Transcripts For CNBC Worldwide Exchange 20130923

And the terrorist attack on a busy kenyan Shopping Mall leaves dozens of people dead as the hostage crisis spills into a third day amidst gunfire and explosions in nairobi. Weve got the latest data out of europe in reaction as we wait for the german election results. German private sector expanding a little bit more. 53. 8 in september, 53. 5 in august. The composite or manufacturing pmi for europe, 51. 1. It was around 51. 4 in august. The consensus was 51. 8. In fact, that pmi a little bit weaker than the consensus. Even on the german side, the german manufacturing number came in slightly weaker. 51. 3 versus 51. 8. New orders slowing down a little bit as emerging markets wane. Euro dollar down 135. 11. Last week we were 135. 60. Thats the economic back drop as Angela Merkel romped to victory. It is left facing tough coalition choices. Around 41. 5 of the vote but her liberal partners failed to make it into parliament. Europe reacted by opening slightly slower. Jeff and annette have been pulling the all night shift. Its amazing how accurate the very first exit poll was on this. They seemed to have called it pretty clear. What happens next . Well, its interesting, isnt it, ross . The first polls were pretty much banging line with where we are with some of the surprises, i guess the fdp not making 5 . The afd not make 5g here, and then slowly there were some people who were getting very excited about the idea that it was an absolute majority. And then that started to feed into the narrative, and then now we are back to this whole idea of a grand coalition and even Angela Merkel herself has been talking about the fact that germany doesnt have a history of absolute majority government. But lets just listen to how the chancellor celebrated the victory. Translator together we will do everything to make sure those are successful years. For now we will wait for the election result. Its too early to say exactly how we will proceed. We will discuss everything tomorrow in our leadership where we know the exact results of the elections. But to celebrate, that we can do today already because we have done super. So a Remarkable Campaign really. Yeah, it was a Remarkable Campaign. It was very much focus campaign on Angela Merkel. The whole strategy paid off perfectly. Germany voted in favor of stability and not in favor of change which actually was what steinbrueck and the social democrats represented. All in all i think the message is Angela Merkel is the mother of the country. Yeah. And they like it. Mouti. Yeah, its mother. So what about steinbrueck. This is going to be fascinating because hes said that he doesnt want to be a minister in a coalition government, at least thats what he appears to be telling the media at the moment. This is how he talked about how the spd performed in this election. Lets listen in. Translator the situation is very unclear, therefore, the sdp will not engage in speculation about the next government. The ball is in merkels court. She has to get herself a majority. Of course, the biggest loser in that election were the liberals, the fdp. For the First Time Since the Second World War they are not represented in parliament, and of course as well people at the Christian Democrat Party yesterday were saying its a big shame, not only that they are losing their Coalition Partner but as well that the liberal ideas are no longer represented in parliament is a problem. But on the other hand, they have to say that Angela Merkel is absorbing those liberal ideas as well quite successfully. First of all, take a listen to what their chairman had to say yesterday. Translator its as clear this is the worst result weve achieved so far for the fdp. As leading candidate, i take responsibility for it. And you know, ross, there were some very Interesting Campaign ideas that were being thrown around and annette talked a lot about this on friday. You, too. Well, we did talk about it, and you went out and you had a look at some sausages and this kind of thing. This is all about the greens idea, that we have a vegetarian day, a day where you eat nothing but fruit and vegetables, and it did appear that the german public werent that excited about it because the greens seemed to be losing some support as we came into the election. Lets listen to what they had to say about the greens performance. Translator we had two goals. We wanted to replace the cdu and fdp through the sdp and the greens. We wanted to achieve this by strengthening the greens. Both of these goals we didnt achieve. This is bitter and we must face this reality. Well, and as well, too, yeah, give you the full picture we should as well talk about the far left. The left party actually were really successful in the east, but as well in overall terms due to the weakness of the greens, they are now the third Strongest Party in germany and their chairman or president , mr. Geeze was quite overwhelmed. Take a listen. Translator as you know, i said a double figure. We didnt reach that. We needed to fight passionately. There is news. There is new protection. We are ahead of the cdu and the greens. The adp is out and the fdp is out. So youve had a pretty good mix there of what the various Party Leaders have had to say about the election outcome. Andreas gluth is with us. He joins us from the economist. The afp didnt make the 5 required to get a seat in parliament. They still polled pretty strongly. How does that change the political dialogue in germany . I think it will increasingly change it very much. Just for perspective, i think when the green party arose as the first generally new party in post war history, it took them years, i think about eight years to get into parliament, which was exactly 30 years ago. It took the alternative for germany to enter into particle flamt this building. Thats an astonishing rise. I was looking at some of the fine print of the statistics last night. Obviously they had something to do with the failure of the ftp because a lot of their supporters are disenchanted free democrats and they came over, but they also got a huge influx of people from the left party. They did much better than we expected in east germany. So they really have become number one protest vote. Thats not enough to changer man politics as we saw with the pirate party because they used to be the protest vote and theyre nowhere now after yesterday, but the alternative for germany is very disciplined. Theyve raised a new issue which is skepticism of the eurozone. Now that theyre very articulate, theyre around now. Theres a European Parliament election coming up next year. I expect them to do very well. Theyve been legitimated by the result. Theyre going to change the debate. Angela merkel and all of german politics and the center right, which Angela Merkel has shifted left, they need to look to the side. Weve got to account for these voters who will otherwise keep going that way. Talking about the impact as well in germany and an end on the eurozone. There are some headlines saying germany is Angela Merkel country. Are we finally there . We just have one big maximum leader. Well, i mean, in a sense we are. Were about half a kilometer away from the poster with her famous merkel rhombus. Germans identify with her. The german word is completely to misunderstand modern german politics. Essentially what you have is an extreme centrism. Its a contradiction of words. She has taken over the entire Center Ground and it happens to meet in the person of Angela Merkel. You could also say there is pretty much agreement shes not going to go as conrad adenaur did for a fourth term so this is really her last four years. Were going to see one more term with her, if were lucky. It might not even last whatever coalition she builds that first term so, yes, at the moment this is her zenith. I would think its for her personally probably also the beginning of her slow descent out. Its been a little mixed on the German Economy at this point. There are those that are saying theres underinvestment here. Layoffs are increasing. Shes had a honeymoon period where the eurozone crisis settled and datas been good. Potentially things could worsen into the end of the year and into early 2014. How likely do you think that may be . How likely may germans roux that they didnt vote for a change. I dont think they wont roux that they didnt change. Even if its precarious, if it gets worse there are ways to roux and there are ways to keep it stable. I think germans give her credit for keeping it stable. Shes had a bit of a honeymoon. She and germany have benefitted through the crisis. For example, the budget balance looks good in part because germany has had to pay less in interest because of the euro crisis. It was lucky that just at this time, you know, the chinese needed a lot of things manufactured in germany. There was a lot of luck involved. The euro crisis for now has helped more than it has hurt, although that could change. She has been very lucky because shes benefitted from the reforms of her predecessor which was a social democratic reform which tore up this party because theyre not happy with their own reform but it made the labor market flexible. Thats one reason why the Unemployment Rate is low. Shes run on her former opponents record in a way. Shes been lucky. All of that could change and we dont know whats next in the euro crisis. Thats why were probably always going to have a grand coalition. No one experiments with that. Clearly from here, the german people at least see her as a safe pair of hands when it comes to managing the crisis. Andreas clug with the economist. Ross, well send it back to you. Plenty more to come from you both. Log onto the website and you can read the opinion piece and why germany needs to repair its frayed relationship with the european trading partners. Follow us on twitter cnbcworld. We had the pmi out. It beat forecasts for a rise of 51. 