TheChek News Flow

Netflix dips 7 pts in after-hours; Icahn filed 13-D disclosing reduced stake in co following recent stock sales

NFLX From Icahn filing:

o On October 22, 2013, the Reporting Persons ceased to be the beneficial owner of more than five percent (5%) of the Shares. o The Reporting Persons may be deemed to beneficially own, in the aggregate, 2,665,557 Shares, representing approximately 4.50% of the Issuer's outstanding Shares (based upon the 59,257,798 Shares stated to be outstanding as of September 30, 2013 by the Issuer in the Issuer's Form 8-K filed with the Securities and Exchange Commission on October 21, 2013). o Commentary: Icahn Enterprises L.P. (Nasdaq: IEP) and its affiliates today filed with the Securities and Exchange Commission an amendment to their Schedule 13D reflecting the sale of 2,989,000 shares of Netflix common stock. Netflix common stock is held in the Sargon Portfolio, a designated portfolio of assets within the various private investment funds comprising Icahn Enterprises' Investment segment, of which David Schechter and Brett Icahn are the co-managers pursuant to agreements dated August 1, 2012 (the "Co-Manager Agreements"). o The decision to sell Netflix common shares was made by Carl Icahn in view of the 457% increase in the price of those shares since the original investment at approximately $58 per share. In order to address certain provisions under the Co-Manager Agreements, Carl Icahn and Icahn Enterprises reached an agreement with David Schechter and Brett Icahn (a copy of which is filed as an exhibit to the Schedule 13D) that will allow Carl Icahn and Icahn Enterprises to reduce their exposure to Netflix while allowing the Co-Managers to maintain the potential to receive compensation under the Co-Manager Agreements based on the performance of Netflix shares. o While I basically agree with David and Brett's assessment above and have often held positions for many years, as a hardened veteran of seven bear markets I have learned that when you are lucky and/or smart enough to have made a total return of 457% in only 14 months it is time to take some of the chips off the table. I want to thank Reed Hastings, Ted Sarandos and the rest of the Netflix team for a job well done. And last but not least, I wish to thank Kevin Spacey. I also want to thank David and Brett. The Sargon Portfolio which David and Brett co-manage and I supervise, has generated 37% annualized returns since its inception on April 1, 2010 through September 30, 2013 and currently manages in excess of $4.8 billion for Icahn Enterprises and my own capital. Icahn Enterprises has assets of approximately $29 billion.

o CNBC also just highlighted a bearish technical pattern (engulfing triangle) and the stock slipped below its 20 dma of $318 as news of Carl Icahn selling some shares hit in the after hours

Asian Market Update: 1-year high in Australia CPI gives AUD an added boost

***Observations/Insights*** - US earnings season kicks into higher gear with more disappointing results in the tech space - BRCM, ALTR, JNPR all down in extended session on soft guidance. - Australia Q3 CPI rises to a 1-year high on sequential basis with a fairly even split between tradable and non-tradable components, sending AUD to multi-week highs against USD and NZD. AUD/USD and AUD/JPY rise above $0.9750 and ¥99.50 respectively - both at the highest level since early June. AUD/NZD hits a 6-week high above NZ$1.1490, with some relative NZD weakness following comments from Fin Min English talking down the currency. S&P/ASX at the highest levels since late 2008. - PBoC continues to stay out of the way of upward bias on the yuan; USD/CNY set at a fresh record lows, just as China Premier talks down market concerns regarding govt debt levels while investors await the formal findings of a state-sanctioned audit. - BOJ governor enthused by the progress made on inflation; Local press speculates cabinet office will not raise its economic assessment in October; Japan earnings season formally opens tomorrow with results from Canon.

***Economic Data*** - (AU) AUSTRALIA Q3 CONSUMER PRICES (CPI) Q/Q: 1.2% (1-year high) V 0.8%E; Y/Y: 2.2% V 1.8%E - (AU) AUSTRALIA SEPT DEWR SKILLED VACANCIES M/M: 0.5% V 0.6% PRIOR (4th consecutive month of increase) - (AU) AUSTRALIA AUG CONFERENCE BOARD LEADING INDEX M/M: -0.2% V +0.2% PRIOR - (US) API PETROLEUM INVENTORIES: CRUDE: +3M (4th consecutive build) v +2Me

