Transcripts For CNBC The Kudlow Report 20131001

The hour. Those stories and much more coming up on the kudlow report beginning right now. Good evening, everyone. Im larry kudlow. This is the kudlow report. We are live at cnbc headquarters. The house is voting this hour on the gop spending plan d. This is a piece meal approach to reopen small portions of the federal government. Their plan, separate bills to fund the National Park service, part of the departments of veterans affairs, and operations for the district of columbia. So far Senate Democrats have rebuffed the house four times and have been unwilling to negotiate. So even if somebody wants to appeal obama care, and i do, and you know i want to appeal it, i must say to the gop, you fought the good fight. More people now know that the economic and Health Dangers of the Central Planning obama care which cannot work, youre right, but now is the time to back off. Now is the time to move on. Even powerhouse Football Team university of alabama punts once in a while to get better field position. To my friends in the gop, the shutdown is not helping you. Instead, take a clean cr and move onto the debt bill and the rest of the budget. That is my message right at the top. Now with me for the full hour we welcome back former republican senator from texas, kay bailey hutch chin son and with all the latest in washington, cnbc, robert costa of the National Review joins us. Going to be around for a while. Robert costa, i dont know if anybody agrees with me or not. Im not trying steal the fire, i just believe these little shortterm narrow spending bills are too gimmicky and its time to move on to something more serious. First of all, tell me whats going on. What are they voting on tonight . Larry, i just walked over here from the u. S. Capitol. I think privately a lot of republicans believe with the kudlow message. They have to move on. For now theyre resisting it publicly. They want to try to endure the Government Shutdown. Thats why tonight theyre passing three pieces of legislation, piecemeal bills to force the government to see if harry reid will budge. Harry reid and his caucus voted against a conference with the republican party. That surprised me. I think they voted last night and again this morning. They dont want to talk. Ive never seen so much ill will, robert. Thats so right, larry. What harry reid is doing is hes trying to see if House Republicans will blink. You would think maybe a Conference Committee between both chambers could solve these differences. Right now House Republicans keep pushing, so does harry reid. I think the shutdown will continue to endure unless one side blinks and the other side wants it. Senator hutchinson, welcome back. This seems tougher, a little more ill will than usual. You tell me what youre thinking here. Youre absolutely right. There is more ill will because the president and Congress Just cannot get together. The president says were not going to negotiate at all, period. You cant do that. There were two branches of government here at stake. You have the presidency, you have congress. Youve got to come together. Reagan showed it. Tip oneill showed it. Come on. I agree to your point. I love the football analogy. Im a good yankee. Youre from texas, i know. Its right though. You have to fight another day. I mean, we cant win this particular battle at this particular time. We fought. I was voting against obama care on christmas eve, larry, and we lost. Now weve got to take it to the people. Weve got to take it up on the debt limit for gods sakes. Were spending out gazoo. Lets retreat and go forward. Were going to talk more. This may bleed into the debt limit. Paul ryan is saying thats true. Robert costas, dont move an inch. Senator hutchinson is with us. Democrat from new jersey and jim jordan, republican from ohio. Thank you, gentlemen. I know youre very busy. Jim jordan, walk me through. Im not sure i understand the narrow piecemeal bills and how this is going to work to solve the problem. We funded the troops, larry. The senate took that as a unanimous vote from both bodies. Lets keep the parks going so our world war ii veterans dont have to jump the barricades. Lets make sure the veterans get the things they need. The essential things we need to fund. Lets go back to the issue of obama care. Why should the president be able to give special deals to big business and politicians and not treat the rest of america the same. Its equal treatment under the law. A hallmark of what our country and our constitution and government is all about. Thats our argument. There are a few things that make sense to fund. Even the democrats agree with us on the troops. They may not do what we want to do with the parks and veterans, but it comes back to the fairness, equal treatment under the law argument and thats a powerful argument we think r resonates with the american people. Bill pact, welcome back. My favorite democrat. The fairness argument, i want to understand two things, why does the senate i know youre in the house side. Why do you think the senate refuses to have a conference, okay, with the house . Why . I dont understand that. And, secondly, what about jim jordans argument that whats fair is fair . We want to be fair, but the point of the matter is weve had five months to negotiate and jim knows that. Everybody knows that. The great senator knows that. We passed a budget in both the house and the senate. The next move, larry, you know it better than i do. The two groups come together and they have a conference, but the republicans refuse to name the conferees. So dont talk about were