9. Break that down. Services doing better than manufacturing. Services 51. 1. The manufacturing slipping from 51. 1 in september. This is all september from 51. 8. The german manufacturing pmi partly responsible for that. Joining us with his thoughts, chris is a chief economist at market. Chris, whats the key take away . How much concern is there over german manufacturing slipping . Whats that down to . Still expanding, just at a slower rate. Yes, indeed. Previous months have been particularly good really. Its got to be put in that context. It does look like there is some further weakening of demand from the emerging markets. We can see german manufacturing sr. Benefitting within the eurozone. Some countries into the u. K. And the u. S. It seems that wider market, the emerging markets which is causing some suppression there. Against that, the Service Sectors have faired better than expected which is all the more surprising given the fact this is an election and often you get some down time where companies defer their decision making. This is sort of the flash number. Nevertheless, you take the german numbers. What sort of economy, Economic Growth is Angela Merkel going to turn around and tell her german electorate that theyve got for the third quarter. You extrapolate these figures. Were growing. This is a modest pace of growth. Were looking at growth. 2 perhaps. This is just in the boundaries of anything reasonable. So very weak situation still, but i think generally the indicators are turning up the Fourth Quarter could be stronger barring any surprises. Whats the breakdown at the moment between the core and peripheral in spain . Weve got growth as a whole, but how weak has spain and italy been . Heres where theres some good news. For this number we include these countries but we dont break out the numbers for them. What we can see is outside of france and germany there is some growth now. Its the best since perhaps the beginning of 2011 and importantly what were seeing is the number of job losses, theyve eased quite considerably. The weakest for two years. Spain and italy are making progress. Structural reforms are taking place there. The growth there for the spanish labor costs, theyre fairing better than germany. This comes down to germany making progress. Chris, stay with us. Well talk about chinas pmis and look at the u. S. Right now, lets bring you up to speed with the Global Market activity. Were on the down side. Not by much. Advancers and decliners, nearly matching each other five to five. We are up near the session high at the moment. Equities, little bit upset by James Bullards comments from the fed. We might get some tapering in october. So were not quite certain where were going. Ftse 100 last week, it was up 12 points. 2 . Right now its down five. Xetra dax hitting the all time high at 8 j. 694. 8,689. We are five points away. Cac is up. Bond markets, yields on treasuries hit 2. 67 . Were still at 2. 67 year. Ten year gilts yield. 1. 94 . On the currency markets, euro dollar, 1. 3560 post the fed. We still have a 135 handle. Pretty muted reaction. Dollar yen just below 99 at the moment. We still havent sustained the breakover of 100. 90. 76. 97. 76 was the three week low. Sterling dollar doing pretty well. Up 1. 35 cents. Still above 1. 60 but about a cent below that eightmonth high as well. Meanwhile, chinese factory activity picking up at its fastest pace. The flash manufacturing pmi coming in at 51. 2. That Beat Estimates thanks to a jump in export orders. That data giving exporters the hope that china will hit its growth target for the year. With that back drop, we have the update out of singapore. Thank you, ross. That higher than expected hsbc flash pmi were broader economic recovery for china, especially for smaller private firms. Subindices, 11 out of 12 expanding in september while new export orders hit a tenmonth high. Only employment still remains below 50 but also improved from the previous month. On the markets today the shanghai composite got a lift, higher by 1. 3 . Standing above the 2200 level. Meanwhile, japans nikkei is out of action for public holiday. After a typhoon hit hard overnight, hong kong was suspended this morning and back online in the afternoon session ending down. 6 . Elsewhere, south koreas kospi played catchup to the fed after holidays ending higher by a modest. 2 . Australias asx 200 not able to get a lift. Minors were broadly weaker tracking lower commodity prices. As for individual movers, these chinese car makers are among the top gainers at this helped by the upbeat Economic Data and hopes of strong sales ahead of the golden weak holiday in early october. More lolly dayzyze holidays coming. This is in the main land while Fund Managers have High Expectations about its new hybrid launch in the Fourth Quarter. Back to you, ross. Thanks for that. Thats how asian markets are traded today. Chris is still with us. The china market pmi for the sixmonth high easily beating forecasts. Does that mean we can relax now . No. Its moving in the right direction, isnt it . Its encouraging to the export index lift above the 50 line for the First Time Since march. The slowdown it would seem since late last year is becoming entrenched, somewhat dissipated by this. Theres some lift here for a couple of months, but its still very weak in terms of levels and were still seeing emerging markets in general really struggle while the developed world seems to be picking up some pace. Is there a concern about where the growth has come from . Theres a big up turn in credit and its the same sort of stuff. Its state owned infrastructure. State owned enterprises. Thats what weve had before and its not what we need in the future. No. Thats reflected in the services pmi as well. That was up to a fivemonth high back in august. There are signs that the domestic economy is expanding perhaps fueled by that credit easing earlier in the year. Say that export index reading is a quite crucial one. Its risen sharply in the last few months from the contraction into expansion territory. That suggests that chinese manufacturers are continuing to win business broad and that should feed through to a more balanced rate. How do you work that out . When you look at sort of the manufacturing pmi in europe and germany, we suggest there is a bit of easing of demand. Then you look at the china one. Its saying something slightly different. I think theyre reflecting how business is being won. Its a shift in chinese manufacturing. Its just a shifting of trade somewhat. Okay. Chris, good for now. Take a break. Well take a pause as well. On todays show, remind you what else is coming up. The countdown is on in washington. Well break it down with jonathan allen. The Chinese Court hands down a life sentence to bo xilai. The Opposition Party is trying to woo voters ahead of the 2015 election. Thats at 10 45 cet. The hostage crisis at a kenyan mall has spilled into a third day. Well have the latest from nairobi on the terrorist attack after the break. Announcer youre watching Worldwide Exchange. A siege at a kenyan Shopping Mall has entered its third day amidst heavy gunfire a amongst explosions this morning. 68 people have been confirmed dead. Nbcs ron allen is in nairobi with the latest. Ron. Reporter good morning. Yes. Its a very tense morning here outside this mall. Were several hundred yards away, but even at this distance weve been able to hear gunfire and explosions. Its been sporadic. Not sustained, but it started last night. Helicopters were seen flying overhead very low and slow. There were several explosions. We can also see the troops on the fringes of the mall here, on the edge of the safety corridor moving into more aggressive positions and the kenyan government has made a number of statements saying that this is their final push. At this point we think there are perhaps as many as 10 to 15 gunmen still hold up inside the mall. The government incysists that ty are still hold up. Numbers are very hard to come by here. Very difficult to tell exactly whats happening. The bottom line is that the government appears to be determined to try and end this now. Were about to hit 48 hours this have hostage siege. Outside here in the community, the hospitals are filled with wounded. The number has risen to about 200. Theres a very aggressive blood drive underway to help those that are injured. There are still a number of people unaccounted for. That number seems to be dropping down to as few as 20 now due to the local red cross. Still a very fluid situation. The bottom line is the kenyan government appears to be bringing all of this to an end. The big concern concern is the safety of the hostages. Thank you. There are eight days to stop a potential Government Shutdown. Key lawmakers expect theyll be able to avoid that. The Sticking Point is a bill passed by the house last twheek defunds president obamas health care law. The senate is expected to strip out that provision this week. Chris williamson is still with us. Its hard to know, chris, whats going to happen. One would suspect what happens is what normally happens, theyll shut the government for a few days. The thing is how much of a decision was whats going to happen to the government was impacting the fed. And if we get it out of the way, does it mean they might taper in october . It was certainly cited as a factor, that nontaper