Transcripts For CNBC Worldwide Exchange 20131009

Banks in europe. We have not made sufficient progress. Shares in Alcatel Lucent fall for a second day as the government ramps up the pressure. The Prime Minister urging management to revise its plan. Youre watching Worldwide Exchange, bringing you Business News from around the globe. Okay. Very good morning to you. Very good afternoon. If youre in asia, this is wednesdays edition of Worldwide Exchange. Its hump day, lots to get through today. Of course. And were going to hear from president obama who is going to nomiNate Janet Yellen today to be the next fed chairman b, replacing ben bernanke whose term ends in january. The president is expected to make the announcement at the white house at 3 00 p. M. Eastern, an hour after the latest fed minutes were released. Yellen was appointed as vice chair in 2011. Shell be the first woman to lead the Federal Reserve in its 100yearround. Joining us for the show today, ricar ricardo. Everyone seems to be quite pleased. Is she the most qualified appointee in the Federal Reserves history, do you think . I am not sure. Im not a historian. I cannot tell few shes the most qualified ever. But i think she definitely has been around for some times as a regional fed president and then member of the fomc. So she definitely ticks all the box necessary terms of competence. I think the markets view her as dovish and continuing with bernan bernankes policies. Shes the one that tipped in with putting an inflation target into the fed and raising inflation for many people to look at. Sure. But always in the context of the mandate. And prior to that, she did warn about the reason for the market and the subprime markets. But i think that was also in the direction of saying we may need to ease policy because of this problem. No doubt, she appears to be the most comfortable appointment as far as investors are concerned. They feel like they know what shes getting. Yes. It comes today, as well, as were going to get the minutes from the fed. Which im guessing is a fairly fascinating reading. Will this he show any consensus . Also, what will they say . Will the interest be on how much they pin that decision not to taper on the government and politics and how much they pin it on actually the data, not being good enough . I think there will be definitely a mention. From that point of view, it would look like the fomc took the right decision. I personally think what was a bit more questionable was the fact that the press conference in particular bernanke seemed to walk away from the threshold. From all the framework that the fed had given us in previous months, so i think what we want to see from the minutes, what kind of discussion was there about this point . Was there a consensus . Was it a deliberate choice or was it bernanke who decided to sound dovish in the first conference because hes worried about the economy not having enough momentum and obviously was worried about the fiscal risks . Yeah. Well, now, it appeared were not getting any data. The president will nomiNate Janet Yellen 2100 cet. Now, plenty of action, as well, on social media. A lot of them focused on her representing continuities weve talked about. Shes the first woman to take the job and the first democrat since 1987 to become a fed chair. What do you think matters . Let us know. Email us, worldwide cnbc. Com. Tweet cnbcwex or direct to me rosswestgate. Thats not the only thing the president is up to today. Hes been pushing House Republicans to end the u. S. Shutdown and raise the debt ceiling. In a more than hour long News Press Conference tuesday, the president said hes happy to speak with john boehner will everything, including his Health Care Plan, but not until this is resolved pep says exhaustion cant be a routine part of democracy. Theres no silver bullet. Theres no magic wand that allows us to wish away the chaos that could result if for the first time in our history we dont pay our bills on time. And when i hear people trying to downplay the consequences of that, i think thats really irresponsible. Earlier, the House Speaker struck a more constellatory tone. He shows back saying he was disappointed. So the president s position that, listen, were not going to sit down and talk to you until you surrender is just not sustainable. Its not our system of government. And speaking in an exclusive interview with cnbc, cnbc executive voiced confidence that the u. S. Will find a solution. I think they are well aware that the u. S. Had as the Major Central Bank of the globe any decision they take has to other advanced economies to other emerging economies and there ever they clearly intend to communicate what they intend to do. He was speaking to annette and shes in frankfurt and joins us with more. Annette, central bankers are always rather fairly regarded. How did you find mr. Assmussen . Actually, i think he showed a little bit of his humor in the interview yesterday. But, of course, in general terms, he was quite guarded above all when it comes to comments on the Monetary Policy stance and, as well, his assessment of the economy. Because that, of course, might trigger Market Expectations for another rate cut. Take a listen to what he said when i first started off with my first question on how he rates the current extent of the economic recovery. What we see that what with the in mind since over the last december is now undermined by incoming data, we see a gradual recovery in the euro area, steadily improving over the course of the year and we see it continue to be better next year. So its positive that this is the hard data. Its a very gradual recovery, but it is a recovery. And our Monetary Policy stance is in line with this development which is lets say we have subdued credit growth, we have subdued monetary growth and this is how we stand. In the interest for the room to maneuver is quite limited. What other options do you have . Lets say we have the whole array of options left on standard measures which is the Interest Rate where there is still some room. We have the whole array of nonstandards measures left coming from the famous rto to requirements for discontinued the monthly the weekly option operations. So there is a whole range what we in theory could do. No decision has been taken yet. In the last press conference, mr. Draghi was saying that there were discussions about an Interest Rate cut, but there was no majority in favor of it. Do we see a shift towards or trend that theres a tendency of more people in favor of cutting rates . Through this, you cannot read out of his last statement. We will repeat this debate month after month. The recovery in the eurozone, the fragile recovery is very much depending on exports. How much do you vary about the strength of the euro right now . No, we always said this is unchanged. We dont have an Exchange Rate target. When we do our growth forecast and our inflation forecast, we dont have an Exchange Rate target here. But he also admitted that the recovery or the fragile recovery we are seeing in the peripheral of the eurozone is very much depending on exports. One intends to put one and one together, that, of course, a strong euro is endangering that fragile recovery. That is most likely why we are having those discussions in the governing council to cut rates again. But, of course, the big question is what would that actually mean to cut rates again . It wouldnt necessarily help the Financial System because the low rates and takes us through because the credit channel, as we call it, in Monetary Policy speak is still blocked here in the southern periphery of the eurozone. If you look at the rates banks are charging for loans in spain or italy, it tells you a whole lot about financial fragmentation and the eurozone. And that is something the ecb is, of course, worrying about because we dont really see a lot of credit growth down in the south. Another area, of course, we were touching upon are the european stress tests, the asset quality review to be performed by the ecb next year and he explained to me that europeans actually have learned their lessons and that this big asset quality review as well as stress tests will be the last time policymakers in the eurozone have the chance to really fix the Balance Sheet of European Banks. So this will happen next year. And only after that, the ecb will take on its role as the general supervisor of the big banks. With that, ross, back to you. Thanks for that. Ricardo, what do you make of those comments . I think they are pretty much in line with what weve heard recently from the ecb. Obviously, these involve str striations in the u. S. Includes the Downside Risk in the economy, as