going to negotiate now, were going to talk across the table, that phony picture you saw which was on your network and everybody elses network about republicans on the other side and rnpcs on the other. Theyre not going to get away with this any longer. There was a law that was passed upheld by the supreme court. Its not perfect. We never passed a perfect bill. Then there is the budget, and we want to get this budget passed. Weve agreed to the number. We have compromised on the number, between 987, 985, and a trillion 300 billion dollars. We compromised. Its a trillion fiftyeight. Its way over, by the way, the sequester spending cap. Jim jordan, i didnt know this. Why dont you want to name conferees . What we dont want government to get away with is treating americans differently. Equal treatment under the law and fairness. That is a fundamental principle. Thats all that were arguing. Were happy to name conferees. Were in the debate over the continuing resolution. Four different times weve sent up proposals to the senate. Four different times they havent come to the negotiating table, now they wont name people to come and sit down and conference it. This is how it works. House has a position. Senate has a position. You sit down and you work it out. Were willing to do that. They wont even name anyone to come to the table. Where were you in april and may . Excuse me, do you deny that both houses passed a budget in april . Do you deny that . No, we did. The usual procedure, since your party criticized the democrats for never passing a budget, the usual rule is to bring people together. Im not making it up. I want equal treatment under the law. You name conferees and well name conferees to the budget. The new budget started october the 1st. The four years means nothing. Were talking about this year and in this year lets talk about this and the shutdown. No. This is after the fact. But, gentlemen, wouldnt it make more sense, again, to go back to my original point . Look, i worked in the office of management and budget under reagan. I know a little bit about how this process works. Why not go for 13 appropriation bills. So far as i know not a single appropriation bill has passed. Why not go for 13 no, thats not true. Thats not true. Which one has passed . Weve got four. Not one has passed. Not one has passed by both houses. Not by both houses. We passed four out of the house. The senate and i understand that. My original question was why wont the house and senate pull a conference together . Reid says no. They voted no. I dont understand why democrats in either house were voting. What you need here no one understands. You need a budget, for heavens sake and then you can do your business. Larry, youre talking about people having selective memory. This is a very good example of that. This is a slippery slope they want to put us on in these three votes. What person in the congress doesnt support the budget . I spent all of my life are you going to vote for it . No, im not, because i think its a fraud. I think its a sham. Am i clear . A world war ii veteran will have to jump the barricades tomorrow. Come on. Look. Youre using facetious arguments that happened today. That happened today. You set it up and you had one of your i didnt set it up. They did it. You had one of your shows there saying look what the president is doing to veterans. Baloney. Weve had more out of this president for veterans than in any what happened today with the world war ii vets is an example of whats wrong. Its unfair. Larry, you know the facts. We have a picture of the vets trying to get through to the mall. I hear you. Youre both making points. With all due respect, i dont know where president obama is on this. He keeps telling people he doesnt want to get involved. I happen to think thats dead wrong. You made this deal. I worked for a president that got involved. Years ago after him bill clinton got involved, rolled up the sleeves. George w. Bush got involved. I do not understand how were going to work out any of this stuff, and i mean any of this stuff, not just the appropriations but all the rest of this is going to go through including obama care unless and until the president gets involved. Weve got a debt ceiling coming up and the debt ceiling may be the most difficult, painful thing of all. Where is mr. Obama . I know where the president is. You know where he stands as well. Hes done what hes had to do. Were big boys and big gals now. We have to make our decision. Then it goes to the executive branch, larry. Theres a separation of powers here. I dont think its that separate. Bill pascarel, thank you very much. Jim jordan, thank you very much. You bet. We know this shutdown is all about obama care, but the Health Care Exchanges went live online today or did they . A lot of websites crashed during the opening hours. There were other glitches as well. We have a live report on obama care day one. Please dont forget. Free Market Capital is the best market to prosperity but obama care sure aint on that path. Im kudlow and well be right back. Just by talking to a helmet. It grabbed the patients record before we even picked him up. It found out the doctor we needed was at st. Annes. Wiggle your toes. [ driver ] and it got his okay on treatment from miles away. It even pulled strings with the stoplights. My ambulance talks with smoke alarms and pilots and stadiums. But, of course, its a good listener too. [ female announcer ] today cisco is connecting the internet of everything. So everything works like never before. Obama cares Health Exchanges are officially open for business, but not without some glitches. Nbcs Danielle Leigh joins us. The web sides where they can join us as you said were plagued by glitches. In washington, d. C. , where i am, one in Person Health care center had to turn people away when the website crashed. Maryland delayed its opening until noon. The federal site was blaming heavy demand for error messages. One man waited for three hours and still hadnt gotten through. Health care administrators say the problems are because of demand and that the glitches will get fixed. Just to give you an idea of traffic today, new york said that 2 Million People had visited their state website in 90 minutes. The federal site had at least 2. 