tv Markets Now FOX Business October 9, 2013 11:00am-1:01pm EDT
our time is up. dagen: great job this morning. is janet yellen, the president reedy to 90 janet yellen says the next chief of the federal reserve. a first for a woman. the centers for disease control on full alert calling back furloughed workers to shutdown, put the agency behind the 8 ball in response to the latest salmonella outbreak. the part-time economy, and the of the freedom to go part time. and we have other suggestions. all that and more in this hour of markets now. and we can have dagen mcdowell a
obscure for a handover. dagen: and hangover and cure-allss. and looking for direction today. >> we are seeing a market that is pulling back, dow jones industrials down for the third day in a row. and right now down 23 points and a mixed bag as far as how components are doing. the big picture is the trend is to the downside, we are 5.7% behind the all-time closing high in september by the dow jones industrials. they're doing so great year to date. there's some profittaking going on because of concerns in washington. hang over fears on wall street, a lot around here, basically on
top of that. let's bring it in on friday mornings. connell: thank you, nicole petallides. janet yellen to run the federal reserve, the nomination of current vice chair janet yellen to replace her boss, ben bernanke. that should happen later today. connell: with all the dysfunction of washington is there a possibility, the senate fails to confirm reddick? peter barnes at the white house with latest. >> the senate is going to confirm her. let me steal a line from one of my friends in the fed press corps who calls her ben bernanke 2.0. he is expected to continue policies of the money she helped formulate and support since she and vice chair of the fed in 2010. he is considered a dove, more concerned about growing employment than fighting inflation. a big proponent of quantitative
leading, $85 billion of bond purchases, and some analysts and research notes and don't expect her to be the much from the fed's plan announced earlier this year to start the during these purchases, but the outcomes in. and don't assume she will support q e forever. deegan the front runner, and larry summers's former economic adviser to the president withdrew last month, she would be the first woman head of the federal reserve, has been in and out since 1977 had started as an economist at harvard university, on the deck of the board of governors from 94-97 and became chairman of the council of economic advisers for president clinton at the white house in 97-99 when i first met her and she is a professor emeritus of economics at uc berkeley where
she has been on the faculty since 1980. she is a passionate forceful advocate of her beliefs and positions, believes in research and transparency at the fed, born and raised in brooklyn. what more do you need to know? she is petite, 5 feet tall. one of her former colleagues telling her the new york times today she is a small lady with a large iq. connell: you covered it all. peter barnes, at the white house today. charles schwab joins us from stanford, connecticut. this idea that ben bernanke 2.0 that peer brings up from perspective of someone like you who watches the market. >> i do think she is of, she made that clear in her policy
views. the thing that is different is it she is not a consensus builder. in that mold of ben bernanke, she may not be willing to e long the decision making purely to get consensus and might be willing to let her own views take precedence. i wouldn't put her in the middle between ben bernanke and alan greenspan. is closer to ben bernanke but alan greenspan wasn't the consensus builder. he was more my way or the highway. just a touch of that based on what we know about. connell: the good thing about that, the forecasting record has been from what i read and what has been said is pretty good. she was able to predict a lot of the troubles that were either have gone through or going through before they happen. >> the fed could use more help in its forecasting record so to have been ahead, someone who does a better job than the
consensus has put out. connell: let me ask about the market and where we stand, the movement of today but what do you make of the reaction in the market's leading up to october 17th and after the current partial shutdown of the government for lack of reaction have you been surprised by o co anything? anything standing out? >> not surprise of the 5% correction, it is in keeping with what was expected at this stage. no question things get uglier as we continue this brinkmanship for the october 17th deadline. default is unthinkable. there are scenarios that could mean it is not apocalyptic. it certainly wouldn't be positive. almost educated complaisance that might explain why the market has not sold off more, not least be in we went through similar circumstances in 2011, didn't default but there was a rally but the underlying conditions both here in terms of
our economy, fed policy, qe2 had ended in august of 2011 but q e 3 hasn't started so the fed wasn't adding to its balance sheet, europe was a mess so this is not whistling past the graveyard but there are some questions under the market, we have the specter of a downgrade and concerns what that meant. we have that wes and we now know that the downgrade did not cause the calamity a lot of people -- connell: one more thing before we let you go, the phrase you used, default is unthinkable. i you in this camp that doesn't think default will happen on the seventeenth or thereafter or clothes or do you just think it is unthinkable because they have to get something done? >> it is unthinkable because they have to get something done. the chances are not zero but there is one. connell: we will talk about what might happen after the seventeenth in real life later. always good to see you. thank you for coming on. dagen: when the government shutdown turns scary listen to
this. there is a salmonella outbreak that has sickened 278 people across 18 states. now the centers for disease control and prevention is scrambling to call back some furloughed workers to contain this outbreak. how serious is this? could more of this be to come? deputy secretary shalala joins me and you have a new book. the name of it is? >> i watched and obama tweeted. 200 years of pop culture and the white house. dagen: is this the exact type of scenario or situation you would fear would happen when we are in shutdown? >> this kind of thing is happening all the time. there are 3,000 annual deaths from food borne illnesses that costs $70 billion. this is a serious thing that is ongoing. how does the government deal which workers do you choose to furlough? indications of the parks department the administration is making as difficult as possible.