well. The potential impact on the u. S. Economy, the impact on the financial markets, obviously, netnet, the ecb sounds a bit more open to capping rates or doing another long dated npo. That comes the cost in this interview. As musen said well vote every month on Interest Rates. I think if we do get a very difficult october with this showdown in the u. S. , the ecb will cut rates. You think they will . Well, i think its now 50 50 with you know, its this confrontation continues in the u. S. , i would probably change my forecast. Because my forecast is the ecb phase on hold based on these ongoing improvement in Economic Conditions. I think well have to reassess over the next two or three weeks. But clearly from a trading perspective, my bias now is more to be on the long side and to be overweight duration in the bond portfolio. Because these rates are real and i think the confrontation in the u. S. Will last at least a few more days if not a few more weeks. And that means Downside Risks for the economy. Yeah. And i suppose, you know, were trying to weigh it, everybody believes there will be a deal done. But how much damage we do in the meantime, we dont know. Yeah. I mean, i think everyone is applying rashlty and is thinking ultimately, the electorates will put pressure on the Republican Party and they will do the right thing. But the thing is, its a much more complex situation with the socalled tea Party Component taking a much more radical position and leaders having to try and keep the party united around the common position. So this confrontation, i think, logically will last at least until the 11th hour. And then that deadline is a lot more flexible one. It may drag into october. We can rule out that there is no deal at all. If there is no deal at all, obviously, the u. S. Government will have to cut its expenditures very aggressively, suspend from statements and that, the at that point, means gdp growth could be flat, could be negative in q4. Its a totally different scenario that we have in mind. Stick around. Thanks for that for now. Im going to let you go, actually. Also on todays show, well hear from the man who has been credited with saving the rupee. Stay tuned for our interview with rajan. And chinese and indian economies are continue to go weaken. Well get into the detail at 10 25 cet. Also, as the head of the Ethics Committee lands in zurich to kick off an intgz into the bid process for the world cup tournament, well ask a leading sports lawyer if he can strike out corruption. Thats at 10 40. Plus, Mainland China can get its own dusting of magic when the third resort opens in 2015. The chairman of wald disney parks spoke exclusively to cnbc. Hear what he said to say. And its day nine of the u. S. Shutdown. Well find out how as a culture businesses are dealing with the lack of reports and data. Thats at 11 40 cet. Meanwhile, we are an hour and 15 minutes into the trading day. This is where we stand at the moment. 73, advancers being outpaced by decliners at the moment. Ftse 100, down 71 points, the lowest close in three months following those sixweek lows for the dow and onemonth lows for the s p overnight. We are up about the best levels of the session, but it will be stocky trading as we go. Where are we trading right now . The ftse 100 is down 0. 3 . The xetra dax is fairly flat, cac 40 fairly atlanta. Ftse mib up 0. 3 . As far as the individual stocks are concerned, theres a number that were focused on this morning. Homes got a number of upgrades for House Builders in the uk. Goldman sachs putting a conviction buy on its list. Taylor wimpey, up 3. 25 . Alcatel lucent down nearly 6 after Francois Hollande says he wants the firm to reconsider its huge cost cutting plan. The vix also in focus. We had the record volume in vix options yesterday. Were above 21 for the First Time Since june 24. A little bit of relief for the dollar as far as janet yellen is concerned. And on bond markets, take a look at where we stand with treasury yields. 2. 6 . Slightly lower today, but were still in recent range. Dollar yen has been the one. We got down to 96. 55 which is a twomonth low on dollar yen. Dollar yen at the moment, that yellen announcement giving the dollar a little bit of a lift. And euro dollar, you can see it 1. 3527. A little weaker. That was the eightmonth high which was around 1. 35, 1. 3645, somewhere around that sort of level. Thats where we stand in europe. Joining us with the update from asia, sing wish has the details from europe. Thank you, ross. We talked about the dollar movement. The nikkei 225 ended higher by 1 today, getting a lift from rebounding greenback against the yen, lending support to exporter stocks. In the u. S. Political debt market, keeps volumes tepid. While the index continues its climb, its still down about 13 from its peak in may. The shanghai composite added 0. 6 ending above that key 2200 level. Meanwhile, the hang seng index in hong kong ended down by 0. 6 . The tie ex in the red. South koreas kospi ended higher by 0. 4 . The australia index, all trading at the moment. Mizuho financials lost about 1 after admitting top management knew about loan toes criminal groups at least three years ago. Meanwhile, tenco shares in the red as japans industry manager rejects new legislation to save the struggling utility giant. The operator of the crippled fukushima power plant says six workers were exposed to radioactive water from the leak. Back to you, ross. Thanks for that. Well take a short break. Still to come, Indias Central Bank says why he felt confidence enough to lower the rate overnight despite recent pressures. There is a pursuit we all share. A better life for your family, a better opportunity for your business, a better legacy to leave the world. We have always believed in this pursuit, striving to bring insight to every investment, and integrity to every plan. We are morgan stanley. And were ready to work for you. 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. The plunging rupee, are just two of the crises facing india. He was asked why he cut the overnight rate. Government has done a fair amount, containing the current account deficit, but also in talking about plan toes finance it and, of course, the rba has contricketted. We havent given the government a window. One way to narrow the deficit would be a big jump in diesel prices. If thats not on the table, then a sequential increase in prices at a rate which makes us close to the market in the near future is important because thats a big source of the fiscal deficit. I think that the government understands what needs to be done and the basis for which its out. Joining us now is karen moore from hsbc. What do you make of rajam . What is his challenge . I think hes pointed out exactly what the market is looking at there. We want to be atrathed to assets in the emerging world. What were looking for is government toes make assets attractive to xwrempt difficult reforms, Structural Reforms thats going to boost the potential of the economy and, therefore, attract capital in, regardless of what the Federal Reserve is doing. So hes right to point out the key role of government here. Central banks can defend currencies for a small period of time, but its governments driving with form thats really going to shape the potential growth and attractiveness in india. Okay. Now, lets just move on. Because Economic Conditions in emerging markets are going to weaken. The emi is talking about growth. What is it saying . It is just above that crucial 50 mark which defines expansion above contraction. Activity in the emerging world is soft. We know this. It is until the context of high growth in the last few years, perhaps growth that was a little bit too strong, a little bit frothy, perhaps too much credit. So we have seen the likes of china, india, brazil. All of these economies have slowed down to compensate for perhaps some of that less quality growth you saw in the last few years. Nevertheless, at the moment, were going through a soft patch. And much would depend on what happens with fed policy. How much of a reprieve does the currency appreciate why you are at the moment . How long is it going to last . Weve all sat here watching the fiscal policy in the states and wondering how thats going play out. Were watching it and, of course, the Federal Reserve is also. What the Federal Reserve does next is not only data dependant, seeing how the private sector recovery continues with its momentum, but all of that could be send off course if we dont roach an amicable compromise with regard to the debt ceiling. The fed are certainly on hold for the foresee bble. When you look at these overall pressures, who is going