surprise. I think as you suggest it will go to the last minute and then all will be okay but there will be some nail biting moments in between. It is a factor if it all gets resolved then the door opens for that fed tape yerg in october in theory, but given what we had last month, i dont think theyre going to do that. I think were going to see them push it out further, probably into next year. If they didnt take that opportunity this month, then why do it next month . Thats a fair point. James bullard suggested they could. When you look at the Economic Data which has showed that slowdown, perhaps more severely than people realize. When you look at the manufacturing numbers, they show a stagnation of the sector in the summer months. Weve seen some lift from that which has shown some lift in august, but its still very modest. When you look at the retail sales data as well, very few signs of life there in the u. S. Economy at the moment. They need to see the economy much higher and payroll numbers to follow suit as well. I think the trajectory could put the taper out to next year. Chris, good to see you today. Chris williamson, chief economist at market. Dont forget, still to come on the market, what impact could it have on the greek austerity debate. The troika is there. Julia is there as well. Well get to that after this. [ male announcer ] these days, a Small Business can save by sharing. Like carpools. Polly wants to know if we can pick her up. Yeah, we can make room. Yeah. [ male announcer ]. Office space. Yes, were loving this communal seating. Its great. [ male announcer ] the best thing to share . A data plan. At t mobile share for business. One bucket of data for everyone on the plan, unlimited talk and text on smart phones. Now, everyones in the spirit of sharing. Hey, can i borrow your boat this weekend . No. [ male announcer ] share more. Save more. At t mobile share for business. These are the headlines from around the globe. Celebrations in berlin as Angela Merkel sweeps an historic victory. The focus on forming a coalition as we await a final election count. Hsbcs flash pmi is boosted and its staying on track. The showdown over the budget bill could get loud and ugly this week in washington with eight days for congress and the white house to avoid a possible shutdown. And a terrorist attack on a busy kenyan Shopping Mall leaves dozens of people dead as the hostage crisis spills into a third day amidst reports of continuing gunfire and explosions in nairobi. An hour and a half into the trading week in europe. Equities a little bit high. Xetra dax, 8,693. The fats si is down. Bond yields as you were, gilts yields, 2. 92 . Treasury yields 2. 93. Ten year bond yields steady as well, at 1. 94. In the currency markets they hit the 7. 5. Dollar yen below 99. Sterling dollar just before 60. Yeah, Angela Merkel romped to a victory in the federal election. Not quite enough to get an overall majority. Went around 41. 5 of the vote. Her liberal opponent failed to make it into parliament. How will the result affect germanys relationship with the rest of europe. Jeff and annette are there as well. Just before we get on to that point, when will we have the final official count . Well, i think were pretty much confirmed, arent we, annette, now . Yeah. The real final official count with a legal disclaimer will come in roughly an hours time, but we shouldnt expect any big changes anymore. Yeah. Whats interesting, ross, just to bridge and move on to that eurozone issue here, is how there will be those who say the pieces fell into place pretty much as expected. This is not a remarkable election. I have to say if you think about the course of the eurozone crisis, it is remarkable to see an incumbent government returned and to make gains because weve not really seen that around the eurozone. Weve started to get some other leaders now in europe coming through and congratulating Angela Merkel. Obviously mr. Cameron is delighted in the u. K. Another conservative government, that probably lends some support to him. Monsieur hollande gave his support through gritted teeth. I dont think other countries will be too disappointed with this outcome. Well, they wont be too disappointed with this outcome. Of course, Angela Merkel is a tough cookie to negotiate with and it was pretty clear from the legacy of her job during the eurozone crisis that shes not giving away taxpayers money just all of a sudden. But, you know, it is better to know the devil you have to negotiate with than not to know the person. So overall i think the what we will hear, it is received quite positive. Above all i have to express by her friend cameron. Yesterday evening we had a chance to catch up with the former head of the European Parliament and take a listen of what he had to say about the legacy and her credibility. Angela merkel in her time as chancellor did what she promised, and i think this is the secret of her success, that people trust her, that people believe what she says and in difficult times she does the right thing to defend all european currency, to promote european integration and to refresh the values and the interests of germany. This is a good day for all of us today. So in essence one can say that she has zero tolerance for politics and that our government is not very is rather critical of what happens in italy, but for now the eurozone seems to be quite happy with her staying. Yeah. Absolutely. And you can see that, i think, ross in the markets. As you were describing some of the reaction here, i would say a sigh of relief, a little bit muted, no movement around the european debt curves. By and large i think this is a result that the rest of the eurozone can live with. Back to you. Okay. Jeff, annette, thank you for now. Meanwhile, the eurozone debt crisis also dominating the closing stages of the next election campaign. Merkels sdp and peer steinbrueck criticizing her. Will a grand Coalition Change life. Jules is in athens as the troika has returned. Jules, how has this election in germany being viewed there . Well, ross, i think there was a hope kraer than expectation that we would see a grand coalition in germany then there will be a slight softening of approach as far as greece is concerned. I do emphasize the term hope rather than expectations. Quite honestly we have the troika, and the golden dome. They continue to be the hottest topics. We have the troika here. You have the perception of that among the domestic media, very different from the international perspective. Theres a pr campaign as far as the government is concerned. This negotiation is going on very smoothly. And of course just what on earth to do with the golden dome party and limiting their ability to influence policy going forward. I want to get to my guest, the former World Bank Economist who joins me now. I wanted to talk to you. Good morning, ella. Thank you for joining us. Weve seen pictures of celebrations in germany. There are things to celebrate and perhaps the broader eurozone as well. I believe knowing the day after the german elections is going to be the day before the german elections. There isnt really very much to celebrate other than what there is to expect is continuity of the austerity packages that we have been receiving all this time. One of the things that ive been talking about in brussels is that, yes, weve been slow on policy ahead of this election, but also the austerity police have been quiet. Do you think things could get tougher for greece going forward. Im afraid there is an element of toughness that will come up, and thats very much coming from, if you wish, understanding of the results of the elections. Mrs. Merkel has pretty much told its people, her people, that greece and the south needs to put their stuff together and thats a continuation of the austerity packages that were expecting. Before the elections we also heard that there is not going to be any conversation or talk about the official debt of greece which is our debt is extraordinarily big and completely unsustainable. I wanted to get you on the politics actually, the impact of golden dome and the events that weve seen last week. How acute a crisis do we have politically . You were part of the system. Right. You understand this. Yeah, well, originally the crisis has been misdiagnosed as a crisis of liquidity. We dont have a lot of money to pay off our debtors. In reality its a structural crisis and its a crisis of lack of productivity. The austerity package as a solution has not been the Perfect Match because it actually makes our structures weaker and our governance weaker and the effectiveness of the governance weaker. The example of golden domes unfortunate hate crime that took place a couple of days ago, that has alarmed me quite a lot because it does show that there is a growing discontent and its becoming less and less manageable. Does it come down to institutions . There were police that were watching and they didnt intervene . No, they intervened completely at the end when everything was pretty much completely over. We do see that every day. As a matter of fact, golden dawn has gained a lot of its power a among the poor and middle class because they seem to be there faster than the Police Officers seem to come to a calling of any sort. So thats how they have grown into taking over a lot of voters, not because of ideological perspectives. People dont vote because they seem to be right wingers. People vote for them because they believe that theyre the ones that keep, if you like, a sort of safety and governance in their neighborhoods. Whats the answer here . Has the government completely failed and can they turn