Down the day, ann from wells fargo, march, todd and todd morgan from bel air investment advisers. Well try to distinguish between the two todds. Welcome to everyone. Ann, first to you. We just watched stocks sell off sharply into the close, financials in particular. What does that tell you . I think it is the market just worried about whats going on at the fed and the debt ceiling, budget hearings, all that we have. More uncertainty in the market. Uncertainty has really become an ugly word for us, i guess. You still there are plenty of stocks you like individually right now. I mean, youre still fining value in this market, around you . We are, bill. What were trying to do, our process focus is on companies that may be interested in either acquiring or also being acquired. The stocks were looking at are trading at discounts, we think theyre intransic or private market value is. Many of those companies are trading at very attractive valuations. And in a low rate environment that looks like its been extended, they could be even more attractive. You call carl icahn and tell him about that . I donten if carl will take my call. Michael, people are trying to figure out the paradigm weve been in for the last several trading cycles. Can you help us figure out whats driving the action here . To me, i think its digestion. We shot up pretty high on the flagpole in that reflex reaction after the nontaper announcement. I feel its one of these periods where we hit new highs, side ways, flatten out, and you dont have a lot of people who feel theres a rush to buy at these levels right now. Until financials get their feet back under them, they really have to stabilize. Its interesting how shortterm trader anxiety has picked up well in excess of the losses weve seen. This has been the pattern all year. People rush to get was in. I think that probably insulates you from a big down move unless you get some kind of a shot. Todd morgan, as we sit here in washington right now, senator ted cruz of texas is going through what he calls a filibuster of sorts. Not officially one. But hes standing on the senate floor saying he will not stop talking, trying to bar the senate from voting on the continuing resolution that would defund obama care, which is what the house passed last week. Hes going to fail in this just because of senate rules but hes making his point here. This is the kind of fiscal wrangling the fed has been talking about, isnt it . At what point, todd morgan, do you think this will start to bother wall street . I think its a little early. But if this continues for another two, three weeks, you go into hurricane season, which is october. Historically speaking, october is the time where we have some kind of correction. When uncertainty spills over in the market, thats usually the time you get. So, it would not be unusual. Theres other issues people are somewhat concerned about. That is the earnings reports. They might be sluggish coming into the next quarter so people are concerned about that. You just had a terrific rally in the stock market. People are starting to take profits. And you know, all great climbers need a chance to pause and refresh. Thats maybe what this market needs before we take off again next year. Todd, are you surprised at how shortlived the rally seems now and has been after the move last week, unexpectedly by the fed, to stand pat . Well, not really. I think this does happen when after a big burst. Sometimes you do have this pull back, this second opportunity, if you will, for wouldbe buyers. But i do agree with both michael and todd. First of all, weve seen this before. In terms of the uncertainties and how investors react, well tend to get choppiness, well tend to get mild pullbacks. Investors get nervous. But its the same situation. I mean, i think the good news is, there are a lot of people on the sidelines. You can see that in s p componen components significantly above 2012 levels, even significantly above this years lows. Youve got the vix, even with the market recently being at an alltime high, the vix is 25 above this years low. There is some nervousness out there. But i think the point is, with all these Underperforming Fund managers, theyre waiting to come into the market. There are some more uncertainties to be resolved as we head into earning season and as we head into these debt ceiling talks. They want to play catchup at some point when all is said and done. Mike, lets go back to whats going on in the senate and the fiscal drag. As we consider the debt ceiling debate as it gets under way in earnest and how long before the government runs out of money and theres going to be a shutdown, we all know the last time we went through this, tremendous volatility for the markets in august of 2011. We have not seen that at all this time around. Is it still early or were not going to see that at all, do you think . I dont think in retrospect anybody feels smart for having panicked ahead of 2011 or ahead of the fiscal cliff noise last year. I suppose if we do get right up against a deadline and it starts to become prioritizing, you know, treasury cash flows and things like that, maybe we do use it as a good excuse to pull back. Right now i think its almost the other way around. Were going to basically assume this is a lot of sound and fury until were persuaded to think otherwise. Todd, to look at september, typically a seasonally weak month, with all these issues going on that weve talked about, and despite the fact weve had the best start to the month in decades and stocks in an historic 2013, i would imagine that by those metrics, what were witnessing is pretty extraordinary. Yes. Its