to fare better . Clearly, you have the india, indonesia, the current and twin deficit issues. Who is going to fair better . I think coming back to the french governments comments, the country is going to do well. Where the governments take note of this Market Reaction, take note of what the markets are telling them and, really, push through very difficult Structural Reforms. So as were seeing, there are some good signs in india and perhaps brazil, of course, weve got an election coming up and, therefore, pushing through difficult fiscal issues when you are coming up to an election is more tricky. So of all of the big emerging economies and, of course, china already are very far ahead in terms of reforms theyre implementing. We need to look at the pudding. Because less so when it comes to brazil because of the timing of the election cycle. Karen, thanks for that. Still to come, shares soaring as the government puts the finishing touches. But will it deliver . Find out what our next guest thinks after this. Part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. Join the millions who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. And provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. With all the good years ahead, look for the experience and commitment to go the distance with you. Call now to request your free decision guide. Its official, president obama will nomiNate Janet Yellen today to be the next fed chairman, ending months of speculation will who will replace ben bernanke. President obama and House Speaker john boehner trade shots over the debt ceiling deadline. Its our last chance to restore confidence. The board member warnings of the importance of this months Bank Stress Test in an exclusive interview with cnbc. He has not make sufficient progress. And Indias Central Bank government sees clearer skies ahead by urging the government to put its fiscal house in order by slashing fuel subsidies. All right. Industrial production, sterling just weakening after Industrial Production. Manufacturing down 1. 2 on the month, down 0. 2 on the year. The forecast is for that to be up 0. 3 . Industrial production up 1. 1 on the month, 1. 5 on the year. That is the weakest since september 2012. Industrial Production Forecast up 3 on the month. July Industrial Production rise above 1. 1 on the month. 1. 1 annually. So after having a string of better than expected data, were now starting to see the first signs of uk data thats a little weaker than we expected. Sterling down to a session low of 1. 69. There we go, 1. 5988 and euro sterling is firming on it, as well. Andy buffett fund manager at schroeders joins us now. The first bit of data was disappointing for the uk for a while. When you look at the companies that have been reporting, most of them have been making their numbers by cutting costs. Selling low cost stuff to other people around the world. Everyone has been benefiting from their claims from a year ago. Today, a bit of a slowdown. Were definitely seeing some of the cracks appearing now. And just relying on the House Building sector to drag the whole of the economy up. Its a lot of work, im afraid. You talk about how had House Builders. They have had an upgrade today from Goldman Sachs. Is it too much value if there already or is it well, personally, the rest of them have gone up without me. When you look at it, its still sort of seven times afternoon earnings. But, you know, it still remains expensive. I cant believe in the longterm that actually giving people a guarantee to go and buy a house which is expensive is going to be in their best interests and qe, i think, everyone says qe is going to the tapering is going to start with the fed. Its going to end in 2015. You know what . The people are already in there. Lets keep it going. Sooner or later, you have to take it and say, look, we need rebalance the economy. And the retailers were all down yesterday. It was the likes of marks expenser. My hold in retail remains sports direct. Companies like pendragon. And if you look at it on the high street, the gains have gone to those which ive got a government position and has in core retailing, the core retailing is the last sort of industry to be touched by the internet. There was a whole sort of section given over to the overcoats which have been worn by traders because the whole industry has now become a lot more professional. If you have more capacity going out, then the top line remains elusive from all these companies. And stick around for you. We saw sterling reaction to that data. As far as the dollar is concerned, the dollar index has given premonth lows. We were down overnight. A little weaker. We got down to twomonth lows around 96. 55. Euro dollar, below 1. 36. On bond markets, yields a little lower mainly across the board. 3 gilts, 2. 67. Were going to be keeping our eye on the spanish auction, as well. Implying around a 5. 25 yield. As far as european equities are concerned, as well, there we go. Its pretty flat, actually. Now, shares in Alcatel Lucent have plunged after it was said the Telecom Equipment firm must revise plans to cut 10,000 jobs from its workforce. Stephane is in paris with the latest. Stephane. And without negotiations and without agreement, the plan wont be approved the Prime Minister said this morning. The warning, ross, came 24 hours after the french industry minister made similar comments asking for Alcatel Lucent to review its Cost Reduction plan. Or if they are just trying to spare french workers and asking the company to shift the burden to other cups. It has Unlimited Power on the job cuts, but then the government can negotiate, thanks to its stake in the french Largest Telecom operator. So in exchange for a reduced amount of job cuts, perhaps alcatel could get some contracts. Thats the pressure that the government can do at this level. Nevertheless, its impossible for Alcatel Lucent to continue without significant job cuts. The company must reduce its cost base. Union social networks are concerned about the future of the company, not only about the Cost Reduction plan. Alcatel still needs to sell some parts of its business to raise at least 1 billion euros. This is critical because alcatel must repay a loan of 2 billion euros that was granted a few months ago and the guarantee for this loan is the portfolio of alcatel and without the patent, theres just no future for the company. Thanks for that, stephane. Alcatel lucent has been cut to junk status because of the firms ability to strengthen its Balance Sheet. But this is sort of a whoa that was expected. The fact that moodys would then cut to junk bond, telecomitalia was not a surprise. Its the timing that seems to surprise. In about a months time, theyre expected to come out with a new industrial plan, something to give the market an idea of how they plan to move forward. One of the big assets is how they move forward. That would help Telecom Italia. So theres strong debt in which the company says theyre continuing to deleverage and will continue to deleverage has fallen by 7. 6 billion. Of course, the difficulties is the domestic part of its business. It is slow in moving, so not growing much at all. The network is another big issue. They need to spin off this network of Telecom Italia as another part of its moving forward. So for telefonica to gain control, a lot of things need to happen. So really, today, it was the timing that was a surprise. Claudia, thanks for that. Lets get more thoughts, as well, from andy. Were all sort of wondering whats going to happen to vodafone, meanwhile. Its interesting. They have a holding in voe da phone. Most uk institutions do. But vodafone kind of has been on my investment career really because it didnt exist in 1987 when i started in the market. And now, in my 8100th quarter running money, its how many quarters . Its the 100th quarter running money. Congratulations. Thanks for that. But the thing is, vodafone has slimmed down shape could be quite an attractive investment proposition because the ability to grow when youre smaller is much easier. Or, as we see in this whole telecom space, consolidation continues, then something is going to happen. Personally, ill be a relaxed holder of vodafone. Either the new Management Team are going to reinvigorate it or its going to prove attractive to at t is actually seen potentially. But thats how many times have management of companies not taken the tough decisions . Its a brave call to open yourself up for growth avenues or become a target. Is brave good . Brave tends to be good for shareholders. Brave tends not to be good for management in their jobs. Right. Thats why Management Teams always talk about share hold honor value in peeths with institutionalal shareholders. Meanwhile, samsung is throwing in nice curves to its galaxy. Its launched a curved display hand set in a move to beat apple ininnovati ininnovation. It could be a precursor to wearable products. The stock wasnt trading due to a south korean holiday. And panasonic has decided to pull the plug on plasma tvs. Kitadai has the story for us from tokyo. Kitadaisan. Thank you, ross. Panasonic is getting out of the plasma tv business by tend of the year. Tease just fine win vesters who sent shares is 1. 