***Fixed Income/Commodities/Currencies*** - (JP) BOJ offers to buy ¥250B in 1-3yr JGB, ¥350B in 3-5 yr JGB, ¥200B in JGB with maturity over 10-yr - SLV: iShares Silver Trust ETF daily holdings fall to 10,367 tonnes (lowest since 10,284 on July 23rd) from 10,391 tonnes prior - GLD: SPDR Gold Trust ETF daily holdings rise 6.6 tons to 878.3 tonnes (first rise since 9/19) - USD/CNY: (CN) PBoC sets yuan mid point at 6.1330 v 6.1395 prior setting (new Yuan record high setting)

***Speakers/Political/In the Papers*** - (CN) China Premier Li Keqiang: China govt debt is broadly safe and under control - Chinese press - (CN) China may issue new property curbs policies in Q4 - Chinese press - (JP) Japan PM Abe: Will move steadily towards fiscal health targets - addressing parliament - (JP) Bank of Japan (BOJ) gov Kuroda: BOJ easing effects are materializing; Japan is gradually moving towards 2% inflation target - adressing parliament - (JP) Japan Cabinet Advisor: Japan will not be able to persuade markets unless inflation target is achieved by monetary policy alone - financial press - (JP) Japan govt expected to maintain economic assessment unchanged for Oct - Nikkei News - (AU) NAB head of Australia economics Brooker: Still in environment where price increases are soft - SMH - (KR) Bank of Korea (BOK) Gov Kim: South Korea should prepare for changes in external conditions - financial press - (NZ) New Zealand Fin Min English: govt shares concern on exchange rate value

***Equities*** Market Snapshot (as of 03:30 GMT): - Nikkei225 +0.2%, S&P/ASX +0.2%, Kospi -0.3%, Shanghai Composite -0.9%, Hang Seng +0.3%, Dec S&P500 -0.2% at 1,746, Dec gold -0.3% at $1,339, Nov crude oil -1.6% at $97.62/brl

US markets: - CREE: Reports Q1 $0.39 v $0.39e, R$391.0M v $393Me; -13.4% afterhours - IRBT: Reports Q3 $0.26 v $0.26e, R$124.5M v $127Me; -9.5% afterhours - USNA: Reports Q3 $1.16 v $1.14e, R$173.7M v $169Me; -8.7% afterhours - BRCM: Reports Q3 $0.76 v $0.69e, R$2.15B v $2.13Be; -8.1% afterhours - ALTR: Reports Q3 $0.37 v $0.34e, R$445M v $452Me; -6.0% afterhours - PNRA: Reports Q3 $1.35 v $1.35e, R$572.5M v $585Me; -3.1% afterhours - JNPR: Reports Q3 $0.33 v $0.31e, R$1.19B v $1.17Be; -1.8% afterhours - CNI: Reports Q3 C$1.72 (adj) v C$1.58e, Rev C$2.7B v C$2.6Be; Authorizes new share repurchase program (4.1% of shares outstanding), two-for-one stock split; -0.1% afterhours - ACE: Reports Q3 $2.49 v $2.22e, net premiums earned $4.61B v $4.67B y/y; +0.1% afterhours - AMGN: Reports Q3 $1.94 v $1.77e, R$4.75B v $4.61Be; raises FY13 outlook; +1.5% afterhours - SWY: Buyout firms said to be interested in buying Safeway either as a whole or in parts - financial press; +4.1% afterhours - APOL: Reports Q4 $0.55 ex items v $0.25e, R$845M v $823Me; +15.8% afterhours - GLW: Reports prelim Q3 $0.33 v $0.32e, $2.1B v $2.1B; Strengthens Strategic Collaboration with Samsung; Corning authorizes additional $2B share repurchase program (approx 10% of market cap) ; +25.8% afterhours