8 million visitors since midnight. There were some successes. California launched its first completed application just four minutes after opening the exchange. President obama today said that the demand was much greater than they had anticipated. He did say that all of this traffic is evidence that people want obama care. Im Danielle Leigh, back to you. Many, many thanks. Danielle leigh, appreciate it. With day one behind us, how bad are the obama care glitches . Can they be solved . Dr. Matthews at the institute for policy management and also being joined on the set. Im going to tell you, we had Scott Gottleib on from aei. He pointed to some big software breakdowns that he did not think were going to get solved because frankly the federal government cannot run 20 of the economy even in todays high tech world. Whats your take . I think thats probably right. They were trying to do a sample run back in july 15th. They werent ready for it. They postponed it to august 15th. They werent ready. They postponed it until the middle of september. We see theyre still not really ready for it. I suspect some of the glitches can be fixed. Theyre trying to integrate this into the irs and other databases that theyve never done before. Thats supposed to be able to allow them to check a lot of things and create a real integrated system. It opens up a lot of problems and a lot of security breaches. This is the socalled hub software problem. Very important. It links up treasury, irs, department of homeland security. It also links up with the states and the Medicaid Programs and its supposed to link up even with verification of income. Sarah hudson, do you think this can ever work . This is like never its not google. Its the federal government doing this. The scary thing is Peoples Health Care Coverage is a at stake. If you have these kinds of glitches, is it the medical records or choice of doctors. Thats an issue, as you know. No safe fire walls. Huge. This is not ready. Thats why the position that some of the house members or all House Republicans are taking is delay the individual mandate another year. Lets work the glitches out. Its really the right thing to do. The administration has done that with corporations for signup. Why not give individuals that final to make sure its right . Matthew, let me go there for a second, this seemingly unfair, congressman jim jordan was talking about that. Year delay for business. No year delay for the individual mandate. That was defeated in the senate as you probably know. What im driving at here is can a country our size, maybe smaller, can you actually run a computer system, a Software System with all of these links that we described nationwide, 18, 20 of the economy. Nothing like this has ever been tried before. Do you think its possible . I think its at least possible, but the veterans department, the va, has been trying to integrate its website with the department of defense for veterans coming back and theyve thrown 1 billion at this and havent gotten the system working yet. Yeah, i know. Weve been told, by the way, that the fbi has tried for years to do this. I think the problem here is sheer size and i dont think you can do it all centrally planned. Have i to leave it there because, sorry, we have some breaking news from cnbcs ayman jabbers. What can you tell us . Reporter good evening, larry. The breaking news is we have a new letter here, from the treasury secretary to the speaker of the house dated today. It was delivered earlier today. In it treasury secretary jack lew reiterates that the date for the government default deadline is october the 17th. Hes saying here in this letter that in fact thats still going to be the case even though weve had this Government Shutdown going on that could change things a little bit. The news in here is that the treasury secretary is now using all of the so had ever called extraordinairy measures that hes been using to keep to that date. Hell use two specific ones including the spending as necessary, the daily reinvestment of the portion of the exchange stable zagts fund that is invested in refresh ri securities. Treasury will enter into a debt swap with the federal Financing Bank and the Civil Service retirement and disability fund. Im told those are among the last maneuvers here that treasury can do in order to get to october 17th. The Exchange Stabilization fund, that goes back to the 1930s when the dollar was tied to gold. I think its about 50 billion. Before your time, larry. No, i remember it well. I may have been there. Let me ask you something quick. Paul ryan and some others, mainly paul ryan, chairman of the House Budget Committee has said on a number of occasions that this discussion on obama care is going to bleed right into the debt ceiling. If that happens, that is going to make this more complicated by a power of 100. What do you think about that . Thats absolutely what it feels like right now. Weve got until october the 