6 higher on the news. Panasonics decision marks a longterm decline of the tv industry. The Company Initially considered ending production in fiscal 2014 but has decided to accelerate the timetable. Since the rise of flat panel tvs in the late 1990s, tv manufacturers had used lcd panels for smaller models and plas plasma panels for larger ones. Now thanks to larger innovation, the technology for lcd panels has gone mainstream, as well. A plasma tv exceeded loss expectations. And the latest round of stress tests will be the third and final chance for europe to rebuild confidence in its banking sector. She joins us for more once again on that. Annette. So fix European Banks Balance Sheets, the ecb is extremely wary about the fact that we had two round of stress tests already in europe and there was not a lot of there was not a lot of improvement when it comes to the health of the Balance Sheet of the European Banks. This time, everybody should be different. One big thing is the revolution from germany is opposing quite harshly. I asked whether germany might change its mind. This is a point i dont know. The ecb decision is quite clear. We want, together with the European Bank decision a resolution regime and this covers a joint legal framework, a joint fund and a joint authority. This is what is needed to have a complete banking union. I know youre about to publish a lot of details this month. But just convince me, why should we be convinced after two rounds of stress tests in the eurozone that this stress test is now credible and very harsh on banks . Because we europeans are able to learn. No, two stress tests that for a number of reasons, and im not blaming any institution here, but for a number of reasons, two stress tests fail to restore confidence in our banking sector. In my view, this is our last chance to restore confidence. This we want the clear banks and second, in our view, the main reason why bank lending is not kick starting up to levels at which we would like to see it, is we have not made sufficient progress in bank Balance Sheet repair here in europe. So the asset quality review of the ecb is of vital importance to convince investors that eurozone banks will actually healthy and there are no hidden things on their Balance Sheet. But at the same time, one mass to make very clear that there is still a lot of unknown arrivals, not only on the Resolution Fund side, but as well, we dont know where the back stop, financial back stop will come from. Right now, it is under discussion that will be provided by the national government, but this is by far not sure because among eurozone members, theres still a lot of disagreement. So not clear where the money comes from if there will be a capital detected by the stress tests and how they are going to fill the gaps. One idea i think was to tap the markets again, but looking at the appetite for exit chief from Financial Institutions in the periphery of europe. I rather doubt that this is actually a very viable plan. So all we know is that the single supervisory mechanism means the ecb is taking the oversight of the big banks in the eurozone might be in place by the beginning of 2015. But there is still a lot of potential for delays there. Annette, thanks very much, indeed, for that. Plenty more of course on line from that interview. Still to come, did fifa commit a goal or a foul when determining its 2015 place for the world cup . Well discuss coming up after this. Auto automaker ford is filed sales showing more than 9 the 00,000 sales in china this year. Tokyo and honda will duel for the top spot. Go Goldman Sachs is expected to raise 350 million from the sale. Begin collecting evidence from representatives of every bid team to host the 20182022 world cup tournaments. The football governing body is responding to press reports which suggested michael garcia, the head of the committee is to land in the uk today to begin his investigation by quizzing the team behind the london 2018 bid. The process began after a number of corruption allegations were made. The senior pat ner and president at the British Association for port and law and joins us non. Thanks so much for joining us. Thank you. Probably theres less concern from a football perspective about those russia bids and more concern for top football tournament caps on 2002. And thats a different thing to the legal matters here. But im wondering now, because fifas solution would be to switch to a winter world cup where the commercial consideration res now influencing legal challenges. Absolutely right. Theres been all sorts of allegations about bribery and corruption. The Investigative Committee set up by fifa are going to look at everything. Theyre going to speak to everybody. Theyre going to speak to everybody involved in the world cup bids. But there was an unusual place to have it. And fifas explanation was they wanted to help countries develop football where they havent had that opportunity before, which is understandable. That time of the year, historically the world cup has been in june and july. We all know in qatar in those moments the heat is unbearable. Never mind playing football, its unbearable to look around. So there is a possibility that it might be moved to the winter season. Now, this will clash with other issues such as the Champions League football from which people are paid and they wont get paid for 2022 . Theyre contracted and they pay Something Like 1. 3 billion pounds to have the right for qatar and russia. I think theyve been sold on the basis that its the normal time Champions League. And it looks like that is not going to happen. We dont know whats going to happen, do we . The investigation, which is going on, is not to decide whether it should be in the summer or the winter. Thats not what the Investigative Committee are doing. Tethices committee are going to investigate was it a genuine bid and was there any element of bribery involved. Who has the final say, then . Lets say they bruise this report and there was a bit of bribery going on underneath. Who actually makes the call . Right. Well, its called in a chat with michael garcia, who is a former u. S. Attorney general lawyer. And hes head of the Ethics Committee of the investigation. All it was bid to do was to bid by the normal proper manner. Hes not going to rely on hearsay and rumors. Thats not what lawyers do. He will rely on all the facts. And to be doubly traps parent, because hes american in relation to the american bid and the russian bit, theyre going to appoint somebody else to look at those two so theres no question of a conflict of interest. So theyre doing that. Whether eeths the right time of the year, the Ethics Committee are not concern with that. At the moment, the Ethics Committee hasnt requested that the attorneyment be moved to the winter. So the job really is to investigate and he will rely on hard core evidence. So any evidence of corruption, thats what hes investigating. Is it to say, actually, the mistake has been made, were going to change it . If he finds that there was corruption in relation to the bid. And, remember, certain people on the committee previously have already been dismissed. There was corruption. And also when who stood against blatta, he applied for reelection, hes been dismissed for life from corruption. So that related to that particular matter. He can only rely on the hard core evidence because that is what he has to investigate. It was 138 in favor of qatar and the english bid, of course, wasnt considered. But theres the point. If corruption is found, whether they can go back to your yes, they can. They cak the is question. Changed hands workers say protesters unveiled a reading saying go home fifa. Yeah, who are they . Just finally, andy, its hard to do anything at the moment, isnt it . Thats one thing. In this whole european stress test, amid the u. S. Banks, theyre written off 10 of their total assets, u. S. Banks. So if banks are writing off bad loans and say theyre reducing the amount and that can lead to deflation, thats why deflation comes in. And thats why i think, you know, at some point qe is going to come to europe and that would be a game changer in items of european stock markets. Andy, always good to see you. Thanks vep. Well take a short break. Still to come, yellen may be replacing bernanke, but will there be any change at the fed . Second hour of Worldwide Exchange after this. This is Worldwide Exchange. Im ross westgate. Its official, president obama will nomiNate Janet Yellen to be the next fed chairman ending months of speculation about who would replace ben bernanke. President obama and john boehner taking shots, neither giving ground on the debt ceiling deadline. And this is our last chance to instill confidence. Jorg as mussen warns of this months stress tests in an interview with cnbc. And shares of Alcatel Lucent have been down as the government has ramped up pressure on the group. The Prime Minister, the latest official now urging management to revise its Just Announced restructuring plans. If youve just joined us this morning stateside, warm welcome to you. Its the start of your Global Trading day. U. S. Equities, now a great day. The s p down at onemonth lows. We are called higher at the hope. The dow is some 46 points above fair value. About 15 points above fair value for the nasdaq and the s p 500 is around 6. 