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tv   Closing Bell  CNBC  March 9, 2017 3:00pm-5:01pm EST

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i mean, you were at sera earlier and today with tillman? >> well, we've lost 7% of the price of crude oil. extremely volatile. thanks to all of my team. they bust their butt. take away is oil still matters a lot. how about that. >> it certainly does. >> good stuff. safe travels, guys. thanks for watching "power lunch." >> "closing bell" right now. hi, everybody. welcome"closing bell." i'm kelly evans at the new york stock exchange. >> i'm bill griffeth. financials have been one of the leading sectors. president trump meets with ceos and find out what they discussed today. >> here's a name you may not have heard in a while. jon corzine taking the stand in a trial over who is responsible for the firm's 2011 bankruptcy. we'll take you live to the courthouse. but first investors have been waiting for more details on
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corporate tax reform, but before they can get to that senate majority leader mitch mcconnell said today congress needs to resolve health care reform. listen. >> i think finishing on tax reform will take longer, but we do have to finish the health care debate, up or down, win or lose, before we go to taxes. >> kayla tausche is on capitol hill with whether the gop leadership's plan to repeal and replace obamacare is gaining any traction. i think they got it through committee, didn't they? >> yeah, after 28 hours, bill, it got through the energy and commerce committee. that wrapped up a few moments ago. health care is the first political test for the administration and for this congress. speaker ryan has been getting some help from the president and vice president in making his sales pitch for this bill, but interestingly today i asked him how he plans to win over companies that will either have to accept or offer these plans they've been so critical of the way obamacare was structured,
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and he said that the insurers for their part just want certainty. >> the insurers are telling us if we don't know what's going on come late spring, we're going to have massive premium increases and pullouts and you'll collapse the individual market. what they tell us is if you only repeal the law, gut and repeal the law as some folks are suggestsing, you'll have triple digit premium increases and collapse the market. >> the insurance industry praised the fact that this will stabilize the market but the rest of the medical industry has been very critical. the ama which represents physician rights, while we can't support the bill as it is written, there is no reason to believe that reasonable people can't find areas where compromise is possible. the problem is the industry as a whole has a very long list of what they want. they don't want anybody to lose coverage and they'll be on the hook for those costs. they want more young adults to participate to offset some of the costs for sick people.
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they want states to have flexibility, to be able to finance medicaid in a more innovative way and they don't want to weaken employer plans any further. groups representing hospitals, pharma, biotech are all included in wanting those same four things that i just listed. guys, we'll see. this health care bill is presenting quite a few challenges, more than congress anticipat anticipated, and we'll see how much more support speaker ryan and co can drum up. >> they have to maintain momentum. this is the only opportunity to do health care at this point in the administration before the mid-term elections obviously. despite the fact that it may not be the perfect bill. >> paul ryan said the same thing. >> reporter: he did. and it's interesting, guys, that so many people, republicans included, have come out and said, wait a second. we don't like these certain facets or we're not okay with that. this is very close to what the speaker put out last summer in his better way plan so there have been time to rally and corral some of these republicans
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and democrats for that matter around this bill if this was the bill they wanted to put forward. perhaps it's just posturing, perhaps it's political theater, we don't quite know yet. >> how much of a difference do you think the senate will make in all of this? i mean, that's really where they're going to have to make some changes, right? >> reporter: exactly, bill. interestingly it's the senate that really favors more flexibility for states and governors and giving them more of a cushion in medicaid. that is something that the house hasn't necessarily wanted. they've been proposing some amendments in the opposite direction so there does seem to be some ideological tug of war going on between what's happening in the house and senate and it's unclear who's going to win at this point. >> kayla, thank you very much. great work as always. by the way, coming up, we have former aetna ceo ron williams and ron desantis will be weighing in at different times on the health care debate. looking forward to both of those interviews coming up on closing bell. let's get to one of the
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other big stories today. oil falling below 50 bucks a barrel for the first time this year amid fears of a supply glut. i spoke with chevron's ceo about how the oil supply and demand is working. >> opec decided to cut production to try to accelerate the rebalancing of the marketplace and so we're seeing that happen right now and there are debates whether the market is fully balanced or getting there, but the general point is as demand grows about 1 million barrels a day and as we start to see the impact of lower investment in the business, the market is coming into balance. so i think we're seeing that, yes, and i think that's why you're seeing some recovery in prices over the last six months or so. >> john watson speaking on tuesday, rather. jackie deangeles joins us with a closer look between this push and pull between supply and demand. >> it's interesting because it seems like a little bit of a delayed reaction, this slide in prices. we knew that when opec cut there
