other obligations not just people who pay treasury bills. we have senior citizens counting on her social security check arriving on time. we have veterans who are disabled counting on their benefits reedit we're have diseases that have payrolls that they have to meet. if they don't get paid on time, they may have to lay off workers. all those folks are potentially affected if we do not pay all of our bills on time. was also true is if the market is seeing we are not paying our bills on time, that will affect our creditworthiness even if some people are being paid on time. so just to boil this down to
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personal examples, if you have a mortgage, car note and student loan you have to pay and you say i will make sure i pay my mortgage but i will not pay my student loan or my car note, that will still have an impact on your credit. everybody will still look at that and say you know what, i'm not sure this person is so trustworthy. at a minimum they will charge a higher interest rate. that would happen to you if you made those decisions. the same is true for the federal government. we are exploring all constituencies. i know secretary lew cap address some of the additional details about this. but let me be clear, no option is good in that scenario. there is no silver bullet, no magic wand that allows us to
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wish away the chaos that could result if for the first time in our history we don't pay our bills on time. when i hear people tried to downplay the consequences of that, i think that's really irresponsible. i'm happy to talk to any of them individually and walk them through exactly why it is irresponsible. it is particularly funny coming from republicans who claimed to be champions of business. there's no business person out there who thinks this wouldn't be a big deal we had not one. you go anywhere from wall street to main street and ask a ceo of a company, ask a small business person whether it would be a big deal if the united states government isn't paying his bills on time. they'll tell you it's a big deal. it would hurt. it's unnecessary, that's the worst part of it. this is not a complicated piece
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of business. and there is no reason why if in fact republicans are serious about wanting to negotiate, have a conversation, wants to talk, there's no reason why you have to have that threat looming over the conversations. think about it camille the ó republicans have held out on negotiations up until the last week or so, is because they thought it was a big enough deal that would force unilateral concessions out of democrats and out of me. they said so. they basically said you know what, the president is so responsible that if we just hold our breath and say we're going to threaten default, he will give us what we want and we won't have to give anything in return. that's not my account of the situation, you can read statements from republicans over the last several months who said
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this explicitly. and so for them now to say this wouldn't be a big deal, it is and how we have acted the past several months. that isn't a big deal, why would i give concessions out to avoid it? it is a big deal, nobody should be getting concessions that the full state the mac faith is restored. >> thank you, mr. president. speaker boehner unwilling to hold a debate. what is your word for those affected by the shutdown, worried about a large impact. how worried are you preferred to this that it may do harm to the nations economy and your second term? president obama: you're making an important point, which is what we are asking of the republicans right now is to keep the government open at funding levels the democrats think are
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very harmful to the economy, and inadequate to make sure the economy is rolling faster, more people put back to work and the middle class is growing. we are willing to pass at least a short-term budget that opens up the government at current funding levels. it doesn't even address the harm that's been done because of sequestration. now the democrats have a budget that would eliminate sequestration, the meat cleaver approach to deficit reduction reedit and make sure we're adequately funding basic medical research and headstart programs and a whole range of things that have been really hard this year. but we recognize there will have
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to be some common mice is between the democratic position and the republican position. in the meantime we shouldn't hurt the economy even worse by shutting down the government. so let me give you an example very specific. because of sequestration, because of the meat cleaver cuts that have taken place over the course of this year, thousands of families have lost headstart slots for their children. you have parents all over the country scrambling to figure out how can i find some decent quality childcare for my kids. the government shutdown means several thousand more will be losing their slots. if we vote today or tomorrow or the next day, go ahead and reopen the government, at least those additional several thousand people will be spared
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the difficulties of trying to scramble, figure out where your kid is going to be when you're trying two to go to work, but doesn'itdoesn't solve the broadr problems. if we were going to have real negotiations, democrats would say let's solve the bigger problems. what about the thousands hurt by sequestered. the democrats aren't thinking that band right now, we understand there has to be some give and take. but what we are saying is don't hurt more people while w we're trying to resolve these
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not one from which we can cover. they have hustles over the
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budget and leaders see that. if they're in a democracy. what they haven't seen before from the vantage point of a lot of world leaders is the notion that one party in congress might blow the whole thing up if they don't get their way. they have never seen that before, and that does make them nervous particularly given what happened in 2011. we have been here before. the assumption was that the americans must have learned their lesson, there would be budget conflicts, but nobody again would threaten the possibility that we would default. when they hear members of the senate and members of congress saying maybe default wouldn't be that bad, i bet that makes them nervous. makes me nervous. it should make the american people nervous because that's
