Concerned. German september ifo, 100. 7. The current condition is 111. 4. The expectation is 104. 2. So not quite as a small jump in ifo. And they said the august Business Climate was revised to 107. 6. So not quite as big a jump as we might have expected. Lets get Immediate Reaction to that. Miles bradshaw is Portfolio Manager at pimco and joins us right now. Miles, a small bones in ifo. Whats your assessment of what that means and of the German Economy . I think it underwrites the other data that suggests the european economy is slowly recovering. Germany is leading the charge. You know, the ifo on has been stronger, the pmis have been stronger. But its a subdued recovery and its a recovery that isnt going to cause the ecb to be tightening policy anytime soon. Whats more important in terms of the ifo is the expectations data in terms of having an assessment about where gdp is going to be going forward. I think that was a bit more than expected. But i think the key theme is its a very weak recovery. Should there be any more action from the ecb . Particularly if market rates have sort of gone up. Should is a difficult question. Whats well, its not a difficult question. Its not for on me to say what the ecb should do. I think our job is to try and predict what they will do and try and position for that asvest investor. The grounds for them doing more i think is very strong. But there seems to be no clear consensus within the ecb to act now. As the economy is improving, i think that reduces the likelihood of any immediate action. I think for them to react, youve either got to have some sort of loss of momentum in the economy or some sort of greater volatility in financial markets. Lastly, weve got a quality review coming next year and there may be more stress in the Banking System on the back of that that the ecb will react to. Miles, deidre in london. I usually sit in the Singapore Office and see all this enthusiasm about the recovery. Do you think those expectations are a little overblown and that investors need to scale back or at least hold on a little bit . I think the enthusiasm is because what are we now, almost six years into the Great Recession and were just barely recovering. So i think thats why theres such enthusiasm. When you look at things like consensus forecast, no one is expecting a radical shift in the European Growth outlook. Its very subdued and its barely trend growth that were looking at, despite having contracted for so many years and having a double dip recession. So i dont think the enthusiasm is there. I think if you look at equities, they are quite cheap, so that might be some enthusiasm about reducing the tail risk to the eurozone economy. It means valuations and risk assets can reduce more substantially. But i dont think thats drawn but a fundamental shift in the joeth outlook. Well come back to you shortly. But youve got time for a cup of coffee. So that is the latest snapshot Business Sentiment. And the Economic Outlook will flavor Coalition Talks as Angela Merkel attempts now to form a new government. Most analysts will favor a grand coalition with the main opposition, the spd. He geoff and annette are still in berlin. They just cant get enough of it. This is an interesting one with the green. Angela merkel clearly won this election. Shes in the driving seat. How tempting might it be to have a Green Coalition and ignore the spd . Well, i think just on the ifo for a moment, ross, i think this is fascinating how this may now play into some o negotiations. What youve got in the greens and the spd are two parties effectively that think the rich should pay more, but also there should be at this point more public spending to help stimulate stronger growth. So on the one hand, you might argue that weaker Economic Indicators plays into their hands a little bit here. But on the other side of that, maybe merkel can say, you know what . Look how fragile things are. We dont want to start tinkering around, raising taxes, putting in place minimum wages that could be costly for companies. So this does help guide the negotiation strategy a little bit. Well, actually, the social democrats are very much, as you pointed out, in favor of more spending. But at the same time, they are, as well, in favor of more spending most likely for the eurozone. So this is actually one of the critical discussion points between Angela Merkels party and the social democrats because, actually, its on that topic they probably dont get on one sheet. So it is we really have to watch out what happens on friday. The social democrats have a convention on friday and they will ask the Party Members whether they want to go into a grand coalition with Angela Merkels party. Because last time, they got terribly rude doing that grand coalition. So yesterday i went to the social Democrats Press conference. The first suggestion no one can say of what happens the night before and i asks Herr Steinbrueck what would be his mark in terms of changes in eurozone crisis politics. Take a listen what he had to say. What change would a grand coalition mean for politics in europe . I cant tell you this now. But you must have an idea. Weve got a lot of ideas. So share them with us. Translator no. Well, the reality is, i dont think theyre going to get a whole lot of traction on an easier time for the eurozone and that was reinforced by michael fukes, who is a Senior Member of the cdu party who said, look, austerity is going to be here to stay in this new term for a cducontrolled government. This is what he said. The soushs of it and the queen are not on our side in this particular gain because they are not as as we are, as cdu is. So as a matter of fact, either we are softening it, which i dont want. And i think Angela Merkel doesnt want because we think austerity is the right way to go. We think its going to be competitive in europe as a whole in each and every country and that is only possible if we do reforms. The problem is the socialists, they dont want to deal with harms as intense as we like it. So i believe its going to be one of the very big themes in the negotiation. Our input into the association is definitely a different one than the spd. So what is interesting, id say, in that run up to Coalition Talks is that we christian democrats are quite vocal about what they want and what they dont want whereas the social democrats, geoff, they dont try to make a mark, probably being afraid of that they might lose their position, huh . Well, the horse trading begins here. We know thats going to probably go on for several weeks. And just on a final thought, we just spoke at the end of squawk box to alexander schuman, the chief economist at the German Chamber of commerce and industry. He said we are seeing a steady recovery in corporate confidence, but dont get carried away here. And i think maybe, ross, thats reflected in that ifo number that weve seen just as you came to us. Back to you. Thanks for that, geoff, annette, well catch you a little bit later. By the way, i want to say its great to have you here. Thank you. Ive been so lonely. I know. You had to have someone come and defend you and sit next to you. Are you going to stay . Im not. Back to singapore in a few weeks. But i have to say, loving the weather. As long as i see sunny skies over the next two weeks in london. What are the chances of that . Very good. I think the autumn youll find is an amazing time to be in london. Perfect. Meanwhile, mario draghi hinted yesterday the central bank could provide another round of key loans to keep Interest Rates from rising. Also, we are ready to use any instrument to see another rto to maintain the short money markets at the level its warranted by our as emt or inflation in the medium term. Still with us, miles bradshaw, Portfolio Manager at pimco. Miles, im not sure if you heard our colleague speaking about how this ifo number may change the landscape and the coalition numbers there. Do you think its going to be affecting whether merkels party, who they partner up with . I dont think so. Unfortunately, i didnt hear the bit from berlin. The economy has been stable in germany. Weve got record low unemployment. I think the record building process is going be about what tradeoff the cdu can give to the spd and how does the spd distinguish itself. Myles, im seeing in your notes that you are worried about some of the periphery countries and greece in particular. You dont think that debt level is sustainable. We had mario draghi saying this week that he thought it was. Whats behind that . You look at the level of market Interest Rates for privately held greek debt. Theres not a lot of them, but theyre on the order of 10 . Greek debt is on the order of 70 gdp. So were skeptical about that because greece is a small economy. Its going to be difficult to get growth up 2. 