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was a slide there. the data has been showing us, confirming that, in fact, that's happening. prices were stuck until yesterday. i think part of the slide under $50 a barrel has to do with the big inventory bill we saw. that was sort of a trigger. also, we've been reporting out of houston that opec, the secretary general was saying an extension of this december cut is not guaranteed. those cuts were very key to lifting this market up as watson said. now from the supply/demand side, you've got this production here in the united states, over 9 million barrels a day. the russians over 10 million barrels, the saudis under 10. the russian energy expert told me they've executed half of their 300,000 cut and they're working to finish the rest. the saudis saying the russians are going too slow. while opec players are trying to do their part, they need non-opec coordination and cooperation and there's doubts that the market is really seeing that. one of two things is going to happen here, either opec extends the cut to try to keep its price
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up or it throws its hands up and they say why shall we bother? let's all it sweat it out together. to watson's point, most of the people that i spoke with said they do believe a rebalance has happened already. when most of wall street was giving us the rest of the year for it to sort of play out. >> all right. yeah. the wrangling continues. jackie, thanks very much. >> sure. will this dip in oil derail the stock market rally as washington appears to be in a hold pattern. joining us on the closing bell exchange, david bansan, steven sarge guilfoyle from the and rick santelli is at the cme in chicago. i've got two people on this panel who like energy stocks right now. sarge, you were just telling me, you bought some this morning, right? >> oh, yeah, i've been nibbling today on this weakness. i got out of part of my
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technology portfolio. i started nimbling on slumber j, on valero, on thesero because i think they're quality and i speculated on sanchez energy. i make small purchases here as i see how the dollar reacts to the fed, i'll decide whether they are positions i want to stay in or add to them. >> david, you think energy is one of the most attractive areas going into the trump era. is that true no matter what the oil price is? >> it absolutely is. the thesis that we're talking about here is energy as part of his manufacturing job story, that it becomes an incredible way. you notice in his speech that he talked about a public/private partnership around infrastructure. this is an entirely private way to invest in infrastructure. the massive need that our national energy infrastructure has, our ability to export natural gas, there's a wonderful play here that is not crude oil
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price sensitive. >> hey, rick, we don't often time at this point, time of day about the relationship between commodities and treasury yields. so as oil goes lower here, and there's some -- john kildup was on air saying he could see it going to $42 a barrel before this selloff is finished. what do you think that would do to treasury yields which have been going up lately in anticipation of a fed rate increase next week? >> you know, i think i'm going to take the same tactic that dave has taken. just because the price of oil goes down, when you think that that's a major input cost to things like manufacturing, i think it's a positive and it's an input cost on absolutely everything with regard to energy. so i think that energy is not necessarily the poster child commodity if you're trying to assess pricing pressures in that arena, i think, for example, the profile of grains or other commodities or copper is not going to mirror that. this is really a unique situation and i'm very
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optimistic there will be an indirect correlation. the lower prices go and a trump administration that likes oil, wants to export oil, natural gas, fracking that can turn on the switch, the fact that we're competing around the globe now, that's a good thing and even though the price goes down, the indirect effect is i think it will be good for the economy, not necessarily for all parts of the cottage industry, at least for the here and now relating to energy. but on a bigger picture, you know, rates right now, we're looking at the 30 year finally broke out. virtually the highest rate since the summer of '15. tens are playing with the super important 260 level. really the area to pay attention to, september of 2014. tomorrow's number is huge, but how to put it in context. i believe rates are going up, but i also believe that after tomorrow's number the people who bought the auctions this week will be happy as well. i'm not so sure it's going to be a linear move from 260 and above to 3% although i do think eventually that will be a big chapter in the book of interest
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rates. >> very quickly, rick, what number are you looking at tomorrow from the jobs report? >> i'm looking for about 230,000. >> okay. >> pretty healthy number. david, you mentioned that your interest in the energy space is not so much keyed off the price of oil. you have names like enterprise and enbridge which you continue to think will do well. does the u.s. have the cost advantage? we can keep pumping this even as the price goes lower? >> you have to remember that a significant amount of the revenues of those two names is not in crude oil, it is in natural gas and the lower price of nati gas is creating higher volumes. these are volume plays. and so to me i think it's a story of infrastructure need. if we want gas and oil to continue to be transported around this country by rail and truck, then we don't need more pipe lines. but what the trump administration has done from a deregulation standpoint is say, no, we're going to support this industry. it's job creating. it's environmentally superior and ultimately the economics are