17th. You can see a very dramatic scenario where we have another late night on capitol hill, this time reopen the government and avoid a u. S. Debt default on the same deadline. Were sort of getting all of it out of the way or whether this is a prelude what were going to see then. If youre going to compromise, one side or the other is going to cave in, offer something that theyre not going to offer, you want to do that on the very last day against a very big deadline. That would be october 16th. Maybe were teed up here for a big deal or a defaumt. This could be a big brow had a had a. Now, folks, we learned today that there is a whistleblower, an informant, some even say a mole at jpmorgan whos been tipping the feds off about the banks alleged mortgage misdeeds. This is what Ceo Jamie Dimon talked about with attorney general eric holder last week. We have that story next up on the kudlow report. My customers can shop around see who does good work and compare costs. It doesnt usually work that way with health care. But with unitedhealthcare, i get information on quality rated doctors, Treatment Options and estimates for how much ill pay. That helps me, and my guys, make better decisions. I dont like guesses with my business, and definitely not with our health. Innovations that work for you. Thats health in numbers. Unitedhealthcare. 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. Well, all right. Welcome back to the kudlow report. Im supposed to be kayla tesch shi. Ill turn it over to you. You make a good Kayla Tausche nchs there was an interesting story about jpmorgan. A jpmorgan employee is aiding authorities. According to the wall street journal a Company Insider is providing a large amount of information about Mortgage Backed securities. We dont know who the person is or whether they still work there but the email given to the doj indicates that jpmorgan vastly overrated the mortgages. This could cost the bank as much as 11 pld. 4 billion of that would be released to consumers. 7 billion straight to the government, larry. Theyre still fighting over that. The original spread was 20 billion and 4 billion. 20 billion was according to the new york times, the number and the 11 billion was in the middle. 4 billion will stay at 4 billion. Homeowners and consumers who were affected wont get anymore. The government wants more than 7 billion. Thats what the reports have said. We dont know what the proceeds are going to be used for. I know youre a greater player. You dont have to get information or name names. Did you get the information from the mole . I dont know. If the mole is out there, call me. I have twitter. Our own john harwood, distinguished reporter of his own right, has an exclusive interview tomorrow with president obama. That will be played tom here on our network at 4 00 p. M. What do you think thats about, obama sort of coming out now. Is he going to want to say hes willing to negotiate . He cant stay with the position he has it would seem to me, i would agree with you. I would think that if the president was going to have success with congress, he has to show that hes willing to talk to them. For him to say im not going to negotiate, period, you cant do that. There are 435 members of congress and you cannot ignore them and walk away. So im hoping hope springs eternal. However, it appears to me that hes still campaigning. Hes still making speeches and saying republicans are doing this terrible thing. He just needs to realize that republicans do represent a good number of people, house and senate, and if hes going to have a success for his own legacy, he needs to be closer to congress. My pal i hope hes still my pal. Chris matthews has a new book out about reagan and tip oneill. That was my era. Whatever they thought about each other they were able to get Business Done and they were able to throw back a glass of whisky after work. Thats the kind of thing i miss that, just the thought of that. We need that now. We need that now. You know, is boehner whos a pretty good golfer in his own right. He played golf with obama. That was a while ago. That hasnt been repeated. That has to be part of this capitalism on thursday. He always said if i can get half a loaf and move in the right direction right. Im going there. He understood dealing with the legislature in california i love this. Instead of saying whats that sound i hear . Its the sound of cement cracking around my feet because you always say this isnt cement and im not moving. Reagan knew how to compromise. Clinton was very good at it, too, you are exactly right. I have to get out of here. Youre exactly right, clinton was also good at it. Kayla, thank you very, very much. Give the mole from jpmorgan my very best regard. Now time to get back to the top story in america. The federal Government Shutdown continues. It looks like it will for a while. Is there any chance for a deal. Were about to ask for the president ial candidate. Man oh i cant go tonight woman i cant. hero thats what expedia asked me. Host book the flight but you have to go right now. Hero laughs and i just go . This is for real right . This is for real . I always said one day id go to china, just never thought itd be today. Anncr were giving away a trip every day. Download the expedia app and your next trip could be on us. Expedia, find yours. Make my mark i wawith pride. Ork. Create moments of value. Build character through quality. And earn the right to be called a classic. The lands end no iron dress shirt. Starting at 49 dollars. So, if youre sleeping in your contact lenses, what you wear to bed is your business. Ask about the