this is not something to play around with. these are workers who need to be guaranteed to be protecting the american people. dagen: 30 workers have been called back. the cdc is running with the third of its staff. two thirds of staff have been furloughed. one thing that did jump out, the computer network, pulse net that connects the 7 public health labs. 7 of eight people responsible for running this network. seven had been furloughed and there's only one responsible for operating the computer network. is there any way to know or do you care this could have contributed. >> most people have gone back to work which is a good thing and i am not sure this would have prevented it. the real way to prevent it is to cook your chicken, wash your hands and watch surfaces so there are a bunch of things that people need to do to solve these
problems but it is good to have folks that are monitoring this. dagen: what does it speak to paula other agencies as well that were not truly prepared for a shutdown, did they make better decisions who should be furloughed or who shouldn't be furloughed? >> i don't know if anyone is truly prepared for shutdown. you have the sequester and the sense they weren't thinking of the ossibility of a sequester which workers should go off at that time and the shutdown, whereas well. dagen: how long having worked in the federal government we can handle this, and a greater impact on the population? >> the serious people get back to work, people have the whole situation sorted out but the way to do that is to get to the negotiating table, we will solve this like we have done in the past. dagen: are you glad you don't work for the federal government >> it would be very challenging. i have friends in senior government saying they are doing things the tragedy or a ado in years. a real challenge.
dagen: like what? get their own copy? >> kind of writing the legal them and doing more managements of until then. dagen: thank you some much. we will see you soon in person or by remote. nice to have you here. connell: if you are a fan of craft beer you have to wait awhile for the next new offering. more on that in the government shutdown and to affects coming up. the choice for obamacare millions of full-time workers ready to dump jobs and go part-time so we will get into that. taxpayers have to pay for their health care. we will talk about it coming up and starbucks in the news, the latest promotion encouraging people to pay forward. we will tell you about that. it is paula and on markets now. we look at oil as we go to break, $101.68.
so i can reach ally bank 24/7, but there ar24/7.branches? i'm sorry, i'm just really reluctant to try new things. really? what's wrong with trying new things? look! mommy's new vacuum! (cat screech) you feel that in your muscle i do... drink water. it's a long story. well, not having branches let's us give you great rates and service. i'd like that. a new way to bank. a better way to save. ally bank. your money needs an ally. the aware of rejecting a bid by joseph h. bank to require all outstanding shares of a company. what is going on?
>> you seeing men's warehouse jumping and moving to multiyear half on the potential takeover of $2.3 billion joseph h bank is buying, that is a $0.56 premium. men's warehouse saying it clearly undervalues the company and possible growth that it has going forward and as a result starting to see the backlash. we will see whether or not it comes through. corp. both men's retailers together. they would certainly create a national giant, powerhouse, but for right now at seems it is only at the beginning, the possibility that this will actually occur. we will continue to follow this story that joseph a. bank is moving forward. connell: all thhse business tories are side effects of the shutdown and when you think things cannot get worse with the federal government shut down we bring you this story. it may start to hit you in
suggs. the agency that approves crafted breweries, the latest victim. alcohol and tobacco tax and trade bureau says it will process taxes from existing permits but applications for anything new not good news for oktoberfest more people watching football but bring you the good and bad news here. dagen: if you switch from beer to liquor, bourbon and wind up with a crushing hanover. here is evidence that will cure a handle with scientific evidence to back it up. and and would be best at breaking down alcohol fastest. and and good news for the
coca-cola company. >> i have beennwaiting 16 or 17 minutes. dagen: it is peer light for things for children that have --. the raid times 1,000. dagen: there was a bottle of and in the green refrigerator. not feeling 100%. connell: some more, talk about janet yellen. suspected to be the next fed chair. dagen: i do know that. former fed governor wayne angell appears to top all about her. connell: the grand canyon a victim of the shutdown keeping law enforcement busy out there. we will have that story for you
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>> 21 minutes past the hour your fox news many. could soon be a significant amount of money. u.s. officials say the obama administration plans to strip the country of military and economic assistance the u.s. gives each of $1.5 billion a year in aid. the money could be restored once a democratically elected government is returned. 64-year-old diana famous for her trip from cuba to florida is raising money for sandy victims with a marathon in the pool in new york city, it is happening outside macy's in herald square. she started yesterday and will finish tomorrow morning. former pro football player aaron hernandez is due in a massachusetts court today for a hearing where lawyers will discuss evidence in the case. he is charged in the death of odum lloyd, semipro football
player and facing several firearms related charges. fernandez has pleaded not guilty to all those charges and those are your news headlines on the fox business network. back to the woman who knows everything about curing a hangover. dagen: not everything. i didn't listen to good advice. >> you are dehydrated you need electrolytes. dagen: president obama is expected to nominate janet yellen to appoint ben bernanke as head of a federal reserve when he exit in january. lien inga la the federal reserve governor. joining us from washington d.c. terrific to see you. very easy to sketch the similarity between janet yellen and ben bernanke even in terms of policy but tell me how she is different from lot monetary
standpoint, and personalitywise. >> she is different from larry summers, that is for sure. dagen: thanks for that. that is a good question. the key question is she right that unemployment is too high? she is right. is she right that inflation will not be a problem? and i say yes, she is right. is the zero fund rate likely to provide? no. the funds rate is more apt to be around 2% that around zero. dagen: how will she be different from ben bernanke as the head of the federal reserve. she has been much in charge of
the change in communications policy and press conferences, will she be any different at least to the casual observer? >> it is and not a communications problem besetting the fed funds rate close to zero. doing that, what we could call negative will affect for every american, every american householdd every american group that has short-term funds, holding the funds rate down that low has a negative effect and that is what we have got to get away from. dagen: do you think she will? >> yes, i think she will because she is a very smart individual. and economic reasoning, what i am giving. dagen: if you are in a different situation in your life
professionally and you offered this job given the exceptional easy money policies that have been in place, $85 billion in bond buying. would you want the responsibility of unwinding this? >> sure. i would want the job. if i were 20 years younger i would be delighted to have a job. yes, it is a good job. dagen: if it goes wrong, that is your legacy. she is screwing up. are you thinking about that? >> janet yellen's job is to think about the next four years, she will take office in 2014 and stayed until 2018. her job is to think how will he be judged in 2018 and i am saying she will be given much more credit if she has a fed funds rate at 2% and leaves it there but she will if she has
zero and everyone is speculating about when the rate rises. dagen: it was great to see you. thank you so much. you have taken it in charge. i didn't say 20 years younger. you are just fine as you are right now. we will see you soon. connell: if it goes wrong or if it goes right that is your legacy. that is how you have to think. be optimistic. that could be your legacy too. dagen: i am asking would you like to take on the responsibility of a monster created -- she was there so she knows. connell: she knows what she's getting into. the net is a tall order. connell: the debt ceiling, we will talk about it coming up but this will be important. you her october 17th. we have the real x date when the treasury will no longer pay its bills on time or full time and what it means, what will happen after that. dagen: a part-time economy.
