Downgrade. Fwu given all of that, take a look at the futures right now. You may not surprised to know we have some green arrows across the board. S p 500 up about 6. 5 points and the nasdaq up about 8 points on an expectation that a deal does get done today. But, boy, things could turn around. We will see what happens. Over, over to you. I know youre waiting. I know. Were watching and waiting. I know were news people. Come this afternoon, if we dont have anything andrew, when they said two weeks ago that these things will converge, the debt ceiling and the government shut down will converge, wa did everyone say . Theyll probably wait until the 17th to do it. Today is the 16th. But tonight, its midnight tonight is the no, i know. You know that theres the slightest bit of breathing room. You know that. I think theres a decent chance we get to tomorrow and maybe the house votes tomorrow. Look, and yesterday, once again, was humiliating for boehner. Remind he me of do you remember plan b . Plan b collapsed because he didnt have the votes for plan b. Do you really think at this point if the Senate Passes something, its going the be mroftly clean, hell brng it up. There will be enough republicans to get it done and well the put this off and well do it again in six months. Joe, i love your outlook. Its just realism. The thing is, the republicans look the worst roit probably right now, but the president , you know, he doesnt want to be the first one that provided over a default, okay . So he doesnt hes not going to look great, either. And neither side wants to hurt the wants to burn down the house to save the house. Thats wa i think. Some people do want to burn down the house, but well talk about that. But not where you cant rebuild it. They think longterm entitle manies are important enough that the house is going to burn eventually. So they think that eventually its going to be destroyed and were going to default based on how much weve promised. Theyre crazy, thats admittedly true. In other countries, six different parties, four of them come together on one side and two on the other. Now weve got that here, but in different parties. But the house is supposed so be the you know, i dont want to call them the we talked about it yesterday. Theyre the omegas. They are the delts or whatever it was in animal house. Theyre those guys, theyre going to be there causing prubl trying to keep power divided among the different houses of government. I think this is all fine. Youll see. I hope youre right, joe. I hope youre right. Stokes, wouldnt you think that would be the most sensitive place to an actual imminent default . Yes, but the application still is we do get a deal. Thats what i mean. Youve been you know, you wrote the column two weeks ago sort of hoping that when there would be a default, remember . Im hoping that im very wrong. But, you said dont be so sure there wont be a default. Not a default, that we could go past the 17th and no, it was a default. Ill get the column for you. I didnt read it that day, but we have to talk to mr. Buffett. Lets do. Lets get to becky. Gentlemen, thank you. Now lets get to the man of the morning, war b buffett, chairman and ceo of berkshire hathway. Warren, youve heard the news. You know where things stand in washington. At least at this point at the look at the reaction in the markets, not much. Wall street seems to be betting that there is going to be a deal. Do you think thats a safe bet . I dont necessarily think its a safe bet, but i think its a perfectly okay debt to buy securities. We bought a 1 billion business about five hours ago. I think over at the uk. And we did not buy it with a condition in it that we could call off the deal if there was a no vote on the deficit change. Limit change. So if you can own a Good Business, a good farm, a good apartment house, you know the United States is going to be around five or ten years from now and you know it will be more prosperous. Its not necessarily a mistake to buy stocks because you dont know the outcome of something thats happening in congress. Thats a great longterm view. And your view has always been no matter what happens, we will get through it. We got through the great depression. We got through world war ii. But what about the immediate . People are really concerned about whats happening in washington right now. Its a mess. And if you think about it, i used to tell my children when they were young, it takes 20 years to build a reputation and 20 minutes to ruin it. Weve been building a reputation for 237 years. The United States has become the reserve currency in the world in the process and people all over the world hold our paper. So to do anything to damage the 237 years of Good Behavior is idiotsy. I dont think it will happen. But if it does happen, its a pure act of idiotsy. You might say that the threat to not raise the debt ceiling after you youve already spent the money is its a political weapon of mass destruction. We used the atopic bomb back in 1945 and said we werent going to use Something Like that again. The russians and the soviets the same way. There are certain weapons that are just improper to use against humanity. And so to use this as a weapon against the american public, it is idiocy. Its too powerful. Some republicans made the claim that, look, we are doing this because we are trying to save the longterm health of the country and we are very concerned about the path we are headed down. Is that an unfair statement . Well, we could have said in vietnam that were trying to save the and were going to use a nuclear bomb in the north. Theres all kinds of times when you get frustrated in government about your lack of ability to carry out something. It does not mean that youre selfdestructive. Its not a weapon that should be used. Theres plenty of weapons to use. You can do various things. But you should not take an asset that weve spent 237 years building and tear it up. Over any kind of a fight. You can do it over abortion, do it over gun control, all kinds of things. Its an improper weapon to use. Joe has made the argument this week that you dont burn down the house to save the House Partnership guess youre making a similar argument. Yeah. It is a it is