air optix® contacts so breathable theyre approved for up to 30 nights of continuous wear. Serious eye problems may occur. Ask your doctor and visit airoptix. Com for Safety Information and a free onemonth trial. Could save you fifteen percent or more on car insurance. Yep, Everybody Knows that. Well, did you know the ancient pyramids were actually a mistake . Uhoh. Geico. Fifteen minutes could save you. Well, you know. The workers are still on the job. Youre still going to get your mail. Youre going to get your social security, medicare checks. Military will still protect you. Yes, if youre flying, tsa and air Traffic Controllers still on the job. The Federal Reserve on the job for better or worse. The shutdown is a lot smaller deal than people think. Kind of a slimdown, but the Mainstream Media is going nuts trumping up the politics of the News Headlines and the optics are bad. Most of its falling on republicans. The question is will the gop get all the blame . Why not then just pass a clean funding bill and move on . Maybe thats the answer. Lets bring in our Political Panel for the evening and see what they have to say. We welcome to the show martin frost. A former democratic congressman and House Budget Committee member and Alice Stewart is a radio talk show host and a former santorum press secretary and former senator Kay Bailey Hutchinson is still with us. Marty frost, thank you for coming on the show. We appreciate it very much. Its been a while since ive seen you. I have a peculiar view to have its best shot. Now, you know, maybe time to back off and kind of work on healing some of the wounds and getting rid of the shutdown. Marty, what do you think of this . Will they do that or will they keep fighting on . Larry, i was there in 1995, the last time we went through this. Ultimately the republicans had to backdown. I know that not everybody and all of the federal employees are out of work. We represented texas and there are a lot of regional offices in dallas, texas, my hometown where people are out of work. My wife is from kansas city. There are a lot of regional offices. Theyve made their point. They ought to pass a clean cr and lets see what happens with the debt ceiling. The its not in anybodys interest that this continue. Let me did you to you, senator. Yes, 800,000 workers are going to be furloughed. Theyll get paid when they come back on the rolls, correct . Thats correct. Big company like merck laid off 18,000 people. 60 will work. National security, planes, trains, cars, thats going to work. Entitlements work, that will work. Fda, Federal Reserve god help us and the irs, theyre all going to work. Why does everybody make such a big deal about the shutdown . I think the country can do very well with this shutdown. Because there are areas like passport offices, there are areas that need to function. Its just not a responsible way to go about making a point. Now here we are, the house now passing piecemeal were going to fund d. C. , you know, if were not going to fund kansas city, why should we be funding d. C. . I mean, why do you not take a stand where we can make a difference. We being the republicans . Yes. I agree that obama care is wrong. I think its going to hurt health care in our country, but we cant win. We dont have the votes. We need to go to the ballot box to get the votes. Where we need to focus is this horrendous debt. Now theyre talking about maybe breaking sequestration levels. We have to go up there that says were going to ro chet down spending to whittle down the deficits. We need to stick to that. We need to be talking about it as we are having this looming debt ceiling issue come forward. This will bleed into the debt ceiling. Hang on everybody, please. We have a special friend and great reporter, john harwood has scored an interview with president obama. Thats tomorrow. Cnbcs john harwood joins us on the phone. Good evening, john. Congratulations, what is the occasion of this exclusive interview . Is president obama gearing up to Say Something . The president is meeting with members of the Financial Services forum tomorrow, people like Lloyd Blankfine and jamie dimon at a time that hes trying to put out a message that a potential debt crisis, which is something that is a couple of weeks away, would have a terrible effect on the economy. Hes trying to rally support within the Business Community to tell the congress specifically House Republicans and republicans throughout the congress to go ahead and raise the debt limit. That argument so far has not resolved the standoff that were in the middle of right now over funding the government, and we dont have a solution in site on the debt limit. The president with just a couple of weeks ago is trying to get into it. I dont want to presume your interview. Weve all been around a while. I dont see how the president can maintain and sustain his position, that he will not negotiate at all on the debt ceilings. President s have been involved for years. I just dont see how he can keep that up. To your point, a good point, hell tell the business men tomorrow and have them put pressure on congress. Why doesnt the president go direct lip to congress and tell them himself . Hes been doing that both in his direct communications with members and in his statements. I would say, larry, i saw a potential opening with the topo lit call leadership 5id this afternoon who told me, one, he expects the shutdown to go on for a debt limit, stalemate is in a budget deal. Something involving the sequester cuts, that is the kind of area where the president has indicated that hes willing to negotiate. If thats