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Good evening, it is day seven of the Government Shutdown. And no signs that the United States is getting any closer to avoiding the first default in the nations history. There are no scheduled talks between democrats and republicans. There are no votes scheduled in congress, and both sides appear to be digging in for a long fight. But president obama said today he would accept a shortterm increase in the nations Borrowing Capacity in order to avert a catastrophe, but he also said both sides need to come to the table. Were not going to negotiate to the threat of hurting middle class and american families. Were not going to negotiate under a threat until they get what they want, or the economic threat that the economists warned would result if congress chose to default on americas obligations. Meanwhile, House Speaker john boehner doesnt want to see the nation default but says the president is the one who is not willing to negotiate. The president had us all down to the white house last week, only to remind me that he was not going to negotiate over keeping the government open, or over the looming need to increase the debt limit. The president s refusal to negotiate is hurting our economy and putting our country at risk. Well, on wall street with no real signs of progress to end the Government Shutdown or to end the nations Borrowing Limit, the prospect of the default sank in and the stocks fell hard. The dow and s p are at onemonth lows, today the blue chip stocks fell a point, the nasdaq down a steep 37, and the s p 500 lost 14. Is the Government Shutdown and no deal on extending the debt ceiling taking a toll on the markets and economy . Joining us now to talk about that, bruce casman, and carmine grigoli. Welcome, gentlemen, let me begin by talking about the economy and start with you, bruce, if i may. What is your view on the economy if the standoff goes right up to october 17th or if it goes a little beyond that, what impact will that have on the economy . How much will it shave off of Economic Growth . What do you think . I think the direct effect of the shutdown will be limited, taking a few points off the quarter. I think the indirect of hurting confidence and uncertainty will be a little bit more. And the real question is what do we actually do when we get to the debt ceiling limit, do we have a solution that doesnt create ongoing problems . The uncertainty is how we get to that is what is doing the damage now. And i wouldnt want to express enormous confidence on how we resolve it and really what is the big issue. Carmine, let me turn to you and a what you should do with my money, if im a typical investor with 40 stocks and income, let me put it another way, why shouldnt i raise cash against the possibility that this really goes off the track. I wouldnt panic, this could be a compelling case, the markets typically and shutdowns do not react in a very big way. Corrections are normally short, shallow, and you recover fairly quickly. In fact, if you look at shutdowns ten days or more, you see a decline about 2 , that is comparable to what we see today. There is no question that fear is intensifying here. I would use that as an opportunity to buy, not an environment we should be selling. Carmine, we are not getting government reports, obviously, because of the shutdown but well start to get earnings reports starting tomorrow with alcoa reporting. Will the investors be paying attention to those reports or just will they keep their sights on washington and what is going on there . It is going to be hard to shift the earnings, but nonetheless, in this particular earnings season, what weve seen in the past couple of months, the expectations have been chopped in half, it is now expected to grow 3 . If you look at the overseas companies that operate domestically, you see it changing, with Companies Reporting earnings, showing a big improvement in earnings. And i think that will continue through this year. Bruce casman, you probably heard about the debt default or the failure to raise the debt ceiling as bringing about the possibility of economic catastrophe. His words. Do you see it that way . And would the failure to make good on the federal governments obligations even for a couple of days or hours, produce the economic catastrophe that so many seem to fear . I think we have to consider what actually happens. I think if we stop paying our bills and stop paying social security, defense spending, all the things that we do, we would over a period of a few weeks create a fairly significant economic damage that would be far worse than anything were seeing right now. A day or two itself probably wont be such a big deal. I think we have to recognize that. It is 3 to 4 gdp, to increase our debt. If we mention the debt payment, the interest or principal, i wouldnt want to hurt the impact of that. That is unlikely but it would be a very scary thing to have to experience. What about what all of this does to fed policy . Does any of this change the calculus, especially if theyre working in a vacuum with all the reports. What is your thinking, bruce . We think the fed made a determination not to consider this fed calculus, we think the length of the shutdown, the uncertainties, could push them back into next year. The idea that they tactically wait, and if the debt problems are behind us and they can get back on track looks less likely with the extent of the shutdown and the data and the risk still ahead. All right, well continue to watch this closely, as i am sure you will, too. Bruce and carmine, thank you for joining us, thank you, gentlemen. And china, the largest foreign holder of debt looming in on the crisis urging the lawmakers to do what they can to avoid a default. They are asking for concrete measures to raise the u. S. s Borrowing Limit before the deadline to protect the safety of chinese investments. Meanwhile, the Government Shutdown and the worker furloughs appear to be causing a problem in the housing community. Some lenders and business operators warn they may not be able to work with the tax documents to make the home loans, and some home loans have stalled entirely leaving them out in the cold. Reporter a partial shutdown at the irs threatens to shut thousands of