switching from full time to part-time, changes in the health-care law. and also as we go to break look at some winners today. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim
happens after that. starbucks latest promotion counting on the kindness of others. dagen: where is my coffee? utility stocks don't seem to get hit too hard over the past few days. the only s&p sector to post gains yesterday. what re stocks doing today? nicole: it is not a surprise to see this group doing well in a time of uncertainty out of washington utility stocks are safe haven or dividend, and is strange, to see that group of up arrows on the week when we see down arrows across the board. this is the third down did this week for the dow jones industrials, up 5% off of the high. so energy up 1.1%, duke energy up 1% as well. the u.s. dollars higher, commodities pulling back, these utility stocks are faring quite nicely. connell: depending we come down politically you may think the world will end with the debt ceiling is not raised for the
whole thing is no big deal at all. we will cut through all of that, give you just the fact relying on bipartisan policy center which came up with a x date, the day the treasury will no longer pay its bills in full or on time predicting that is between october 22nd and november 1st. steve bell joined those, senior director of the economic policy project at the bipartisan policy center in washington d.c.. and what happened after your date range in a moment, a lot of people have questions and a lot said about it but first thing we notice is that date is not october 17th, the date we keep hearing. it is a little after that. tell us how you arrive at that. >> the october 17th date as secretary jack lew mentioned in his letter was the date he is going to run out of extraordinary measures which means borrowing where he can from other government potts and he will only have $30 billion
cash on hand. to us, the reason we say the twenty-second through the first is he has two or three large payments on the first, total of fifty-eight billion dollars so it seemed exceedingly unlikely event he will be able to get past the first. team a but it seems unlikely, therefore with revenues coming in kind of sporadic we, billion dollars here and $10 billion the next day the exact date is not possible but i can tell you for sure that sometime in at five day working day period the treasury will not have cash unhand. connell: we are going to play a hypothetical, which your report does, goes through hypotheticals on what it might look like but first the idea, it is all over the place the last few days, prioritization, we will pay some bills and not others, your understanding of it, is it legal? will that happen? >> first of all i don't think
anyone knows it is legal because it has never been attempted before but let's talk about the practicalities. the computers in all of the agencies spit out of these bills, $3 billion to $5 billion a day through computer and treasury, treasury makes the treasury computer says that is okay, i will pay it. at some point some bill will come in and they will say i can't pay it. what time and they that is no one knows. to change those computers is a difficult and time-consuming logistical exercise. connell: if it is difficult, you hear people in the markets, that is why they are worried about this even if you and, quote, prioritize and if you can't is difficult. some of this has been on the screen as we have been talking but you did this in the report because people ice-cream in about it but what would actually happen? let's just say as you say in the report you choose to say some things and the district and -- the interest on the debt is the top of the list so you pay and
we will put this on the screen as we talk about it. you are also going to pay medicare and medicaid and social security benefits, military pay and retirement and add up all those things, $222 billion is the number we're looking at. if you choose to pay it that you can't pay and other things and peer they come, we're looking at some things you can't pay, education, defense, food stamps, if you can't pay, things like somebody's tax refund will be an example, veterans' benefits, federal salaries and benefits, so we essentially the treasury if they are allowed to, and pretty big losers. >> anytime you think about prioritizing that is the question. and china, japan, are we going to pay them first or social security and veterans' compensation for disabled
veterans? i think the treasury doesn't make that decision. i don't sing they will, what they're likely to do with the following. all those bills come on monday. they don't have money on monday. they wait until tuesday when they when they have cash on hand and all the bills on monday. that can't go on forever but that is the best guess as to what they will do. connell: they wait for revenue to come in middle of the weekend that is from tax receipts in the middle of the weekend they will pay at. is there another date? i don't know if we are getting too far but is there a drop dead date. it would be a default. >> lockheed martin and the biggest contractor, and send the $1 billion bill from the department of defense and send it to the computer, doesn't get
paid. we have a contract you have breached. the government has said we said we would pay you and you are not going to do it. more serious is what is happening at a short end of the treasury market. i cannot stress enough how extraordinary it is to seek the four week or 90 they bill, go up in interest rate by three or four times literally in two days. connell: that is the market story today. you are right about that. >> absolutely. connell: you did a very good job going through this in detail and telling people what will happen and we thank you for that and we will have you back, thanks a lot. dagen: agreed. absolutely. the video interview, of a will read tweet absolutely. again and again. connell: screaming and yelling about this. from the analysis they have done. dagen: starbucks is using the
shutdown to promote a paid for red campaign the we will tell you about next. connell: the president's health-care law laying groundwork for the economy by part-time workers. that is the story we will talk to judge andrew napolitano about. dagen: more arrests announced that the grand canyon. it is shutdown too.
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connell: with more on the wide-ranging impact of the partial government shutdown an estimated 8 teen thousand people visit the grand canyon every day in the month of october. a span of one million dollars a day but the park and local businesses are not seeing any of that with the stalemate in d.c.. dagen: earlier park rangers arrested 21 people for trespassing. will carr is standing by outside this fabulous national park with more. >> with the government still shutdown, the grand canyon will remain closed and local business leaders tell me that is killing the bottom line. if it continues it could devastate the community. >> millions of dollars are being lost every day. >> superintendent of grand canyon national park isn't mincing words. the government shutdown, especially the town of tucson which depends on forced dollars.
