Traders spent much of the morning waiting for speaker baner to emerge from the meeting with the House Republican s. He same out and said they made no decisions at all. Is it fair to say Speaker Boehner doesnt have the votes to get whatever they have on the table through the house . Yes. The situation is in flux right now and it was surprise because yesterday was all about the Senate Making progress, harry reid and Mitch Mcconnell on a plan that they were going to send to the house and count on the house to pass it. John boehner had a meeting with his caucus, came out, and when he spoke to cameras it was clear that caucus was badly divided. They arent sure which way to turn. There have been no decisions about what exactly we will do. Trying to find a way forward in a bipartisan way, that would continue to provide fairness to the American People under obama care. But the very fact that the house was considering passing a bill and sending it over was a blow to the talks between harry reid and Mitch Mcconnell, limited Mitch Mcconnells freedom of maneuver as the republican leader of the senate. Harry reid came out after that House Press Conference and lit into john baner. We felt blind sided from the news of the house. Extremist republicans in the house of representatives are attempting to torpedo the senates bipartisan progress. Lets be clear the house legislation will not pass the senate. Ive been talking to members since then. The house proposal is still being tweaked to figure out how they could get the votes to pass it. On the senate side, democrats and republicans say the talks between reid and mcconnell could be restarted this afternoon. Right now members of both republican and democratic caucuses are having their weekly lunch. We expect them to come out to cameras at about 2 15 and then were going to learn where we are exactly at this moment. Still some hope that senate process will resume, result in a deal that could be passed tonight or tomorrow. Thank you very much. Stay with us. Because were going to broaden out the discussion now, here to discuss the showdown in washington is peter henry, dean of the stern school of business at New York University. First bring in representative marcia blackburn, a republican from tennessee. Welcome back to cnbc. Good to have you with us. Good to be with you, thank you. Im sure well get to where things stand and all of the toing and froing but i want to ask you a different kind of question. As you and your colleagues in the house deliberate what to do, how much thought do you give to whats really happening and the stakes for individual americans . For example, if the credit of the United States is downgraded, presumably stock markets will go down, bond markets presumably will go down and this will take money out of the pockets of everyday people. How much thought do you give to those individuals . We give a tremendous amount of thought to that. Its top of mind. And were in constant communication with our constituents. I was looking at emails coming in from my constituents before i came over here. Im doing a couple Coalition Calls this afternoon, last friday evening i did a telephone town hall and had about 13,000 of my constituents on it. So constantly were working with them, were talking to them, were very concerned about being here at the last minute and still trying to negotiate a deal and i think its fair to say that those of us in the house are tremendously disappointed that the senate has not met us at the negotiating table and we are hopeful and that before were out it today, that we will we will have them at the negotiating table and not only will they work with us on the debt ceiling but also on the continuing resolution and on the budget, the longterm spending issuing have to be addressed and you cannot continue kick the can down the road. I want to bring john harwood back in and peter in just a moment. I dont want to not ask this question. Whos got the worst job in washington, the coach of the redskins Mike Shanahan or john boehner . Well, you know, i think that could be up for debate as to what you think is best and worst, but i have to tell you this, i really am just humbled that i can be here and be working to find a longterm solution to our nations spending problems. We cannot continue borrowing 2 billion a day. We cant do it. Weve got to find a way around this. I think everybody in the country would love to see a longterm solution. Yes we would. Seems, john harwood, the debate is focused on shortterm changes to obama care. Well, right. The real question is whether we can get over the finish line in the next couple days. I would like to ask congresswoman blackburn, theres been tremendous criticism of the approach that House Republicans have taken from your colleagues in the senate, some in the house as well. I would be interested in your view, do you think that you in the house have taken the right strategy and do you think its worked out well for the Republican Party for the house and for the country . Well, john, thats something thats going to be debated for months and years. I will tell you this, we have continually sent over to the senate budgets, we have sent continuing resolutions as you well know, i wrote the delay or suspension of obama care for a year because i think its a fairness issue that individuals would be treated the same as businesses and so i think that as we