interesting, and one thing we were talking about at schaeffers is how much pessimism was being built up as we entered that, quote unquote scary month of september. A lot of fear in the market. I think there is, you know, a lot of sideline money that can come in. Theres a of Short Covering potential. I think there are people looking to get into this market, come off the sidelines. And, p. S. , that portfolio protection trade, which via vix call options hitting record levels or near record levels, thats a sign theres going to be less panic of selloffs than when you had the unwind of that activity. That gives you a boost. Ann, i know you like to ignore headlines as much as possible. Will you be able to ignore what this market does or does not do when the fed finally gets down to tapering at this point . The expectation is that it starts to go south. I think the real fact of the matter is, if the fed feels Strong Enough that they can finally taper and pull some of this away, it means the economy is Strong Enough. Thats a positive overall. So, yes, it will shock the system for a short time. But i think overall, it sends a message that were in a healthy mode and that growth, even though its slow, can continue. We will leave it there for the time being. Everyone, thanks much for your perspective. Bill, on a day when despite the strong run for stocks this year, weve sold off into the close. Yes, once again. Four down days for the s p and dow. Dominic chu has been monitoring it. How about skepticism from the market. All that news about smartphone maker blackberry going private, maybe a 4. 7 billion cash deal. The bid rests at 9 a share. The stock is now closer to 8. 50 a share. Questions remain about whether fairfax financial and partners can raise the money needed to make this deal happen. Home builders, kb and lennar report earn lgz before opening today. They both beat. Kb home said orders fell short of estimate but its a temporary phenomenon as customers get used to higher Interest Rates. Analysts at jeffries and aig upgrade. And shares of chip equipment maker Applied Materials are up after the Company Announced it would acquire Tokyo Electron in allstock valued at 29 billion. This deal combines the worlds number one and number three makers of the stuff that makes computer chips. Well finish off with another chip stock. Cypress semiconductor, citing soft handset sells in asia. Thank you very much. Dom mentioned outperformance in housing stocks today, bill. In keeping with that theme, homeownership in this country actually at an 18year low. The question is whether thats a bad thing. Well get former congressman Barney Franks take on that coming up. Also, should blackberry shareholders take the money and run . Or should they hold out for a better off than 9 a share . We have both sides of that debate coming up next. Much more on the closing bell. Welcome back on a day when the dow and s p 500 are in the red again. Bob pisani joins us with a look at whats happened. Four days on a row down on the s p 500. I was kind of disappointed with the action at the close. Dow jones traded in a fairly narrow range. In the last 20 or 25 minutes the dow industrials just kind of sank into the sunset. Ill tell you why i was disappointed. Because Interest Rates were low all day long. Were at a sixweek low on yields on the tenyear. Normally in the past, thats been pretty supportive, particularly as weve been dropping again today for stocks. Didnt seem to matter that much. Take a look at sectors. We did get some economically sensitive sectors like industrials that did fairly well today. Not terrific. Utilities were positive throughout a good part of the day. Ended slightly negative. Overall, still not the kind of boost you would expect with Interest Rates this low. We mentioned housing, but autos was another start, carmax, same store sales increased 18 . All the about auto stocks were to the upside. Aerospace did very, very well. I dont know if you saw this story from airbus, longterm jet demand forecast will double in the next 20 years. Theyre expecting the world will need 29,000 new jets in the next 20 years. 29,000 new jets. Partly because of the explosion of air travel in asia. We saw Aerospace Stocks moving up. Back to you. All right, bob. Looks good. Thank you very much. Bill, were still keeping an eye again on whats happening out of washington. But, of course, theres plenty of Corporate News to follow as well. Right now weve got news well, certainly the story about blackberry yesterday. It broke around this time when we got that 9 a share offer from fairfax financial for blackberry. Noted Technology Analyst dan niles said on this program yesterday that blackberry shareholders should take the money and run. Take your money and leave. Because this is the best thing that could have possibly happened to you. When is the last time you saw a company of blackberrys size cut revenue forecast by almost 50 in a preannouncement . Larry agrees with dan niles. He said if shareholders wait, the offers could get worse. Kevin stadler says this is a fire sale price. Investors should hold out for more. Gentlemen, welcome. Kevin, this is a depleting asset. Whos going to step up and pay more . I think a private equity bidder would benefit from buying the company. And i also think i wouldnt count out mike. Theres real value at this with this asset. Larry, is there real value or are we witnessing one of the greatest value destruction efforts . There is no value. This is a bad bluff in a highstakes game of poker. This thing could continue it go down to 2 a share. How would it get down to 2 . The issue is they dont have anything. Youre laying off 40 of your workforce 4 a share in cash. Okay, 4 a share in cash but i still think larry go ahead. When you say the company doesnt have anything, i think when you say the company doesnt have anything, i think youre the facts stand in your way. Specifically, dont look at their cash. But they do have 2. 