>> that is truly sad to drive around grand canyon national park ended is like a ghost town. >> the kenyan remains closed but hotels sit empty. gift shop revenues are plummeting. the local industry is deflated. forcing many companies to bring their season to a costly end. >> we are losing $1 million. between our company and other companies with october trips. >> business owners and local leaders so fed up they face the protest outside the gates today. for now many are offering up their own money to reopen the tourist attraction. so far they have raised $400,000. the superintendent said it is not that easy. >> only congress can open the gate. >> until that happens, the fishery washington will continue to hurt a community that depends on the grand canyon. >> the new bid by pants. your fighting national politics and not feeling the pain.
>> this is not only painful for local business leaders but also people trying to sneakkinto the grand canyon. more than 20 people have been issued citations. they have to appear in federal court in the future so trying to get into the grand canyon is a big no-no. dagen: great stuff. thank you so much. starbucks ceo howard schultz is hoping to teach lawmakers a lesson in paying forward. from today until friday just this week the coffee chhin is offering a free brewed coffee to any u.s. customer who buys another person a beverage. it is just a tall group, it costs $0.05 to make at starbucks but ceo howard schultz says it is a way to help fellow citizens support and connect with one another as we wait for elected officials to do the same. take a look at the stock of starbucks today. no impact. connell: they will lose some
much money. gold feeling pressure right now with the dow and with a shutdown dragging on so we will bring in david williams to talk about it, strategic goal standing by. >> the outlook is okay, a surprise because it is down with janet yellen being announced as about to be announced as running the fed you would think the gold would rally but commodities in general going down with it. connell: why so much? $24 to date. >> that is a shocker. the dollar is strong and commodities are weak and we are searching for a reason why we will all find out tomorrow like markets always do. it is not the end of the world. we are hoping 1300 and get a little below that earlier. at these levels, it is very cheap and holds for a couple months but it is a shocker, down
this much today, almost 2%. connell: thank you very much at the exchange. dagen: the judge is coming up. president's new health-care law is bad news for everybody. we will talk to him about the move to part-time employment by america. connell: before we do that we will look at the winners we are seeing in the stock market. [ male announcer ] ed help keeping your digestive balance in sync?
work, at the health-care law kicks in. dagen: the senior judicial analyst, fox business and fox news with more on this, the way the law is structured they wouldn't be, the employers would not be required to provide health insurance if they move people from full time to part-time. judge napolitano: they can move full time to part time, they can divide companies into many smaller companies, and a larger number. this is a massive transfer of regulation on health care. the cost is extraordinary. bill haas in choice is going to be extraordinary. living in new jersey i am required to buyout plan and insurance policy now because i live in new jersey. i have to buy an insurance
policy for coverage i couldn't possibly use because of my age and gender. ss and everybody in the country will have the same burden. i could go to montana and if they are licensed in new jersey it would meet by new jersey standards and everything will be the same. choice is diminished, price goes up. incentive not to cover people means when you do cover them, charge customers and clients more. the obama administration and the democrats in congress have really visited a monstrosity. put aside whether you can sign up or get through to their web site. the cost to individuals is extraordinary. connell: if anyone looks at it this way it doesn't matter but there is political irony in this. you use the word incentive at the end. if you think about how the obama administration things about economics they love incentives.
that book nudge a few years ago, believing incentives to get people to do what they want to do. you say the cost of incentive is wrong with a have the incentives in reverse. they're a big government mind-set which honestly believes it knows better for us how we should live and are into the business of providing incentives so we will obeid from. so we will llsten to them. if you don't eat broccoli we will tax you and the supreme court says the government can tax anything it wants but in this case you are correct. they got it in reverse. a disincentive to do this and somebody pays. dagen: particularly for the young because you are required there is a standard policy that everyone must by now which makes those policies for young people lot more extensive than a in many states. judge napolitano: attacks on the failure to get a policy and the
individual mandate, that tax is less than the cost of the policy so there is a disincentive by the policy, incentive to paid the tax and the tax is not enough to subsidize someone else's policy. the taxpayer. dagen: i want to bring up the 30 hour work week because 30 hours or more yyu are a full-time employee under obamacare. a design did that we. i think full time is 80 hours a week. 60 hours a week. they designed it that way so more companies wouldn't take people on to part time but it will happen anyway. judge napolitano: the risk taker, the investor is always going to do what will produce maximum return on the investment and that means breaking the company into small companies or limiting people's hours and they will do it. that will reduce productivity and increase costs and we will all pay for it.
connell: we will ramp up. and letting it happen and going back and -- judge napolitano: once these things we fear actually happen there will be a political force for change. connell: than you see and snow about. judge napolitano: then you find that you can keep your doctor and your policy was wrong. connell: be back soon. dagen: winners weekdays from the debt limit. dick bove as dire warnings for the u.s. and the world and will lay an all-out. connell: is getting cheaper and easier to hack into the computer systems, security expert, brian finch, will join cheryl casone. markets now continues.
it is embarrassing. >> get out of this so these families whose loved ones just died, just died will receive the benefits at least that will give them some comfort. cheryl: both sides frustrated as those killed in action are being withheld until the government reopens. hello, everyone. i am cheryl casone to take it to the next hour of "markets now." day nine of the shutdown and we are juut six days away from hitting our debt limit. some argue hitting the deadline will not be the end of the world, dick bove argue they could wipe out bank equity and all lending to the private sector. he will be joining me in a few moments. president obama's biggest notes the nomination of janet yellen this afternoon. if approved, she will replace the head of reserve.