this around . Im afraid that we are going very, very fast towards a situation where our degrees of freedom for maneuvering and restructuring our government are becoming weaker and weaker so the government and the Police Structure as well as the politics that continue to remain around here need to slowly start looking into changing their way of dealing with government. They should engage the middle class, however, it is hard to do that when you have, say, wage cuts, pension cuts that have gotten to the point that incentives are negative. Which Police Officer feels the great incentives to defend themselves when the rules are going to be pretty much against them and the salaries theyre getting are really weak, like 600 euros a month or 700 euros a month. We are running out of time but i want to get a yes or no answer from you. Youve seen your former party effectively obliterated in the polls is this the beginning of the end of the old school of politics . I believe it is. I dont know if they believe it or not though. Ross, the end of the Current Situation for the Political Party here in greece. Back to you. Jules, for now, thank you. A little bit more to come later. The italian minister has threatened to quit the government if they press ahead with the tax cuts. He said it was on the line and rome must stick to its agreement to hit a 3 budget deficit target. Well take a short break. Brittains party is trying to win over voters. Well hear from the secretary from the Labor Party Conference right after this. The additional banks will win a spot as an underwriter from the ipo. And if you are one of the lucky ones to get your hands on an iphone s this weekend, apple sold out of its initial supply in less than two days in the 11 countries where it launched. Shipments for retail and Online Stores have been pushed to october. They had signaled their inventory was very low. At t received very few 5s models and no gold versions. Apples stock in frankfurt marginally higher today. Blackberrys woes continued. On friday they said it will post a 1 billion Second Quarter loss. Blackberry is shifting completely away from the consumer and will focus on mainly enterprise customers. It will release its full Second Quarter results and plans on restructuring this friday. Blackberry stock as you see in frankfurt down 18 . Thats down on reaction to that news late friday. Microsoft is holding an event in new york where the company is expected to unveil the new surface tablet. This comes a month before microsoft releases an update to windows 8 which will be usable on smaller touch screens. These have become much more popular because theyre cheaper and easier to carry. The new surface tablet could be lighter and thinner thanks to an energy chip from intel. And its the end of an era. Volkswagen has officially put the brakes on its line of camper advance. They announced the last vw mini bus will be built in brazil this december after more than 60 years in production. The retrobus is the longest produced model in automotive history. So we want to know from you, whattest your favorite retrocar. Join the conversation at Worldwide Exchange. Email us at worldwide. A beetle, a mini, could be anything. Now back to politics and brittains Opposition Labor Party will be asking the Government Spending watch doctor to scrutinize the pledges in its 2015 election manifesto. They can be trusted to run the economy. Speaking earlier the chair finance minister said that georgeous bourne is wrong to claim victory when it comes to the recovery. We said he would choke off recovery, and he did. He said the deficit in 2015 would be 18 billion. Its over 90 billion. If you call that winning a debate, i think maybe you need to go back to the drawing board. That was ed ball speaking to tom mckenzie earlier. He was at the Labor Party Conference and joins us. Tom, its all very well sort of criticizing the government. A lot of investors want to know what the labor partys policies are . Yeah. Ed bulls was in fighting spirit when i spoke to him earlier. The seas behind me are calm and quiet today, but it hasnt been plain sailing for brittains main Opposition Labor Party. They have been criticized for being divided. Theyve been criticized for lacking a vision and those policies, for not spelling those out more clearly. Theyre also struggling in the polls as the leader in the coalition. Theyre still seen as more able to handle the economy and the personal polls are pretty bad. This is labor partys conference. Theyve come out fighting. There was a positive spirit and theyve released a number of policy proposals that really touches home in how working british families are feeling. They want to raise the minimum wage. They want a levy on banks. They want apprenticeships for schemes and companies that take on employees from outside the eu. They want to submit their numbers from the office of budget responsibility. They want to show their math adds up. With 20 months before the election in the u. K. , will it be enough . Joining me is the shadow business secretary chuka. Thank you for that uplifting introduction. Thank you for joining us. You want to up the minimum wage. You want a levy on the banks and you want to compel businesses that take on employees from outside the eu to have apprenticeships. In respect to the minimum wage, one of the great things we have in this country in terms of the way it is, we have the low Pay Commission which is a partnership between business, employee groups and the government reach an agreement on where we set the floor in a way that is fair but also doesnt mean a grop in jobs. That is the way that we would proceed if we make any alterations to the National Minimum wage after the consultation. In respect to the bank levy, its 2. 7 billion pounds lower now than it was in 2010. We had all the problems. Im incredibly proud to be a member of parliament that represents a london seat. All we ask is that the Financial Services sector does a little bit more for our world economy. Many people benefit from what our city brings. We want it to do a bit more for home. I think the third thing you mentioned was the desire that we have to ensure that we have more apprenticeships in the country. We have a bit of a problem, large companies, they cant get the skills from people that they need so theyre hiring from abroad. Fine, if you do that, by all means do that to fill your skills gap. We want to ensure that were training up young people so you dont have to do that in the future. Hence, why we want to connect that to apprenticeships. We have the biggest turnout at this conference in many years. We held a mess sieve business reception. It was the best attended business event we think of any of the Major Political parties in the u. K. That isnt a sign of an antibusiness party at all. That is a sign of a party that is absolutely in tune with your views of the business. Going back to the bank levy, how much are you targeting . What do you want to get . Were hoping to raise 800 Million Pounds and that will help to pay for better child care to ensure that we can get more women back to work in the country. You focused a lot on the cost of living crisis at the conference. Isnt part of the problem number one people still associate labor with being part of the cause of the problem, not the cost of living crisis that people are facing here. Number two, there are polls out in the last few weeks showing that people feel much more optimistic about the economy than they have since 2009. If you ask that question i suppose that people may remember president reagan before he became president asked people during the tenure of president carter, do you feel in the u. S. , do you feel better now or worse off now compared to when the Current Administration came to office. And most people in this country will say that they feel worse off and thats because on average they have sustained a pay cut of 1,500 pounds sings this government came to office. So i think people are clear about who shares the blame for this. More important, what are you going to do about it . What are you going to do to help my family and deal with the rising cost of living and get my pay up. Thats why weve been focused on that because we dont feel the government has been. Ch uka, shadow business secretary. Outlining some things labor is putting up here. Tom, good stuff. Thanks for that. Well turn from brighton to beijing. Former Commerce Party leader bo xilai has been sentenced. A lot of people have been talking about that this sentence was harsher than they expected. Life in prison, he was stripped of his property, his political rights. That basically means he will likely no longer be able to reenter chinese politics. A lot of people have been talking about how he was a charismatic man. He was able to fashion himself as a man of the people but at the same time he seemed to pose a threat to the establishment. A lot of people have been talking about how this is a way for the president here to consolidate his power and to neutralize that threat and for that threat and that action really to be a warning to others about whether or not they would fall out of line. Theyre talking about how this is a way for the government to clear the decks so they can focus on the policy initiatives that will be announced later this year. Ross. Thanks for that, eunice. The latest from beijing. Still to come, Angela Merkel believes they must work hard from the stable majority. The second half of Worldwide Exchange continues right after this. [ tires screech ] [ male announcer ] 1. 