5 points above fair value. European equities have been fairly mixed. The ftse cnbc global 300 is just down 9 moints. The european equities yesterday were down 1. 1 , the lowest close for three months when we finished trading on tuesday. Right now, its flat. Xetra dax just up 8 points with the cac 40 up 0. 2 . The ftse mib is continuing its outperformance. Tenyear treasury yields, 2. 6 is where were yielding at the moment. We had disappointing for the first time disappointing data out of the uk. Yields there, 2. 65 . And on the currency markets, the dollar index just coming off its eightmonth lows. And euro dollar, heading lower down to 1. 3527 moving further away from that 1. 3645 level near the eightmonth high. Thats why we stand here in europe. Sixuan has the recap from asia. Sixuan. Thank you, ross. The nikkei 225 led the games in asia today, getting a lift from a rebounding greenback against the yen lending to some exporter stocks. And the u. S. Political dead lock keeps volume tepid. The shanghai composite still added 0. 6 . So ending above the key 2200 level. But the hong kong and taiwan lost contraction. And let me show you some laggers in japan. Mizuho financial lost 1 after Bank Officials admitting top management knew about loan toes criminal groups at least three years ago. Meanwhile, tenco shares also in focus as japans industry minister rejects legislation to save the struggling utility giant. The operating of the crippled fukushima power plant says workers were exposed to radioactive water in the leak. In chile, auto tanked 3. 4 today after Goldman Sachs equity arms added a discount up to 7 . Back to you, ross. President obama today will nomiNate Janet Yellen to be the next fed chairman replacing ben bernanke. The president is equity. Ed to make the announcement at the white house at 3 00 p. M. Eastern. Yellen was appointed as fed vice chair in 2011. If shes confirmed, shell be the first woman to lead the fed in its 100year history. Rob caramel is chief analyst at ing and joins us for more. Do you think theres ever been a more experience d person to be appointed as fed . Pretty much. You could almost argue that shes been running the fed for some years now. Shes been in charge of the feds communication strategy. In that case, we should criticize her. Maybe the policy itself isnt to blame. Maybe its just the delivery of that policy. Well have to wait and see whether she does a better job than ben bernanke. I think the policy might be okay, but the delivery will certainly by rather dodgy. Well, weve got the minutes today. And actually, if youve got a deeply divided fed and nobody really knows whats going on, cuff a communication policy . That might be one question. Well, i think the whole if there is a debate on the communication strategy, it was a useful thing to have in the past when markets got things wrong, clearly mispriced as they were in the run up to the last fomc meeting, thinking that september was a debatable day. But in the old days, you would have had a nudge to the presence that theyre barking up the wrong tree here. Things have moved fairly quickly to the right position, no big surprises, everybody is happy. This was a great case of inconsistent communications. You say that within a few meetings, youre going to be doing something. Everybody goes, oh, you few meetings, that must meet september. Run up to that, you dont tell them theyre completely wrong. Maybe shell do a better job. Whose fault is that . Good question. Maybe the markets were just going a few means more than two, less than four. Its september. It was always going to clash with the budget debate thats going on right now. But yellen, as far as investors are concerned, the best candidate got the job. Global investors want somebody who isnt going to immediately changed policy. A lot of people are focused on her representing continuity. Some focus on the fact that shes the first woman to take the job on, the first become since 1987 to become fed chair. What do you think matters . Let us know. Join the conversation here on Worldwide Exchange. Email us, worldwide at cnbc. Com. Tweet cnbcwex or direct to me rosswestgate. Meanwhile, the president is pushing House Republicans to end the u. S. Government shutdown and raise the debt ceiling. In a hour than hour long News Conference on tuesday, the president says hes happy to talk with House Speaker john boehner and others about anything including his Health Care Plan, but not until after these two deputies are settled. He says republicans must end their threat saying extortion cant be a routine part of democracy. Theres no silver bullet. Theres no magic wand that allows us to wish away the chaos that could result. And when i hear people trying to downplay the consequences of that, i think that is really irresponsible. But then, following the president s News Conference, boehner shot back saying he was disappointed. So the president s position that, listen, were not going to sit down and talk to you until you surrender is not sustainable. Its not our system of government. Theres been some debate about whether the 17th is the deadline or not or what payments can we make or can we not make. Theres an underlying sumg here these guys will get their act together. How big is the risk . I dont really want to quantify it because this is one of those binary decisions. Either they will or theyll muck it up and it will be a default. If i put a number on it but you can still have a small this could go a few days, a couple of payments, and then they i dont know. You know, there is a chance of that. Exactly. I actually quite like that idea. Do you . Not like it, but i think theres a decent chance that something will happen. When you listen to some of the arguments on both sides, its clear that there are i think some people taking fairly irresponsible views with respect to the debt default. And were worrying about whats best for the global Financial System. I think once you do get default, you get such a Market Reaction to this. Talking about the sixweek lows on the stock market. If you look at it, we havent fallen there. We got the highest yields now for tee bills in five years. Well keep our eyes on that. I think were being told by Fund Managers they dont want to own those t bills at that october 31st, running into the november 1st period. Youve got to falls in the stokt market. Fund yields end up. You had yellen in the back drop to maybe muddy the waters. But theres an tumgz that the treasury market rallies in for this crisis is maybe not so obvious right now. Its actually been steady around the 2762, 2. 