borrowers out. This is just one more market trying to get its legs. Reporter most of them require the irs verifications. The irs is not providing that. Lenders announced they would suspend the requirement, but this year theyre using words like shortterm. A wells fargo spokesperson said that the Government Shutdown will continue to be lie the circumstances. It is changing dramatically with each lender, each day, so each lender has to take a stand on what theyre going to handle in the way of credit risk. Low down payment loans insured by the governments fha are still going through, thanks to a largely automated system, but only about 2 of the fhas staff of 3,000 are currently on the job. Hardest hit are rural borrowers depending on the governments program. That is shut down, no loans, it is less than 5 of the market but a lot of these are firsttime buyers who have no lender option. One of them posted the problem on youtube. We have a situation with a buyer, five kids, they are homeless, we cant get back negotiation material because of the shutdown. Reporter and as negotiations stall in d. C. , so too, does the local housing market. I have had buyers decide to take pause, even though they know theyre going to be ultimately be paid. Theyre nervous, they dont know how long this is going to last, and they dont know the impact as they get out of the market. As the shutdown draws down, they are essentially doing no dock loans, the ones that crashed the market. All the mortgage safeguards from federal regulators go out the window. And the federal work stoppage is forcing the furlough of 2400 private Sector Workers at the defense contractor, lockheed martin, that is fewer than we first reported and told you about last friday. That is because the pentagon decided to recall 350,000 of its civilian workers over the weekend, keeping the work orders for the company in effect over the weekend. And manufacturer was the first to announce plans to furlough thousands of its workers due to the Government Shutdown. But now those plans have been scrapped entirely, and that is thanks to the same recall of civilian workers by the pentagon. And there is another drunk related to the Government Shutdown that wont make the farmers happy, they wont issue the key crop report because of the furlough of hundreds of usda workers, the employees missed out on daily reports of livestock, grain reports, milk production and other metrics used in the monthly crop report. It is the first monday in october, in the Supreme Court, hearings began today on a handful of cases watched closely by wall street and american businesses. Hamton pierson has more. Reporter the Supreme Court is open in spite of the Government Shutdown, six cases on the calendar, mccutchin versus the federal Election Commission is at issue. The limit is over 123,000 in a twoyear federal cycle. If the challenger wins, individuals could contribute millions. Meanwhile, the Roberts Court could venture into uncharted territory, when the justices take up the issue of resources. A lower court said president obama went too far when he named members of the National Labor resolutions board,ni a and installed Richard Cordray back in 2012. The practical effect is that the court has the opportunity to decide what the recess actually is, is it any break during a session of congress or is it only breaks that are between the enumerated sessions of congress, which are typically in december, january of each year. The power of the Environmental Protection agency to make rules governing Greenhouse Gas emission is on the radar screen. Two cases focusing on pollution across state lines are on the december calendar. Meanwhile, billions are at stake regarding the clean air act. Thomas lorenzen says it is the environmental issue of our time with more cases to come. Epa has been trying to deal with how do you assess the states fair share with other contributions to the states pollution and how far can you go to make the states address that . Other high profile cases are michigan and a ban at universities, buffer zones for protesters outside abortion clinics are all on the calendar. The Supreme Court is open for business this week, despite the partial Government Shutdown. But what happens to the Court Calendar next week is still very much in the air. For nightly Business Report, im Hampton Pearson in washington. And first time the International Markets close. T. J. P. Morgan chase is still fighting from the fallout from last weeks socalled london. They denied information that they manipulated the creditors markets, by responding, the commoditys Trading Market can either sue j. P. Morgan or try to settle with the bank. And in 2014, United Health care is adding walmart to the sams Club Warehouse to the preferred Pharmacy Network that begins next year. And it has been one year since the marketplaces, all part of the Affordable Care act, the planning and preparation, theyre still working through glitches and error messages. Reporter josh and emily ostein have been trying to create an account. We have been trying to create an account, they say the user word is incorrect, the pass word is incorrect. They both work in the Health Care Industry but will lose their health care in january, theyre anxious to get their plan resolved. This reminds you of Different Things our clients go through daily in applying for different types of services they want. New jersey is one of three different states on the federal exchange, after taking parts down over the weekend, Officials Say wait times were cut by 50 , but they still have more to do. Folks are working on it 24 7, tomorrow will be better, next week will be better. I. T. Says there are flaws in the code system. They didnt have an adequate plan for the people trying to get in, we have a capacity issue, that makes the codes inefficient, it makes things slower. Apparently there could be parts of the site that just dont work yet. Federal Officials Say the site will be taken down to add more hardware, and software, but experts say it is no easy fix. The front end, they are sort of aesthicits. Reporter emily and josh are trying to be patient for now, hoping at some point they will get through. It is a big program, there are complications in the beginning, im anxious to see what is out there and if it could help us. Bertha coombs, new jersey. And a major deal in japan. The european aircraft maker air bus secured their first order from japan earliy airlines toda, they will design their models worth 9. 