6 billion, which is 5 a share. Look at their assets. Specifically if you look at bbm. Bbm is a business. If you really if you its useless. Its popular. Its useless product. No. Whats app used by 250 million users . Its not a useless product because people spend 9 0 minutes per session a day. Thats more than television on this product. Who would buy that, though . Yeah. But its useless if someone like fairfax comes in without any synergists that cant do anything with it. It will go away. A Company Whose whole goal in smartphone business is larry, larry they cant thats where i naets where i agree with you. Its nothing. You got to have a ton of cash to continue with thats where i agree with you. Were on the same page. Go ahead, kevin. Were on the same page. I actually think i agree with you. If fairfax doesnt have a strategic plan. Now, a private equity buyer would come in with a strategic plan. Specifically you split the company in three parts. One is bbm is spun off and it will attract millions and millions of users. It already has. Its a useful product. If you spun it off as independe independent entity, social Media Companies would find it a huge part of their company nobody wants it zoom will i say this youre confusing some parts i think if you can outline what would be an attractive thing for private equity can be attractive to do. You cant guarantee theyll step up, so why should shareholders gamble and hope that what youre discussing materializes . Its just money. I think theres a great arbitrage between this current market value and the sum of the parts. You split the entities. One other piece of the business is the patents. They have 5,000 patents plus theyve applied for numerous patents recently. Theres real value there. Specifically whats taking so long . They trade at four times revenue excuse me it it takes them off the table. If nobody like microsoft, you think they would come in and take them off the table, the patents and Enterprise Software microsoft doesnt want the whole business. Exactly. Microsoft does not want this whole business. One at a time. The patent business trades at four times revenue. The overall business right now trades at 0. 2 times. The they have to split the business into three parts and the sum of the business will get to you 14. The patent business, public comps trade at four times revenue kevin, good point. Lets give larry last word. The bottom line is, there is no business there. Youre buying a stock on future earnin earnings, zero. Thats why i say 2 because they have nothing. Youve been telling me you arent Aware Service business has 1. 6 billion of revenue per year. Thats a real business. Its a real business if somebody comes in with a real synergy and does it. Not fairfax. Its an insurance company. I think the point is someone has to be step up with a plan otherwise it people are going to get burned. Larry, youve been telling me split the company in three different parts we got the point, kevin. You got it. And its a thank you all for joining us today. A contentious issue, obviously. Bill, a lot of companies are trying to make a decision about whether to support that device youre holding. Im hanging onto it. Bin saurs. Is the American Dream turning into a fantasy . Wait until you hear what former massachusetts congressman barney frank says about that. Also drama on the high seas as Oracle Team Usa makes a huge push to reclaim americas cup. Well head west to the bay area for a live report. Do not touch that report. [ female announcer ] youre the boss of your life. In charge of long weekends and longer retirements. Ask your financial professional how lincoln financial can help you take charge of your future. How lincoln financial can help you take charge of your future. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Asia Property Value on the up, up, and away. Home prices posted their biggest yearly increase since february of 2006 despite rising Mortgage Rates. Diana olick on the pulse of all things housing. House prices continue to defy gravity but gains aslowly slightly. Probably due to higher Mortgage Rates. Tight supply has kept the pressure on, though. Prices in the nations top ten and top 20 cities in july rose just over 12 from a year ago on the s p caseshiller index. This is a threemonth running average. You have prices going back to may in that reading. All 20 cities showed positive returns, but 15 out of 20 showed the gains slowing. Again, higher Mortgage Rates to play and the fact that huge price gains in some local markets were simply unsustainable. Robert schiller, one of the creators of the index said on cnbc this morning that some markets were, quote, bubbly. Take a look at San Francisco, las vegas, los angeles, prices up 20 year over year. Lennar and kb home jacked up prices on newly built home, 16 and 23 respectively. Kb says because their strategy is to move into higher priced markets. The premium for a newly built home over an existing home has now jumped from below 10 in 2006 to around 40 at the beginning of this year, according to capital economics. That spread will have to narrow given higher Mortgage Rate so you may see builders bringing prices back ever so slightly. Thank you for that. Speaking of prices, they may be up but homeownership is down. In fact, the lowest point, bill, in 18 years. So, the new American