21 gigawatts. Today, thats easy. Ge is revolutionizing power. Supercharging turbines with advanced hardware and innovative software. Using data predictively to help power entire cities. So the turbines of today. Will power us all. Into the future. 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. This is Worldwide Exchange. Im ross westgate. Celebrations underway in berlin as Angela Merkels conservative sweep to an historic victory turns to forming a coalition as we await the final election count. Chinese factory activity hits a sixmonth high. Rising export orders boosting the hsbc pmi. Thats keeping the main land growth on track. The show down could get loud and ugly this week in washington. Eight days for congress and the white house to avoid a possible Government Shutdown. And a terrorist attack on a busy kenyan Shopping Mall leaves at least 68 dead as the hostage crisis spills into a third day amidst reports of gunfire and explosions in nairobi. All right. Very good morning to you. If youve just joined us state side, Angela Merkel has won a victory in the German Federal election. Shes been left facing coalition prices. Shes got 41. 5 of the vote, not enough to get an absolute a majority. Her liberal partners failed to make it into parliament. Jeff and annette have been pulling the all night shift in berlin and join us now. So, look, how long is the process now going to take . What happens next . What happens next, annette . Well, they are starting to talk and they start to talk and they talk and talk and talk until probably november when we see a government. Legally the parliament has 30 days until they have to convene the first time, but that doesnt say as well when we will have a new government. So probably sometime in november. The spd has a convention i think mid november when they want to finally probably say yes to a grand coalition. Yes. So its horse trading from here on in, but lets make the point here. This is not a bad place to start from if you are Angela Merkel. This is an election where she was expected to be returned but whats been achieved is something more remarkable than that. Shes made gains as an incumbent party in power during a very difficult phase for the eurozone economy. This is a ringing endorsement from the german people as to how she has governed the country over the last two terms. She secures this historic third term and there were people who were just ecstatic at the cdu headquarters last night. Youd expect them to be happy, but we caught up with a number of the ministers in the current government and asked them what was it in the campaign that was got across to the people that managed to persuade them to turn out in such numbers and vote . Lets take a listen. I spoke to the environment minister. This is what he had to say. It was all about leadership. It was all about no nonsense politics. Angela merkel has made germany to an anchor of stability. Angela merkel has been honest to the german people about the sovereign depth of germany, the need of reforms and all of this is now paying back. People have accepted that she has presented a good program, a reasonable program and people want her to implement the program over the next couple of days. Do you think the relatively strong showing from the afd suggests that there is a strong body of opinion in germany that does want to see some change in the european treatise . Well, at this moment we all hope the afd will not overcome the 5 threshold and then it will be forgotten over a couple of weeks, but its something we have to wait and to see until tomorrow morning when we know the definite results of this election. It is too close to call at this moment, but i have no doubt that germany will stick to its pro europe politics. We are deeply convinced this is our heritage from the founders of germany, of the german republic, and we will continue to do so. Are you surprised by the relatively poor showing of the liberals, the fdp . Well, the liberals have been in trouble for most of the last four years and we had hoped for a slightly better result. Perhaps they can recover overnight until the last votes are counted. By the way, the liberals have seen good and bad times but they have always recovered over four years period. So i have no doubt the liberal party will remain a factor of german politics also in a medium term future. What was interesting, i thought there were many things interesting in the interview, but the point that he was making about the afd, im not sure this is a party thats barely seven months, eight months old and they managed to poll as strongly as the fdp, which has been around for decades. Germans in general are very unpredictable voters so they are voting a party into well, almost into parliament which hasnt been in existence a year ago. It happened with the pirates as well. I dont remember, an Internet Data Security Party but then they disappeared again almost completely. Now they just have 2 of the votes, i should say. But with the afd actually it might be different because they have a reason to exist in a way because the eurozone crisis most likely here to stay. But we are discussing that and as well more about the Coalition Building with our guest whos ben huteman, the secretary general of the network of European Movement germany. Thank you very much for joining us here. Thank you. First question would perhaps be what would you say the alternative for germany, we were discussing it, antieuro party, is it here to stay or is it disappearing again like a lot of politicians would like to have happen . 5 is 5 . If you take the flip side, its 95 . Would have imagined some years ago that this crisis, at least in cumulative communication, that this would bring a very strong party against it or not. So if its only 5 , i dont want to minimize it, but i think you have to say there was no real opposition. All the major parties have vote the in favor of the yeah, the measures they have taken. So its only kind of resolved which might lead a longer time if the crisis gets stronger. Angela merkel has proven that the crisis together with the spd with the greens has proven to be very, very solid. Having said that, your organization is focused on the ties that bind germany and brussels together at this point. Dont you feel that some of those ties may be a little weakened now that those in the cdu who take a stricter line on austerity and are more reluctant to be dictated to from brussels perhaps feel there should be some push back now from the German Government . There was a pro European Party fdp, the liberals. On this point on austerity, theyre very straight. Now theyre not pulling the commission, you have the social democrats, the greens. Both of them are giving a little bit more softer move. You cant argue that merkel might go to the point afd has to be minimized by stronger measures. I dont think so. I think Angela Merkel has proven many times that she makes compromises and she gives in for the sake of the country so i think she can do much easier with the grand coalition or with the greens. Always discussing less austerity, more money, more transfers but we are rightly bound to our constitution, and a lot of lawyers ive been speaking to lately have said we are already at the limits what we can do. So what are you discussing with brussels there . Well, this is a very hard question because my organization was found 4849 in germany way before the Constitution Court was existing and the fathers of this country, they all thought there must be a European Federation in 49. Its not easy to answer from my side. From the brussels perspective, its quite clear that they are confused that the Constitutional Court has a big impact. This is a loerng process. Communication is crucial. I think this is why afd got a lot of votes because the constitution said we need parliament to get in not just for the sabke of democracy, the want to communicate with more people. The bad thing with the chancellory is its a small building. There are very few people sitting there. There are no other people in the democracy with so few people. They need more communication. For a question on that. One of the problems i at least think we have is that the finance ministry and the germans tend to think in legal terms whereas others or brussels tends or tries at least to think in economic terms. Will there be some Movement Towards one goal . Its a big learning process. I think the europeanization process didnt take place in eastern europe, it takes place each day here in germany. The Budget Committee was never taking care of European Affairs before the crisis. Now you talk to everybody and they know the difference between the councils. So you have more to explain. More people with questions. When you take this, the explosion of the eu topics, if you take this into what afd has to get out, i think its quite a fair reaction of the democracy. Yeah. Well see. I have the feeling that Angela Merkel is more or less going for bilateral deals. What do you think . Well, i mean, increasingly whats been interesting is as trade has slipped away from the eurozone partners, its focused on china and germany and germany and the u. S. A. And that is a more bilateralist approach. Thank you very much for being here. Thank you. Lets send it back to you, ross. As a thanks for that. The latest on the german elections. If youve just joined us state side this morning, this is where we stand with u. S. Futures right now. We are a little bit higher for the s p 500. Two points above fair value. The dow jones up half a percent last week, the s p up. We were up at fresh record highs during the week. Right now two hours into the trading day in europe, the ftse up after being. 2 last week, currently down. 2 . Xetra dax absolutely flat. On bull markets, treasury yields still around 2. 