go through the next few months, youre going to see people come back and look at the fact that we in the house, with bipartisan support by and large, continued to send options to the senate. Congresswoman, just to follow up your old colleague in the senate said the strategy was the dumbest idea ive ever heard. John boehner made clear it was not his strategy. Was it your strategy from the beginning . No. My idea, what i brought to the table, was that we needed and we have to deal with the obama care funding issues in the continuing resolution. Weve got two different components going on right now. The debt ceiling and the continuing resolutions and, of course, many of us as the obama care bill was signed into law and then the implementation began, we have worked on this nonstop, conducting oversight, looking at what the rollout was going to be, and now were beginning and will hold next week the hearings on oversight of the rollout and the things that are not working well, reviewing what is taking place right now. So our approach has been in search of accountability, an accountable cr, accountable Spending Plans and getting the longterm fiscal issues of the nation addressed, putting those on the table and finding a solution for it. Weve got to do it. Let me bring in peter henry of nyu for either an observation, a question to the congresswoman or whatever. My question, congresswoman black blackburn, theres a missing word from the conversation which is prosperity. Seems as though the American People have elected Congress People like yourself to focus on prosperity and were in a weak recovery, labor Market Participation is at an alltime low, in the postwar period and unemployment only down because of that. Why are twe not focusing on prosperity, why are we focusing on the issues taking us to the brink and putting nous Financial Market calamity, a weak one at that. Jobs and the economy, through all of this, jobs, economy and the impact of obama care or the Affordable Care act, those are the top three things that continue to come forward. And youre exactly right. Labor force Participation Rate is at an alltime low and we are seeing parttime jobs increase. And i had an email today from a lady who spoke specifically to this very issue because shes looking at all the dysfunction that is here in d. C. And bear in mind theres plenty of blame to go around and she is seeing all this dysfunction and she is wondering why some employers and nbcs a great example, you got a waiver youre exempted out of obama care, but her employer is going to be faced with this but the issue isnt the health bill law thats been passed. The issue is prosperity and jobs. Right. She was moved to parttime work. Now this is where it affects an individuals prosperity. Her she is earning less income, she is no longer provided Health Insurance because she was moved to parttime to come under that fulltime employment number so this is where they all meet and this is why we as policymakers have to look at the impact of this law because we are hearing specifically from people about how it is impacting their paycheck, their take home pay, the benefits that they are offered and their ability to have a job. I ran in the Grocery Store a few weeks ago i ran into a woman who she and her husband now both have been moved to parttime status so they are each working two jobs and are in search of Health Insurance because it was terminated from their employer. That is the real world impact. Of what is taking place right now and prosperity is an enormous issue. People would love to go back to having an economy that is a growth economy and my hope is that we can get this debt ceiling issue resolved and longterm spending problems of the nation resolved so we can put the focus on jobs, prosperity, jobs growth. Are you prepared to go over the debt ceiling or limit . I am confident that were going to get this issue resolved and i am holding on to that optimism and confidence that we are going to solve this and that we will not go over the debt ceiling. All right. Congresswoman blackburn, thank you for being with us. Thank you. I appreciate it. Peter, well see you back here later. John harwood, thank you as well. Check in with Mary Thompson for a market flash. Taking a look at shares of jc penney. The company said that it has not hired a bankruptcy lawyer, actually come off the 30year lows, im trimming some of its earlier losses. Jpmorgan out with a note while it likes some of the moves the company has made its a longterm work in progress. Jc penney down about 4. 5 . Back to you. Still a lot of money in the bank. Thank you. Looks like the nobel peace the Nobel Prize Winning economist Robert Shiller is w k walking back on his warning of a housing bubble. Recent months dramatic gains in markets like las vegas or San Francisco looked bubbly as he put it. Joining us now is cnbcs real estate reporter diana olick and sherry owe leafson, real Estate Attorney and ceo of the carnegie group. Welcome both of you. Sharon, kick off with you, do you think there are bubbles in the u. S. Housing market . Theres no question, be simon, that we are sort of becoming like Robert Shiller said, detached from the fundamentals. I think one of the big issues is that the tracks had been greased for higher prices and for folks out on the front line, going to offer, for example, 250,000 on a home, when the realtor tells them this home traded for 500,000 during the bubble, thats meaningful even though it is detached from the socalled fundamentals. I think we were headed in that direction, but were seeing a change of tides now and i think im pretty confident were going to be backing off of that. Interesting. Diana, what do you see . Well look, we are backing off the price jumps in the First Six Months of the year but there is an argument to be made for say bubble 2. 