63 level, as well. Rob, always good to see you. Thanks so much. Any Federal Reserve decision on tapering will have International Implications and the central bank will need to clearly communicate its exit intentions. That says you of Jorg Asmussen. How concerned is he . Well, actually, he looks and feels confident that it will resolve. But on the other side, as well, he was pointing out that market volatility is something which we are probably have to get used to, as well. Mario draghi during a recent press conference was, as well, saying that the ecb is expecting the volatility to be here to stay punish that is not what mr. Asmussen said when i asked him about the feds tapering if and when it will start. Its a tradition among Central Banks that we never comment on other Central Banks actions. So the u. S. Will do what is right for their country to do. They set policy due to their domestic objective as we do for the euro area. I think they are well affair that the u. S. Have ats as the Major Central Bank of the globe any decision they take has to to other advanced economies to emerging market economies and that, therefore, they clearly communicate what they intend to do. But in terms of rates, rates rising, as well, in the eurozone, what kind of measures can the ecb take in order to prevent those rates to rise . We will we are looking at money market rates, especially very closely, which is what mario draghi referred to. We will keep this in mind and if necessary we can deal with a number of instruments with the liquidity situation for the banks. But it must also be clear that liquidity is no substitute for lacking capital. Staying in the United States, another huge topic, of course, right now for them is that they dont have a budget and the government has shut down. Do you think theres a real risk of the United States potentially defaulting . I dont see this. I am convinced and im sure that they will find a solution before the critical moment arises. Staying with the fed and exiting the loose Monetary Policy, do you think you can learn from lesson from the experience now in the market and what is the plan from the ecb in the future to exit the loose Monetary Policy stance . We are in a different situation of the business side than the u. S. For us, its clearly too early to exit. For me, its more a question of political will than of technical possibilities. When we are talking about the clear and transparent communications, the ecb is officially of course lacking the feds transparency. Because so far, there are no minutes or deliberations as mario draghi likes to call them published. But there is a discussion under way. And mr. Asmussen is one of the big propones of publishing those members, but there are other governing Council Members who dont like the idea to have their name and their position out there in the markets above all because they face perhaps scrutiny. But its not clear yet when we see these members. Still to come, Mainland China will see its third resort to be built in asia in 2013. We catch up with the chairman exclusively after the break. A recap of the headlines today, janet yellen will be nominated as the first woman of the tr. The European Central bank Jorg Asmussen says the u. S. Will get its out in order. Mineland china is getting its first disneyland resort. The chairman of the Walt Disney Parks and resort will compliment rather than compete with the other asian resorts. We have substantial experience in operating resorts around the world. And weve seen that the strength and success of one disney park location always ends up reinforcing the strength and success of other disney park locations. Is especially true in the United States. I think it will be that way here, especially given the size of this marketplace. So i think this sxang in hong kong bodes well for shanghai and the birth of shanghai bodes well for long congress. Still to come on the show, j. Crew looks to conquer the uk and britains top shop has its size on the retail space. As more stores set to open, should we be shaking in our booties . More when we come back. Just by talking to a helmet. It grabbed the patients record before we even picked him up. It found out the doctor we needed was at st. Annes. Wiggle your toes. [ driver ] and it got his okay on treatment from miles away. It even pulled strings with the stoplights. My ambulance talks with smoke alarms and pilots and stadiums. But, of course, its a good listener too. [ female announcer ] today cisco is connecting the internet of everything. So everything works like never before. A stagnant economy and a plunging rupee are two of the challenges facing the reserve bank of india. He was asked why he cut the overnight rate. When we announced the Monetary Policy, we said that we were going to get away from these exceptional liquidity measures. I feel that the Interest Rates we had in place as a result of the exceptional liquidity measures were a little too high, given the growth situation in the country and given the inflationary situation. So we needed to get out of them at a measured pace as we in the currency sort of being restored. What really changed between september 20th and now . Stability. I mean, the Exchange Rate is pretty much what it was then. But two things, one, increasingly, theres a sense amongst analysts and indicators that indias current account deficit problem is under control. Its going to, you know, simply billion that the government proposed the current account deficit after calculating it with us seems now imminently reachable. In fact, some analysts, independent analysts are saying it will be even better. You have given the government a window to correct its fiscal deficit. Are you satisfied that the government is using this window at all, that quantum hike in oil prices and diesel prices which are being contemplated is now off the table . Are you uncomfortable with the pace of reduction of sussydys . The government has done a fair amount both in kabing the current account deficit and in talking about plans to finance it. And, of course, the rbi has contribu contributed. So its a joint effort. One way to narrow to deficit would be a big jump in diesel prices. If thats not on the table, them a sequential increase in prices at a rate which makes us close to the market price in the near future is important. Because thats a big source of the fiscal deficit. I think that the government understands what needs to be done and the pace at which its rolled out. Indian policymakers, is there some ideal of banks confirmed on the upi. On cpi, we have not heard anything from the reserve bank. To some extent, first we have to try and see how our measures work with cpi. If you think of the last five years, cpi has been only, you know, coming down very, very slowly. So we have to see. I mean, theres no point putting a number out there and the kind of disinflationary process you have to engineer to get that number. Maybe more than feasible in this kind of economy. So we have to take a measured approach to bring down cpi inflation. But what i want to emphasize is that were not going to night it. At the same time, i think, you know, are you going through a broker and this and that, i think any central banker today realizes that if economic fwroeth is weak, its already a disinflationary process under way. And so whenever you look at inflation, you take into account the economy and what you want to put in place in order to bring down the inflation. Still to come on the show, our next guest says janet yellen was priced into inflation. And stay tuned for more on the new fed chief. Markets might tick higher at the open today. Right now, the s p surprise by eight and the dow by more than 60. More after this. [ woman ] if you have the audacity to believe your Financial Advisor should focus on your longterm goals, not their shortterm agenda. [ woman ] if you have the nerve to believe that cookie cutters should be for cookies, not your investment strategy. If you believe in the sheer brilliance of a simple explanation. [ male announcer ] join the nearly 7 million investors who think like you do face time and think time make a difference. Join us. [ male announcer ] at edward jones, its how we make sense of investing. Youre watching Worldwide Exchange. Its official, president obama will nom in a minute Nate Janet Yellen to be the next fed chairman. President obama and john boehner trade shots neither giving ground in the debt ceiling deadline. Its our last chance to restore confidence. Asmussen warns of this months stress tests in an exclusive interview with krnsz. We have not made sufficient progress here in europe. The dow down at onemonth lows. We might get a business of a bounceback for these markets. The s p 500 currently trading 8. 5 points above fair value. The nax dax is some 17 points above fair value and the dow at the moment is some 61 points above fair value. Theyve just turned up right non in european markets. The ftse 1 is 00 is flat, xetra dax up 0. 3 . Cac 40 up 0. 