73 is the yield. Gilts yields a little bit higher. And on the currency markets, euro dollar has been up. Still with the 135 handle. 1. 7560 post the fed yesterday. Dollar yen just below 99. Remember, hit 9776 the threeweek low dollar. Now weve had eurozone data today which showed a pick up in the composite pmi 52. 1. Chinas factory work also picked up. The flash manufacturing pmi came in at 51 point poip 2. It Beat Estimates thanks to a jump in export orders. Lets check in on how asian markets have reacted to that. We have the details out of singapore. Thank you for that, ross. New export orders expanded for the first time in six months. They also showed some improvement. On the markets today the shanghai composite finished above. Japans nikkei is out of action for a holiday. After the typhoon hit hard overnight, hong kong is back after slipping. 6 . Theres a catchup to the feds surprise rally after holiday. Just higher. 2 . Australias asx 200 not able to get a lift up. Minors were broadly weaker. As for individual movies, chinese car makers among the top gainers helped by the upbeat Economic Data and also hopes of a strong sales ahead of the golden week holiday in early october. Shares of the warren buffet backed byd surged while front managers have High Expectations about its new hybrid car launch in the Fourth Quarter. Back to you. Sixuan, thanks for that. Germanys Angela Merkel sweeps her third term as chancellor. The focus now turns to the former coalition. The heat is on in washington. Eight days to go before a Government Shutdown. Meanwhile, a siege in a k kenyan Shopping Mall is still yuntd way. 69 people have been killed by somalia militants while 63 are thought to be missing. Nbcs ron allen is in nairobi with the latest. Ron. Reporter clearly here the kenyan government is making a final push to try and end this crisis as soon as possible. Weve seen a lot of military activity. Weve heard a lot of explosions and gunfire over the last couple days and last evening we saw helicopters circling the siege below stating that the government was trying to make a move. Theyre concerned about the fate of the hostages still being held inside. We believe there are as many as ten or so left. The government has been able to freeze some. Accurate counts are very difficult to come by. Were also being told by the military that there are heavily around begun men and women in the mall. Theyre confined in one area of the mall. Theyre still surrounded, protected by the civilians they have. Were still several hundred blocks. Even though were at this distance, we can still feel the atmosphere is much more tense this morning. Weve seen military ambulances going in and out. Troops coming in and out of the situation down the road here at the mall. So, again, every indication that right now the kenyan government is trying to put an end to the situation. Back to you. All right. Thank you for that. Nbcs ron allen in nairobi. Before we go to the break, reminder whats on the agenda today in the states. Weve got september flash manufacturing pmi. Out just before 9 00 a. M. A trio of fed chiefs. The central bank is taking its Bond Buying Program on hold. As for earnings, red hat reports results after the close. Worldwide exchange continues after this break. Announcer youre watching Worldwide Exchange. Taking a very close view of what happens to the german elections in greece. Troika officials have begun talks in athens to review the Greek Economy and assess the need for any bailout funds as well. It comes as the government in athens considers a crackdown after one of its supporters was implicated in last weeks fatal stabbing. Jules is in athens and joins us with the latest. Jules, were looking of course as well as what the forming of a German Coalition may mean for greeces continued bins bailout conditions. Absolutely. You can choose a number of topics. Very little is the view here. Weve also got the troika here, too. To coincide with that, we have the first of a number of strikes and protesters. I want to show you some pictures. This is a funeral procession organized by the municipal police. These are the local police here across greece. Theyre being transferred. Some of them are going to be losing their jobs. Others are going to be taken into the main police force, the Government Police force here. Theyre protesting both those cuts. Its a number of Public Sector job cuts that have been organized. 25,000 people to lose their jobs by the end of this year. A funeral procession. A number of other strikes and protests by the Public Sector organized this week. And, of course, the impact still ongoing of the extreme right Golden Dawn Party movements last week and that associated murder that we have. I want to briefly tell you about the poll readings that weve seen so far. 3 to 4 percentage point drop in support for golden dawn over the last few days. So an immediate backlash as far as the public is concerned about that murder and the events that followed this week. I have to say that these kind of processions very normal for what we see in athens. Ive seen many of these over my time spent in athens. Yes, just the latest this week. We are expecting more this week. This is set to coincide with the troika talks. Very different opinion about the local media about how well these talks are doing there and that information coming from the government versus the International Perception is that yet again these talks set to be very difficult, ross. Now of course thats could incompetent siding with what we got here that very little will change as far as austerity is concerned here in greece. For now there, ross, back to you. Jules, thanks for that. Short break. Still to come. Its a race against the clock in washington as politicians bicker over budget talks and the debt ceiling. Were back here again, folks. More when we come back. Has its ups and downs. Seasonal. Doesnt begin to describe it. My cashflow can literally change with the weather. Anything that gives me some breathing room makes a big difference. The plum card from American Express gives your business flexibility. Get 1. 5 discount for paying early, or up to 60 days to pay without interest, or both each month. Im Nelson Gutierrez and im a member of the smarter money. This is what membership is. This is what membership does. 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. Just eight days for congress to pass a stopgap budget to avoid a potential Government Shutdown on october 1st. Key lawmakers from both parties expect theyll be able to avoid that. The Sticking Point is a bill passed in the house last week that defunds president obamas health care law. The senate is expected to strip out that provision this week. The next fight after the budget bill will be over raising the debt ceiling on friday. President obama called House Speaker john boehner and said he wont negotiate on the issue. In his weekly radio address the president has accused the gop to plunge them back into default and back into recession. The United States of america is not a dead beat nation. We are a compassionate nation. Doing anything to threaten that is the height of irresponsibility. The u. S. Is expected to bump up against its Borrowing Limit in october. Robert zel lick weighed in on the debt ceiling dilemma in an exclusive interview with cnbc. The Republican Leadership in the house has a challenge with some of its own membership. The republican membership faces a primary challenge as well as a general election challenge and the Democratic Leaders have also struggled to be able to whether they even want to support the president on some of these issues. Normally in the u. S. System these things work out. If i were forced to bet, i think thats going to happen. You have greater risk. Coming up, well be in washington for a closer look of the budget showdown. Politicos john allen will join us fairly shortly. Plus, the fd may have failed to make it into parliament, but theyre going to influence german politics for some time. Well also have the latest from berlin. [ man ] monica had big dreams for her wedding. I want peacocks. Peacocks . Walking the grounds. In tuscany. [ man ] her parents didnt expect her dreams to be so ambitious. Italy . Oh, thats not good. [ man ] by exploring their options, they learned that instead of going to italy, they could use a Home Equity Loan to renovate their yard and have a beautiful wedding right here while possibly increasing the value of their home. You and roger could get married in our backyard. Its robert, dad. [ female announcer ] come in to find the right credit options for your needs. Because when people talk, great things happen. Because when people talk, train horn vo wherever our trains go, the economy comes to life. Norfolk southern. One line, infinite possibilities. Lets get a recap of headlines from around the globe. Celebrations underway in berlin as Angela Merkels conservative sweep and historic victory has a focus turning to form a coalition as we await the final election count. Chinese factory activity hits a sixmonth high. Rising export orders boosts hsbcs pmi. That keeps the main growth on track. The showdown over the budget bill could get loud and ugly this week in washington with just eight days for congress and the white house to avoid a possible Government Shutdown. Plus, a terrorist attack on a busy kenyan Shopping Mall. There is gunfire and explosions in nairobi. Announcer youre watching Worldwide Exchange bringing you Business News from around the globe. Very good morning to you. If youve just joined us in america, its the start of another trading week here on cnbc. We saw gains of the s p and the dow. The s p up some 21 points. The dow at. 5. The futures indicating the s p is going to ep up around 2. 