we have the pros and cons of yellin as the next fed chief. and hence the united states may soon cut back on our military aid to egypt. i will be speaking, saying cutting aid will be the single most dangerous act we could do in the middle east. we have all this and more in this hour of "markets now." ♪7 cheryl: again, welcome, it is the top of the hour. let's bring in from the floor of the new york stock exchange, nicole petallides. what looks like a positive day has now become a negative day. nicole: that is right, cheryl. down arrows again, the third day in a row for the dow jones industrial. talks of janet yellen appointed to the fed had role. once ben bernanke's time expires on january 31. she will continue printing. it is already factored into the
market. overall the dow squeezing out a gain. we have seen attorney arrow around. a lot of story stocks in particular watching apple, new ipad coming out in october. utilities are doing very well, the safe haven group and we're watching oil closely as the imf gives news of turmoil in the middle east actually moving to the upside. back to you. cheryl: nicole, thank you very much. we will see you 14 minutes from now. i guess you can say move over, ben bernanke. a new sheriff in town. ben bernanke expected to replace by janet yellen 3:00 p.m. eastern time today. easing and otherwise tense situation for wall street making the d.c. that stalemate we are seeing. joining us now, at the cato institute.
and axel murr, chief investment officer at merk investments. i don't think you're much of a yellin fan, are you disappointed by the presence choice today? >> i am disappointed. after the larry summers fiasco the president's got himself into a corner where he noted choice but to appoint yellin. i accept anybody on my short list, probably not on the president's short list. i think she probably has the 60 votes in the senate, certainly some republican opposition. they will grill her going forward on her record going forward, and a lot of issue of her behavior as the san francisco fed. essentially sitting on a housing bubble and didn't see it. she is not my choice but she is the one we are going to. cheryl: something appoint two, her history as a san francisco
fed president and some of the other votes she has been a part of. do you think that taints her in any way as the next fed chief? >> it defines her. the key is at the heart of what she is talking, focusing squarely on employment. what that means is the federal reserve would continue to try to solve fiscal problems. we have a big fiical mess. we cannot solve them with fiscal issues. the other thing is we cannot afford positive real interest rates. it will be tough, we will kick the can down the road and the federal reserve will facilitate that. yes, we should be concerned because it means the dollar is at risk and the bond is ultimately at risk as the bond market will wake up to. cheryl: i want to take that to the market, that is the devaluation of the dollar. fed policy so far has been
something the fed can count on to push down the dollar and we we're seeing that still today. mark, do you think she will continue on this path and maybe create another asset bubble like the one that got us into this whole mess in the first place five years ago? >> i 100% agree with that. there is an explicit strategy they believe exports has been one of the few bright spots of the economy and if we just weaken the dollar, never will publicly say they want a weak dollar, but create a weak dollar, believe that will increase u.s. exports in that way. absolutely believe that is the strategy. it is eerily familiar that we're back in 2003, 2004 when the post dotcom bubble all of these jobs not being created. low interest rates drive the housing bubble. again, this was right in yellin's backyard.
and only california but arizona, nevada among other places. i very much fear she hasn't learned anything over what happened in the last decade, we will see a repeat. cheryl: do you agree with that? maybe she can try to differentiate herself from ben bernanke. i don't know that. >> should put some nice intellectual framework around it but yes, i fully agree. the problem is we have too much debt in the world and we treat that differently in different parts of the world. it doesn't work too well, but here we will kick the can down the road as we do anywhere else in the world. it is with monetary policy and yes, that will create bubbles anthat will debase the dollar. the problem is we have account differences. when the bond market forces policies to their knees, the dollar may be far more at risk. we will have other crises
playing along like in japan where they are very relatable. cheryl: the asian finance minister are thrilled the president will be nominating janet yellen. can she right the ship that comes the global bank? other global banks have followed our lead in blowing out stimulus year after year, month after month. maybe the train stops with her. >> i am willing to say started as an economist of the fed, she certainly has seen what out-of-control inflation can do to the economy, so whatever choices she makes are not going to be in ignorance. i think she is going to be more to unemployment. setting interest-rate policies are basically the world, part of the problem is the fed does not
act like they care about the rest of the world. >> of course the fed will always focus on the u.s., but there are countries like israel and south africa that missed the opportunity to engage in real reform. china gradually opening up dealing in a world flood with money in a more constructive fashion. the countries that don't get their acts together will be hit with liquidity and panic in the springtime, the good news is the policymakers are bringing opportunities. cheryl: it'll be interesting to see how the afternoon plays out and the confirmation process. motion be the chairman or the chairwoman of the fed? thank you very much, great stuff. i am curious about that, actually. optimism over janet yellen's fed chair nomination failing that
deficit budget impasse for the stock market. todd, you are bullish somehow even though the market has completely has not completely plummeted in the 10% or more range. you are taking this as a good sign? >> i am right now, cheryl. one is clearly the macroeconomic data doesn't support any kind of papetapering by the fed. we already know that. wall street: the president's bluff and also congress, the doomsday rhetoric we have been hearing over and over again. it is unhealthy to have a shutdown right now, but the overall impact of the nested economy is it is still weak. the fed will print money helping stocks in the long run, that is why i am polish. cheryl: on the other side of the coin, kevin, we do expect this
to hurt the economy, always furloughed government workers are not out spending money, not even getting paychecks. what will that do to gdp already forecasted to be 2%. >> if you follow that logic, you will have massive amounts of gdp growth. a year ago we had a lot of concern about a fiscal cliff and we worried and worried about that. eventually we did have some frustrations but the economy has moved on. the fact that we have a temporary shutdown of nonessential workers and government, with the government is calling it to me does not move the needle in terms of the importance in the economy, more to do with what happens in the private sector and private investments. that is really the thing that is going to ultimately move the economy to expansion from recovery before we lapsed back into some sort of recession.
cheryl: the dow is flat at the moment, but if you look at what the markets have been doing, dow dropped 160 points yesterday, is that he had four-week low yesterday. these are telltale signs there is higher volatility, which we know, and there is more concern now than there was two days ago about the shutdown. >> that is right. main streets have to stay on the sidelines right now. you can go into cash or find the quality investments. here's the thing, a government shutdown is one thing and we have the ceiling next week, but you have the rhetoric going on, your congress that negotiates via television interviews. not doing it face to face. talk about the sequestration, we have gone down this road, doomsday scenario never occurs, and therefore we live to see another day.