Notable movers by sector: - Consumer discretionary: Jtekt Corp 6473.JP -2.2% (cuts H1 guidance) - Consumer staples: Beijing Sanyuan Foods Co Ltd 600429.CN -10.0% (Q3 results) - Industrials: Nidec Corp 6594.JP +6.4% (H1 results) Nippon Paint Co 4612.JP -2.8% (to delist from Nagoya Exchange); China Railway Construction Corp Ltd 1186.HK +0.5% (to sell stake in JV); Fuji Heavy Industries Ltd 7270.JP +1.0% (speculation on expansion); Chengdu Road & Bridge Engineering Co Ltd 002628.CN +10.1% (awarded contract); Sichuan Guodong Construction Co Ltd 600321.CN +3.1%, Sichuan Expressway Co Ltd 107.HK +4.4% 601107.CN +10.0%, Sichuan Road & Bridge Co Ltd 600039.CN +10.0% (Sichuan Province plans large scale investment) - Materials: Discovery Metals DML.AU -9.6% (Q3 production results) - Financials: Ping An Bank Co Ltd 000001.CN +4.6% (Q3 results) - Healthcare: Jiangzhong Pharmaceutical Co Ltd 600750.CN -5.2% (Q3 results); China National Medicines Corp Ltd 600511.CN +4.7% (Q3 results) - Telecom: ZTE Corp 763.HK -4.6% (Q3 results) - Utilities: Huaneng Power International Inc 600011.CN -5.1% (Q3 results); TEPCO 9501.JP +1.2% (cost reduction plans)

Notable after hours earnings movers: GLW +19.0%, APOL +14.6%, BCR+ 2.4%, CREE -13.9%, UIS -11.9%, USNA -11.4% Companies trading higher after hours following earnings/guidance:

GLW +19.0%, APOL +14.6%, BCR +2.4%, MTSN +1.9%, FOXF +0.9%, EXAC +0.3%, WCN +0.1%

Companies trading lower after hours following earnings/guidance:

CREE -13.9%, UIS -11.9%, USNA -11.4%, IRBT -8.6%, FTI -7%, RFMD -6.7%, BRCM -6.4%, XOOM -5.7%, ZIOP -5.7%, EPZM -5.2%, ALTR -5.1%

Unisys drops over 5 pts to $20.88 following poor Q3 results

Unisys misses by $0.69, misses on revs Reports Q3 (Sep) earnings of $0.25 per share, excluding non-recurring items, $0.69 worse than the Capital IQ Consensus Estimate of $0.94; revenues fell 9.7% year/year to $792.1 mln vs the $858.38 mln consensus. • U.S. revenue declined 2 percent in the quarter while international revenue declined 15 percent. On a constant currency basis (2), international revenue declined 13 percent, primarily due to lower technology revenue.

Cree beats by $0.01, reports revs in-line; guides Q2 EPS below consensus, revs in-line Reports Q1 (Sep) earnings of $0.39 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.38; revenues rose 23.8% year/year to $391 mln vs the $392.18 mln consensus; adj. GM +170 bps YoY to 39.2%

Co issues guidance for Q2, sees EPS of $0.36-0.41, excluding non-recurring items, vs. $0.43 Capital IQ Consensus Estimate; sees Q2 revs of $400-420 mln vs. $414.32 mln Capital IQ Consensus Estimate.

Closing Market Summary: Stocks Climb Despite Weakness in Technology

The S&P 500 (+0.6%) registered its fifth consecutive advance despite seeing some volatility during the first half of the session.

Equity indices opened in positive territory after the September nonfarm payrolls report missed expectations (148K actual, 183K consensus). While the disappointing report underscored the subpar condition of the labor market, participants did not appear too concerned with the news knowing the Federal Reserve has pledged to maintain its loose monetary policy until conditions improve notably.

The market's response to the jobs report was a reflection of the belief that the Fed would not reduce the size of its asset purchases in the immediate term. On that note, Treasuries and gold rallied while the dollar sold off. The 10-yr yield fell nine basis points to a three-month low of 2.52% while gold futures jumped 1.9% to $1340.20 per troy ounce. Elsewhere, the Dollar Index lost 0.6%, ending at its lowest level since early February.

Nine of ten sectors posted gains while technology (-0.2%) underperformed after enduring some late-morning weakness. The tech sector fell from highs to lows during the first 90 minutes of the session as momentum names like Facebook (FB 52.68, -1.18), LinkedIn (LNKD 244.95, -4.84), and Yelp (YELP 69.41, -1.65) sold off. Netflix (NFLX 322.52, -32.47) also displayed weakness, reversing sharply from an earnings-driven gain of almost 10.0%.

Also of note, Apple (AAPL 519.87, -1.49) shed 0.3% after its latest product refresh event was met with a sell-the-news reaction after the stock rallied 5.1% over the past week.