5 points. The dow jones currently implied up around 58 points as well. As far as the rest of the global elections are concerned, weve tried to tick a little bit higher. Were flat for the fats si cnbc global 300. Not an enormous reaction. Angela merkel was close to getting an overwhelming majority. Were in for weeks and weeks of coalition discussions. Xetra dax is fairly flat. Its currently off about a quarter of a percent, the cac. Angela merkel is romping to victory. Left facing some top choices. They had about 41. 5 of the vote. Her liberal partners failed to make it in. Jeff and annette are in. Theyre discussing the person permutations. How short were we from Angela Merkel getting the overall majority, which would have been a huge surprise. It was close, wasnt it . Very close. Three seats or so are missing. Yeah. And whats as you pointed out about the liberals, i think some surprised that they didnt make the 5 and perhaps equally some surprised that the afd polled as well as they did for such a young party. But before we get ahead of ourselves and talk about what comes next, maybe its just worth dwelling on the victory for Angela Merkel. A remarkable course of events here. Four more years and an historic third term in the chancellory. Lets just listen to how she celebrated that fact. Translator together we will do everything to make sure those are successful years. For now we will wait for the election result. Its too early to say exactly how we will proceed. We will discuss everything tomorrow in our Party Leadership when we know exact results of the election. To celebrate we can do because we have done super. So of course we have that saying that she was home ward. The little girl now seems to have as much power as helmud cole had in that country. We as well had a look yesterday what of course their main challenger peer steinbrueck said. The social democrats did miss a majority by a lot of seats. Take a listen. Translator the situation is very unclear. Therefore, the spd will not engage in speculation about the next government. The ball is in merkels court. She has to get herself a majority. Its funny. A lot of this was about hands, wasnt it, when it came down to the debate between Angela Merkel and steinbrueck and there she was with her rhombus shape and steinbrueck, well, i cant show you what he did because wed get taken off air, i suspect, but it had something to do with the middle finger. And it was just one of a series of gaffes that seemed to lose him voters, but lets come back to whats the biggest surprise. If the afd, the seven month old party had been aible to break through that 5 ceiling and get a seat. They came close, but they didnt quite make it. But, still, for a party that is so young, a remarkable performance. And the leadership really, well, they were pretty pleased, i think. Lets listened to bernd. Translator we have accomplished a lot. You have accomplished a lot. Its been an enormously brave and motivated campaign full of enthusiasm. Lets talk about where we go next then. Marcus walker is with us from the wall street journal. Youve had to write on this through the night. As you look at the options now for Angela Merkel, what are her choices . Well, shes got two choices. She can go with the social democrats or the greens, and these are going to be very tough negotiations because both of those parties will approach these talks with some trepidation. Merkel has a track record of strangling her junior Coalition Partner. The spd didnt benefit from being in government with her. The free democrats have been destroyed now. Both of those parties will evaluate very carefully what can we get out of another coalition or does it make sense to oppose her. Can it be a game changer that its her last term. Could it make it a little bit nicer for potential Coalition Partner . Well, we dont know whether it is her last term. There was one book that says shell step down in a year. I dont believe a word of it. Its hard to think about political leaders to step down. You remember tony blair stepped down but he was under pressure for years to do so. There is no gordon brown in the cdu. I think shell be around for a long time. Shes young. A mere 59 years. She can go on for some time yet and she clearly has the stamina and she has the appetite for the politics. She likes her job. Let me ask you about the alliances because would the greens be comfortable sitting at the same table as the csu . I think thats the big Cultural Divide. I think there are many in the cdu who would be fine with the greens and they have a lot of personal connections and friendships. I think the csu still has this slightly backward looking sense of a culture war against the tree hugging hippies even though thats not what the greens are. Theyre more likely to be suit wearing lawyers. The csu feels these are the people that will bring about civilization. Theres a lot of suspicion in the other direction, too. Thats a big Cultural Divide that will have to be bridged. On cultural policy there are differences but not insurmountable. From your experience in covering elections before, a, how long will it take us now to get a government and, b, what do you think are the Game Changers or game break or the things which have to be on the table to be negotiated between the parties . I think itll be a small number of weeks. There is a deadline for which i cant i think its in three or four weeks time when, you know, a new chancellor is supposed to be elected and it will be a tough few weeks though. Its going to be a complicated chess game between these three parties, merkel and her tuiasosopo tensional part 234ers. The crucial issues will include taxes because the social democrats and greens will say were only going into your cabinet if you agree to tax the rich more. They talk about how inequality has risen. They want to tax the rich and wealthy and that will be hard for the cdu and csu to digest. Lets just talk for a moment about the losses for the liberals. This is a party thats been a stalwart of the german political scene for a very long time, but their vote just seems to have collapsed. What did they do to irritate the german electorate. Four years ago when they entered government on a high after winning nearly 15 they immediately made some very bad mistakes. One of them was that they were elected on a promise to simplify the tax code. What did they do . They complicated the tax code to give tax breaks to the corporate donors, including the hotel lobby. That infuriated a lot of german voters. They never recovered from that and the sense that their personnel is very weak with a lot of young and rather green, in the wrong sense, leaders. From your take and as well your observation looking at the finance ministry, do you really think that there will be a Material Change towards Foreign Policy but as well the eurozone crisis politics . The people stay the same. We have the same problem with the bundas bank. The finance ministry is very interesting. I get a sense the spd wants it. They think its the most powerful part of the government, the most powerful seat at the table. In the past they wanted to be foreign minister. I think finance minister is the new foreign minister. Germanys money is what gives it clout. In the spd gets finance minister, i dont think the brot outline would change. Germany might be a bit less insistent on austerity. It might be a bit more skeptical on the banking union. They would have to move aside the few nans minister. I have to break this to you, annette. Im not sure if youre aware, but internationally the germans are not known particularly for their sense of humor. Yeah. I know. Or im humor free. Or their jokey approach to life. I know youre an exception to the rule here, but it is interesting that already, ross, and lets go on this trifling issue for the moment, that this election result has spawned some internet humor and some twitter humor. There are some jokes. Ill try these ones out on our audience, and ive just picked them up from twitter, of course. What is the difference between a smart car and the fdp . Well, they have two seats. They have two seats. Smart cars have two seats. The fdp dont. The other one is what is the similar between becks beer and the fdp . Should i answer it . Go on. 4. 9 . Absolutely. Another one at the expense of the liberals. On that one, ross, well send it back to you. Cnbc, the only channel thats finding something to laugh about in the german election this morning. I think Angela Merkels laughing, isnt snee. Probably, but shes back to work. Yes. No rest for Angela Merkel. She looks happy in this dancing photo. Slightly uncomfortably happy i should say. Jeff, annette, thanks for that. Plenty more of course on the german elections online. Meanwhile, some of the other stories were following today. Sources have told cnbc twitter is in talks on a Credit Facility ahead of its ipo. The move is customary for firms. Facebook secured 8 billion in credit two months before going public. Its expected that by taking part in the funding the additional banks will win a spot as an underwriter on twitters ipo. If you arent one of the lucky ones to get your hands on a new iphone 5s, sorry, youll have to wait. Apple sold out of its initial supply in less than two days in the 11 countries where it launched last week. Shipments for retail and Online Stores have been pushed back to october. Apple stock just up marginally. Still to come, the u. S. Budget showdown intensifies as they make a last attempt to defund obama care. With democrats and president obama standing firm, which side will blink first . Well talk about it after the break. 