5 billi 9. 5 billion, th competitor to boeing, boeing shares are down to 116. 69. And cooper tire and rubber falling sharply and more uncertainty surrounds the deal with indias apollo tires. They agreed to purchase it for 2 billion, now they are seeking a price reduction because of Labor Relations in the u. S. And china, cooper says make good on the contract. Shares are down to 25. 72. Shares on blackberry rose as talks happen with google and sep for a possible sale. This could be an alternative for the potential agreement between blackberry and financial, the report shows shares up to 7. 97. Shares up for pacific, after the company agreed to sale its Juicy Couture brand. The sales have plummeted in recent years, the plans to sell them to focus on growing. Shares are up to 25. 71. Decker tumbling on a warning about sales trends for the companys ug brand. The stock ended in session lows on more than double the volume. Deckers tumbled to 53. 07. And Hedge Fund Manager carl icahn tweets he may have conversations with management regarding strategic alternative and board seats. The stock rose sharply after hours of closed regular session, up 4. 5 . And stocks already getting their first buy rating. The analyst robert peck from Sun Trust Robinson humphrey recommended his clients buy shares from twitter, saying they will trade at 50 apiece next year. Why the rosy outlook from a stock that has not been priced yet. You got into double margins. They have invested heavily. I think you will see more of the profitability come out now over the coming years. And Sun Trust Bank is not involved in twitters initial stock offering. If youre looking to trade in your older iphone for a new one, two major stores made it easier, walmart and iphone, this is the one with the plastic backing that comes in five bright colors there. Starting saturday, radio shack customers buying a 5 c will receive a 50 gift card used for their 90 phone. Walmart is lowering its price to 40s saying the discount will last through the holiday season. Apple getting the allclear about the handling for billions of cash and related taxes overseas. Four months after opening their books, the agency is takes no action against apple, finding that its disclosures are sufficient and in line with tax regulations. Coming up on nightly Business Report, californias monterey shale is four times bigger, many hoped it would be the economic gusher, reaching the oil is tough and just got tougher. Well explain in a moment. But first, how commodities and treasuries and currencies perform today. Good news for drivers, gasoline prices falling over four cents a gln over the last two weeks, in jersey, i saw it for 3. 09. One reason why Energy Prices are lower than they were in the past is because the u. S. Is now producing more energy than ever. But some of the nations biggest underground reserves has gotten more costly and harder to get out of the ground. Reporter california is in the middle of an oil boom which could grow if wells can reach oil trapped thousands of feet below the surface in the monterey shale. Well, were looking at a typical drilli ining rig. His Company Searches for oil, thought to have four times more crude than elsewhere. They are using fracking, but it has proven difficult and expensive. An operation a lilike this, depending on what theyre doing at that particular point of the well can be at 2 or 300,000 a day. A day . A day. Reporter but while traditional pumping continues, the cost of fracking goes up california has just passed the strongest law in the country. Which allows them to list the chemicals used, and monitoring the water and seismic activity. One thing well see is more extensive preand post testing of the water activity. They are trying to balance the minerals without killing the golden goose, although the new laws could slow it down and could make it too expensive to drill. We have the monterey shale, there are potentially 15 billion barrels of oil there. It is coming up with the technology that we need to go and get the resource. In places like kings county, theyre hoping for more jobs related to the shale. So far, not so much. Environmentalalists say the new law doesnt go far enough, they wanted a moratorium on fracking, but the industry argues they have been fracking for many years without problems. Now they have to decide if it is worth it to dig so deep in the earth which may not give up the oil so easily. Finally tonight, if diamonds are a girls best friend, this will get somebody a lot of friends, a flawless White Diamond about the size of a small egg auctioned off in hong kong today for a recordbreaking price of 36. 6 million, which is on the low end of the estimated sale price. Susie was not bidding, that is the problem, we know that large collectible diamonds like this have seen big increases as some of the richest people in the world have turned to jewels as investments. Not just investments, theyre fun to have. That is a rock, when it is clear like that it goes with everything. You know, there is a pink diamond just in case you want to think about joanne in november 59 carats. Lets get our money together. That is nightly Business Report, im susie gharib. Nightly Business Report has been brought to you by street. Com. Interactive financial multimedia tools for an everchanging financial world. Our dividend stock adviser guides and helps to generate income during a period of low interest rates. We are the street. Com.  narrator welcome to film School Shorts, a showcase of the most exciting new talent from across the country. Experience the future of film, next on film School Shorts. Film School Shorts is made possible by a grant from maurice kanbar, celebrating the vitality and power of the moving image, and by the members of kqed. [ ring ] hey, hey. Yeah, sorry. Cell phones dont really work out here. You what . Youre not [bleep] with me, are you . Are you sure . Yeah, ooh no, no, no, dont worry about my end. Dont worry about my end. Yeah, i will. I will. Yeah. Things are finally starting to happen

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