0 and that is that while were still 22 lower than the peak of home prices in 2006, were operating in a completely different mortgage environment than we were back then. So back then, if youre buying a 200,000 house, you didnt have to have any money down. You could get an adjustable rate interest only mortgage, you could get a negative amortization mortgage and didnt have to prove you had a job to do it. Today the environment is completely different. You have to have 20 down for the conventional loan, even going fha, 3. 50 down, paying higher premiums and it does say even though prices are still lower some of the markets are bubbles. We should mention, sherry, one important point, Interest Rates remain very low and i think im right in saying in your industry the rule of thumb is that a 1 move on the Mortgage Rate affects affordability by about 10 . Its huge. Its really significant. As rates go up, the other thing that Interest Rates have been impacting, this goes to the psychology of housing, is demand. So i expect to see some significant drops in demand from home buyers. A lot of these folks are fatigued. The truth is simon that so far right now, were down to under 30 of our home purchases are by first time buyers. A lot of the sales were talking about are cash deals to begin with. Diana is right, that loans have been more difficult to get and after june 1st when some of these ability to repay rules come in that were initiated under the dodd frank act, i would expect to see it more difficult. Three in ten folks will be unable to get a loan, three in ten qualified today. Wow. Sherri, well live it there. Thank you, sherry and diana olick. Mark cuban in court today, our cameras caught up with him. He always has something fun to say. Thats next on the show. And she gave up a top job at a giant retailer to become a smaller part of the big team at apple. And thats just one interesting part of the story. Robert frank is outside burberry in new york city. Robert . Hey, simon. Angela ahrendts didnt just break the Glass Ceiling she broke the mold for ceos. Her unusual success and also why the British Press was not always so friendly coming up after the break. If the debt limit is not increased before the extraordinary measures are exhausted the treasury will not be authorized to issue Additional Debt that increases the amount outstanding. Its as simple as this. At bny mellon, our business is investments. Managing them, moving them, making them work. We oversee 20 of the worlds financial assets. And that gives us scale and insight no one else has. Investment management combined with investment servicing. Bringing the power of investments to peoples lives. Invested in the world. Bny mellon. Mark cubanen back in court today, not on the court. Hes in dallas as we near the end of the Insider Trading case against him. Cnbcs cameras caught up with him a few hours ago. Kind of stuff that the mavs lost last night but shawn did play and well have Jose Calderon back on saturday. Weve all had a tough scoring night but a lot of confidence. Im excite wed got back into it and play again on wednesday and well be back again on saturday. Im looking forward to a great season. Looking forward to a great season. Mr. Cuban is with the dallas mavericks. The group is in court right now and any news we promise to bring it to you. Simon . Thank you very much, tyler. The ceo of the fashion house burberry is leaving to head apples retail business. Shes an american from small town indiana, and rising, of course, clearly to become one of britains highest paid executives. And thats just where the story starts to get interesting. Our wealth editor robert frank is live in new york. Over to you, robert. Thanks, simon. Angela ahrendts known to americans as the smalltown girl who achieved the ultimate dream but in britain she is called the queen of the ftse known more for her outsized pay. She was the highest paid executive in the ftse 100 with a total pay of 16. 9 Million Pounds, around 26 million in todays currency. Now that included a salary of 1 Million Pounds as well as bonuses and the sale of more than 11 Million Pounds of previously issued stocks. The British Press reporting a lot on her 12,000 square foot estate outside london as well as the indoor pool, her tennis court, but she has created more than 4 billion pounds of shareholder value. The stock has tripled and sales have doubled during her six years. Heres how shes really evolution nized or revolutionized the brand. Shes take an brand that was mass marketed, brought it more upscale with higher end, more expensive products. Shes taken them into the Technology Area with a lot of digital and social media and guys, i just want to show you one prop from this store. Heres how apple and burberry go together. This is a 300 iphone cover thats part of their new rhythm fragrance series so this is a 300 cover. Im not sure how it gets in your pocket with all the studs on it but these are selling