something where youre going to destroid stroi an asset of the american people, 315 million americans to get your way on a specific bill. And its such a powerful weapon that it my even work unless both sides say, this is off balance. So weve been treating tomorrow, october 17th, as if its a hard deadline. Do you think it is . Well, i think its crazy to find out exactly what the inflow and outflow of the treshly will be in any given month. You know it isnt sustainable when were spending more than were taking in to have it. The treasurys flow of funds, ive snefr seen the exact dates on tax receipts coming in primarily when Social Security goes up. But it should be over. I dont care if its two days later or that you actually would run out of money. Who knows. The treasury doesnt know precisely. But forget it. This is like this is like poison gas. You dont use poison gas to say, well, people wont die until next saturday. Is that a prediction that the market will react rapidly and strong tomorrow . If we dont have a deal by midnight tonight or when the markets open tomorrow morning, is that like we saw back in 2008 in the financial crisis . We were looking at issues every weekend that you want to resolve before the markets open. It could be. Ive never felt i can predict what markets are doing to the next day, but it certainly has the potential for that. And its idiocy. Fitch put us on negative watch based on not the u. S. s ability to pay its bills, but the idea that you have all this wrangling in politics and the ideal of getting them p there. With them making this move, do you think the damage has been done . Theres a tiny bit of damage thats been done. We have spent 237 years without people working whether were going to pay our debt. Even in the great recession, people do not worry about government bonds being used. We financed ours in world war ii. People did not worry about the fact that when the government said we promised to pay. Isnt that something. Anything like this arose just slightly, but the actual fact would be, you know, many fold. It is huge compared to this at that particular time weve seen so far. If we prove were total idiots, i think that has an effect. Were on the here at fortunes most powerful womens conference. Christine legarde, the former french finance minister was here last night as the key note speaker. She raised the suggestion that the use has done enough damage, that it brings the idea of the dollar as the reserve currency into question. Do you think thats the case . I dont think its the case quite yet. It could be done very, very quickly. By next week, do you think . I dont think theres another reserve currency that would jump in next week. But it would produce chaos over time. I cant tell you exactly wa day it would be. Like i said, the treasury opens their mail like we all do and hopes theres more checks in it than bills. Some days there are and some days there arent. But we know were spending more than were taking in. Incidentally, the congress did it. It just its so silly to sort of deny reality when youve spent the money and say, no, were not going to borrow it. Lets talk about that acquisition that you referenced earlier. This is a 1. 1 billion argument that bish yoch is placed. Its liquid disexpensing machines, like the machine i have at our office where i can get a coke and cooling equipment. All designed for beverage cooling and dispensing. So 1. 1 billion, people look at that and say wow, thats an ee normal amount of change. Not for berkshire. No. Weve committed to spend 5. 6 billion on mv energy. Well spend about twice our depreciation on plant deployment. So we are sfending at a rate this year thats as high as ever. Have you been looking for a big, big acquisition . You had in the past. Youve always talked about how you have your elephant gun out and ready to go. Right. Its met foficcal, but its definitely here. But have you seen anything . Yeah, yeah. We always have a a little sighting. I wush to the clearing and cant quite locate the science. Wuven that got away, you mean . Well, i dont like to say it that way. Recently . Yes. How big . An elephant. Heinz is something of an elephant. 12 billion is an elephant to us. But this was a bigger one. How much cash does berkshire have on hand right now . Right now on a consolidated basis, but sclusing our railroad and utility, we would have about 40 billion. So thats more than the United States will have tomorrow, ard cooing to jack lew. Right. But they should not regard us as a source. Have you sold anything . So no. First of all, do you own any shortterm treasury bills . Probably those that are due in less than a week. We always have a big rolling chunk of treasury bills. And i issued no special instructions in terms of getting rid of the shortest ones. I am fought worried in the sense of those treasury bills being paid. Im worried about damage to an asset that we carefully cultivated for years. Those shortterm treasury bills, though, the rates have spiked on them, especially in the last couple of days. Bill gross said hes a buyer over at pimco. Are you . Theyve spiked, but youre talking about going from zero yield to 35 basis points. But 35 basis points for three or four days does not amount to a bunch of in other words, youre not scraping for cash . Ive got Better Things to have had although that date looked pretty good. Have you changed anything youve done at berkshire as a result of whats been happening in washington . No. We have been at a derth when it comes to getting any signs of the economy, any reading on what is happening because you dont have any economic numbers coming out. You have a lot of numbers coming out every day. In your opinion, has the u. S. Economy been hurt by whats been happening in washington and does it show up in your receipts . It has not shown up. But what will show up is in the world, United States citizens lose some faith in the full faith and credit promise of the United States. That would be a momentous event. Even if we said, well, were slowing it for a week or were putting out script or whatever, that would be huge. We have been spent 237 years building up our reputation for billing our bills on time. It would be crazy for me to say, well, ive