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very attractive. so we love those stories and we love those names again without a particular play on crude oil and i would add hearing rick santelli say he's on my track is just something that is happening every day between rick and i. we're on each other's track on all of these issues and more. >> there you are. get you guys together for lunch sometime. sarge, broadening out just a bit. do you see the jobs number tomorrow moving this market one way or the other? it's been sideways for a few days now. >> no, they could give us 25,000 tomorrow and negative wage growth and they would go ahead with this wage hike. pretty much every member of the fmoc, they've all lined up like ducks. they've told us we're going to get an increase in the feds fund rate increase. we're going to get three to four hikes this year which is really silly. you can't tell me we're going to hike in june if we get two months of poor macro. they should take it one at a time but i do believe these markets have priced in 3/8 of a
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point. >> do you think they're wrong about that, sarge? do you think the market has this wrong by saying, hey, the data looks pretty good? they might start to go once every meeting, every other meeting? do you think the market is ahead of itself? >> no, i think we've priced in 1/8 of a point and we have the support of earnings. earnings have been improving. yes, valuations are high, but we are probably, if we can maintain some growth, i know gdp is just about awful for the first quarter and it was awful in the fourth quarter. let's face it, inventories are down to almost nothing. they'll have to build them back up. the second quarter gdp will have to track higher than the fourth quarter. the market has it right here. when the s&p was on 2401 after the president spoke, we're here at 2360, right here is okay. we're priced right. >> hey, guys. thank you all. appreciate your thoughts on today's market action. >> thanks, everybody. >> see you later. 45 minutes to go. we're seeing the dow down 19
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points, s&p down 1 point. small declines. the nasdaq down 4, russell down about 5. as we mentioned, president trump met with community bank ceos about making it easier for them to lend money. we'll talk to one those ceos at the table. buyer beware. the risks of purchasing a flipped one. you're watching cnbc, first in business worldwide. siness world.
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stocks generally are a little bit lower right now. the s&p is up a half a point at the moment, but the financials are off session highs after white house press secretary sean spicer said that the trump administration is committed to restoring the glass stiegel act which essentially prohibits commercial banks from engaging in investor banking. >> is there any plans for the president to meet with senator sanders and his repeal of glass stiegel on his agenda? >> there's no current schedule
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to meet with him. i'm sure that as he has done with several other members of congress from both sides of the aisle that will be committed. >> still committed to restoring glass stiegel? >> yes. >> president trump did meet with some ceos of community banks earlier today. here's what he had to say about their importance for small business in this country. >> community banks play a vital role in helping create jobs by providing approximately half of all loans to small businesses, and that's been dwindling because the community banks have been in big trouble. nearly half of all private sector workers are employed by small businesses. we must ensure access to capital. small businesses and for small businesses to grow. community banks are the back bone of small business in america. >> well, joining us right now, a ceo who was in that room with the president today. lori stewart is ceo of sound community bank and sound financial bancorp.
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ms. stewart, good to see you. thanks for joining us today. >> thank you for having me. >> what did you hear from the president? did you like what you heard from him today? >> well, the president and his team is very interested in listening to the issues that are impeding banks, and especially community banks, ability to continue lending and supporting that small business growth you just heard about. we are the primary funders for small business. you know, we' mostly small businesses ourselves. i have 106 employees. that ability to fund small business, provide the capital or financing that they need is really the backbone of our economy. so i felt like the president was listening to the layering on of regulation and the things that are impeding this. >> lori, what do you expect to change now as a result of what was discussed? >> so i think the most important thing that could happen for community bankers is not to
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abandoned current regulations. we all believe that we should be regulated. you know, we're in charge of other people's money. that's important, but the layering on and the amount of regulation has really impeded our ability to loan. for instance, we have an ability to repay regulation where the regulator says, gee whiz, before you make a loan it has to meet these conditions for the borrower's ability to repay. well, i don't know a banker in their right mind that would make a loan without figuring out if the borrower could pay, but under the rules of that reg only w-2 income qualifies so what if you're a retired person? what if you're a small business with seasonal income. >> right. >> you might not qualify. >> yeah. i remember talking to barney frank about that very issue, and his response was this.