well. This is part of the reason why she right now is so popular and successful in the luxury space. Im sure youll get used to them. We should point out, of course, that the that a rain coat in britain is actually called a macintosh by some. Shes going from selling macintoshs to macintoshs. Roughly. You get it anyway. One thing that caught our attention on Angela Ahrendtss resume her degree is from Ball State University in the great state of indiana, not stanford or harvard and now holds one of the most coveted jobs on the planet which begs the question this lunch time, who needs ivy leaguers anyway . Cnbcs robert frank is still with us, john fortt with us and peter henry, noted economist, author and dean of the Nyu Stern School of business. Im sure you would have a view on this, sir. Absolutely. First of all, nyu stern is in our own league, not the ivy league, but i would say that Angela Ahrendts is an extraordinary person and i think it goes to show that we have no monopoly on talent. Its great talent can thrive wherever it goes to school. John, i suppose we should point out this is retail, not brain surgery. Well, even brain surgery, look at tim cook, hes from alabama. He went to auburn university, also not ivy league. So i think theres something to be said for people who have talent, doesnt necessarily matter where they start out. They seem to end up a lot of times in great places. Or people that work hard. Shes worked her way through donna karan, liz claiborne, this is the product of decades of work and having a client husband and compliant husband and three children who will follow you around the world. Shes a sign that the meritocracy works not just in the u. S. But overseas, and on the other hand, harvard still generates more people worth 200 million or more and more billionaires, 52 of them, than any other school and far and away the largest in the country. If you look at selfmade wealthy university of virginia is number one. Harvard still dominates the rich list. Meritocracy works but maybe only so far. You know peter, there is actually a real problem, all joking aside, there is a real problem potentially in this country at the moment that an awful lot of people from the middle, the middle of soelts, are beginning to believe that education is possibly too expensive and maybe not worth it. Those that already have very well educated parents and a lot of money will probably always go and get their mbas if theyre not picked off by facebook or whatever in the meantime. It is those people who should be in a sense climbing upwards who really you would hope had they would get the american dream, that may be discouraged and that is dangerous for this country because it will always be about education, education, education. Simon, you put your finger on the key issue. If youre born in the United States, in the top 25 , you have an 87 chance of going to college. Bottom, you have an 8 and schools like nyu, and the school of business trying to bring in as you say students from the lower part of the economic distribution into the discussion about how to become part of the leadership class, part of the class that creates value, and we have to do that in order to hold the society together and create a Better Future for all of us. You know, john, technology is a fe nom nal thing for this economy. Technology has in many senses misled a lot of people because they believe they can make a lot of money quickly by founding an instagram and an awful lot of people in Tech Startups that perhaps might not should have should not have made that decision. Help me out here. Am i barking up the wrong tree . No. I think youre right. I think there are a lot of people who are hoping to build the next instagram and for the people who have the absolute top flight talent to do that, it doesnt have to succeed. The product can end up essentially being the resume that gets them that job at an apple or google but the issue really is what happens to the most talented, the hardest working young people in this country . What sort of chances do they have . Are we the sort of place that gives those people the best chances and so that they end up in a position like your tim cook and Angela Ahrendts or are we losing that a bit and shifting to something else. That does have implications for the economy. Thats an important point well made. Leave it there for the moment. Thank you, robert, john and peter. Stick around. Were going to come back with some of you in the second half of the show. Back to you. Thank you very much. The debt limit deadline fast approaching if we go over, what gets paid and what doesnt . Well, hes not jack lew but today Steve Liesman plays him on tv. You wont want to miss that. Coming up next. Its a growing trend in business do more with less with less energy. Hp is helping ups do just that. Soon, the worlds most intelligent servers, designed by hp, will give ups over twice the performance, using forty percent less energy. Multiply that across over a thousand locations, and theyll provide the same benefit to the environment as over 60,000 trees. Thats a trend we can all get behind. They always have. They always will. Thats why you take charge of your future. Your retirement. Ameriprise advisors can help you like theyve helped millions of others. Listening, planning, working one on one. To help you retire your way. With confidence. Thats what Ameriprise