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irresponsible. it is out of touch with reality. it is based on a flawed analysis of how our economy works. you cannot pay some bills and not others and think somehow the fact you are paying some bills protects you from a loss of credit worthiness. it is not what happens in our own personal lives, i don't know why people think that's how it works for the united states government. >> do think you might have emergency power to use? >president obama: we have used a lot of our emergency powers. jack lew has kept paying our bills over the last several months. at certain times those emergency powers run out and the clock is ticking. i do worry that republicans, but also some democrats may think we have a bunch of other rabbits in
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our hat. there comes a point in which if the treasury cannot hold auctions to sell treasury bills, we do not have enough money coming in to pay all our bills on time. it's very straightforward. i know there's been some discussion for example about my powers under the 14th amendment to go ahead and ignore the debt ceiling law, setting aside the legal analysis, what matters is if you start having a situation in which there is legal controversy about the u.s. treasury's authority to issue debt, the damage will have been done even if it was constitutional because people wouldn't be sure. it would be tied up in litigation for a long time. that will make people nervous. so a lot of the strategies
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people have talked about, the president can roll out a big coin or he can resort to some other constitutional measure, what people ignore is that ultimately what matters is the people buying treasury bills, what do they think we had again, i will boil it down and very personal terms. if you are buying a house and you are not sure if the seller has a title on the house, you will be pretty nervous about buying it. at minimum you would want a much cheaper price to buy that house because you wouldn't be sure whether or not you would on it. most of us would walk away because no matter how much we like the house, we say to ourselves the last thing i want to do is find out after i bought it that i don't actually own it. same thing as truth i'm i'm buying treasury bills from the
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u.s. government and here i am sitting here, what if there is supreme court case deciding these aren't valid, these are valid legal instruments obligating the u.s. government to pay me. i'm going to be repressed, which means i may not purchase them. if i do, i will ask for it a premium. so there are no magic bullets here. one simple way of doing it, that is congress going ahead and voting. the fact right now there are both, i believe, go ahead and take this drama off the table, should at least be testament. speaker john boehner keeps saying he doesn't have the votes for it. what i have said is put it on the floor, see what happens. at minimum that every member of congress be on record. let them vote to keep the
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government open or not. they can determine where they stand and defend their vote to the constituencies and let them about an whether or not america should pay its bills or not. and if in fact some of these folks really believe it's not that big of a deal, they can vote no. and that will be useful information for voters to have, and if it fails in and of defaulting, i think voters should know exactly who voted not to pay our bills. so they can be responsible for the consequences that come with it. >> you mentioned supreme court started with the campaign-finance case. citizens united devastated to the public's interest. i want you to weigh in. president obama: it would go even further than citizens united. essentially would say anything
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goes. there are no rules in the terms of how to finance campaigns. there aren't a lot of functioning democracies around the world that worked this way that you can basically have millionaires and billionaires bankrolling whoever they want, however they want, in some cases undisclosed. what it means is ordinary americans are shut out of the process. democrats are not entirely innocent of this in the past. i had to raise a lot of money for my campaign. there is nobody who operates in politics it has perfectly clean hands on this issue. but what is also true is that all of us should bind ourselves to some rules that say the people who vote for us should be more important than somebody
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who's spending $100 million to help us get elected because we don't know what their agendas are, we don't know what their interests are. i continue to believe citizens united contributed to some of the problems we're having in washington right now. you have some ideological extremist who has a big bankro bankroll, they can entirely skew our politics and a whole bunch of members of congress right now who privately will tell you, i know our positions are unreasonable, but we are scared if we don't go along with the tea party agenda were some particularly extremist agenda, we will be challenged from the right. and the threats are very explicit, and so they told the line, that is why we as a breakdown of just normal routine business done here in washington on behalf of the american people
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did and all of you know it. i'm not telling you anything you don't know. you report on it. big chunk of the republican party right now are in gerrymander districts where there is no competition, and those folks are much more worried about a tea party challenger then they are about a general election where they have to compete against the democrats or go after independent votes. in that environment it is harder for them to compromise. mark. >> thank you, mr. president. this week the president of china has visited several asian countries you are going to visit and had to skip because of a shutdown. his also taken a big role at the summits both of which your menstruation has made a big priority of four other pivots.