Even though the tech sector briefly pressured the Nasdaq into the red, the S&P was underpinned by several influential groups like consumer discretionary (+0.7%) and energy (+0.7%). Interestingly, the energy sector rallied even as crude oil fell 1.4% to $98.30 per barrel.

Three of four countercyclical sectors outperformed as consumer staples, health care, and utilities advanced 1.4%, 0.9%, and 1.3%, respectively. Trading volume was in-line with average as just over 750 million shares changed hands on the floor of the New York Stock Exchange.

Looking back at today's remaining data, private payrolls added only 126,000 jobs in September after adding an upwardly revised 161,000 (from 152,000) in August. The consensus expected private payrolls to increase by 183,000. Aggregate wages rose 0.2% in September as hourly earnings increased 0.1% and the average workweek remained at 34.5 hours. While that is not as strong as we would like, it is enough to keep consumption spending moving upward. The unemployment rate fell to 7.2% from 7.3%.

The August net long-term TIC flows report indicated an $8.9 billion outflow of foreign capital from U.S. denominated assets. This follows the prior month's $31.1 billion inflow.

Separately, construction spending increased 0.6% in August following a big upward revision (1.4% from 0.6%) in July. The consensus expected construction spending to increase 0.4%.

Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET while September export prices ex-agriculture and import prices ex-oil will be released at 8:30 ET. The day's data will be topped off with the 9:00 ET release of the August FHFA Housing Price Index. On the earnings front, Boeing (BA 122.48, +1.01), Caterpillar (CAT 89.17, +1.47), and WellPoint (WLP 88.43, +0.83) will report their results before the opening bell.

Nokia Ab OY Ticking higher on circulation of Third Point investor letter that indicates Loeb bought a stake in late Q3

- Loeb investor letter: We purchased Nokia late in the third quarter following the announced sale of its Devices and Services (D&S) business to Microsoft for €5.44 billion in an all-cash transaction. At our purchase price, we seized an opportunity to create new Nokia at a substantial discount to target value. The company will have approximately €8 billion of net cash when the transaction closes, and we expect a meaningful portion of the excess will be distributed to shareholders in coming quarters. Either a buyback or a special dividend is possible, which should draw additional investors to new Nokia when the cash return scenario develops following the deal closing.

- Link: {http://www.thirdpointpublic.com/wp-content/uploads/2013/10/Third-Point-Q3-2013-TPOI-Letter.pdf}

US MArket closed on the flat lin, tech Sector continue to OP ahead of Apple presentation today (AAPL +2,5%)...NFP will be published today, DAL & UTX are main companies reporting before the bell...VIX @13,16 (+1%)...Brazil +1,26%...Asia markets eased following recent gains...waiting for NFP..Nikkei flattish, HS-0,5%, Shanghai -0,98%...Data on real estate prices in China (+9,1% yoy) put some pressure on mkt...

Eur$ 1,3668 European Futures Indicated Flattish

Keep an eye on :