here is the thing, right now the only thing that keeps this market from plummeting right now is the federal reserve and quantitative easing. we take that away, all bets are off. cheryl: it is interesting the president is announcing the appointment of janet yellen today in the middle of all of this. i will tell you this, i'm not trying to be a conspiracy theorist, i think it is interesting. you think they will cut a deal in washington. but i am seeing more reasons, market activity if you look at credit default swaps, those are getting more expensive. it seems to me there is a little bit of bits and pieces of nervousness. if we get to the middle of next week and there is no deal, is that when we have to reevaluate whether or not we can handle a debt ceiling that is missed? >> it'll be one of those things if we get into the middle of next week or the end of next week, it will be sloppy. but i am hard-pressed to figure
who actually wins in such an outcome. truth be told both parties ultimately rely heavily on revenue coming into the capital in order to continue spending. there are a lot of incentives for both sides to get a deal. ultimately to think about a default or on the treasury debt is really unthinkable. i think there is a long way to go between here and there. not a lot of incentives to go that far, but the world is watching us, the master this gets, the more egg is on our face. have a public relations problem. >> listen, investors are going to ultimately win on all of this. we're going to have this slowdown. 20% of gross domestic product is government spending. we will have a slowdown in growth method product in the fourth quarter, but who cares, the federal reserve is there.
plus we have gender yellen in charge, the ingredients are there for a continued all market in 2014 because of everything that has taken place right now. cheryl: you like janet yellen. >> i'm starting a new club, a private club on wall street. cheryl: gentlemen, thank you very much. something a lot happening in the united states but a lot happening overseas. violent protest in egypt continue and the u.s. may soon be cutting back in that country. while this is a big mistake. joining me with the reasons why. and we're just a stays away from hitting the u.s. debt limit. dick bove has dire warnings for the u.s. he says for the world. there will be a lot of problems for us. overseas as well. he is next.
cheryl: the dow higher by seven points right now, at&t leading the dow. chevron is the drag on the dow. let's bring in nicole petallides on the new york stock exchange. nicole: this is an interesting one on boeing. the dreamliner pligh plagued wih problems, everything from battery fires that grounded the model. however if you are interested in driving all mac flying on a dreamliner, you may want to think about it. they will be getting it back into service late next week, which s great news for bowling in particular and norwegian air shuttle. they have one other dreamliner they're sending in tw to boeingr
a checkup. they will be up and running at norwegian air shuttle. doing similar checks for any possible repairs needed. the lightweight model, and of course less fuel consumption. back to you. cheryl: thank you very much. i'm going to let you know at home, i will be asking norwegian airline ceo all about his dealings with boeing. i will be speaking with him tomorrow first on fox business interview at 12:00 p.m. eastern time on fox business. if you did not know, we're eight days away from hitting our debt limit. the world is very nervous. dick bove true u.s. default would wipe out bank equity and stop all lending to the private sector. you say we are not an island and we're operating like we are, explain that. >> basically making the assumption the united states if
you will can go through this debate about its debt and debt ceiling and shutting down the government. other participants in the world market don't get affected by it. they do get affected by it. if we take simply china and japan, china has $1.4 trillion in ownership of u.s. treasury, that is 32% of the assets of the people in china. if we defaulted and the value of those treasuries go down, the assets of the peoples bank of china goes down and it effects the economy. $1.1 trillion is owned by the japanese and they have a similar problem. if you put those two countries together, that is 45% of all of the debt of the united states on the outside of the united stat united states, roughly 18 to 20% of all of the debt of the united states. we've already done irreparable harm to kos these countries recognize they cannot hold that
much in treasuries. once the crisis is over, they will start to let them out into the market. cheryl: we have been getting a lot of commentary from analysts like yourself. i want to read a quote to you. they are not so worried about any delay with the debt ceiling. here's what they say. in the current case such an outcome would be a far simpler situation for the ratings business when the world's largest and wealthiest countries would be related below those compared with it. how do you respond to a statement like that at hsbcc >> basically speaking, you have two think of it not only from the standpoint of suppliers of the debt, which is what we are talking about, but from the holders of the debt. what happens to bond funds, which are required to get rid of anything they own, which is in default. what happens to money market funds that have to dump their holdings?
what happens in the repo market shutting down almost completely. what happens to banks? basically if you add up all of the government-backed securities on the balance sheet of the american industries, almost equal to the common equity of the american banking industry. a default would cause the breakdown of that common equity, the banks couldn't lend money and fdic insurance would not exist, it is out the window, it is gone. no protection against your bank deposit if there is a default. i don't believe there will be a default, but i keep getting asked what happens if there is a default? a depression happens, that is what happens. cheryl: everybody wants know what the probabilities are. you mentioned the banks, jpmorgan coming out on friday. you released a note oo jpmorgan. are you expecting any fireworks on the report? >> it strikes me there is likely to be because we don't know if
jpmorgan will put up a reserve of 10 or $11 billion against a potential government settlement. if it puts up the reserve it is admitting it will make a payment of that nature. if it lowers its reserves instead, i think investors will get very, very upset with the company. the company is going to be dramatically impacted as a result of all of these lawsuits that has received, it is not going to be going back to normal business once the lawsuits are gone. it will have a series of businesses they are in stop. cheryl: dick bove, thank you so much. we will talk with you soon. another threat of the government shutdown, less security to calm the cyber attack. it is also getting easier to hack into those systems.