5, 3 rate. Greece is extremely volatile. For us, the valuations on greek debt are not attractive at this stage. There needs to be a second debt restructuring. Myles, do you see any progress by the greek governments . How do you think thats looking . Do they have what it takes to implement these tough reforms . How do you think its going so far on . Its surprising, the data for this year has been quite good in terms of the fiscal deficit numbers. Greece has hit a primary surplus. So there has been some very Good Progress after a very poor start. The issue, though, is not in terms of this year or next year. Its in terms of the next few years, the next five years or so where unemployment has to come down rapidly in order to create political stability and where, really, the only way you can do that is clearly you need some significant debt restructuring. And it doesnt center to by writedo writedowns. It could be Interest Rates for years. But without that, i think its going to be difficult to get private sector confidence back to sort of sustain a growth rate that can bring the unemployment level down. Myles, thank you very much for that, myles brad show, Portfolio Manager at pimco. Now lets get a check on my home turf. Sixuan, good to see you halfway around the world that time. Over to you. Good to see you, too. I hope youre enjoying london. Hopefully i can pay a visit to london sometime soon. As for the markets, following wall streets selloff within we saw consolidation in asia giving more uncertainty on the feds future tapering. Chinese investors booked profits after the markets recent run up. The shanghai deposity lost 0. 6 today. The hang Seng Hong Kong lost 0. 8 . The nikkei, early losses in early trade. In china, banks and brokerages let the lawsuit ping an bank tumble almost 5 today. Meanwhile, pudong bank lost over 3 today. But the shanghai based bank has gained nearly 20 this month so far. Citic securities took the brunt of the selling down 4 . Apples asian suppliers bucked the down trend thanks to apples best ever sales launch with china adding to the list of launch companies. Apples Major Contract mistaker gained 3. 4 on the hong kong bores and lg display in south korea finished higher by over 2 . On that note, back to ross in london. All right, sixuan, thanks for that. Were down at the session low right now. Advancers and decliners evenly matching each other. But that number is a little disappointing, the headline index a little shy. It was 112. Its ticked higher. Its softer than we expected, and thats taken us down to the session low. The ftse 100 was down 40 points. Pretty flat at the moment as is the xetra dax. The cac 40 and the ftse mib have very slim gains at the moment. Its hard to see, actually, in the context of peripheral and german bunch, which are just yields lower by 1. 9 . How were going to get any more spread compression between italy and spain after the moves that weve had. Tenyear treasury yields, back down again. 2. 68 . We hit 2767 immediately after the fed. Weve been trading after the yield. We are lower. Gilt yields are lower, as well today. 2. 87 , as well. The yield on the tenyear. On the currency markets, dollar yen, 99. We pretty much held the gains on euro slshl dollar. Sterling Still Holding 1. 60. So, really, the context of a free trading day so far. The currency markets havent done an awful lot, pretty much kept to the recent changes. Plenty more to come on todays show. Weve been talking about the german chancellor. Whats coming up . Thats right, ross. German chancellor Angela Merkel gets busy trying to form a new government. Some say negotiations could take weeks. We discuss with Morgan Stanleys chief european economist at 10 30 cet. And could boeings loss be another firm gain as they failed to win south koreas fighter jet contract. Tech experts deskrend on new york for advertising week. Thats at 11 40 cet. And conflicting reports over the siege at kenyas Shopping Mall with militants claiming they still have hostages. Well have the latest from nairobi in around about 30 minutes. And thats not all, ross. Still to come, telephones are rise to the rescue of telecom natalia. We will discuss what it means for your m a outlook. Stay with us. You really love, what would you do . [ woman ] id be a writer. [ man ] id be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] id be an architect. What if i told you someone could pay you and what if that person were you . When you think about it, isnt that what retirement should be, paying ourselves to do what we love . Blackberry has signed a deal to go private. Fairfax stepped down from blackberry last month when it began shopping around. Fairfax still needs to do Due Diligence. And line up financing. Mrb is up 1 on monday. But traded more than 100 million shares, nearly four times its daily average. Would he be asking viewers, what would it take to bring you back to blackberry . It would take a lot, i think. Although we still use them here. Great security. And i still love the keyboard. I would hope that if they could just get the apps sorted out, i think i would be willing to consider it. You still like the keyboard and people that got good reviews. Absolutely. Does it accomplish anything with it . You cant download your apps, all the stuff. If you think of an app and you have an iphone or samsung, you think of something and its likely already there. Its a good point. Is apps the problem . What would it take to get you to take back blackberry . Whether youre business or a consumer, right . Emails email us, worldwide cnbc. Com or tweet us, rosswestgate or cnbcwex or directly to deidre, deecnbc. Now, telco has agreed to under write its 300 million hike. It will give telefonica an initial stake and months of speculation over the future of the debt lading telecom giant. Telefonicas stock is up 277 today. And we were just talking about blackberry. M a is on the rise. A new Quarterly Report on high volume deals has found they managed to outperformance the globe index in the Third Quarter by 3. 7 , despite falling deal volumes. They showed the best results, outperforming the regional index by a record 10. 3 Percentage Points. Not bad returns there. European counterparts, they underperformed by 1. 6 as deal volumes in the region here continue to fall. This marks the first time global acquirerers have outperformed since 2011. Now, ross, im joined in the studio by steve allen. Steve, many thanks for being with us. So this is interesting. The north americas outperforming 10. 3 Percentage Points above. These are companies that have acquired other companies, have gone on to do very well after that. Whats behind it . This is a study looking at deals that are closed. Having done the deal, can you start to expect value . Weve seen over the last few quarters. We constantly see dealmakers do overperform. But the americans have been doing particularly well. I think this is the fourth consecutive quarter doing better and better. Wa does that mean, are americans just better a picking up companies and doing deals . I think if you look at the region, they are different. Americans, a lot more deals are domestic. So some extent, taking in your home country is easier. If you look at the macro picture, the issues of going cross border getting workforces to Work Together is a hard bit. How do you close a deal, get people to Work Together, get the synergies to happen . If you go across border, people work in different ways. The americans side step all of that by staying home a lot. In the world we work in, its definitely getting the people to Work Together. A lot of times you hear a deal falling over. We did the deal and we couldnt get the workforce to gel. Grat strategies. Does that make more of a difference . In the manufacturing business, people would think it doesnt matter, really. Its industries where the assets are the people. And that could be high tack, it could be researched based industries, meat and entertainment has certain issues. Services businesses. Things like manufacturing, where its more like the physical assets, its easier. And the russian asset. We know it has a huge amount of cash on the Balance Sheets at the moment. What is the primary rationale here . People are trying to buy future growth. Are they spinning off noncore businesses . Whats the key issue, do you think, for m a . Volumes are down. So some companies are still doing it. And deals are happening. It is about longterm growth. It is about saying, how do we expand . How do we buy in the next capability . Where is the business going . Clearly, the dominant theme frankly is caution. Were seeing outside north america, europe in particular, a steady decline in deals. And interestingly, despite the global rise, many fewer big deals. So even despite the cautious optimism, companies are still being cautious. So i think the dominant word, i would say, is hopefully return to normality, but caution. And whats interesting, as you said, the report said they tended to stay in their sectors. I cover china mostly and singapore. And you see a lot of Chinese Companies trying to make deals in north america, sometimes unsuccessfully. Do you think regulations are increasing . How does that compare historically . China in is a fascinating case. Theres a lot of Media Coverage about companies trying to do deals, but, in fact, many chinese deals are domestic. So this the ones that get the Media Attention are the big ones that sound exciting. Most Chinese Companies settle for consolidation. Its easier to some extent to stay at home, to do what you know. But yes, the media would always pick on that story. So you see a lot of chinese deals. Yes. Thank you so much, steve. Steve allen from towers watson. Still to come, the celebrations are over and the hard work begins. Can chance la Angela Merkel form a successful new government or will the success come with a sting in the tail . We will cross to berlin right after the break. Were back in two. And here are your headlines from around the globe. German ifo rises. And the markets are buzzing over blackberry which lands a bid to go private for its biggest investor for nearly 5 billion. The u. S. Senate kicks off its debate over a budget deal. Time is running out to avoid a potential Government Shutdown. Explosions and gunfire reported near the nairobi Shopping Mall where 62 people were killed in a terrorist attack. But kenyan troops say they do have control of the site. And we will be talking more about nairobi later in the show. European markets, meanwhile, pretty flat. The ftse 100 off 0. 