- AALB NA : Aalberts Industries 3Q Orders Rise, Maintains 2013 Outlook - AZA IM : Alitalia industrial plan to be ready in three weeks - BALN VX : Baloise Holding German unit getting back on track; Superbly positioned in Switzerland, which produces about 50% of volume - Investor day - BLT LN : BHP Billiton 1Q Iron-Ore Output Beats Est.; Raises FY14 Target - BSY LN : BSkyB, Twitter to Share Soccer Video Clips, FT Says - BZU IM : Buzzi Cut at Credit Suisse; Consensus for Russia, Mexico High - CA FP : Carrefour Drops Plan for High-End Store at Madeleine: Echos - EAD FP : Airbus to Seek Certification of A350 With Lithium Batteries - ENG SM : Enagas 3Q Net, Ebitda in Line With Estimates - FCC SM : Bill Gates Buys 6% Stake in Spain’s FCC for EU113.5m (7,64m sh @ E14,865 - Treasury shares - 5.14% discount vs today close) - GSK LN : GSK Plans to Cut 271 Jobs in France, Les Echos Says - KPN NA : KPN 3Q Sales, Ebitda Fall; Says on Track to Realize Outlook, 3Q Sales, Ebitda From Continuing Operations Fall - LISP SW : Lindt & Spruengli Names Pfluger to Group Management - MOR GY : Morphosys Wins New U.S. Patent for MOR208 With 2029 Expiry Date - MT NA : ArcelorMittal Downgraded at UBS on Excessive Recovery Rally - NOVN VX : Novartis 3Q Core EPS Misses Est.; 2013 Forecast Increased,Raises 2013 Outlook on Growth at Pharmaceuticals, Declines To Comment on Landolt Remarks on Roche Merger, Work on Strategic Review Continues, CEO Says - PC IM : Pirelli Expected to end shareholders agreement - Italian Press - UG FP : Dongfeng Says It Hopes to Broaden Partnership With Peugeot, Will Remain a French Company, Montebourg Tells Parisien - PUB FP : Omnicom merger will be completed in 1Q - RCS IM : Della Valle Seeks New Board for RCS, Repubblica Reports - ROG VX : Genentech Receives FDA Approval for Rheumatoid Arthritis Drug - SFL IM :Safilo Has Opportunities to Improve Profitability: Berenberg - SSE LN : UBS Managing sale of 1,5% of the co. @ 1,405p (closed @1,452) - SWEDA SS : Swedbank 3Q Net Income Rises to SEK4.17b From SEK3.5b, Says Raised Capital Rules Unlikely to Affect Dividends - TEL2B SS : Tele2 Post Unexpected 3Q Loss; Cuts 2015 Sales, Ebitda Outlook - TIT IM : Telecom Italia Is Said to Withdraw Fixed-Line Spinoff Proposal - TLW LN : Tullow Oil Signs Agreement to Sell Pakistan Assets: Dawn Link - TKA AV : Telekom Austria Targets Deleveraging via Cashflow, Pays EU1.03b for Spectrum in EU2.01b Auction - TKA AV : could interest Carlos Slim after KPN failure - URKA LI : Uralkali: Belarus' President Alexander Lukashenko suggests Mikhail Gutseriev could buy stake; Vladimir Yevtushenkov denies interest in acquiring - Valvitalia may see FSI acquire 49% stake from private equity funds - VATT SS : Vattenfall Abandons Plans to Expand in France, DI Reports, looking to sell 40% of European operations to reduce carbon emissions - WPL AU : Woodside Says Israel Court Decision Adds Gas Policy Certainty

Up

*Celesio Moved to No Rating at BofAML, Was Buy *GRAINGER RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN *NESTLE NAMED A MOST PREFERRED STOCK AT CITI, REPLACES DANONE *PIK RAISED TO BUY AT UBS

down

*ACTELION REMOVED FROM UBS'S MOST PREFERRED LIST *BLUE LABEL TELECOMS CUT TO NEUTRAL VS BUY AT UBS *BUZZI UNICEM CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE *CASINO REMOVED FROM CONVICTION BUY AT GOLDMAN; KEPT AT BUY *CEZ CUT TO NEUTRAL VS BUY AT BOFAML *ETALON CUT TO NEUTRAL VS BUY AT UBS *FOREST OIL CUT TO SELL VS NEUTRAL AT GOLDMAN *GDF SUEZ CUT TO NEUTRAL VS BUY AT BOFAML *IAG CUT TO HOLD VS BUY AT CANTOR *LVMH REMOVED FROM UBS'S EUROPEAN KEY CALL LIST *MILLICOM CUT TO NEUTRAL VS BUY AT CITI *NOKIA CUT TO SELL VS BUY AT NORDEA *NOVOLIPETSK STEEL CUT TO SELL VS NEUTRAL AT UBS *SEADRILL CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN *SEVERSTAL CUT TO NEUTRAL VS BUY AT UBS *SURGUTNEFTEGAS CUT TO NEUTRAL VS OVERWEIGHT AT HSBC *VBH HOLDING CUT TO UNDERWEIGHT VS NEUTRAL AT HSBC *VOESTALPINE CUT TO UNDERWEIGHT VS NEUTRAL AT HSBC

PT Changes

* Banco Santander PT Raised to EU5.15 vs EU4.35 at Barclays * Bourbon PT Raised to EU19 vs EU18 at Raymond James * Prysmian PT Cut to EU22.7 vs EU23.3 at Goldman

Initiation

*DCC RATED NEW BUY AT CANTOR; PT 3,120P *SHANKS RATED NEW BUY AT LIBERUM, PT 125P *TMK RATED NEW EQUALWEIGHT AT BARCLAYS; PT $15