Financial does. Thats what they can do with you. Ameriprise financial. More within reach. Thats what they can do with you. At a ford dealer with a little q and a for fiona. Tell me fiona, whos having a big tire event . Your ford dealer. Who has 11 major brands to choose from . Your ford dealer. Whos offering a rebate . Your ford dealer. Who has the low price tire guarantee, affording peace of mind to anyone who might be in the market for a new set of tires . Your ford dealer. Im beginning to sense a pattern. Get up to 140 in mailin rebates when you buy four select tires with the Ford Service Credit card. Whered you get that sweater vest . Your ford dealer. Its a running theme on power lunch today, tick, tick, tick. If we go past the debt ceiling deadline the treasury will have to start getting creative in deciding what gets paid and what doesnt get paid. Heres our own Steve Liesman now as a wouldbe treasury secretary jack lew. Okay. Tell me how much is in the account . 4 how many cents . Yes. How many cents . 65 cents. Okay. Got it. Listen, pay the interest on the debt, but delay Social Security a couple days, okay. Until theres 30 billion. Hold on a second. Good afternoon, mr. President. Yes, sir. Pay Social Security right now, understood. Dont delay Social Security. Hold on. Did you hear that . Shut down the Justice Department and the faa. I know that closes the courts and grounds the planes. Okay. All right. Okay. Good. All right. Court is closed. Social security paid. Interest paid. Not good. Not that bad. Defense secretary hagel, how can i help you, sir . Yes, im aware of the military payments due november 1. Im going to do my best. I understand how important it is to pay the military. Yes, defense of democracy sir. Lives at stake, i understand. Hold that thought for one minute. Can you hold on, mr. Vice president . Yes, im sorry. Yes, mr. President. Im watching the Market Reaction now. Right. Not good. Unemployment insurance i dont know, mr. President. We might. I understand might is not good enough. Well find a way to pay. I hate to do this, can you hold on one second. I can tell you categorically the Environmental Protection agency will not be funded. Yes. I know the environment is important. Hold on one second. Hold on. Senator cruz, i suppose good afternoon. No, sir. Construction on highways in texas will not be funded. Why . Is because we hit the debt ceiling sir. Thats why. Hold on one second. Hold on. Mr. President , no, sir i was not yelling at you. Im sorry. If you could just hold on one second. Hold on. Im sorry, i dont have a lot of time for the general council. What is it . What do you mean what im doing is illegal . I dont have authority to make these choices . Between payments. I cant hold on a second. Mr. President , i have some very bad news. How many hand sdrous . I have many hands. Many hands and make labor light there. Thats what it takes to do the job. Not going nobody has been here, nobody knows what theyre going do, if theres a priorization plan and the only thing i can think of this ends in a constitutional crisis. Absolutely. And its its a train wreck, as that illustrates. Its important to point out not only does that one is the difference between one spending bill passed and another, and does jack lew as treasury secretary have authority to make those choices. All these hands that can answer the phones. I hope we didnt make too much light of it. I think comedy sometimes is exactly makes the point. Thanks. Steve liesman, thank you very much. All right. Simen. We are shutting up on gold. In fact, were now this is now the fifth straight losing session weve had on gold. Three month low. 1274 as you can see there. Silver is down as well. A lot of the commodities are down. Oil, gas in negative territory. Theres still, tyler, a belief that theyre going to get this thing done before everything falls out of bed. Back to you. Thank you very much, simon. Even with all the negativity surrounding the Government Shutdown, the impending debt limit business, the feeling some of the smartest people on wall street seems to be this could be a buying opportunity and the equity markets could move higher. Heres what david it tepper said today on squawk box. I was a little surprised but not that surprised and understood when they didnt taper why they didnt taper. It was because the economy wasnt quite at their projections. If it wasnt quite at their projections before this nonsense its not at their projections now. Tepper on the taper. He is not alone. Omega advisors leon cooperman says theres still room for stocks to move higher. The third phase of bull market normally is the like the exuberance phase, silliness phase, people forget about the mistakes of the last cycle and were not there yet in any broad sense. Not in the exuberance zone just yet. Are they right with their assessment . Welcome to power lunch, mike wilson, chief Investment Officer at Morgan Stanley wealth management. You heard what those two noted guys said. Smart investors both seem more room for equities to move inpresuming we dont run off some cliff. I think thats correct. The bottom line is we have a perfect template for this in 2011 and i think thats what david probably was referring to last time this happened, it ended up being a buying opportunity and stocks took off. That was the time when u. S. Stocks really started to outperform the rest of the world because when you raise the debt ceiling limit, thats actually a pro growth strategy. Whats happened now because of 2011 people are front running that to some degree. While we agree this will probably end up being a buying opportunity, some may be priced in. Is the United StatesStrong Enough to support rising stock prices . Are the earnings there . Are the es there to support the ps. Weve had massive multiple expansion in the last couple years and stocks anticipate good news. They were telling us all along the economy was going to be fine. We believe the economy is going to be fine as well and the Global Economy is healing. But youre right, multiples have expanded and now stocks are more likely to kind of progress with earnings growth, not more than earnings growth. 