where the discussion goes as opposed to in effect null fieg obama care, thats why i think a real conversation could be had. Grade stuff interviewing president obama here because you didnt fix it. Now lets go back to our panel, martin frost is a former house member, former senator and Alice Stewart, former Rick Santorum press secretary. Alice, thank you for your patience. Let me ask you about this whole business is it time for the gop in preparation for debt ceiling talks as john harwood has indicated is a uponbilitpossibi it time for them to back off . The red state democrats and mansion and those stayed with the is it time for the republicans to back off and start refocusing now on budget and debt matters . I think the key right now, larry, moving forward will be for republicans to do what theyve been doing the past few weeks is to work on ways to fund the government. They put forth several plans. What theyre talking about with the debt limit reminds us of when president obama was a senator. If we were thinking of raising the debt limit, it shows a failure of leadership. We have the situation with shutdown of the federal government. This is representative of the leadership. I will say theres some blame to be spread with those some of those in the senate and house. We have a failure of leadership. Gone are the days of our elected leaders sitting at a table and having the political sausage making of what goes on in washington and having the bipartisan talks and hashing this out before we reach a deadline. That hasnt happened here. The president made a few phone calls five hours before the shutdown yesterday and thats far too late. They need conversations like clinton and Newt Gingrich did in 96 and 97. I have not had a drink in 18 years. I didnt throw the whisky back, they did. To the benefit of the country. Marge ross, let me say this. I happened to personally oppose obama care and i had no problem up to a point where the democrats were spreading the record. It seems to me, marty, until the matter of a clean cr around voted on, it will impede progress for everything else. I dont think theres any question for that. Larry, there is one element. Maybe this will come out in the interview tomorrow. There is the question of tax reform. There are a lot of people who would like to see some progress on tax reform. I dont think theyre going to do a big tax reform package, when you vote on it in the house and in the senate next year. The republicans have taken the position, the House Republicans, they want to change the senate rules as a part of that. Thats not going to happen. You can have some discussion. A lot of things are floating around. It could be part of a final agreement and not have the country deformed. Im saying, yes. Not have the country default is important. I dont believe that it would ever default, i dont believe that. You could put yourself in the position if you dont raise the Borrowing Limit where 1 3 of the budget goes unfunded. That would be most unusual and most unfortunate and probably would damage our credit rating. I have to get out. Our panel stay with us, well be back with you shortly. We have a couple of other topics to cover. Im larry kudlow. Well be right back. Mom, dad told me that cheerios is good for your heart, is that true . Says here that cheerios has whole grain oats that can help remove some cholesterol, and thats heart healthy. [ dad ] jan . Bny mellon combines Investment Management investment giving us unique insights which help us attract the industrys brightest minds who create powerful strategies for a countrys investments which are used to build new schools to build more bright minds. Invested in the world. Bny mellon. Welcome back to the kudlow report. Stocks may be surprising some people. We thought the shutdown would continue last weeks selloff. The dow was up and the nasdaq had the best day, up 46 points. A lot of that is due to apple, up 2 . Carl icahn took to twitter saying he had dinner with tim cook and is pushing him to do a 150 billion stock buy back. Take a look at gold. Down to more than 40 an ounce today. Not a good run for gold bugs this year. Larry, back to you. Kayla, thank you very much. Now government shuts down and the markets rally. Here is peter costa. The president of empire institutions. Zachary carol. You have a Government Shutdown, blah, blah, blah, blah. Stocks did very well. Gold, the safe haven got slammed again. Is this shutdown thing going to have any impact on the stock market . The gold thing is interesting. If people are worrying about the debt ceiling and that leads to credit downgrades, you would have expected the fear trade to go into gold. People are treating this as an inherently shortlived event that wont impact the u. S. Credit rating. It wont lead to a downgrade. Nothing with the path that this will ebb and flow. Hopefully that complacency is merited by future incomes, right . Were talking politics here. I dont want to obsess about it, but it is possible, right . We heard the report, treasury secretary lew, october 17th. Thats the currency support. With that in mind, today being october 1st, only two weeks, this budget battle, continuing resolution battle can go two weeks, bleed right into the debt ceiling with as much ill will and ill feeling in washington as ive ever seen. Are you complacent . What zach is saying is true. The question is, will it last . Theres two questions there. The first is if the congress decided to work in the best interests of the people, we would not have this problem. Right. I know, right . Incredible thought this morning. They hav been working in divergent