2 for the xetra dax. As far as bond markets are concerned . A little negative today. We have the tenyear bund after that ifo reading was a little lower than expected. The yield, just under 1. 9. The tenyear treasury still continuing downwards after yesterdays nontaper. Were at 2. 69. You have the tenyear guilt and the tenyear italian bonds, as well. Yeah. We saw the dollar dip down. But were still above 1. 35. We hit 1. 3560, 7 1 2 month highs. 99, just cant above borl 100 for dollar yen. We had a bet in asia when it would go above 100 and now it just keeps waving in between. So chancellor merkels continuing attempts to form a new government today. The tie up with the green party is still a possibility. Plenty of favoring in this grand coalition idea. Geoff and annette are still there. How long do we think these negotiations are going to run on for . Well, this goes on for some time, potentially. I think there is a there is a sort of 30day period where the discussions are meant to take place and then were meant to get closer to a coalition government. But my understanding is and help me if im wrong here is that actually that 30 days can be extended a little bit. So theres no hard and fast rule, it seems. But you were saying you think maybe november. We might not have a solid coalition for the next four years until november. Yeah. The last time around, it took, i think, six weeks. Then well end up in november, geoff, id say. Yeah. Its going be fascinating here, ross. There are lots of issues on the table that parties will have to trade on to try and get closer to the end game here. And thats where the interest is for our audience, i think, ross. What happens to the minimum wage idea . What happens to tax hikes . What happens to ottobahn charges . A whole slew of different fiscally sensitive ideas that will impact the direction of travel for the German Economy and the future daytoday for german people. Yeah, thats very much it. And as theyre really at the early stages here in terms of coalition forming. Yesterday i attended a press conference from the christian democrats which is, of course, Angela Merkels party. And i asked the deputy chairman how they like the idea, as well, of the coalition of the green. Take a listen. Im not optimistic, but we will have talks with the green party. And then you have to analyze. Is it possible for four years or is it not possible . And i am skeptical that its possible, but talks are important. So, you see, theres a little bit of skepticism around here. But we are now joined by garrett schict who is the spokesperson greens. Thank you very much for coming to us despite the rain. Its awful weather here in berlin. Speaking about awful weather, awful situations, youre not in a good situation, as well, after the election. What kind of concessions would you make to go into a coalition with the cdu . I dont see any base for a coalition between the christian democrats and the green party. One thing is that we lost and we have now to analyze why we lost and this is our job for the future and to build up the green party and the opposition. And secondly, if you look at the party program, for christian democrats and the green party, its very difficult to imagine a Coalition Agreement that fits for both parties. So looking at the outcome of this election, i think ive negative seen such a destruction of parties. The levels are totally off. And you have to say its quite a bit of losses, as well. Why was that . Was it external or internal . It was one of the toughest campaigns we had to face as the green party in the last years. There were different factors. People were sometimes frustrated of what they saw at a regional level, where we had to make difficult decisions. And then there were various factors at the federal level, too. One factor is certainly that we were honest. We told people the truth about the fate of public finance. And we said, if you want to have new projects, we need to have the money for that. And it was very difficult in a situation where everybody felt, oh, germany is fine. Why changing . People might say it would seem remarkable to have a groan cdu csu coalition. But its not unheard of for the parties to Work Together in regions or in cities. So there is some basis for the two sides to stick together. Theres an important difference between a local level and the federal level. The issue that comes at the local level and the federal level are at a city structure. At the federal level, which we talk about, Interest Groups that stand wind the cdu and have helped the cdu gain these elections. These are the Interest Groups we fight against because we feel theyre not very good for the public in general. What do you think four more years of Angela Merkel and a coalition means in germany . I fear the Structural Reforms and the economy, but nothing on that was done, not even and i fear that could continue because merkel is very cautious. She never takes important steps that might risk her power. So i guess there could be four more lost years. For hour lost years. Thank you so much for joining us. Well, annette, were hearing it both from the green party and the cdu. No green conservative alliance. But you know german politics. Do you think there might be a sliver of an opportunity here not prepared for the friendly negotiations . I dont think so. The greens have made it pretty clear already in past years that they dont want to go together with Angela Merkel. Its one of the big reasons, as well. Not only looking at the topics, as well, that the party doesnt want to be destroyed in a coalition of Angela Merkels party. The big thing is, why dont the social democrats want to do it . Well wrap up for the time being, ross, but well see you briefly before the end of the show. Back to you in london. Thanks for that, geoff and annette. The other big focus has been the German Ifo Business survey. Came in softer than specd. We picked up on the headline number. 107. 7. It was 108. 2. It fell from august to september. Joining us for more, elgin. Slightly disappointing that ifo number, elga. But what role does the state of the economy play as we constitute a new german government. What role did it play in the election . Well, i think it played a very Important Role because of the Strong Performance in the labor market and i think that is why the sentiment in the election was very much, you know, the last four years for most people in germany were good ones. So people voted for a continuation of the previous government or at least this cdu, a cdu led government. In your notes, we were just talking there with geoff about whether there would be any potential for green cdu coalition, which you think is unlikely, as well. One of the big issues facing german the german Business Economy is actually the cost of green policies. Their energy costs for german business are like 60 , 75 more than in the United States. Theyre at a severe competitive disadvantage. The bdi has come out and said we need a proper Energy Policy to get our costs down. Is that going to happen . Yeah, i do think that Energy Policy is a high priority for the parties. Not just because of the competitiveness angle, but more importantly because of the cost for Renewable Energy at the moment are very much brought by individual electricity customers at the retail level and that is sort of increasing the resist ance among the broader public. Geoff wants to ask you a question. Geoff. What im interested in here is whether you think this was just a golden window of opportunity for the cdu cfu to get back into power. Because we do have this moment for the German Economy where, okay, the economic numbers are not fantastic, but theyre not so bad. Low Interest Rates. Low unemployment. Generally recovering economy. Is it going to go wrong in the Fourth Quarter or the First Quarter of 2014 . I dont expect it to go wrong in the near term. But what we are seeing and i think this mornings eye for Business Climate underlines it, that the recovery, even in germany, is not particularly strong. After a very sort of nice spurt in growth in the Second Quarter, i would expect the Third Quarter to be a lot weaker in terms of growth. And if you look at some of the Industrial Production data, at this stage, we cannot even rule out a negative print on headline gdp, both in germany and in france. And with the two largest economy necessary europe decelerating, i think this is quite a soft back drop from a cyclical point of view. Medium term, we expect this recovery to continue and to gain some momentum. And germany will outperform the rest of the euro area in terms of