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The question is how do you make sure you have the money you need to enjoy all of these years. Announcer youre watching Worldwide Exchange. And a recap of the headlines today. Germanys Angela Merkel sweeps her third term as chancellor. The focus now turns to forming a coalition. The heats on in washington. Eight days to go for lawmakers to avoid a Government Shutdown. And rising exports boost chinese factory activity to a sixmonth high. Clock is ticking towards a potential u. S. Government shutdown next week as members of congress dmig their heels over what should or shouldnt be included in a stopgap spending bill. Beth coombs has got the latest for us at cnbc hq in the states. Hi, bertha. Good morning, ross. Eight days from now, the obama care exchanges, its the startup for people to buy insurance. It just so happens there are eight days for congress to pass a stopgap budget to avoid a potential Government Shutdown. That all happens on october 1st. There hasnt been a shutdown since 1995 during the clinton administration. Key lawmakers from both parties expect theyll be able to avoid that but the Sticking Point is a bill passed by the house last week that defunds president obamas health care law. The senate is expected to strip out that provision sending it back to the house. It would then be up to House Speaker john boehner to decide whether to approve the senate bill, reject is t, or attach ne provisions such as delaying the implementation of obama care. Con conservatives say theyre going to link it to obama care and may prevent a filibuster. Senator tom coburn, a gop budget hawk, says that strategy just wont work. If the majoritys going to run the minority over with a train, the minority has the ability to stop them. We dont have the ability both according to crs nor politically do we have the ability to put a total stop and defund obama care. It would be nice if we did. Id be in the fight. If and when this matter is settled, the next fight will be over raising the u. S. Debt ceiling. On friday president obama called House Speaker john boehner and repeated he wont negotiate with republicans on the issue. In his weekly radio and internet address, he accused the gop of threatening to plunge the u. S. Into default. The United States of america is not a dead beat nation. We are a compassionate nation. We are the worlds bedrock investment and doing anything to threaten that is the height of irresponsibility. You just kind of wish there were some sort of super mediator who could come in and get these guys to get along, ross. Its amazing that we find ourselves at this point once again. Weve got peace in Northern Ireland after many years. Maybe its not impossible one would think. Well see what happens. Bertha, thanks for that. Joining us with more is jonathan allen, White House Bureau chief of politicpolitico. Jonathan, its the third year in a row that theyve failed to pass a fiscal bill. What happens . The senate will strip out the defunding obama care section. When it goes back to the house, will centrist republicans be able to get enough support to pass a clean bill . Well, let me start with that first assumption there because the conventional wisdom is that the senate will strip out that defunding obama care provision. Im not 100 sure that there are 60 votes for that right now. Not 100 sure there are 60 votes which you would need in the 100 Member Senate to get anything done right now. So thats the first step, and its a big hurdle. Its a much bigger hurdle than i think a lot of people in washington are assign to go it. If, in fact, that goes back to the house youre going to see a fight, i think, where House Speaker John Boehners going to have to decide whether or not to act against the will of the majority of his Republican Caucus and act in conjunction with House Democrats to pass something. Might even require some concessions to those House Democrats. The way youre talking, jonathan, it sounds like youre saying odds on that theres going to be a Government Shutdown. Well, i wouldnt bet money on it right now eight days out. Weve been through these crises and often a fig leaf can be given. Usually the losing side gets a fig leaf. That said, there are a lot of incentives now for a shutdown to occur. You have a Republican Party thats hell bent on getting rid of obama care or at least symbolically showing that they can do that. You have a president whose legacy hinges on obama care so as a result of that there arent a lot of incentives pushing them toward a deal and there are not a lot of middle ground issues on which they can stake that. If we okay. So weve got a lot of hurdles. If we did get a continuing appropriations resolution bill, the government keeps spending, then we have another fight over the debt ceiling. Which is bigger, the debt ceiling or keeping the budget going . As far as International Financial markets go, certainly i think the debt ceiling is a larger issue. If there is a Government Shutdown, short Government Shutdown in particular, i dont think youre going to see a huge effect on the American Economy or on the world economy. Weve had one before. It did not destroy the United States. In fact, the American Economy did very well in the wake of that shutdown. Not because of it. Theres no causal relationship there. Certainly the government could survive, the American Economy could survive a short shutdown. Yeah, but the debt ceiling means they might not be able to pay interest on their bills which would be a big thing. Jonathan adam, White House Bureau chief at politico. Still to come, as euro markets go for four street weeks of gains, well get the latest from chicago for a look ahead to the week. Building animatronics is all about getting things to work together. The timing, the actions, the reactions. Everything has to synch up. My expenses are no different. Receiptmatch on the business gold rewards card synchronizes your business expenses. Just shoot your Business Card receipts and theyre automatically matched up with the charges on your online statement. Im john kaplan, and im a member of a synchronized world. This is what membership is. This is what membership does. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. [ woman ] if you have the nerve to believe your Financial Advisor should be thinking about your retirement at least as much as you do. [ male announcer ] join the nearly 7 million investors who think like you do. Face time and think time make a difference. At edward jones, its how we make sense of investing. If there is some sort of Government Shutdown they think it will be a negligible impact. The focus is on the upcoming earnings season which begins in earnest in the next week or two. Especially going into the last quarter, going into the Holiday Season it will be a really key look at retail and the banking sector. I think those are the two sectors going into the end of the year that probably could lead the s p to even newer highs. Again, going back to washington here, and i dont mean to minimize anything coming out of there, but its the same old song and dance. And the guys down here, the guys trading these markets, they dont really care what goes on there until something happens. So theres eight days left, you know, to discuss the whether we get a shutdown or not. Nothings going to happen, at least here, on making a decision on that until probably day one or two before that comes about. September 30th or so. Because, like i said, its the little boy that cried wolf. People are sick of it. What do we do we know that. What do we do . We have more fed speakers coming out. Do we keep trying climb our way high or not . I think you do. I think you have to be nimble in this marketplace, but id really hone in, again, on retail and also the financials. The financials have held really strong. Look at jpmorgan. For all the negative news that have come out, the big fines, this, that, and the other, the stock has held strong. Goldman sachs had a boost last week because it got added to the dow. These financials are really leading this marketplace. I dont see that backing off at all. All right. Scott, good to see you. Scott, Market Strategist at trading advantage. Thanks for that. Thats it for todays edition of Worldwide Exchange. Coming up, squawk box and the countdown state side. Whatever happens, have a profitable day. Goodbye. Still dont like the stock. From your first move in the. Good morning. Todays top stories. One week to go until the Government Shutdown deadline. Can washington find a solution . In global news, Angela Merkel turns in a victory in germanys weekend elections. Meantime, in asia, chinese manufacturing hits a sixmonth high. On the corporate front, citigroup reportedly had a significant drop. Ragged session on friday. Thank you, ben. Its not beltway ben. Monday, september 23rd, 2013. Squawk box begins right now. 6 good morning, everyone. Welcome to squawk box here on cnbc. Im becky quick along with john kernen. Our guest is miles nadal. Well talk to miles in a minute. The hostage siege at an upscale nairobi mall. Gunfire was heard this morning signaling the situation is still ongoing. At least 68 people were killed when islamist militants stormed the Shopping Center on saturday. Firing on civilians and throwing grenades, the Somali Militant Group al shabab has claimed responsibility saying it was in retaliation for a kenyan intervention in somalia. The focus is expected to be on syria and iran. And a Chinese Court has found the former communist