12 months from now, presuming we get some sort of resolution and we muddle through or whatever we do, where do you think the s p trades . For u. S. Stocks like i said it will probably migrate between 6 and 8 , probably a good target, plus a dividend. Internationally we could get more multiple expansion as theyre coming out and a bigger growth impulse in some parts of the world. That leads me to believe you have your eye on japan and europe. Absolutely. You like those two . We like both. As long or intermediate term plays. To politics, janet yellen nominated to be the next chairman of the federal reserve. Do you have an inhouse observation on that . Do you think she will be any quicker or less quick to pull some of the easy money out of the system . Generally speaking the consensus view she is more dove ir than ben bernanke is or was. More focused on keeping employment going. Correct. Optimal control which weve heard about. She will allow things to inflation to maybe get a little higher before they begin to really tighten the screws on Monetary Policy and we share that view. We think janet yellen is going to be careful with how they remove policy. Thank you very much. Appreciate it. Hope you will come back. Mike wilson of Morgan Stanley. Simon . Tyler, lets check the markets at the moment. Treasury on the back foot as a result of what is happening in washington. Ticking lower today, there was fairly weak demand for the three and six month auction. The yields are slightly higher. At the short end where you the t bills, october and november, there youve seen a little bit of a recovery overall. As you can see, thats where we stand on the treasury market. While congress does whatever it is that congress does, clearly some real americans are getting badly hurt. Power lunch has offered many of those Business People, men and women, a forum. When we come back well talk to a bank thats been hit hard in the crossfire. Were back in two. Going past the deadline without a deal will lead to delays of payments for government activities and possibly to a default on the governments debt obligations. Peace of mind is important when youre running a successful business. So we provide it services you can rely on. With centurylink as your trusted it partner, youll experience reliable uptime for the network and services you depend on. Multilayered Security Solutions keep your information safe, and secure. And responsive dedicated support meets your needs, and eases your mind. Centurylink. Your link to whats next. So she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. With my united mileageplus explorer card. Ive saved 75 in checked bag fees. [ delavane ] priority boarding is really important to us. You can just get on the plane and relax. [ julian ] having a card that doesnt charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u. S. When i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. That clock says it all. One day, ten hours, about 20 minutes away from hitting the debt ceiling. The predictions are dire. Jay is Customers Bancorp chairman and ceo. He and his clients have already started to feel the brunt. Simon with us as well. Jay, how are your customers feeling, feeling the effect not only of the Government Shutdown but of this impending debt ceiling issue . We are a business bank. Ill tell you who specific examples. One is a customer of ours, ready to make an investment. In a small community, 28 jobs is very good. He said the reason they were holding off was uncertainties on health care. Well, he was hoping that uncertainties in health care would go away. Right now, he has turned off the spig spigot, not making the investment because hes saying i have no idea whats happening to america. Another client of ours was making a purchase overseas. Hes put everything on hold. And ourselves as a bank, we are a large Small Business administration lender. We are unable it to get those loans approved. We are unable to get the credit out to the small and medium sized businesses we are serving so we are directly affecting local business on main street. We have heard many an it tech dotes just to your point and it that is about Small Business administration loans, people who intended to exepapdsexpanned, o locations for their business, they have put those on hold and have had in some cases reduced hours or stop hiring or furlough people because they cant get the paperwork moving forward at the sba. Absolutely right. We are doing this to ourselves. For example, Everybody Knows and Business People know they have to manage the revenues, they have to manage their expenses and here we are