growth by quite a margin. But on the whole, this is still a very sluggish growth environment for europe. So may i jump in here, as well. If we are heading into a grand coalition, the likelihood of more spending, i mean state spending is, as well, higher. Would that be a positive for germany . It depends on what you spend the money on. I think what germany urgently needs to spend money on is its infrastructure, net Infrastructure Investment, so Infrastructure Investment by the Public Sector after the appreciation has been negative for ten years. And i think when you drive around germany, when you travel, you actually start to see some of the cracks showing in the german infrastructure and the underinvestment in the german capital stocks, both on the Public Sector infrastructure side but also the private sector is one of the real issues that we need to tackle because its essential for the rebalancing of the euro area as well as the German Economy. Okay. Let me ask you, weve been focusing a lot on the domestic issues and policies. But with the Coalition Talks, the coalition building, do you think that this is going to change or affect germanys stance towards the euro and, you know, potential bailout for greece and help for some of the other peripheries . I would not expect a change in germanys stands on the euro crisis. And in actual fact, we have had a grand coalition on these issues for quite a while. Because all of the bailout packages were approved by the social democrats. All of the bailout packages and wilder european decisions had to be approved by the upper house of parliament. Where the social democrats have had a majority for a while. So de facto, we had a grand coalition on these issues. And, therefore, i wouldnt expect a major shift. There might be nuances here or there. My main worry in the near term is that some of these key decision items that are on the agenda right now might be dragged into the Coalition Talks, which i would expect to be drawn out and so difficult. Thanks for that, elga. Thanks to geoff and annette. Theyll be back, as well. Airbus has been flying high after confirming a large order with lufthansa for 25 jets. Stephane is looking ahead to this. We heard Michael Oleary from ryan air last week when he was trying to talk about this, you know, 10 trip to the states he want to try to get in in the future. He complained he cant get the airplanes. Yeah. Well, thats a long way away. For the time being, well look at the forecast for the next year. Probably this is what were expecting. Airbus is going to increase to raise guidance for the next 20 years. At the time last year, airbus paid a 27,350 aircraft would be necessary over the next 20 years. And more than 28,000 to include the cargo aircraft. Thats the market value of 4 trillion, or 4,000 billion. Airbus believes the global fleet of aircraft across the world will more than double over the next 20 years to 32,550 over the next year. Given the strong start of the year, we have reasons to believe its going to raise its forecast for the next two decades. Now, theres a question mark about the even if airbus and boeing have been successful with their small aircraft, which are the 23 airbus and the boeing, we know the demand for the air jet wasnt very strong. We know airbus is struggling to get the new aircraft for the 2380. Also regarding the regions, ross, last year airbus say that china, india and the middle east would drive the growth, unsurprisingly, and europe and United States being the weakest of the market in terms of the forecast. And its much better now that the Holding Companys name is airbus. It makes things simpler for our simple journalists. Well, you were okay with it, but i was are you calling me a simple journalist . No, no, youre okay. But i had a problem. Thats the reason why they made it, actually, changed the name. Makes sense. Stephane, thanks for that. We will discuss that forecast at 12 30 cet, 6 30 eastern. Developments in kenya, islamist fighters claim they are Still Holding hostages inside a Shopping Mall in nairobi. This as the Kenyan Interior Ministry said it had to be in control of the building and freed those being held. Earlier, a loud explosion was heard at the mall, which was attacked by the terrorist group al shabaab. Lets get more from nairobi. Whats going on now . We had heard earlier that the scene was clear and now an explosion. Thats right. And theres a great deal of confusion about what precisely is going on inside this vast Shopping Mall which was taken over by a group of perhaps a dozen or so al shabaab aligned militants early on saturday. Earlier, the kenyan government had been saying that its military and Police Forces were in control of the complex. And in the last few moments, a spokesman said they were combing parts of the facility in order to in order to ensure that no one was there and that everyone is safe. But recently, we heard explosions and perhaps an exchange of gunfire, as well, which might suggest things are perhaps more precarious. And now Kenyan Television is reporting that perhaps six militants have now been killed. Six more militants killed by the Kenyan Security forces. Where are awaiting official word from the kenyan government here. Thanks for that. Now, lets get straight to nick anthony. Now, nick, you work with Companies Operating in africa by forming joint ventures with them. How does this hurt confidence and hurt investment going into the region . Its exactly what al shabaab want to do. They want to destroy the confidence. They want the west out. They want to destroy the economics of the country. And they do this by attacking western assets. And it shouldnt hurt confidence because there are things you can do about it. If we do allow it to do so, they will win. This is a high end mall. How can that not hurt confidence . You have a lot of Multi NationalCompanies Involved there. When you talk to companies, would on this not set back their investment plans . We would advise not. An attack like this is extremely difficult to counter or so realize its happening. It can happen anywhere in the world. The fact that its happening in kenya should not really put off clients. You were helping build up forces in your company 20 years ago. What chavengd . Why has that now failed . Essentially, al shabaab were put on the back foot by the African Union forces through 2011. 2012. They lost an issue in 2011. That has changed they have changed there are modus operandi. They have gone from trying to hold ground and run a country to a compare of terror, vulnerable assets in surrounding countries. All of the intelligence suggests that they are moving out of somalia into kenya as we speak. And they are reinforcing. What would the policy now be for the kenyan government . Its very difficult for me to advice the kenyan government. They are taking advice from western paris. They will continue to take advice from western powers and rightly so. Its an extremely difficult thing to counter. But i think the advice and the support that the western government is providing them will continue to help with the problem. It needs to be an intelligence led operation. Both at the government level and in corporates and act on that intelligence. Okay. Nick, thanks so much indeed for joining us. As we take a short break, futures today are indicating, well, s p is lower than the fair value. Dow jones called up 7. Well get the latest from tokyo, as well, right after this. Welcome back. Lixil is in talk toes buy germ nieces grohe for 4. 8 billion. Hi there. Having set up a special company to finance the deal, its looking for shares by ntgb capital. The Japanese Company is negotiating with minor shareholders to acquire 100 stake. Theyre looking into the option of listing grohe shares if the lixil deal collapses. Lixil has been stepping up overseas acquisitions rately. Lixil president has been saying lixil plans to buy more overseas companies and he hopes overseas sales to 10 billion in the near future. Back to you. Okay. Fushiko, thanks for that. Still to come, well leave you with a heat map to see how European Equity res trading right now. A little bit even stevens, really, advancers versus decl e decliners at the moment. This is after the ifo number came in slightly softer than expected. Just to remind you, a small rise in the ifo, 107. 7. It was expected 108. 2. Current conditions down 111. 