Dream appears to be an affordable rental. Lets talk about that. In his more than three decades serving massachusetts as member of house of representatives, barney frank frequently spoke on issues of homeownership. He joins us to talk about this latest development. Congressman, always good to see you. Thank you. Welcome back. Thank you. Are we misguided the place of value judgment on this decline in homeownership . I mean, is that necessarily bad for the economy . Or is it just part of a cycle going on right now . Its not real bad. In fact, what was bad, and i ive had a hard time breaking through on this. I have felt almost from the beginning of studying that we overemphasize homeownership. The American Dream ought to be a decent home. But a good home can be a good rental. As well as a home that you own. Even though we slant Public Policy against renters for homeownership but its for people with limited incomes. Even if you can piece it out congressman, youre saying that you meant all of this time along, you werent saying it was homeownership, it just meant being in a house . It didnt mean owning a house because thats completely different from the interpretation people had then and to this day about what you were saying. No, thats a distortion that people were saying. In fact, maria had quoted that. Let me read you something. I anticipated this. Wall street journal april of 2008. Okay, go ahead. Well, is that wrong to no, no. April 2, 2008. Harry lindsey, a highranking executive official of Bush Administration and reagan administration. Representative barney frank is the only politician i know who argued we need tighter rules and intentionally more homeowners and more renters. I have been for rental housing. I have been pushing in fact, in the debate over fannie mae and freddie mac, my emphasis was on getting them to do more multifamily housing on which, by the way, be they made money. They never got in over their heads. As for subprime mortgage, records are clear. There was a partisan divide. Alan greenspan, Congress Gave him the power. It wasnt until 2007 when i became chairman that we put limits on fannie mae and freddie mac and put strict congressman, its one thing to say its fine, you know, for rentals, multifamily. Its another thing to say you werent promoting homeownership. You certainly admit you were promoting homeownership, right . No. What is your no. I was promoting homeownership mr. Frank, as long as you were quoting from the wall street journal, we have one here from 2005 during a speech you made on the floor. Im not here to you know, were pointing fingers backwards. I want to look forward. Anyway, since you brought it up. A quote from you as part of a speech you were discussing a homeownership bill and you said in there, those of us on our committee in particular will continue to push for homeownership. You know, thats what were looking at right now. Yes, for people for people who can afford it. And i was also at the same time strongly pushing for limitations on the kind of abusive mortgage practices we saw so that people werent getting mortgages that they couldnt get. When george bush in 2004 argued orred fannie mae and freddie mac to increase the number of mortgages they gave to people below the peed yan, i criticized it. Homeownership is a good thing for people that can afford it. But fewer people can afford it now. I think thats what were looking at right now. Is there something wrong . We seem to be going backwards no. In the number of people who can afford a home. Partly thats because of the unfortunate Income Distribution where people in the middle income have lagged behind people at the high end. But the problem during the period before, which led to the crash, was that too many people were getting homes. I was critical of that. There was this notion that denigrated renting and that said that everybody could be a homeowner. In fact, thats not a good idea. And we push people into homeownership who shouldnt have been there. I was always opposed to that. We tried to regulate that. In fact, ill going back to the wall street journal. In 2007 we passed a bill in the house when i became chairman to restrict the bad subprime mortgages and the wall street journal editorial attacked me said we created a sarbanes oxley. Homeownership for those that can afford it is a good thing. But pushing people into it when theyre at the economic margins, ive always been opposed. Part of the issue as well is that so many banks or Investment Funds have gotten into the business of buying up properties and then renting them out. The question is if more and more americans are ultimately going to be renting these properties from the investment class, you can give it any kind of overtones you want to, is there something to be worried about there, though . I mean, if you look at the state of play today, what verdict would you render on it . No. You want to make sure these people that own the housing are held to a high standard. Weve had that for a long time. One of the things that should be changed is this, i hope well get a more rational tax structure. Right now there is this quirk. The owner of the property gets the tax break. The renter doesnt. I think if youre going to have that situation, there should be an amendment to the tax law so the tax preference is shared. But i think it is a very good option for people. Look, when i was younger, i was told that i should expect to pay 25 of my income for shelter. Years later people were being told they should make 25 of their income from owning a home. Thats not a good idea. We should give people the notion that the way to build up equity is buy a