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he said, wait a minute. let me get this straight. banks are complaining because we're telling them that they can't loan money unless they know that they can get the money paid back? isn't that what they're in the business of doing anyway? you're saying they've gone too far. >> that's right. i agree completely with barney frank. that is the business we're in, and we are professional bankers and we think we know how to do it so creating a -- >> if i may in the interest of time. what else? what other headwinds are you looking to get rid of? what other regulations are getting in the way of being able to do your job. give us another for instance. >> here's another example. right now anybody in the mortgage business is frantically trying to expand their systems to collect more data at the request of the consumer finance protection bureau that is all public data and very personal data. we'll have to expand our systems by two. the goal of the agency is to seek out discrimination in the mortgage industry and yet the
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things they're asking us to report are very private information that will then become public. >> okay. >> that's one example. the other examples are around the pure volume of regulation. 25,000 pages and, again, if we talk about the cfpb, while their intended focus was larger banks with less focus on small banks, all of these rules impact every bank and they are regulator that expects us to understand their enforcement. >> now you've laid all of that out. how much of that do you expect to go away now? realistical realistically, how much of those regulations do you expect to go away? >> it would be silly if i could just wish upon a star, right, and pick the regulations that would really make us do a better job, but what i think is realistic is that people are
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listening, that -- these are smart people. they understand the differences in the various business models and we can work together to find the right capital levels, the right regulatory levels that address the business level. and you know, in many cases the regulator can do this. regulators that understand our business and can right size the rules will go a long way. we don't have to bog down congress with much of this regulators that understand our business. >> all right. very good. lori stewart of sound community bank. thank you. appreciate your time. >> thank you very much for the opportunity. >> you bet. 37 minutes left in the trading session. they took my board away. i think somebody's messing with me. >> dow is down 12. >> down 12 points. >> the s&p, it's on the screen. half a point. >> you can see it. >> red arrow.
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aig off session highs. a new ceo in the wake of one of the company's worst quarters since the financial crisis. we'll have more details next. former aetna ceo ron williams is up next and we have ron desantis will give us their take on whether the gop bill as it stands right now is what it will take to right health care in this country. that's coming up. matters. up.ery millised both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t. the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain...
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welcome back. aig president and ceo peter hancock informing the board of directors today he will be resigning from his position. this after aig's board was reportedly weighing hancock's future at the helm. and a $5.6 billion claims reserve charge. billion dollar investor carl icahn tweeted this morning, we fully support the actions taken today by the board of aig. i spoke to peter hancock last month after the company's earnings release about that claims charge. >> while a very large number for the company the size of aig, 5.6, is a very strong reinsurance by berkshire hathaway where we have a gain of 2.6. i think this is a manageable adjustment and radically reduces the uncertainty around the book value of the company and gives us more secure earnings going forward. >> hancock will remain ceo until a successor is named. while some analysts are
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optimistic about potential changes for aig, one with an outperform rating on aig says, quote, the change on balance negative as we believe it will further delay aig realizing the improvements necessary to complete a roe, return on equity. >> they got through the first year but they weren't going to let him oversee. >> fended off carl icahn and john paulson who had been calling for this breakup. the shares dropped more. the next day they have to retain their a.m. best rating. there's a lot of pressure on aig. they were not going to give him any more time. >> one of the analysts that i read said that he was concerned that the commercial insurance margins were not -- they are actually compressing. >> there's plenty. we talked about that. there's a lot of competitive forces that are not moving in their favor right now.
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aig shares started positive on the news. they have turned lower by 1/4 of 1%. >> let's face it. it's tough following a guy like bob ben moshe, untimely passing from cancer. he had to take over from a superstar who had turned things around after the financial crisis. >> absolutely. and who had to convince employees not to leave en masse. he basically kept aig's ship going at a time when it easily could have imploded. so he managed to move them forward. peter hancock was now trying to get them to be a less volatile company, and instead quite the opposite has come out of this. >> who wants the job now? >> yes. >> we shall see. >> good luck. time for a cnbc news update. sue herera. >> here's what's happening at this hour. epa chief scott pruitt says he doesn't believe carbon dioxide is a problem for global warming.