5 and the ftse mib is up 1 . This as the u. S. President barack obama is pushing House Republicans to end the Government Shutdown and raise the debt ceiling in a more than hour long News Conference in the white house on tuesday, the approximated says hes happy to speak with john beaners and others about anything including his Health Care Plan but not until after these two disputes are settled. He says republicans must end their threats saying extortion cant about a routine part of the democracy. Theres no silver bullet. Theres no magic wand that allows us to wish away the chaos that could result if for the first time in history we dont pay our bills on time. And when i hear people trying to downplay the consequences of that, i think thats really irresponsible. Earlier in the days, president obama and House Speaker john boehner struck a more constellatory exchange. So the president s position that, listen, were not going to sit down and talk to you until you sur renders is just not sustainable. Its not our system of government. Have we pushed the dollar enough . I think we have one uncertainty in the market. The point youre making, the dollar has weakened substantially over the last several weeks already and, therefore, it is stand to be less impacted by news that we otherwise would regard as negative. Yeah, look, how if we get into next week and theres nocation of a res lug, what is going to happen to asset prices . I think what you started to see yesterday was almost a front loading of a scenario where we go right to the limit. So if you compare the price action and the market yesterday, with what happened into the debt limit in 201 1, it looked similar. So i think what is going on in the market right now is were anticipating wa is going on at the limit. The markets are start to go price those effects already. Therefore, i think we could have a situation where in the next five session well have volatility, but not necessarily a continued deterioration and certainly that was the case in 2011 and were front loading the impact. What was interesting yesterday, the tenyear yields havent moved a little bit. There doesnt seem to be much appetite for t bills at auction inspect clearly people are saying we dont want to hold paper with an october date on it. Yes. I think thats absolutely right. And i think you can see it in the market money issues. It should be stable under any circumstances start to weaken, as well, with the tbill affects spimg over. That shows the market right now is starting to price these effects as it did in the last 48 hours into the debt limit in 2011. On the equity seed, weve seen some leakage lower. 2 to 3 . And volatility has gone up in that market. Its hard to say whether that is fully felt yet. And on the dollar side of things, we have to have something that suggests were going to go and hit the limit before the dollar weakens on the back of this news flow. Stick around. Still to come, its a tale of two discount reporters. Costco is set to report and Family Dollar is, as well. We will review and preview the numbers next. Get paid to do somethingou d 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 . Bny mellon combines Investment Management investment giving us unique insights which help us attract the industrys brightest minds who create powerful strategies for a countrys investments which are used to build new schools to build more bright minds. Invested in the world. Bny mellon. Alcoa is standing by its outlook for increasing worldwide demand this year. Stock up nearly 2 in after hours. Yes, maam brands Third Quarter profits down as they continue to deal with a slump in china. The company is warning it wont return to sales in the Third Quarter. Yumm is down nearly 7 in after hours. And latter today, chevron and Family Dollar will be leading the earnings side. On friday, jpmorgan and wells fargo kick off the banking releases. And theres retailers who focus on sharing money. Courtney reagan is at cnbc hq with more. Morning, court. Good morning to you, ross. Were going to kick you off a little Retail Therapy this morning, talking about costco and Family Dollar. Costco is first out of the gate today, reporting First Quarter results early this morning. Profits rose 1 . Revenue rose 1 . Sales up 5 for the quarter and 3 for the month of september. The september figures include the impact of fuel prices and foreign Exchange Rates. However, analysts were looking for an increase of 3. 7 . Coastco generates more than 70 of its sales from its u. S. Businesses, but it operates internationally. We can take a look at the shares and see how thee trading overseas in frankfurt right now. They are under a bit of pressure, down more than 1 today. Family dollar is forecast to earn more than 80 cents a share in the quarter when it reports. That would be the ri retailers first double digit earnings gain in the past year. Sales are expected to risel to 2. 5 billion, which could be the lowest top line gain since the november 2011 quarter. Family dollars growth has been sluggish as its become more dependent on consumer depending or soft goods. Family dollar stock is up more than 9 yeartodate. And a tie up could be in the works involving suites and ties. The wall street journal reports joseph a. Bank has approached mens warehouse about a possible partnership. Although its unclear if that means a merger. The company made news this summer when it ousted founder george zimmer, though he still owns about a 4 stake in the company. Joseph a. Bank and mens wearhouse trading down 1. 49 and up 0. 8 respectively. Mark parker, nikes ceo will talk to cnbc about 4 00 p. M. Eastern time. Ross, back to you. Top shop is stealing the Retail Sector in paris. Theyre accelerating both plans in the u. S. , rolling out an additional 28 in nordstrom plus more flagships. Joining us, stacey. Good to see you. How big a move is this from top shop . How much influence and weight are they going to get . You know what . Ive been warning investorses for years about top shop. They are going to the u. S. And theyre very serious about it, but theyre doing it in allege intelligent way. Theyre going into nordstrom. The partnership has been a great success, so theyre accelerating the rollout. But at the same time, theyve opened four or five Flagship Stores in major cities like chicago, vegas and new york. And the fist response has been incredible. They are filling a niche between the disposable fast fashion guys and the higher end. And the newest that they drive in the stores is a huge threat to u. S. Retailers. They should be worrying. And what is because its hard to crack the u. S. Market if youre a uk retailer. What is it that they are going to do . Or what is it theyre doing right . Well, i think what top shop is doing, again, you have the disposable guides that is low end, the quality is very low. So top shop is running that middle balance of the fashion and the quality. And certainly, you know, theyre dropping two or three new drops of merchandise a week. I mean, if you go into the Oxford Street Flagship Store, just the excitement in there, you can get a manicure, you can get a tattoo, you can get hair stangzs, its the manager, its the vibe and its the newness. Lastly, theyre doing smart things like lookinging up with kate moss, rolling out a line in the next four to six weeks that will hit the states. So its about hooking up with celebrities and being relevant and thats what theyre doing right. Would have been talking about j. Crew, meanwhile, opening in london, as well. So theyre coming this side. What different will that make to them . Right. So everybody is swapping one of the best retailers around. The uk is getting j. Crew. J. Crew fills i think a very important space which is lacking in the uk which is sort of mid end price points of high quality merchandise here. So they will be opening a huge Flagship Store in the beginning of november and i think that will be a huge disrupter to the uk market. Theyre going open several stores. So i think, again, the local brands in that area need to be very careful and watch out for the steps that j. Crew is taking locally. Just a quick word about nike and costco. Nike say analysts say, sales and margin improving can i continue . And costco, theyre getting a bump. Is that sustainable . Yeah. I mean, if you take costco, theyve been the outliar in retail. Their comps are up 5 . Their traffic has been up mid Single Digits while efblss traffic has been a disaster over the last few months. You know, they have increased their membership fees. So the question is, can they keep that momentum . Can they keep the traffic . We did hear from sams club a week ago or so in the news saying the Government Shutdown here was affecting business. So you certainly want to listen to that. The commentary there. And then we have nike today, tan lists, margins and sales have been outperforming. I like to say that, you know, you look at the shoe category right now and its incredibly exciting. And i have to ask the question, is it the new handbag category . And a lot of the Department Stores is in the United States are dedicating more and more space. Macys is doubling their Square Footage in active footwear. So still an opportunity there for mikey. Stacey, thanks for that. Good to see you. Thank you. Enjoy the trip to paris. Now, the new iphone 5, all Things Digital apple is set to launch the new lineup in october 22nd which should put the tablet in stores for the new Holiday Shopping season. The new ipads are expected to have a newer, thinner design and a faster processor. Amazon and other rivals have lowered price owes their new tablets. Apple stock down some 0. 