home. They should buy a home or rent a home in accordance with what they can need or afford and be comfortable with. Ive been quoting you on the air a lot lately. Whenever we have a banker on, because the last time you were on the program, i was saying to you how we were hearing about how it was tougher to get a mortgage these days because banks were very reluctant to make those loans. You said to me let me get this straight, a bank is not making a loan because they dont think theyll get paid back . Thats precisely what dodd frank was designed to do. Bankers take issue with that. They feel were in an environment where the Regulatory Environment is so onerous that theyre being penalized. I like to ask specifics. Im not aware of any regulation that says you cant do it. Im critical there is a proposal now. One of the important things we did in the bill was risk retention. People were able to make loans and sell the entire loan as security and not have any interest in whether or not it was repaid. I think the discipline of the lenner lender borrower relationship dissolved. We put in the bill some administrator should have some risk. When they tell me that did any of them tell you what regulation stops them . The only rule that we the Capital Requirements that are out there, they have to keep raising Capital Requirements so thats money that could have been used to loan, right . Thats right. If they were overleveraged, they could have made more loans than they could ultimately pay off. Im glad you gave that specific. Capital requirements are an important safeguard against Financial Institutions getting so indebted they cant pay things back. I think those Capital Requirements are a useful thing. The only restrictions i will tell you thats in there we wrote into the law, they cannot make these interestonly loans. You cannot make loans with negative amortizization. We had a problem, one of the major causes was people making loans, these bankers, on their own yes, exactly. Without adequate backup. Okay. Congressman, im afraid we have to leave it there. Always good to see you. Thank you for your time. Ill keep quoting you as well. Im still my heads still spinning. More on housing later. In a cant miss mad money interview, lennar ceo Stuart Miller take talks to jim cramer. Want to stick around for that one. 67 00 eastern time. Middle east has proven difficult terrain for american president s for decades but today the president obama told United NationsGeneral Assembly he would use the remainder of his time in office to resolve major conflicts there. What exactly did he say . Thats coming up next. Later, perhaps we could use a little diplomacy on the domestic front. The president says he wont negotiate on the debt ceiling but someone here says that strategy will lead to a blowup, booming markets and economic recovery. Well debate both sides of the issue. The most Free Research r, customizable charts, powerful screening tools, and guaranteed 1second trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Oil and diplomacy. President obama addressed the future of iran, syria, the rest of the middle east during his closely watched speech at the United NationsGeneral Assembly earlier today. John harwood has the story. Reporter this was an unusually important appearance for president obama in front of the u. N. General assembly because both the issues of syria and iran were on the table. Theyre interrelated. First the president having turned to diplomacy on syria with their use of chemical weapons. Asked the u. N. To back him up enacting a resolution Holding Syria accountable for their stock piles. Syrian government took a first step by giving an accounting of its stockpiles. Now there must be a Strong SecurityCouncil Resolution to verify that the assad regime is keeping its commitments. And there must be consequences if they fail to do so. Reporter in on iran, president obama welcomed the turn toward a softer, more moderate tone from irans new president. Even though theyre not going to meet at United Nations, president obama directed secretary of state kerry to work with iranian government on an alternative to a Nuclear Weapons program. We are encouraged president rouhani received from the iranian people a mandate to pursue a more moderate course. Given president rouhanis stated commitment to reach an agreement, im directing john kerry to pursue this. Irans genuine commitment to go down a different path will be good for the region and the world. Reporter on both issues president obama has promising diplomatic openings but there remains plenty of reason for skepticism of the Syrian Regime and Iranian Regime and their ability to follow through. Thank you very much. I understand we still havent heard from rouhani himself. In the meantime, choppy seas of diplomacy to treacherous tide of americas cup, team usa shocking San Francisco bay area as Larry Ellisons oracle team with a comeback. Josh lipton keeping an eye on the race action. Reporter kept for dead but storming back. Ellisons Oracle Team Usa has knocked out five straight wins at 34th americas cup. Emirates Team New Zealand needed just one more win but the kiwis have not been able to get the job done. Two more races were scheduled for today. The oracle team needs just three more victories to defend the americas cup. Larry ellison very much a fixture at the race this year. Hes been on the water, cheering his team on. The cost of entering the worlds most famous boat race is steep. Building and racing these boats can cost 100 million. As our own jane wells has reported, ellison is funding about 80 of his teams costs. Emirates new zealand, on the other hand, is