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>> i think measuring with precision human activity on the climate is something very challenging to do and there's tremendous disagreement about the degree of impact. no, i would not agree that it's a primary contributor to the global warning that we see. >> the man accused of a deadly shooting in a bar in kansas appearing in court today. adam pureeing ton is accused of fatally shooting a man of indian dissent and wounding two others in a hate crime. bottled water has overtaken soda as the number one drink in the u.s. by sales volume last year. americans drank an average of 39.3 gallons of bottled water in 2016 compared to 38.5 of carbonated beverages. so it's close. it's still close, bill. >> oh, so close. >> oh, so close. i'll see you next hour. >> you've got it. >> see you later. 30 minutes left. we have kenny pulcary on the
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floor of the stock exchange. tomorrow, the jobs number, could you see any number coming out that would change the fed's mind about raising rates? >> it would have to be so, so negative. anything that's in line -- i'm expecting we'll get a number closer to 3 which is up 60%. >> you think we could get 300,000 tomorrow? >> i wouldn't be surprised. look what the edp number is 298. nfp is looking for 180. 290? if we get a number with a 3 on it tomorrow. >> what would the market do with that? >> i think the market would embrace it, although it would absolutely cause everyone to stand up and say, she's going to raise rates. the market is expecting 100% she's going to raise rates. >> the ten year yield touched 2.6% today which bill gross has said if we close above that, the bull market is over for bonds. >> i think it's got to go -- i'm playing 3%. i think 2.6% is a little early.
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when you get to 3 you're going to find a little more trouble for the market. >> kelly? >> we'll address that. 2.59 on the ten year and we have 30 minutes, a little less than that to go into the close. still seeing pressure across the board on these markets. oil again one of the big downward movers today. former mf global jon corzine taking the stand over who's responsible for the firm's 2011 bankruptcy. we'll go live to the courthouse coming up. former aetna ceo ron williams will tell us if this is the right replacement for obamacare. stay with us. stay with us.
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keeping an eye on snap chat. they went public. they're higher for a second consecutive session. we had a pull back earlier this week that took the stock to below its opening price of 24 bucks. it priced at 17. it had shot up at 44% on day one of trading. since then nearly every analyst has issued a negative rating on questions over its valuation. >> well, it's been another busy day for the president. mr. trump sent out pictures of a lunch that he had with conservative lawmakers.
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there it is. this as he tries to rally support for the new gop health care plan which is facing backlash from fellow republicans. mostly on the conservative side because some believe it is too close to obamacare. let's talk about this. joining us is ron williams, he's the former chairman and ceo of aetna who's chairman and ceo of r w-2 enterprises. ron, it's great to see you. i've been anxious. we have so many questions for you to get your view of what you think of the bill as it stands right now. just broadly speaking, are they heading in the right direction or not yet? >> well, first, let me say thank you for having me this afternoon. >> you bet. >> i would say that there's good news and there's still a lot of open questions. i think the good news is that the consumer protections that everyone was worried about in terms of consumers being able to have the right to get insurance, their adult children being maintained on their policies, the comprehensiveness of
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benefits, all of those things are in fact maintained and that's the good news. i think i would say at this stage i think we're not even at the end of the beginning, we're at the beginning. i think we're going to see lots of changes from what i've read so far, the change in the subsidies to the tax credits will reresult in some new winners and losers. it's hotly discussed and debated. >> ron, another thing to stlthr into the mix is whether they start letting insurers compete across state lines. would that be a benefit to e everybody? >> i think it's a plus. it's not a silver bullet. if they're in chicago and they don't have relations with hospitals and physicians in dallas, the ability to compete in dallas is somewhat constrained. there are many national plans, and i think there would be real benefit in having a national standard that could be sold across state lines, but it's not
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really a silver bullet to the issues we're confronting. >> you mentioned all the questions that still exist. one of them is who's going to pay for what. two examples. the hospitals are against the plan as it stands right now because they fear the number of people who would lose insurance, that the hospitals would end up having to pay for in their own emergency care or whatever it is. states are afraid on the medicare, that there's less flexibility, that they might be left holding the bag when there are cost overruns for medicaid at this point. can you foresee a bill sponsored by the gop that would not still put the cost onus on hospitals and states? that seems to be what they're after here, isn't it? >> yeah. well, i would say that i think that is the core issue is as a society, what obligation do we feel and believe we have to make certain that all of our citizens are provided access to health care coverage? and one of the challenges we've had and we must recognize is that the current aca has some real significant challenges, and