been handlinging things and ive got these internal rules and things that were just not going to pay for a few weeks. There would be a lot of damage to berkshire. That would be a thousand more damaged to the its if they do it. But the economy, you have not seen any Consumer Confidence dropoff, you have not seen any spending decline even as the retailers no, if you look at our Furniture Stores and Jewelry Stores and orders coming in on carpet and all of that, no. You know, this is not the last three or four days ive been traveling and but if this goes past tomorrow, we will see. We will definitely see something. It wont cause me to change what i do in life, but we will definitely see something. War b, if you will stay with us, we will slip into break and, joe, ill send it back to you. Thank you, becky. I bet you warren well, who has thought about this guy. Guess what the symbol of germanys post war economic miracle. The symbol . Yes. War b, do you have any thoughts of that . Gummy bears. Oh. Yeah, theyre from the black forest, right . It it was on the tip of my tongue, joe. Im sorry. Hans reigel, he was the last great he died. He was 90. And gummy bears marched around. He just died. Theres a big piece in the journal. The good gummy bears say they come from the black forest. Reigel. He was worth 2. 9 billion and its a little bit sad to me that there is their most famous entrepreneur after tworld war two. Anyway, he was 90 and well miss him. How is that, andrew . Thats safe to say, right . My wife is a gummy bear can you imagine . Life without gummy bears. He will be missed. Yeah . Good. He will be missed. U. S. Equity futures trading above fair value. If we were up 50 we would be at 1 1,520. Anyway, coming up, more on war bs surprise dinner. Did you know about this . I heard about it. I am a fan of this person. Huge. Maria . I am a fan of hers, as well, but this is different. The st. Louis cardinals beat the Los Angeles Dodgers 42 last night to take a 31 least in the mls. Boston is now up 2 of 1 is. Now homer trying to gefg the tigers the win in detroit. Welcome back to squawk box. It is now time for the executive edge. Its our daily segment focused on giving Business Leaders a leg up. We also want to welcome a special member of the squawk team to join this conversation, Warren Buffett. A new survey finds the population of a banking career has fallen. Industries such as software and Computer Services has become much more popular. Lloyds, which conducted the survey said banks must change their recruiting techniques. Guys, is banking dead . I mean, it goes to be how much of the s p were financials a couple of years ago . This is probably it was around the world, too. Did you see that . It was all over america, asia, the middle east, africa. And actually, the byline is in london. I guess its good if you till want to get into banking, its good that theres not as many people trying to get in there. But becky, war b, good thing or bad thing . In 2008, people said before that there was such a brain drain from all sorts of industries that had done goo wall street. Maybe it goes back the other way . Maybe its a good pendulum swing, as well. I cant say its surprising at all. Im getting excited about gumny bears, actually. Think about it were warren. You own candy and you own darely queen. I mean, are you a gumny bear person at all . Joe, im on it and i will tell you, since you tipped me off to it, i will definitely give you a gumny bear as a reminder. If you have any special colors youd like to we make the deal. Honestly, the guy owned half of the company now and a lot of times when a key employee like dont be surprised when we hear about this a couple of months from now. Berkshire hathway finds dont be surprised if you get a gift box with a gummy bear in it, too. I just want to happen im looking forward to this. You dont have to pay a royalty rate to his estate now, do you . Does he own the right to all gummy bears . I think there are knockoffs, too. But warren, if an investment banker comes to you with an idea like this, what is the normal fee . More than one gummy bear. But thats my sharding position, however. All right. Well, i wouldnt be surprised. This is kind of like your kind of company. Plus, its international. It is my kind of company, definitely. And if you say its 2. 9 billion and he only owned half, its a pretty good deal. And 2 billion in sales, too, per year. I had no idea. But one thing a lot of people are pointing to, warren, honestly about was going on in washington, if you madeed a 1 billion acquisition without anything in you know, any way to get out of it based on and if you havent positioned anything else at berkshire for that, i mean, that speaks volumes about whether something is likely to happen at this point if the worlds smartest investor hasnt done anything to repair for it. Well, i think its such idiocy for us to get beyond it. I cant believe that 315 million americans are going to let perhaps even a minority of the party in one house i think there may come out of some something that i hope both parties say, forget about that. This is off the table. We can all about all kinds of things, but were not going to use a weapon of mass destruction im hoping Something Real good comes out of it, just like you. Warren, did you ever think about making the acquisition, instead of making it in the past 24 hours saying, you know wa . Im going to wait a week just to see if case things go down . No. My partner, charlie and i have never had that discussion in any event. And theres been a lot of events over that time. It is election day in new jersey and cory booker and republican steve logan are fighting for steve who . Longan are fighting for the senate seat vacated in june. What do you guys think . Becky and joe live in new jersey. Booker is up by double digits. But this is interesting because its a microcosm of whats happening in washington. Booker has said he would like to see washington settle this dispute. Lonigan said he thinks they should stand firm. He would like to see a year extension on obama care. It was 16 points. I think its ten now or something. Some of the tweeting, i dont know, that was such a tempest in a teapot. I dont care who tweets m