as a country, when president clinton left office, 55 i think of our debt was 55 of gdp. President bush leaves office, its about 68 . Right now its about 100 . It doesnt matter whether its republicans or democrats, we are not partisans but the fact of the matter is, that weve got to do something and just stopping the government from functioning, stopping the country from functioning is hurting our revenues and that is not good for america at all. Simon, jump in here. Why cant we i mean, i get it, jay. You know, obama care is going nowhere it would appear because the president has his veto and seems to be quite clear on that. Is there anything else that we can do apart from them obviously reopening the government and getting back to work that would actually push your entrepreneurs into investing in jobs and growth, get Capital Spending going . Is there anything else that could be done . Oh, definitely could be done. How do you how do you get to consensus . You get to consensus by having win win negotiations. Driving over here i was thinking about president lincolns speech, we are the government of the people, for the people, by the people. We are sort of like government of the politicians for the benefit of their politics and not for the people. Lets have common goals. Very clearly, the Health Care Problem is a real problem in america. Why not admit that yes, we can make it better, i think there will be consensus over there. On top of it, the deficit problem, the spending problem is a real problem. Why not admit it. We have simpsonbowles, say all right, lets work on simpsonbowles and try to do something about it. The private enterprise believes and i was in a ceo retreat last week in phoenix, we really believe that American Economy can grow by 3 next year. That solves our revenue problem. Why not attack that . Why not ask private enterprises, tell us how we can do it. You know, you have common goals, create common vision, creates consensus, president reagan did it with tip oneill, regarding the tax reform. President clinton did it with Newt Gingrich regarding well fare reform. Why cant america get their act together and do it now. You should get involved in politics. We had the ceo of starbucks on the network on friday. You guys have to get more involved in politics and push the process along. Its that simple. I agree with that simon. I think that some of our best leaders unfortunately are so repulsed by what they see in politics that they stay away. But here jay is very eloquently articulated what so many of us in the private sector see as the common problems that we have to solve. For one thing, jay, we made too many promises for too long to too many people and were coming up against that and weve got to address that question among many, many others. Jay, thank you very much for being with us today. Thank you. Simon. Good luck. Mean time, how the Government Shutdown is impacting the performance of your mutual funds on the program. Surprising new numbers ahead on the show. Plus, is this the beginning of the end for land line phones . Well explain in the power rundown. You can live with a Government Shutdown. Even that gets to be resolved. But a debt ceiling really can have catastrophic results. I know what youre thinking. Transit fares as in the 37 billion transit fares we help collect each year. No . Oh, right. Youre thinking of the 1. 6 million daily Customer Care interactions xerox handles. Or the 900 million Health Insurance claims we process. So, its no surprise to you that companies depend on todays xerox for services that simplify how work gets done. Which is. Pretty much what weve always stood for. With xerox, youre ready for real business. Nice car. Sure is. Make a deal with me, kid, and you can have the car and everything that goes along with it. So, what do you say . Thanks. But i think i got this. [ male announcer ] the allnew cla. Set your soul free. Who found a magic seashell. It told him what was happening on the Trading Floor in real time. The shell brought him great fame. But then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their Trading Platform. [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a. Shell. Get live squawks right in your Trading Platform with think or swim from td ameritrade. Welcome back to power lunch. Im seema mody. How mutual funds are impacted by the Government Shutdown. Keep in mind mutual funds on average have been outperforming the s p 500 in 2013, however deutsch bank indicates just in the last two weeks, this trend has reversed. According to lipper funds the last time we saw an outflow was in 2012 around the fiscal cliff negotiations. Analysts say this clearly indicates that d. C. Dysfunction does have an impact on mutual fund activity. A majority of mutual funds are owned by retail investors. Ici reports that in 2012 roughly 44 of u. S. Households owned mutual funds. Analysts write this recent underperformance suggests mutual funds are highly exposed to the momentum players, many of which are in the biotech space. While momentum stocks have rebounded recently deutsch bank says the fact that mutual funds have outperformed so much since july suggests that a momentum unwind could have further room to run as mutual funds trim their outperformers. Simon, back to you. Thank you very much, seemap. In the meantime applying for college got a lot more stressful. That ahead on the show. Plus, why