paths. If they worked together to solve this situation, we wouldnt have this problem. This has been on the table for a while. To me, im not complacent. I do think next week if there is no resolution, it will be very volatile. I think it will get soft. Cr can be done in a day. I am not come pl complacent. I think we can have our own crisis on the 15th. Well make a decision to not allow a default than we are to have that as a financial rally. The markets are making a selective decision that the financial outcome of this are not the primary concern at least for the next two or three weeks. Im going to leave the constitutional issues alone. With the budget issues in washington and so forth, that basically takes the fed out of play for the rest of the year. Absolutely takes it out. Theres no way they can gauge not going to mess with the bond market. No. They wont mess with anything. You know what, i originally thought september, then the end of october. Theyre not going to have the discussion probably until december then theyll decide in january. All right. China. I know you follow it very closely. Our ism was up. Chinas pmi was flat. Is there a recovery stabilization in china . Its been doing better than the hard landing, the annual hard landing from china has proven to happen. It could happen next year. China is definitely a stabilizing situation. Look, u. S. Exports to china, if youre a business, thats the Fastest Growing export market for the United States right now. I think were hearing a lot less about china because theres a lot less about china to hear. Were the risk factor and italy. Italy, okay. Ism was very strong. We have to get out. Im sorry the segment is short. Our ism, manufacturing is going to be much better than we think. Zach karabell, peter costa, thank you. Our allstar panel when we come up, i want to talk about the shutdown and what the republicans next best move will be. We need to fix this budget stuff before it bleeds into the debt panel. Im kudlow. Well be right back. Shes always been able to brighten your day. Its just her way. But your erectile dysfunction that could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. Do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess with cialis. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, seek immediate medical help for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a 30tablet free trial. My quick take on day one of the shutdown, its time to punt. Pass a clean continuing resolution. Even alabama sometimes has to punt. The gop did their best and it wasnt quite passage. Lets get final thoughts from our panel. Martin frost, former congressman of texas, Alice Stewart former santorum and Kay Bailey Hutchinson. You think they should just move on . Clean cr and move on . The most important thing i heard tonight, larry was that president obama, a, might be talking to congress, b, about entitlement reform. That would be huge, that would be a huge step in the right direction for our country. It would be huge. Alice stewart, can it be done . Can it be done or will this cr drag on and on and on . Is it going to be done by this week, alice or will it go 2, 3, 4 weeks . Lets hope it wraps up before the debt limit talks. House republicans were voted in to rein in the size of government. Thats what theyre doing. Sound ideas and hopefully democrats will come premise. Larry, i have a thought of this. We picked up nine seats after that showdown. If the republicans dont do something on the cr and dont do something on the debt ceiling, they may see nancy pelosi back as speaker. It is all possible. Ive interviewed ms. Pelosi several times. A bunch of red state democrats have their problems. Im kudlow. Be sure to follow cnbc. Com all night for any updates. Well be back tomorrow night. ® s so breathable theyre approved for up to 30 nights of continuous wear. Serious eye problems may occur. Ask your doctor and visit airoptix. Com for Safety Information and a free onemonth trial. Its lots of things. All waking up. Connecting to the global phenomenon we call the internet of everything. Its going to be amazing. And exciting. And maybe, most remarkably, not that far away. Were going to wake the world up. And watch, with eyes wide, as it gets to work. Cisco. Tomorrow starts here. Make my mark i wawith pride. Ork. Create moments of value. Build character through quality. And earn the right to be called a classic. The lands end no iron dress shirt. Starting at 49 dollars. [ engine revs, tires squeal ] [ male announcer ] since we began, mercedesbenz has pioneered many breakthroughs. Breakthroughs in design. Breakthroughs in safety. In engineering. And technology. And now our latest creation breaks one more barrier. Introducing the cla. Starting at 29,900. A confident retirement. Those dreams, theres just no way were going to let them die. Like they helped millions of others. By listening. Planning. Working one on one. Thats what Ameriprise Financial does. Thats what they can do with you. Thats how ameriprise puts more within reach. Narrator in this episode of american greed, newage evangelist lydia cladek says she can awaken minds to untold riches, but her promise of big returns buying up auto loans isnt just mystical its unlawful. When these investors are really putting money in lydias pocket. Narrator and even an army sniper cant defend himself against this greedy guru. The threat is right there wears a little dress, wears a big smile, and thats the threat. Narrator and later, south carolinas silver dealer ron wilson is sounding the alarm on the u. S. Economy. Ron predicted, essentially, the end of the world