>> 26 minutes past the hour, this is your fox news minute. chemical weapons inspectors in syria have visited one site and are moving on to a second. that's according to the chief of the world chemical weapons watchdog in the first public remarks about the mission, they need to visit more than 20 sites may need to negotiate to gain access in some areas.
the government shutdown and covers that efforts to investigate the recent selling knockout rake nearly 300 people have been sickened by the outbreak found in raw chicken. those at the centers for disease control sent home without pay. some are being recalled to monitor foodborne outbreaks. detroit tigers forced a fifth and deciding game against the oakland athletics in american league playoff series. detroit rallied for the 8-6 win yesterday. game five is tonight in st. louis. those are your headlines at the fox business network. cheryl: it is time to make some money with charles payne. this hour he is all about making you money while making you copies, 3d. charles: 3d. this is different than most of what i've talked about because
this is industrial. i'm talking big machines like release offensive machine is 400 grand, most expensive is $1.4 million. this company is amazing. they started in 1999. they developed a prototype then. it is working out phenomenally for them. bmw is a customer, ford, bowling, dear. i doubled their workforce. wonderful things. the problem has been execution because all of the hype i am telling you the reason the stock is so far up, 52-week high cannot execute. they have been falling three quarters gone missing by 50%. the 2%. 33%. it had to match the hype at some point. wall street things they will. this morning they said they like it at 70. those are pretty obust price targets. everybody is looking at this
one. if anybody is interested in this, it is obviously a bottle stock. at some point it will execute, in the meantime they will have different materials they can build using three-da 3d systems. huge industrial use. aerospace, automotive, industrial or huge stuff. cheryl: 3d diamond. who doesn't want that. the united states may soon be cutting back on egypt. if this happens, it would be catastrophic to the middle east. and one of the seven natural wonders of the world, the grand canyon, shut down due to the shutdown. but plenty of people are still trying to sneak in and they're going to be spending some time in federal court.
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a new way to bank. a better way to save. ally bank. your money needs an ally. cheryl: beware of these cyber maps. a study estimating cybercrime costs the u.s. economy a staggering $140 billion each year. what's more startling is the cost of carrying out the damaging cyber attacks is a lot lower than you might think. for more, let's bring cyber attack economist. good to see you. this is the topic that you are writing on for your first, your last column, the latest, the greatest on foxbusiness.com. welcome to the family first of all. i just had john nelson on the show, they always rank the ceos and the ceos worries.
number three was cyber attacks. it was number 10 a year ago. are we first and foremost not being careful enough about cyber attacks? and then we will look at the money. >> i think people are becoming aware. they are becoming more aware of the threats related to cyber security. i have a number of clients who come to us and say we need to do more, some of the bigger players do it, they don't necessarily understand they are a threat, nobody would steal their information when in fact as much of a juicy target for the attackers as anybody else. i have information one piece together get very important data and linkages. cheryl: one of the things that has been frustrating with all of the general numbers that get thrown out at us from different
researches, one time i saw a trillion dollars. how can we disseminate fact from fiction when it comes to the real cost of cybercrime? talk to me about that. do we really know? >> it is a challenge, cheryl. it is all over the place. we don't know the extent of cybercrime and cyber attacks that are occurring. there are a lot of occurring right now that we don't even know about and haven't detected that are stealing intellectual property. and how do you actually value that? cheryl: that is a great question. that is the problem, how do you value intellectual property. >> that is part of the big problem, how do you get to that. a lot of information is being lost, businesses are being interrupted if their website is being taken down, and you can put a dollar value for instance
when personally identified records like medical records, credit card information, et cetera. those cost about $200 or so in remediation cost. the band you see from 20 billion reflects in part, some mystery as to what exactly is going on and the unusual math associated with intellectual property valuations. cheryl: was reading your article. i encourage others to read t, but one thing i didn't even think about was if you find a usb flash drive on the ground, don't use it. they are the dirty needle of the information technology world. >> unfortunately you have to be. it is a wonderful tool because companies who manufacture them certain overseas nations will drop them on the ground and they can have embedded code in there. as soon as you plug it in to a
computer, that the virus gets on your system and it is incredibly difficult to pull out. for while the defense department banned removable media from their computer systems because they were worried about people loading information, and attacks coming in from that vector. cheryl: i am curious your thoughts on this. with the shutdown i have been curious about what the defense department looks like right now, what government agencies are doing. are they just not right about cyber attacks right now? >> no, they're certainly continuing to do their work. the question will be if contracts will actually be implemented. things that were awarded in august and september that were scheduled for delivery in the remainder of the fall and upcoming year, will they get started on time. it is not as if they are abandoning their post and anyboy can walk into the country. same with cyber security. but we may not be any getting installation of the newest technologies in a timely fashion.
cheryl: all right, brian, thank you very much. i want to let all of our viewers know to check out his article on foxbusiness.com. as if the budget standoff was not enough, a new drama beginning to brew over egypt and the millions we give the embattled nations in aid. also, oil prices are dropping today. the last week the energy supplier for quite a while. another government department runs out of money. we have the latest at the pits of the cme. take a look at the 10-year treasury and the 30-year period [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ]
>> i mash the webster with your fox business brief. mortgage applications edged up according to the mortgage bankers association. rising 1.3% in the week ending october 4. the interest rate fallen to 4.42%. investors considering selling jenny craig diet business according to reuters, the las vegas food company speaking to a large group of potential buyers for the underperforming brand which sells packaged food. the tax foundation 2014 state business tax climate index is out.
the top three are wyoming, south dakota, nevada. the indus compares all 50 states on business tax breaks of more than 100 tax provisions. california, new jersey and new york took the bottom three spots. that's the very latest from the fox business network giving you the power to prosper. cme group can help you navigate risks and capture opportities. we enable you to reach global markets and drive forward with broader possibilities. cme grou how the world advances.