4. It was from 112, expected to pick up a little bit. And that means futures this morning for the u. S. Also really a little bit mixed. Still to come, time is running out for u. S. Congress. Now just a week left too void a Government Shutdown. We will get into the budget dead lock as the debate begins. Stay with us. [ agent smith ] ive Found Software that intrigues me. It appears its an agent of good. [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ] you really love, what would you do . [ woman ] id be a writer. [ man ] id be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] id be an architect. What if i told you someone could pay you and what if that person were you . When you think about it, isnt that what retirement should be, paying ourselves to do what we love . German Business Sentiment rises modestly. Improving trend has a affiaffir economies are on a solid footing. And blackberry lands its private investor for nearly 5 billion. The u. S. Senate kicks off its debate over a budget deal. Time is running out to avoid a potential shutdown next week. And explosions and gunfire are reported near the nairobi Shopping Mall where 62 people were killed in a terrorist attack. But kenyan troops say they have control of the is site. Youre watching Worldwide Exchange, bringing you Business News from around the globe. Okay. Warm welcome to you if youve just joined us stateside. Good morning. Welcome to the start of your Global Trading day. I have the table accompaniment of deidre today who is going to be with us for the next week or so here in london. Py job is to try and make her stay. As far as futures are concerned for today in the United States, the dow 50 points. The s p down around 8 points. This is where we stand at the moment. The s p is just a point below fair value. The Dow Jones Industrial average just above fair value. The nasdaq about 4 points above fair value. Not really any particular indication at this moment that european equities was softer. We have picked up in that particular point. The ftse yesterday was down 0. 6 . 40 points less. Currently up 0. 2 as is the xetra dax. We hit the session after that ifo number about an hour or so ago. The cac 40 is up 0. 4 . Ftse mib up 0. 3 , as well. 2 other big focus has been on the German Ifo Survey for september, which came in slightly softer than expected. But that is the latest bit of Economic News for the back drop, of course, to coalition discussions in berlin. And, geoff and annette are there, as well. So, geoff, look, whats going to be the clearly, Angela Merkel is in the box seat here. She won the election. How much can she dictate terms to the other parties . Well, this is the point, isnt it, ross . You know, theres mr. Obama. Sat there in the white house and hes thinking, i need to get on the hot line to talk to these europeans. When i pick up the phone and dial, who do i speak to in europe . Clearly, as a result of the election outcome, it is still Angela Merkel who answers that phone at the other end. But i guess the question is when she picks it up and speaks to mr. Obama, from here on in, is she going to be pedalling the same policy line on International Matters on the eurozone and on u. S. European relations as we had in the last term in government . Well, actually, geoff, there is no indication that anything will change. Yesterday at that press conference, she was holding right after the election, she was really saying that nothing will change. She will stick to the policies. She has implemented during the last four years, as well. When it comes to eurozone politics, when it comes to, as well, the decision to do war or not to do war. Germans are very reluctant to go into war. So there wont be any material change. As well, if shes going together in the coalition with the social democrats, they are even less in favor of when we talk about foreign politics, into any kind of war zone and when it comes to the eurozone matters. Their might be actually some changes, right . Well, well wait and watch on that. Its continuity and stability. There are shades of gray on the eurozone and on some domestic policies, ross. But hey, you know what . When you make that call from the white house, it will still be angela on the other end of the line. Back to you. Youre absolute lly right. Geoff, your duties are done. Thank you very much. You can come back and brief me on other parts of berlin that we didnt get to cover on air, if thats all right. I had a delicious curried bratwurst if thats what youre talking about. It could be. And annette, youll be back on closing bell for now. Thank you very much. And if you want to see it, its on the twitter feed. We put the picture out there, didnt we . Yeah, we did. Very berlin. Yeah. Back to you. And thats cnbcworld is the twitter handle. As far as bond markets are concerned today, tenyear bund yields, 1. 88 is where we stand. We had a spanish tbill auction today. Yields on the ninemonth tbill are lower. Treasury yields are lower today, 2. 68 . Getting back down to the level we were just after the fed decision last week. As far as currency markets are concerned, euro dollar took a bit of a dip. Were now back below 1. 35 after being at 1. 3560 last week. Dollar yen still on this 99 mark. Lets recap that asian session. Sixuan is in singapore with us for more on that. Sixuan. Thank you for that, ross. Asian markets followed the u. S. Into reverse, given more uncertainty on the feds future tapering. With no fresh catalyst, chinas investors after the recent run ups. Ahead of the golden week holiday starting october the 1st. Meanwhile, japan, south korea and australia all ended marginally in the red. In china, banks and brokerages led the lawsuits. Ping an bank tumbled almost 5 . Pudong bank lost over 3 today. But the bank has gained about 20 pergs this month so far on hopes for a preferred shares program. Meanwhile, citic securities lost 4 today. Over in japan, under pressure after Deutsche Bank downgrades on some sector leaders. Sites and worries over the domestic consumption tax in tokyo. Tatemono lost 4 today. Some suppliers outperformed thanks to apples best ever sales launch with 9 million new phones sold in the first week. Apples Major Contractmaker fox conn listed on the hong kong bores gaining 3. 4 in lg displays. In south korea, adding 2. 2 . Back to you. All right. Sixuan, thanks for that. And i mentioned if youve just joined us, we have deidre with us. Im on loan, right . Youre on loan. And im still trying to figure out the time change. Usually im in asia or north america and now europe. Its the center of the global time zone. Im liking that, yeah. My job is to try and get you persuaded to stay sfp. What can i do in london to persuade me to stay, then . Lots of things. Well talk about that. Weve got airbus numbers out. Not numbers, but forecasts. Theyre increasing their 20year jet forecast by 20. 6 to 23. 7 . Thats because dee is going to make a time more flights in that time period. The Aviation Industry needs 4. 4 trillion in jet liners and freighters over the next 20 years. And theyre forecast for a wide body to an engine jet will increase by 4. 3 . The thing about this is all asian demand. Thats what i was going to say. So thats all me, right . It is all you. Why Michael Oleary cant get his hands on a jet to bring if i get my own private jet, ill come back every week. Thats fine with me. On a programming photo, airbuss ceo will appear on cnbc later to discuss that forecast. Catch his interview at 12 30 cet. Thats 6 30 eastern. Well, Senate Majority leader harry reid has scheduled a procedural vote on the bill to fund the u. S. Government for wednesday. If it clears that hurdle, the measure goes to debate. The senate could take until sunday evening to pass the bill, giving the house just 24 hours to respond to avoid a Government Shutdown. Meanwhile, u. S. Equities fell monday, following a flurry of comments from fed officials in last weeks decision not to taper their bond buying program. The move hurt the credibility with communications. He says he did vote to taper the feds asset purchases by 10 billion a month arguing the program hasnt boosted job creation. Meanwhile, bill dudley defends the decision saying Monetary Policy is still needed. He sites the tighter Market Conditions and is a tepid jobs recovery. And you can hear more from the new york fed chief in that exclusive interview with Steve Liesman at 6 00 a. M. Eastern. Where does that leave us . Markets ahead of fixed income. Interesting note, treasury yields just heading lower again today. And were as clear as mud, really, arent we on the fed. Its clear they have pulled back from the brink because i dont think its clear at all, is it . Its clear that they dont have enough clarity, in a sense. So we will wait, i will expect, not really until january at the earliest which will be bernankes last meeting that we will get any tapering. But really, i think the underlying message here, they arent doing the things that they dont want to be seen to be stupid to have the debt ceiling crisis go wonky and all of a sudden they have to reverse you said they didnt do it because of the economy and now youre saying they didnt do it read through the lines. They dont have confidence in the politics. They havent got sufficient confidence in the economics, either. But do they risk an each bigger we saw the market turmoil. Do they not risk more of a selloff and more volatility if they do ta . Can the u. S. Economy handle the tenyear yields at 3 . Is that such a huge deal . It isnt a huge deal. Yeah, look, its a huge shocker for a lot of us. But theyre now trying to justify it. Were seeing a lot of different fed heads coming out. But what dudley said yesterday is more of a yellen approach. There isnt a catalyst there. When are they going to do it . I think january, possible march, but i dont think they they did it next month, i think that would look really, really stupid. But if there was a government resolution, they might say well, if that was one of the reasons, then they could have faith in government, why not . Yeah. I think that would be a little bit obvious. How about a bounce in the jobs number . All these are possible. Weve seen obviously the claims numbers are pretty good. All things are possible . All things are possible