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in many places consumers really only have one health plan to select from. so it's not as if we can continue down the path we're going down, but i think the concerns of physicians and hospitals are very real and i think we have to have the debate about how much of our economic resources are we prepared to commit to looking after those of us who are less fortunate. >> and, ron, that population is still just a smaller proportion of the overall insured population of people insured by their employers. how should they expect changes to come through after this bill if it is passed becomes signed into law? >> i think we have to keep that in perspective, that of the u.s. population, 150 million people get their insurance through their employer. for them, very little, if anything, will in fact change. this is really about the population that principally purchases individual insurance and the population that has been in what's called the medicaid expansion where a substantial
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percentage of people have gotten their premium subsidized through taxpayer contributions through medicaid. and the whole question is how does that population -- how is that population impacted in the legislation that's being proposed? >> quickly, ron, we're starting to run out of time and there's still more questions. one of the challenges of obamacare was getting young, healthy people to opt in, and many of them did not and that was a problem because it -- the premiums went up as a result. how do you get them to participate in the plan sponsored by the gop? >> well, i think one of the big issues that has to be debated is what is the right distribution of the premium. in the aca someone who's 60 could pay a maximum of three times as much as someone who's 20, but the person who's 60 is going to consume a lot more health care. so in essence the young person who joined was in fact subsidizing the 60-year-old, but
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the cost of the premium to that young person was so high that they chose not to purchase insurance. so i think what they're trying to do is to rebalance that equation but the risk we run is we'll give the young person a better deal, that will result in the 60-year-old having a greater premium, not being able to afford it and not getting the care that they need. >> all right. thank you, ron, for joining us. please come back. there's much more to get through. >> yes. >> especially as this all unfolds and works its way through the legislative process. that's ron williams, former ceo of aetna. breaking news on fbi director james comey. what's going on? >> reporter: bill, we've been talking all week about the trump tweets last weekend with the wild accusation that president obama had tapped his phones at trump tower. nobody believes that accusation. privately james comey has expressed exasperation that donald trump made that allegation which, of course,
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would be a felony if president trump did it and if the fbi was involved. our colleague has confirmed that james comey was on capitol hill briefing senior senators a few moments ago on issues related to trump tower. now we can only presume that he is telling them what he's told colleagues privately, which is there's nothing to what donald trump has claimed, but we haven't heard that from the senators yet. we would anticipate those senators, of course, who are investigating the broad range of allegations concerning russia and possible connections to donald trump's campaign and their hacking during the election, those would also be relevant topics of that discussion. but he is -- was there discussing trump tower and so perhaps we will get from the senators at some subsequent point a relay of information about the voracity of tweets from president trump over the weekend. >> john, they might not believe that president obama personally
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ordered it but they might think, hey, something happened. somehow transcripts were released how this call was about. how did that happen? anyone figure that out yet? >> well, the transcripts of the meeting between ambassador kisliak and general flynn are not related to trump tower, i don't believe. i don't think that's where their meeting was, but if there was a surveillance being undertaken, wire tap-in particular, that's because a judge determined that there was legal reason to do so. now james comey, the former director of national intelligence, said no such judicial order was thought or given. we don't know exactly what the nature of the surveillance was, but we don't have anything so far that substantiates the idea that trump tower was wire tapped and that is what james comey -- that subject is what james comey was discussing with senators.
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>> all right. thank you, john. keep us updated. >> you bet. >> john harwood in d.c. 17 minutes left in the trading session here. i will turn around with the dow positive now. >> there we go. >> gain of about four points with the s&p up 2. >> nasdaq's positive as well. russell still lagging by nearly 5 points. former mf global ceo jon corzine is testifying about who's responsible for the firm's 2011 bankruptcy. we're live at the courthouse right after this. this.