5 on the stock market but today up 0. 75 . If youve just joined us this morning, janet yellen will be the first female ahead since 2011. But asmussen has said the u. S. Will get its house in order. R ] this store knows how to handle a saturday crowd. [ 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. The United States department of agriculture haas announced it will be plush its reports on friday. The cme said the absence of u. S. Price data this month has created confusion across stock modties, contribute b to a rapid decline in Trading Volume ones. Scott is a Senior Vice President and joins us now. How tough is it getting where youre not getting data . What are you trading off . Well, we dont have any data so we dont really have any trades. Its been incredibly quiet over there and the volumes have been absolutely crushed the. Were getting around waiting for something to happen while we wait for the petulant children to throw their toys out. As for the Nuclear Option that theyre all threatening about some sort of Government Shutdown or debt ceiling, its not going to happen. We wont default. And i think it makes the investors and the traders behind me when we open up here later this morning more and more frustrated. We all know its going to be okay, but we have to sit around and wait until they tell us its that way. That makes trading rather difficult. On the one hand, theres the pressure for the mark to markets and price action to head lower. But on the other hand, if you all believe there is no default, in the back of your minds, youll be thinking as a trader i can pick some stuff up cheaper. How does that work out . Theres two things there. Number one, because weve had a decrease in volume, its been more difficult together the things on that youd like unless you want to see cheaper prices. Weve seen some ditches selling. But on the other hand, i think theres a bigger story here. What about the folks that or the investors that have bought weekly options in the hopes that they would get a more after a usda report and that report doesnt happen . You basically wasted that money. So theres a lot of opportunity cost here that kind of flies under the radar that doesnt hit the headlines. And i think thats the bigger story. Theres a lot of people left in the lurch here that have options that are going to expire into nothing because theres nothing going on. And that is it. They just lost their money on purchasing those options. Right. I dont think anybody could have foreseen these crop reports getting delayed and the cme group not being able to put out lean hog and feeder cattle produces because we dont have any government information to set the index against. So, yeah, theres some things here this really start to hurt. And some of these people that have made a living on doing that type of thing are left in the lurch here and theyre out that money. How much further down the chains does that go . Well, i reckon it goes on to next week and then there will away deal made and a resolution. I think we have one more week for this. Anything you had planned last week or this week, you can basically write down to zero. Were going to see more defensive selling like were seeing in the stock market, as well. Ultimately, were going to see this take their hand off that Nuclear Option. As traders say to me down here, if you bet on the sun exploding, if you win the bet, what do you win . Were all dead, anyway. I think the government will have a lot more to worry about if they do default on the debt. Were going to have to wait apd around until the children in wall get their act in order and its going to be sometime next week. Lets hope so. U. S. Futures this morning have ticked higher. Dow down at sixweek lows suggest we might get a bounce back at the open today. Were about 54 points above fair value for the dow. The nasdaq is around about 16 points above fair value. The s p suspect up around 7 points above fair value. As far as the agenda in the states today, august wholesale numbers were released and theyve been postponed. The latest out of fed minutes is coming out at 2 00 p. M. Eastern. They will give us some clues on Central Banks no taper decision at last months meeting. Huh divided was the fed . And the most important event, thats president obama nominating janet yellen to be the next fed chairman. Yetten was appointed as vice chair in 2011. If shes confirm as expected by the senate, they will be the first woman to lead the fed in its 100 year history. Everyone seems to be fairly happy. Is this the most qualified fed chairman ever . I think certainly relative to the other potential candidates that remain in the race, shes very qualified. You can see that the market is happy with her nomination coming up today. I think in terms of the market, that had a big Market Impact and thats why youre seeing less of an impact now. The other thing i would say that weve had a very dovish signal from the fed when they didnt taper. And the market has postponed expectations for when the tapering will happen next next year now. Therefore, we have a dovish back drop and the appointment of yellen is less impactful than it otherwise would have been. Well, the fed minutes are going to be rather fascinating, arent they . And im fascinated to know how much of a decision to taper was down to because they feared what was going to happen with the politics and how much is down they dont think is economy is strong enough. And depending on whatness aes we get on that, how will we trade off it . Well, i think theres a third thing that some people believe that the fed has lost confidence in the whole qe concept. So i dont think thats true. But that will be something that would be scrutinized in the minutes, as well. I think overall, the data played a key role. It was continued on on the data picking up. The fed had an optimistic view on the economy and it just didnt come through. And now, obviously, you have additional uncertainty about the economy. The shutdown is going to have a direct impact and it might have a confidence effect. So the optimistic forecast that the fed laid out in may june, it just hasnt come through and thats the main reason for not tapering yet. So just give us a recap. Do you think weve pushed it as low as we can . I think were getting close to the lows here. We could maybe see tension in the market get further exacerbated in the next one to two sessions, but i think were front loading the impact. People are pricing that were going right to the limit already and, therefore, i think the dollar could bottom out very soon. Do they need more of a price action . Do they need to see the market being very weak . I hope thats not the case. I think eventually we will see a deal. The alternative is so dire, nobody wants to contemplate it. Obviously, there are Political Considerations that makes it hard to strike a deal before the very last minute. So that is a situation were facing. The market is coping with it. Thats it for Worldwide Exchange. Squawk box is coming up next. We have you have a profitable day. Goodbye for now. Good morning. Todays top story, president obama will nomiNate Janet Yellen as the next chair of the Federal Reserve. Thats going to happen this afternoon around 3 00. Meantime, the beltway battle over the Government Shutdown, a debt ceiling continues. I saw a glirm of hope yesterday. Its wednesday, october 9th, 20113 as squawk box begins right now. I am happy to talk with him and other republicans about anything, not just issues that i think are important, but issues that they think are important. But i also told them having such a conversation shouldnt require hanging the threats of a Government Shutdown or economic chaos over the heads of the american people. Theres going to be a negotiation here. We cant raise the debt ceiling without doing something about whats driving us to borrow more money and to live beyond our means. The idea that we should continue to spend money that we dont have and give the bill to our kids and grandkids would be wrong. Good morning, everybody, and welcome to squawk box here on cnbc. Lets get right to the news of the morning. President obama will nominate fed vice chair janet yellen to run the central bank. Current chairman Ben Bernankes term expires at the end of this year. The d