getting most of its money from Emirates Airlines and new zealand government. Bill, back to you. Josh, thanks very much. You let me say, you may have seen promos on cnbc, oracle Ceo Larry Ellison was supposed to be exclusively interviewed by maria today, but that little boat race got in the way. Apparently this is something that ellison really cares about. You know, ive heard for years that the thing on the trade on ellison and oracle is, when hes on a yacht, you sell the stock. When hes in the boardroom, you buy the stock. Right now hes on a boat somewhere. Yeah, so, bill, i think the message is quite clear, right . Exactly. Ellison has promised hell come on with maria real soon, hopefully with a new trophy. Well let you know. When he lets us now. Countdown to shutdown. President risks derailing economies if he holds to his promise of not negotiating. Or does he . Plus an update on what ted cruz is doing right now on the senate floor. Its not exactly a filibuster but it kind of feels one. Kelly understands whats going on there and shell explain it for us coming up. No, no, i do not understand but i think i can help walk people through it. Be sure to watch closing bell tomorrow. Googles eric schmidt and ciscos John Chambers is on deck and what they say will likely move markets. You dont want to miss it. 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We should have all 100 senators, he said, on this floor around the clock until we stop obama care. Thats what our constituents want. So, he continues despite senate rules, that will suggest otherwise. They vote on this tomorrow. The freshman senators unofficial filibuster is trying to block funding of president s new health care law. Government shutdown is of great concern to the Federal Reserve lately. A lot of people saying thats perhaps why bernanke took out an insurance policy by not tapering last week. A possible shutdown also now being watched closely in terms of what happens with hitting the debt ceiling. Credit suisse saying we should be breaching that limit by october 24th if no deal is made. We could see volatility by october 10th. President obama taking a hardline stance in all this negotiating saying he wants an increase in the debt ceiling and there will be no negotiating over it. William hoglands that could lead to doomsday default scenario. Washington post magazine contributing editor kathy disagrees. Thank you for joining us today. Kathy, why do you disagree . I disagree because i think so obamas doing the right thing. He knows that theres no way theyre going to shut down the government. It is foolish. Ted cruz is new to the government. Hes almost like a baby. All the adults in the room will not allow this Little Tea Party member to ruin what they have going on. Thats what happened to Newt Gingrich in the 90s. Cost him the election and then look what happened. What about the no negotiating issue on the debt ceiling. Is that a good thing is that a bad precedent for the president to set, even before negotiations have begun . Hes telling it like it is. There should be no negotiation. Thats it. Theres nothing to negotiate. And he knows the republicans who are been there for a while agree with him. Secretly, they agree with him. Bill, look, even if even if people acknowledge that the debt ceiling is not something to be messed with, which is the president s message, is your point that by saying, i will not negotiate hes setting the wrong tone . Yeah. Personally, i dont disagree with the president. I wish we didnt have to have this debate owe increasing the statutory debt limit. It is a law. It has to pass. We are not going to default. We should not default. But the president has to also recognize that he basically controls twothirds of the government. And in that sense that you have to come together, you have to compromise, have you to find solution. When you draw lines in the sand so fixed, thats true whether its the president or whether its congress, i think you set up the possibility that you actually do create a real risk that we will default. How else bill, you know how it works in washington. Youve been there for many, many years, been through many negotiations, worked with bill fri frist. How do you go forward over something this important . You do whats being discussed here, that is to negotiate over raising the statutory debt limit. This is not the first time weve had discussions over modifications to the raising the debt limit. Its must pass legislation. Its the only leverage republicans have right now in the congress to achieve some goals they want. I do think there are places where we can find compromise. I dont think that defunding health care is one of the ways to do it through the government shutdown. On the statutory debt limit, we have to be very, very careful. Were playing with fire. Weve never gone here. In the words of star trek, were going where weve never gone before if we go never in the countrys history have we defaulted. But it is an opportunity, it seems to me, to see if there are some places that we can find some compromise in the middle and add it to the debt limit. Cathy, just a quick one. The point bills making is what a lot of people here on wall street, across the Financial Services industry agree with, which is that the president has the right policy, but the question is whether he has the wrong politics in this case. Would you at least acknowledge perhaps the method could be improved . No. I think hes doing the right thing. I think hes hes actually doing what so many republicans have actually told me they want. They want the president to do this. They dont want the ted cruz and the tea party to