cheryl: and news alert for you right now. the white house denying reports the u.s. will and all aid to egypt, but also been told there will be announcement on u.s. involvement in egypt within the coming days. our next guest says scaling back any aid will be catastrophic. joining us now. catastrophic, how so? >> because of the amount of losses that would incur not just in government but also private secttr. we're going to have american companies losing money, lockheed
martin, boeing, i have the numbers. a long list of companies. the u.s. government would lose priority access to the suez canal, the airspace of egypt which is crucial for us to be present in the gulf and in the region. all of that would be jeopardized because of a partnership we have with the muslim brotherhood, former regime which have been accused by a majority of the. it is a big decision, it is the wrong decision. cheryl: what do you think is behind the potential decision? we're getting mixed signals. there are reports they will pull the aide. white house says that is not true. if we do poll aid to egypt, how is that any difference from us continuing to aid pakistan? they were hiding usama bin laden in a beautiful summer retreat. why is it egypt we are focusing on them it will be a money situation, a shutdown decision from the u.s. government, why
not address all the countries in the middle east we are giving aid to? >> it's not about shutting downd keeping the other part. it is a punishment. political punishment of the egyptian government because they removed the muslim brotherhood. in the case of egypt, this is a country which had for three decades maintained a peace process wwth israel. this is a country fighting the jihadist. more than that, it is not just about egypt, it is about a trust built up with egypt and its partners and who are these partners? bahrain, kuwait, arabia, all of these countries need egypt to be their ally and we are sponsoring egypt. this would have a major impact on the region, cheryl. cheryl: mohammed morsi set to go on trial. do you think this is tied to the fact he will be going on trial? >> absolutely, that is part of it.
this is what is happening right now. if you read the "washington post," "the new york times" and other publications close to the ministration, you will see the talking points of the muslim brotherhood present in the talking points of the muslim brotherhood. a certain pressure group on the administration to put as much tension on egypt so that egypt will stop basically dismantling the network of the muslim brotherhood. cheryl: do you think the israalis will step in before we poll aid from the egyptians? you have seen the interviews in the last few days of benjamin netanyahu. talking about the president on twitter. and there region is in jeopardy. do you think they asked before we do? >> also in iran. now they see the flag being appended by the united states. unless we have been changing for the last 30 years, so they are
nervous about the region and if iran is going to mount a threatening weapon, guess what, they may do what they have to do and make a phone call later. cheryl: thank you verr much, we may be calling you very soon. thank you. >> thanks. tcheryl: time for stocks now. let's bring in for the new york stock exchange, jonathan. let's switch gears with a flat day. janet yellin to be nominated for the fed chair. what is the buzz from the traders? >> somewhat old news. we talked about this three weeks ago so any attachments to this has been overshadowed by already what is happening in washington at this point right now. the news of yellen being appointed as afternoon is not strong enough to help this market move out of this rut we are in. the only thing that will help us is if the republicans and democrats moved th to the middlf the table together and come to some sort of solution where we are at.
cheryl: jonathan, thank you. what could be the last report for some time due to be shut down, supplies coming in nearly three times more than expected today. the trading pits of the cme and our very own phil flynn. we have reports today. phil: if you're going to go out, you're going to go out with a bang. 6.87 million barrels, is that ridiculous or what. a sign the refiners mainly because of the big storm coming up in the gulf, they said what the heck, let's get it going. they must do a better job handling their money than the department of labor statistics because they have money until the end of the week. they cannot even afford to put out a report last week. gold down 2240 today. not even janet yellen can get us running today. it is because of a strong dollar that actually has gotten
stronger when we got bad data out of europe, when president obama said he might call house republicans and democrats. when that headline came the dollar soared, gold tent. sometimes a phone call can move the market. cheryl: what are you going to do when we do not have any more energy reports. i have a lot of questions. phil: i know. i'm try to take the collection. can you raise money so we can get reports out? i'm going to be banging my cup here. we will have to go with the api. i am more worried about the farmers. he could see farmers go under if they don't get their money. cheryl: a whole host of things. phil flynn, we will see you in the collection jar. i guess it is called sin city for a reason. vegas, one of the top u.s. cities for mistresses. but it is not number one.
damage roads, buildings and airport runways. scientist blame emissions the impressive size. call for help exchanges are showing signs of improvement with 16,000 households signing up between october 1 and october 5. cover california estimates thousands will sign up in the next six months. california, like many states, got off to a rocky start in the exchange website. nearly two dozen people have been cited for rendering grand canyon national park illegally. people have been caught on the trails trying to hikes were on the dirt roads leading to the canyon entrances. they will have to appear in federal court. most park employees have been for long. officials promise there will be for now on 24 hour surveillance. so don't try this. that is your "west coast minute." staying on the west coast, las vegas, marriage capital of
the world, is now living up to its name of sin city. and from his cheating site ashley madison.com listing the top cities for extramarital affairs. more than a quarter of vegas women using the site to seek out affairs with married men are single. what happens in vegas does not stay in vegas. the other top mistress capital of the u.s. are los angeles, dallas, washington, d.c., and coming in at number one, phoenix, arizona. there you go. sorry, phoenix. the government may be cutting everything from national parks to veterans benefits but they have just enough left in the pocketbook to buy mechanical bulls. the government approved the purchase of the $47,000 mechanical bull for the utah national bar. used by recruiters at events to draw attention. whatever that means. it was needed at the previous one broke down.
finally, the latest and greatest care for a hangover actually has scientific evidence to back it up. it is a sprite. they studied 57 drains and found 11 line pop was the best at breaking down hangovers the best. want to make sure you are paying attention. one of the longtime favorites, herbal tea, driven to be worse making it harder for the body to recover after a big night of drinking. of course, this is all good news for the coca-cola company, they make sprite. big boost for the hangovers out there. 55 after the hour, five minutes until the top of the hour and the bowls are coming out. investors are hoping the printing presses will stay red-hot as janet yellen said to be nominated as the next fed chair. talking to adam and lori about if it will help boost our
lori: progress on the -- narmian behravesh on why he is cutting his growth estimates. adam: the white house may strip the country of military and economic assistance. what the obama administration is saying about it now. lori: once again, welcome. let's head to the floor of the new york stock exchange and nicole petallides. nicole: when we started the show, it was a negative territory, now it is and positive territory. what is interti