and eats all data dependent. But the reality is i think basically First Quarter. How does that nondecision affect markets . For the market, were trying to work ott whether bond markets are having a bit of a reallily here. Certainly peripheral market have had a very bad time of it. We want to understand whats going to happen for places like portugal. And the noises out of spain and even greece are reasonably positive. Can you get any more compression between bundes and spreads . You will. I expect if mr. Draghi at some point comes up with another lto. But that would be a slightly different one. I think it will be one with a rachet on it. If rates were to go lover, then people will benefit. With the rates much lower now, i think they will have some form of guarantee for banks that they can get in and out a little bit more flexibly. About treasuries, what do you think is going to happen to treasury yields . I heard this last week saying now going into the treasury market is a bit like going into a motorway. Thats one of the reasons the fed has moved from stiffer liquidity measures. But they are aware that for the primary dealers, it is a very difficult things because obviously a lot of flatteners have gone on and the market has been side swiped and obviously again last week. Thanks. Meanwhile, a recap of the headlines today. German Business Sentiment fails to meet expectations, despite a slight rise for september. The battle to keep the u. S. Government ramps up as the Senate Debates a fresh budget bill. And mixed reports out of kenya as terrorists claim they still have hostages at the nairobi Shopping Mall. Syria tops the agenda as the u. N. General Assembly Kicks off in new york. But can the Security Council really find consensus on a chemical weapons deal . Were going to preview the talk right after the break. Stay with us. Faulks between russia and syria arent going smoothly. This is according to a senior russian diplomate speaking ahead of the u. N. General assembly in new york. President obama is expected to use his address to warn Bashir Al Assad that he has a limited amount of time to rid syria of chemical weapons. Joining us now is elizabeth fira. Elizabeth, thanks very much, indeed, for joining us. What trajectory do you think these talks are now going to take . Well, the talks are taking place in the Security Council. And what we hope is that theres a strong message not only that assad will get rid of his chemical weapons by june 2014 because theres a strong enforcement mechanism and that seems to be the sticking point. Yeah. And so if we have that as a sticking point, if we dont resolve it, what happens . Well, then theres a question of whether or not there will be military intervention, if there are other means that can be used to persuade assad to go along with the deal thats been struck, try to get rid of the chemical weapons. Elizabeth, im just wondering, if you dont have this, if assad is not facing the threat of force, how can he really be expected, can you trust him to let the u. N. In and give up they will these chemical weapons . How reeltistic is this scenario if the threat of force is taken out of the equation . If the threat of force is taken out of the equation, youll see some delays, trying to cover up the fact that the weapons arent being destroyed. But it is in assads interest to get rid of the weapons, to make sure there isnt a western military intervention. Now, elizabeth, what do you think is the threat of this conflict spreading beyond syria . Do you think thats a huge is that the huge risk at this point . Definitely. I mean, if you look at the humanitarian situation, there are 2 million refugees that have fled in the past year to neighboring countries. This is a massive displacement. And coming into countries where there are fragile political situations, a country like lebanon is looking at having a registered 1 million refugees by the end of the year. How much more can a country like lebanon be expected to do in terms of receiving refugees . Yeah. And how much pressure is that putting on not only lebanon, but jordan, turkey, iraq, egypt. These are the countries being impacted by this. Its putting a lot of pressure on these countries both to get adequate assistance to meet the needs of the refugees to shore up their struggling economy. And most of all its to put an end to this occasional conflict thats displacing so much people the. What needs to be done to help them . What international feeds to be taken to help with that situation . Weve seen the impact, of course, in iraq. Of course. I mean, you know, most fundamentally, these countries need International Assistance to mobilize funds to support them. They need funds in terms of coming up with the right policies so their education and Health Systems arent totally overwhelmed. Theres a particular need to get access into syria in terms of delivery of humanitarian assistance. There are four or five Million People who have been displaced within the boarders of syria where its much more difficult to get International Assistance and the assad regime has made it more difficult. Checkpoints and limits on importing medical goods and so forth. You know, those are the kinds of obstacles that could be dealt with quickly by the assad regime if it wanted to. Elizabeth, thanks for that. Elizabeth ferris from Brookings Institute from washington, d. C. Ross, you know im canadian, right . Blackberry was at one point the most expensive and valued canadian company. It has come a long way from there. Well be talking about it. Will a deal to take the Company Private save the smartphonemaker . Well discuss that straight after this. 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. [ agent smith ] ive Found Software that intrigues me. It appears its an agent of good. [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ] you really love, what would you do . [ woman ] id be a writer. [ man ] id be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] id be an architect. What if i told you someone could pay you and what if that person were you . When you think about it, isnt that what retirement should be, paying ourselves to do what we love . Welcome back. We are going to be talking blackberry. It has agreed to a 4. 7 billion deal with fairfax financial, its largest shareholder which will take the struggling smartphone manufacturer private. Fairfax still needs to do Due Diligence and line up financing to fund its 9 billion share buyout. Last week, blackberry posted a big Second Quarter loss and flash its wore force. Blackberry shares rose 1 on monday, but traded nearly 100 million shares, nearly four times its daily average. James geller joins us from new york. Thanks for being with us, ceo of rapid ratings. This has been a long, painful, slow death for blackberry. What do you think about this potential deal . Well, i agree. I think it has been a very, very difficult time for them. Theyve been in a bit of a spiral. This is sort of saving grace news, but theres still a lot to be done. Theres execution risk, financing risk as you just pointed out. Even if all of that gets done, it doesnt change the actual business prospects. They have a lot to do if theyre going to continue to be a viable concern because the business pressures on them have been significant. James within were you surprised to see this deal . We cover a lot of the Chinese Companies like lenovo and theres at some point some chatter that they may be interested in blackberry. And fairfax seemed to come out of nowhere. Fairfax is the largest individual shareholder with about 10 of blackberry shares. So thief got a defensive position that they need to take, as well. And i would look at this as putting a line in the sand that is telling the markets that at 9, there is a buyer going well through Due Diligence. But, you know, we saw share price yesterday close just under that 9 mark which suggests that the market doesnt actually believe that there is going to be a competing bid that will be higher than that 9. But in general, i would think other than fairfaxs very committed shareholder and certainly a big Canadian Private Equity or insurance in private equity player, i think it would be more like loy a strategic player that will come in if anyone else that does want these assets. They talked about how they might concentrate on the Enterprise Market which is a space they used to own, james. But i wonder, if the market is the future going to be separated between consumer and enterprise or are they merging, anyway . I think thats a great point. Historically, when blackberry had its real beach head, if you will, in the enterprise space, there was much more of a division between enterprise and consumer. But now theres this whole trend called bring your own device which is taking in consumers demand for devices like iphones and android mukts and forcing on or putting pressure on their corporations to let them use those types of products. So thats merging enterprise and consumer. So as blackberry says, its going to drop the consumer business and essentially retreat to the enterprise. I dont think theyve got that safety ground that they may once have had. And i think theyre going to find it extremely hard to retrench into the Enterprise Business and have that be a successful strategy. I know its faithly