run congress. They really dont want to talk about this anymore. They want to do what the president wants. So, the president s actually doing the right thing. And the republicans want it and the democrats want it. So, insiders know that this is what everyone wants. And i agree with cathy that nobody wants default. Nobody wants government shutdown. Right, right. We all agree with that. The bottom line is, though, we have were in a political town. Well, it would be nice if we trumped politics and policy for once. Well leave it there. Bill, cathy, thanks very much for sharing your views on that one this afternoon. Appreciate it. Think about this, what 20somethings buy in china buy make or break stocks on wall street. Sort of a butterfly in the hurricane thing going on. And a look at what makes 20yearolds in china spend their hardearned money. Thank you orville and wilbur. Amelia. Neil and buzz for teaching us that you cant create the future. By clinging to the past. And with that youre history. Instead of looking behind. Delta is looking beyond. 80 thousand of us investing billions. In everything from the best experiences below. To the finest comforts above. Were not simply saluting history. Were making it. China in focus and the 20 something consumers who may be the most important shoppers on the planet. Checking out how Young Chinese of today are shopping and choosing brands because this one will be very important. American car maker, ford, has little insider knowledge of how to market to chinese. Chelsea is a consultant from shanghai. Chinas onechild policy has changed the way her generation lives. We dont have any brothers or sisters. So our schoolmates and our colleagues may be our best friends. I think our generation, we are looking for Group Activities. Their love for Group Activities prompted ford to sponsor ford to sponsor chinas version of american idol. They are seen as the most important up and coming consumers in the world. The secret to wooing them is to understand Young Chinese move between new china and ancient traditions. You have to master different circumstances knowing what to wear to opicnic versus what to wear to a movie opening. That is what the kids here are really looking for. Pepsi says Young Chinese are also looking to live for themselves. So the u. S. Drinks manufacturer hired a popular singer. We are in the process of discovering their selfidentity much sooner. They are more open minded and they want debatable things. Young chinese are technology obsessed. Young people in china are bombarded by brands every day so the competition is more fierce than ever before. Though winning that fight could pay off if chinas 20 somethings become fans of your brand. A reminder that the most important consumers may not just be in the u. S. Any more. The question today is whether the dow and s p will snap their fourday losing streak that is stretching into tomorrow. We will give you a leg up on tomorrows action when we come back. [ woman ] id be a writer. [ man ] id be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] id be an architect. What if i told you someone could pay you and what if that person were you . When you think about it, isnt that what retirement should be, paying ourselves to do what we love . [ male announcer ] the new twin turbo xts from cadillac. 410 available horses. Room for four. Twice the fun. [ male announcer ] staying warm and dry has never been our priority. Our priority is, was and always will be serving you, the american people. So we improved Priority Mail flat rate to give you a more reliable way to ship. Now with tracking up to eleven scans, specified delivery dates, and free insurance up to 50 all for the same low rate. [ woman ] we are the United States postal service. [ man ] we are the United States postal service. [ male announcer ] and our priority is you. Go to usps. Com® and try oday. Chalky. Not chalky. Temporary. 24 hour. Lots of tablets. One pill. You decide. Prevent acid with prevacid 24hr. Welcome back, 30 seconds are on the clock. Our next guests will tell you what they are watching ahead of tomorrows trade. So its a couple of tims. Tim, youre up. Were going to be looking for tomorrow is the new home sales and also durable goods orders. We want to make sure and see if the Housing Market is continuing to improve. And the durable goods as an indicator of the overall economy continuing to just make nominal gains. Not fantastic but nominal. If so, that is what the market is priced for. They are priced for nominal increases in economics and profits. If we see that, then a well diversified portfolio should do well. Tim, what about you . Is it all nominal . I guess so in context. Just when you think things couldnt get weirder, we are anticipating an announcement that the federal Housing Administration will have a financial short fall and require actually a draw from the treasury department, first time in 80 years. The fha was really a savior of the Housing Market but obviously it came at a price. It looks to be a 1. 5 to 2 billion short term cost. Well, we have seen history of intervention in the Housing Market before. We will keep an eye on that one this time around. Appreciate it. That does it for closing bell. Kelly, always a pleasure to have you with us. And fast money begins right now. Live from the Nasdaq Market site, im melissa lee. Here is tonights line up. Hedge fund big wig joins us with stock picks globally. Multibillion dollar listing, the exchange war is on for twitters ipo. And a stock that has more than doubled this year, were talking to the ceo of web md. Our traders are tonight are steven, guy, and pete. Resisting the rally