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does benefit from the chaos in washington, and more broadly, you said in general this hurts the reputation of the united states overseas. are there specific things you can point to that you are ready to see some damage and one that occurs to me is the leaders today announced they still want to wrap it up but they no longer want to wrap it up by the end of this year. had you been there, do you think you could have gotten that additional push? president obama: i think that is a great example. we don't know, but it didn't help that i wasn't there to make sure we go ahead and close a trade deal that would open up markets and creates jobs for the united states and make sure that countries were trading fairly with us in the most dynamic
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fastest growing market the world. i should have been there. but i can tell you because i had to apologize to some of the host countries that they understood the most important thing i can do for them and the most important thing i can do for the bilateral relationship of america's reputation is make sure we reopen our government and we don't default. i don't think it is going to do lasting damage. as i said, if we deal with this the way we should, folks around the world won't attribute this to the usual messy process of american democracy. but it does do lasting damage. in the short term i would characterize it as missed opportunities. we continue to be the one indispensable nation. there are countries across asia
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who have welcomed because they want to do business with us, they admire our economy, admire our entrepreneurs, they know their growth will be contingent on working with us, they care about the security environment we maintain, help maintain and freedom of navigation and commerce that is so important to them. it is not as if they've got other places to go. they want us to be there and they want to work with us. but in each of these big meetings we have around the world, lots of this myth gets done. in the same way a ceo of a company if they want to close a deal aren't going to do it by phone, they want to show up and look eye to eye and tell them why it is important and shake hands on a deal.
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same thing is true with respect to world leaders. and the irony is our teams probably do more to organize a lot of these multilateral forms than anybody. we end up being engaged much more than china for example in setting the agenda and moving this stuff forward, so almost like me not showing up to my own party. i think it creates a sense of concern on the part of other leaders, but as long as we get through this, they will understand it and i believe we will still be able to get these deals done. the last point i make is we cannot do it every three months, right? back in the '90s we had a shutdown that happened one time, and after that the republican party and mr. gingrich realize
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this isn't a sensible way to do business, we shouldn't engage in this and they started having a serious conversation with president clinton about the whole range of issues and got some things they wanted. they had to give the democrats some things the democrats wanted. but it took on a sense of normal democratic process. we already went through this once back in 2011, and the end of last year after my election we went through something similar with the so-called fiscal cliff where republicans wouldn't negotiate about taxes despite the fact taxes actually went up anyway, even though they refused to negotiate. they have gotten so stuff from us they wanted if they had been
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willing to engage in normal negotiations. so we have to stop repeating this pattern. i know the american people are tired of it. to all the american people, i apologize that you have to go through this stuff every three months, it seems like. lord knows i'm tired of it. but at some point we've got to kind of break these habits and get back to the point where everybody understands that in negotiations there is give and take. you do not hold people hostage or engage in ransom taking to get 100% of your way. you don't suggest that somehow a health care bill bill that you don't agree with is destroying the republican or grand socialist scheme. if you disagree with certain aspects of it, tell us what you
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disagree with and let's work on it. if you're concerned about long-term debt, that is a good thing to be concerned about but don't pretend as if america is going bankrupt anytime the deficit is cut in half. that is with the american people i think i expect is just stability, common sense, give and take, compromise. those aren't dirty words, there is nothing wrong with them. i think the american people understand i have pause. one of them is not i'm unwilling to compromise. i have been willing to compromise my entire political career. and i don't believe that i have the answers to everything and it's my way or the highway. but i'm not going to breach a
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basic principle that would weaken the presidency, change our democracy and to damage to ordinary people. just in order to go along with what the house republicans are talking about. >> i get asked about china. >> you know, i'm sure the chinese don't mind that i'm not there right now. in the sense that, you know, there are areas where we have differences, and they can present their point of view and not get as much pushback as if i were there, although secretary of state kerry is there, and i'm sure he's doing a great job. but i've also said that our cooperation with china's not a zero sum game. there are a lot of areas where the chinese and us agree. on trade in particular, though,
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here's an area where part of what we're trying to do is raise standards for, for example, intellectual property protection which sometimes is a big problem in china, and if we can get a trade deal with all the other countries in asia that says you've got to protect people's intellectual property, that'll help us in our negotiations with china. richard mcgregor. there you go. >> [inaudible] what kind of legal liability -- what is your legal advice -- [inaudible] credit issues or -- >> richard, you know what i'm going to do is i'm going to let jack lew, the secretary of the treasury, make a formal presentation on thursday before the senate committee, because this is obviously sensitive enough, and i think people would be paying close enoughtt

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