flawed, actually. James, thanks so much for joining us this morning. Sure. Thank you. Im wondering if you understand how the fins feel about nokia. Do canadians feel the same way about blackberry . I think it must. Blackberry is based in waterloo ontario. But its funny, i was telling you during the break, on instagram and on facebook, a lot of my friends make a big occasion of putting their blackberrys to rest. These finally give it up and theres a lot of canadians that hold up because its a nashistic patriotic thing. They have a ceremony, they post a picture of it under the chairs. Are we going to need counseling in canada for blackberry, you know its possible. Youre okay, though . Im okay. Well take a short break. As we do that, futures right now indicate seeing a mildly flat open no, a flat open for wall street. More to come in the next part of Worldwide Exchange after this. This is Worldwide Exchange. The u. S. Senate kicks off its debate over a budget bill as time is running out to avoid a potential Government Shutdown next week. German Business Sentiment rices, but falls short of expectations. The affirming trend has affirmed europe is on solid footing. And airbuss Aviation Industry has confirmed there will be a need for 30,000 jets as the planemaker hikes its forecasts. Explosions and gunfire reported near the nairobi Shopping Mall in a conflicting report that hostages are, in fact, still inside. U. S. Futures right now indicate ago fairly flat start for u. S. Markets a little later. Remember, the dow down 50 points. The s p currently down eight. This is where we stand on fair value. The s p just, what, 2. 5 points below. The nasdaq just about 2 points above it. European equity markets, though, a little bit from not much by much. The ftse 100 was down 40 points. Currently just up 8 points. We have the Ifo InstituteSentiment Survey out earlier. And it picked up a little bit, but not by as much as expected. There is a little bit of disappointment surrounding that. The cac 40 up 0. 4 and the ftse mib, as well. Deidre is with us or dee is with me for the next few days and hopefully next week a little bit, as well. Dee. Thats right. And youre probably wondering how do you make money in these markets . Arent we all. Here is what some of the experts have been telling us throughout the morning. I would tell you the cartel looks to me like its getting its act together. You take potash, the company, as an example, 40 u. S. Before the cartel broke up and all of a sudden it went to 2d. Its not a bad opportunity if you can look out three years, you can look out five years. If, as i do believe that Interest Rate is coming down and i think the whole repricing of the curve in the u. S. , it will drive it. And on top of this, i think there is, again, incredible signs that china is engaging in credit growth. This credit growth will make commodities overall more as we get into the final period of this year. You buy in october and you sell late january, early february because thats your seasonal cash flow effect coming into markets. So, yes, there might be some choppiness in october. That often happened in the past and im not saying that wont. What im saying is once you get through to that corporate earnings season, especially within europe, that choppiness will start to dissipate. The seasonal factors will take over and theres an opportunity. Now, eric green, Small Cap Fund manager and director of research is with us. Eric, volatility, really, since the fed last week. We just talked about how that is you know, what youre doing with that information at the moment. Well, were if anything. Yeah. Not really anything with the volatility. Was expected that we would have we generally have volatility around this time of year. But there was a surprise that there was no taper. We dont think it affects fundamentally the companies that were involved in. And we think that theres still a lot of opportunity in the small caps sector. Now, people have been talking about small caps being overpriced for a very long time now. But you think that theres still room to go. How high are they going to go . Sure. We think that theres 20 , 25 up side over the next 12 to 18 months. We look at the credit market to predict what happens in equities. If you look over however, the credit markets have been great. Longterm indicators for where the longterm equity markets are going. The high yield credit market in particular, spreads have continued to come down here and is generally thats a very good sign for small cap equities. A lot of what we call small infrastructure catalysts happening where companies refinance very high cost debt and lower levels and create a lot of Free Cash Flow that way. Okay. So its nothing to do with improving fundamentals. There are improving fult fundamentals, as well. We see an economic recovery in the United States start to go accelerate. Housing market has been stronger. Is that coming off a bit, though . Its coming off a bit, as expected. Some of it haas to do with the fact that theres less supply out there. There are a lot of bidders for home and theres less supply. But that will start to catch up and people will start to adjust to high mortgage rates. Were seeing auto production strong. Okay. Lets take your orders. Have you looked at, then, people in the auto supply chain . How are you playing those things . Sure. The auto supply chain, those talks have been fantastic. Weve been involved in several of the names. Actually, in the dealers because lithium motors is one that weve been involved in. Penske auto group, also, which has some exposure here in europe. Theyve been doing spectacular, much better. At this particular moment, do you keep running those . Weve taken a little bit of profits, but we continue to think theres value there. We didnt build enough car necessary 2009, 10 and 11. Not only getting back to a normal level, we have a lot of catch up. Cars are older today in the United States than theyve ever been. I believe the average car is around 111 1 2 years old. I know how you feel. Come on, ross, dont sell yourself short. Where would it be good to be right now with a lot of risk coming up . We look at company specific, bottoms up. We still love the television broadcasters. We think that the affiliate Companies Like yeah. Like sinclair, nextstar, lynn, great television. Those are very interesting ideas here because theyre getting much more theyre getting paid for their programming for the first time. Espn and discovery has been getting paid a lot for their programming. Theyre starting to catch up and you saw the cbs time warner disagreement. Now cbs will be getting close to 2 per subscriber per month for their content. So we like those companies, the values there. Content is being revalued. Contend is being revalued. Very important. The other thing the broadcasters have is extremely valuable spectrum that we dont think is priced into their stocks and really is a longterm option. Certainly not something you hear every day. No. But i am pleased about that. Eric, stick around. More to come from you. Youre going to stay with us on the set. Jpmorgan reached 920 million settlement last week over the london whale trading losses. But the banks legal troubles may be far from over. Bertha coombs is live at our cnbc headquarters with more on this. Good morning to you, bertha. Good morning. The Justice Department is set to sue jpmorgan as emergency room as tod early as today. Reports say talks broke down last week. The case relates to a sale of mortgage bonds between 200 a and 20067. Last month, jpmorgan disclosed u. S. Prosecutors in california will conduct civil and criminal probes into the banks mortga mortgagedback securities. The wall street journal reports the two former traders charged in the london whale case are trying to shift the blame. As part of their defense, javier and julian will reportedly claim the socalled whale himself, bruno ixo, was the one responsible for marking the value of their derivative positions. That could put the government in an awkward position of defending ixls actions. Yet ee reportedly cooperating with their investigation. Checking jpmorgan shares. Europe at this hour, they are off fractionally about 0. 34 . If youre a lawyer working for jpmorgan, this is a gift that keeps on giving. Absolutely. Big bucks to be made there. Lets take a look at todays other top stories. Harry reid has scheduled a procedural vote for wednesday. If it clears that measure, it could take until sunday evening giving the house just 24 hours to respond to avoid a Government Shutdown. The pentagon is learning of the consequences of a shutdown which would put severe hardships on an already stressed workforce. All military personnel would keep working, regardless, but they may not be paid on time. Not good. No. Mean wile, airbus says a surge in air travel by asian passengers will provide a massive boost to its business over the next two decades. The planemaker says at that time, they will make industries orders for nearly 30,000 new jets, worth an estimated 4. 