would a ceo of one of the top fashion houses leave to take a lesser title at a Big Tech Firm . It doesnt happen every day but its happening burberry to apple for this woman. Is it a smart move . Those things and more coming up top of the hour, guys. Back to you. Thank you very much. Why applying for college just got a lot more stressful for students and creating a huge headache for colleges too. Plus the ceo of the fashion giant burberry leaving to join apple as weve been talking about it all hour. Senior Vice President doesnt happen every day, you leave the ceo job for that one. Smart move to take a lesser title . Power rundown is next. Hing we all share. But who can help you find your own path . Who can build you a plan, not just a pie chart . Who can help keep your investments on course, whatever lies ahead . That someone is a Morgan Stanley financial advisor. And were ready to work for you. A oneonone power rundown. Peter henry dean of the New York University stern cool of business is with me. Maybe you know about this story, an online version of the common application is apparently on par with the obama care website, ie it aint working well. Hundreds of colleges are still using it. What are you hearing at nyu . I realize this is an undergraduate entry level application. Things have gone well. Weve had over 1,000 people successfully submit the common application. For us it hasnt been an issue. This application has been out there some years, right . This is a new version . 3. 0 or something . Technology has its blessings but sometimes there are glitches and when there are glitches people get upset. I think in what we know is that technology, the benefits outweigh the costs and i think this is something well get through. It helps you. Yes. Generally speaking. Thats right. Not all schools use the common ap . Thats right. Most of the big ones do . Thats my understanding. Lets move on to another question this move from ceo to senior vp. Burberry ceo Angela Ahrendts taking a step down to become apples online and retail store head. Is it a step down or not . Shes going from the Corner Office to something a little lower, but shes going to a very high profile bigger company. Heres the key thing. Angela ahrendts has always been ahead of the curve in redefining things. She took burberry from 2 billion market capitalization to 7 billion market capitalization through innovation. You have to assume somebody as smart as she is knows what shes doing and in her view is a new challenge. Shes breaking the mold yet again. If you were looking at apple today would you say this might put her in line or in the running to succeed tim cook at whatever point he decides to move on . I think whenever you bring somebody at that level youre thinking about potential do they fit. Think about apples market and think about what Angela Ahrendts has done in china it makes sense. Very interesting. Lets move on to parts of new jersey where we live. Verizon has stopped laying down traditional copper line for its phone network and recently the ceo said its no longer concerned with land lines. Do you have a land line in your house . We have a land line in my house. I do too. Would you give it up . I like the security of the land line during difficult times. During a storm or something. You wonder about the cell service. Do you think were beginning to see really the end of the land line . I think were moving to a new frontier. I think the land line is going to become increasingly less utilized. But i think the key is striking the balance because some people will still want to have that security and companies have to think about how do they anticipate the future and give customers the future while allowing those people who are still wanting to have access to land lines to transition them. My problem with the land lines has been that all of my phones are electronic phones anyway, be theyre cordless phones. They depend on electricity. When the electricity went down for eight days during sandy it doesnt matter. My cell phone was my land line. We have cordless and the old. Do you have a dial . No dials. Peter, great to see you. Thanks. 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Centurylink® your link to whats next. 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. Down 55 points on the dow. Everybody watching whats happening in d. C. Winners charles schwab, u. S. Steel, fedex and ehealth on a program dominated by discussion about the ceo of burberry going to apple let me point out that tim cooks four direct reports at apple last year had incomes each of between 68 to 85 million. Were taking a look at the podium on the senate side where we expect the Senate Leadership to speak at some point. And we will bring that to you as we continue to watch this ongoing drama down there. That will do it for power lunch. Oh, yes. Street signs begins right now. It is now 2 00 p. M. On wall street and in washington, tminus 34 hours until america cannot pay all of its bills. A live look at the white house where president obama is expected and thats key to meet with House Democrats at 3 15 p. M. Eastern time today. In the meantime we are waiting for Senate Members to break from lunch. They are expected to make some comments. Well bring them to you if and when they happen. In the meantime the markets you can safely say are fed up right now you can see on the board behind us