Country Sector Stock Call

*ACTELION REMOVED FROM UBS'S MOST PREFERRED LIST *ARCELORMITTAL REMOVED FROM UBS'S MOST PREFERRED LIST *CASINO REMOVED FROM CONVICTION BUY AT GOLDMAN; KEPT AT BUY *NESTLE NAMED A MOST PREFERRED STOCK AT CITI, REPLACES DANONE *Unilever Named a Least Preferred Stock at Citi * Russia Stocks Upgraded to Neutral at JPMorgan; Poland Cut * Market Will Rally Further on 6-12-Month View, Nomura Says

Washington needs to prove the political system still works

If our leaders adopt a bipartisan approach, we can minimise lasting damage, says Laurence Fink

The US, as we have frequently been reminded in recent days, still belongs to a small club of nations that in modern times have never intentionally defaulted on their debts. But to understand the short and long-term effects of our government’s recent brush with financial Armageddon, it is important to realise that more was at stake than a good payment record. Confidence in America derives not just from our sustained economic growth over the past century but also from our ability to reconcile the nation’s diverse political views. This is now in jeopardy.

The US has always been a nation that set a standard. Our emergence in the 20th century as the bearer of the world’s reserve currency is based on the faith of global markets in the underpinning of our economic system by democratic principles and ability to overcome our differences. Based on conversations with leaders in business and government, in the US and beyond, I can tell you this faith was badly shaken during the 16 days of the government shutdown and the high-stakes poker over a debt-limit extension. While we can all breathe easier because the government is still making good on our obligations, it would be wrong to think we avoided doing real and potentially lasting damage to the economy, at home and worldwide. The weeks of political turmoil have already slowed growth, taking an estimated $24bn out of the economy. This is particularly unfortunate at a time when economic fundamentals have been strengthening and the US recovery picking up steam. The housing market has been gaining momentum, corporate profits have been strong and America has been gearing up for a manufacturing renaissance thanks to lower energy costs delivered by new technologies such as fracking. But the market environment is still challenging. Uncertainty is high and political wrangling is pushing the fundamentals to the backburner. You cannot overestimate the impact of this on confidence at a time when business leaders should be making decisions that drive growth. It has put the US economy in a holding pattern that, if it persists, could lead to a global slowdown. Scores of chief executives have told me they have been putting off investment in factories and equipment, and delaying hiring decisions, while they wait to see how events unfold in Washington. More troubling still, the trepidation has spilled over to the bond market. Many foreign investors are rethinking their approach to investing in US debt. Even a marginal change in the willingness of governments, pension funds, insurance companies and other institutions around the world to buy America’s bonds will incrementally raise interest rates and drive up the costs of financing our deficits. That will not only worsen the fiscal situation at federal, state and local levels; it will also mean higher borrowing costs for anyone buying a house or other big-ticket items. The end result: slower growth. This in turn will push the US Federal Reserve to again delay the tapering of its bond-buying programme. So rates will stay low in the short term, but further distort financial markets and delay the restoration of sustainable monetary policy. And because the dollar will for now remain the world’s reserve currency there will be greater risk premiums for all borrowers. The repercussions will be felt not only in the US markets and economy but across the globe, especially in the developing world, which already pays an even higher risk premium for borrowing. Still, I remain an optimist. If our politicians show themselves ready – and able – to take a bipartisan approach that avoids another debt-ceiling showdown and to address our long-term deficit issues, we can minimise the lasting damage to the economy and restore our reputation as a principled nation committed to meeting our obligations. Above all, the next round of budget discussions needs to show that the US political system still works. But if we head into 2014 beating war drums in Washington and reviving the narrative of a potential default, overseas buyers of Treasuries are highly likely to move quicker to diversify their holdings, with all the global consequences that entails. All members of Congress – conservative and progressive alike – must remember that the US is a debtor nation, dependent on international investors who own more than $5tn – or about 50 per cent – of publicly held federal bonds. That is why the budget battles have global ramifications. The short-term damage has been done; the next round of budget discussions needs to show that the American political system still works. If our leaders can return to the standards of good faith, civil deliberation and mutual respect that have always provided the foundation of our global economic leadership, we can restore the confidence of all Americans – as well as business leaders, investors and markets worldwide – and with that the potential for a long-term US economic resurgence. The writer is chairman and chief executive officer of BlackRock