4 trillion. Airbus says within 20 years, asia will replace the u. S. As the worlds busiest reason for air travel. Well, there you have it. If i stay here for two weeks, i think ill be convinced. Okay. Move over wall street. Marketing and media moguls are in focus in new york this week. We will discuss the big talking points. Thats coming up next. [ woman ] if you have the audacity to believe your Financial Advisor should focus on your longterm goals, not their shortterm agenda. [ 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. And a recap of the headlines this morning, german Business Sentiment fail toes meet expectations despite a slight rise for september. The battle to keep the u. S. Government ramps up. And mixed reports out of kenya as terrorists claim they have hostages held up at the nairobi Shopping Mall. Now, new york has called brands of communication leaders. This is expected to include the rise of digital marketing. And joins us now. This year, a huge number of social networks and social Network Businesses there. Have we worked out yet how we get brands to engage with consumers . Great question. Thanks for having me, ross. You know, its interesting. I think theres a lot of stuff going on in social, a lot of talk about how its going to be monetized. You know, you look at the twitter cbs deal. Thats a very interesting example of how these network res realizing that that second is so in control. I expect well see Media Companies jump on board and want to have similartype relationships with the social network. Its key because were now getting a key report coming up. This will be a gwen. How much is the Second Screen going to reinvigorate traditional tv . I think its going to inveg rate it a lot. Twitter put out a stat a couple of weeks ago that 95 of all conversation thats happening about television is happening on twitter. So i think theres a lot of value there to be had by Networks Like yours. Ryan, is it still all about mobile this year . Mobile is a big thing, for sure. But theres a lot youll see about video. Video about all screens, all devices everywhere. That is a growing area. Ripe, im wondering, in terms of the trend line, as well, how effective is advertising on social media . Is it improving the effectiveness . How do you measure it and what does it look like . So, to broadly say that advertising across social is effective or not is probably not the best thing for me to try to say. But rather to say advertising on social is a whole other challenge and it has to be treated like that. So you have to have print, you have television, and then, of course, you have social. Yeah. And the interesting thing is, you talk about video, as well. Is that going to drive more sales . Do you see that happening . Absolutely. Video is the sounds and sights in motion. Were going to continue to see a lot of growth in that area. Unfortunately, the video link broke. How ironic. Anyway, i think well probably let him go there. Lets okay. Lets move on. Thanks. Well stay in the internet space, though. Microsoft is trying to scratch the surface, get it, of the tablet market again getting two new devices. Cnbcs seema moody got a first hand look and filed this report. Microsoft targeting the consumer at home as well as the business professional with this two new next generation surface tablets. The service 2 as well as the surface pro 2. Now, here are a couple of selling points for these two tablets. First, access to Microsoft Office suite. Second, the ability to run two applications at the same time. So, for example, you can surf the web and take notes with this customized dual screen. Third is the accessories, the insertable doo keyboard that acts as a battery cover. This is microsofts latest attempt to stay competitive and relevant in the tablet market. Access to 200 gigs of Cloud Storage and a fast microprocessor, milk row soft says this is a true replacement to your lab top. Back over to you. Thanks for that, seem ma. Still to come, investors look ahead to fed speed this afternoon. Well preview the trading day on wall street. Coming up. Stay with us. We asked people, if you could get paid to do something you really love, what would you do . [ woman ] id be a writer. [ man ] id be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] id be an architect. What if i told you someone could pay you and what if that person were you . When you think about it, isnt that what retirement should be, paying ourselves to do what we love . Paying ourselves to do what we love . Seasonal. Doesnt begin to describe it. Running a bike shop has its ups and downs. 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. Welcome back. The caseshiller home index is out at 9 00 a. M. Eastern. At 10 00 a. M. , we get consumer september confidence which is expected to fall more than a point from august. A pair of fed officials speak today, Sandra Pianalto and kansas citys esther george. As for earnings, look out for results from carmax, carnival, lennar and kb home. Meanwhile, fairly flat on the futures. The s p was the low point of the show. 3. 5 points below fair value. The dow jones is 1 point below fair value. Eric is still with us. Eric, what do you think is the key for broader sentiment right now . This week, there are a couple of overhandles the market have. Fed chairman potentially that would be a catalyst. Theres some Economic Data coming out this week. This time of year is always a little more volatile. But nothing major on the horizon beyond that. You talked earlier about some of the stocks where youre accumulating. What are you lining up for . Defensive stocks. We believe the u. S. Economy is accelerating. Even companies that have exposure to europe and to asia. We think that they have a big opportunity to outperform and their stocks are discounted at this point. The real defensive companies, the yield companies, those are the ones that have performed great. We think as rates start to move up, the yield stocks got crushed. The fact that theyre not tapering we believe that theyre going to taper they will ultimately taper and its because the economy is getting better. And because the economy gets better, thats going to be good for cyclical companies, both u. S. Cyclicals and international cyclicals. You dont think the fed shot itself in the foot by not asking . Its probably caused a little bit more volatility in the short run. But Everybody Knows they are going to taper. Examine just quickly, they were talking during the break about m a activity. Do you think were going to see more m a activity . Absolute lit. The fact that the stocks are going up when theyre buying other companies. Cfo goes into the board room and says, look, our competitor stock went up 15 when they bought another company in the industry. Tease going to get the board of directors encouraged to buy more companies. Clearly, for the first half of the year, the market leaders were those that were handing more cash back shares either to the share buybacks or dividend payments. Has the mood changed . Weve got from a period of extreme uncertainty to a period where companies are feeling more comfortable. Investor confidence, cfo confidence, ceo confidence, all higher. Its giving them the ability to go out and take some risks. And the riskiest transaction they can make is buying another company and the market loved it. The stocks are going up. Theyre getting rewarded for organic and inorganic growth through acquisition. Do you think that means there might be less share buybacks . Yes. Companies will start spending money, which they havent done for five years. Lets hope it works out. Good to see you today. Thanks so much for joining us. U. S. Small cap fund manager and Director Research at penn capital. This just about brings us to the close of today. Sometime ftime flies when youre having fun. Ill be back tomorrow. Thank goodness for that. Squawk box is coming up next. Otherwise well see you tomorrow. Ill be right here beside you. Mine was earned in djibouti, africa. 2004. Vietnam in 1972. [ all ] fort benning, georgia in 1999. [ male announcer ] usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection and because usaas commitment to serve military members, veterans, and their families is without equal. Begin your legacy, get an Auto Insurance quote. Usaa. We know what it means to serve. Good morning. The markets consider the possibility of a Government Shutdown while washington dealmakers continue to negotiation. In corporate news, chrysler files for an ipo and a cnbc exclusive, Steve Liesman sits down with new york fed president bill dudley. It is tuesday, september 24th, 2013 and squawk box begins right now. Good morning, everybody, and welcome to squawk box here on cnbc. Im becky quick along with joe kernen and andrew ross sorkin. In our headlines this morning, wall street is once again paying close attention to washington today as we move closer to the october 1st deadline for congress to pass a resolution to keep the government funded. Late yesterday, Senate Minority leader Mitch Mcconnell said he would not support the tactics of three tea party backed senators threatening to fund a bill to solve our government. We have former Clinton WhiteHouse Press Secretary joe lock hart and jim nussle. President obama is going to be addressing the United NationsGeneral Assembly today in new york. He can expected to speak on syrias chemical weapons, mideast peace talks and Irans Nuclear pursuits. Irans new president will speak today. Traders says the oil market will be watching body language between the two men. Will they say hello to each other . Will they shake hands or will