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jon corzine is taking the stand in a case against m.s. global and price waterhouse coopers. leslie is at the courthouse. >> hi, kelly. jon corzine has been in there for about two hours testifying on a case over who's really to blame over the demise of m.f. global in 2011. at the heart of this case is about $6.3 billion worth of european bonds, so called
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repurchased to maturity securities. mf global alleges that its accounting firm price waterhouse coopers advised them to keep these off the balance sheet, but mf global says putting them on the balance sheet would have increased the firm's leverage and discouraged those investments in sovereign bonds that ultimately contributed to the firm's demise. now it's an interesting and rare appearance of corzine who we truly haven't seen for the better part of four years now. he gave us some insight into why he ramped up those european purchases when he did. of course, the spreads on those were very attractive at the time and it was something he was looking to do to increase earnings at the firm. he also provided insight into what he's doing now. he's running his family office and teaching at a small college. this trial is expected to go on for several weeks. this is just the beginning. they're seeking damages. mf global's administrator is seeking damages of about $2 billion in this case. now up next for the next several hours we're expecting some
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exciting cross examination. we'll get back to you guys with what we learn, kelly. >> yes, thank you, leslie picker. you know pwc is saying the oscars, now it's going to get brought up every time. >> thought occurred to me, yeah. >> of course. >> 11 minutes to go into the close here. heading right into the bell. and markets, well, they turned positive. >> there you go. >> dow's up 8, s&p up 2, nasdaq up and the russell still down 5. >> one market researcher says it shows it's time to buy. we'll share the data when we come back. me back.
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7 and a half minutes left in the training session. an imbalance. >> the new york stock exchange,
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crosby financial. al frank, both of us of value investing. i still think this market is right for buying? >> absolutely. i still think stocks are attractive. go back to 2007, you had money market funds yielding 5 and 6%. today you're getting 50 basis points. stocks are reasonably priced within that back drop. you still want to be selective. you want to buy under valued stocks. the returns. >> we'll ask you for a few of those. you like the financials. >> yes. >> what else? >> well, industrials. they pulled back. they had a nice move after the election. the back of infrastructure spending. then they pulled back. i think that march and april tend to be good periods for
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industrials and the froth came out of the sector. we would do financials, we would do industrials. >> you're going for a seasonal play. this has been a market that has blown seasonal plays out of the water. >> it's been churning. that's been positive. it hasn't been the entire market all at once. it has been churning. also, industrials are very broad. it covers almost everything so you do have to be selective. >> it's like saying technology. >> that's right. >> broad category as well. >> very selectively. john, people continue to think there's nowhere to find good value. do tell us where you think there are some good ones in this market. >> we like to buy the things that have gone on sale and lately things that are inexpensive are in the health care sector. a name like amgen was not so good for biotech. amgen trading 15 times earnings. the 2.6% yield out of a biotech stock.
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we also like whirlpool trading at 11 times earnings. trading a dividend yield at 2.3%. you have opportunity if you can get beyond the overall market and look at individual names. >> good to see you both. >> thank you. >> thank you. we will take a quick break here. we'll come back with a closing countdown with the dow up 2 points. >> after the bell, capitol hill is focused on the health care battle. steve forbes says congress should not lose sight of tax reform. he'll join us here at the new york stock exchange. stay tuned, you're watching cnbc first in business worldwide. wor.
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coming up on the last two minutes of trade here for the countdown. you know, wall street loves round numbers. we all do, right? it's a way we mark progress either up or down. here are some round numbers we've been watching. wti crude oil, $50. everybody thought it was a support level. it blew through that in the last couple of days. now everybody's wondering if it's a resistance level. here's another one, ten year yield, 2.6%. it hit that number today. as we've itemized, that's a number that bill gross says if we get appreciably above that, the bull market going above the 1890s above that. gold, $1200. we're very close to that at 1201. we've had the worst week. this has been eight straight
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sessions for gold to go lower and everybody's wondering if 1200 can hold at this point. and bertha coombs as i live and breathe here, a round number we're watching for tomorrow is that jobs number. >> jobs number. >> you wonder if it's even going to matter to wall street as everybody has it figured out that the fed's going to raise rates. >> that's the feeling. regardless whether we get a bullish number or not. certainly if we get a number on the payrolls like we got with adp, a real blowout. >> 298. >> a three handle down here. that is definitely going to push people thinking that the fed is not going to raise next week but perhaps in the months to come to try and get out ahead of this pent up animal spirit that seems to be hitting the job market at this point. one of the things i like is the number 51. that's the number to watch. whether the republicans can get that many votes in the senate to patch the ahca, the american health care act. one of the things i watched today was the hospital stocks. >> yes. yes. >> they have been hit hard ever
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since the bill was announced. they turned around. some analysts say that there's so much push back this bill is going to get changed. >> we'll see. in fact, we'll talk about that. congressman ron desantis on the closing bell, we'll see you tomorrow, kel. third time is a charm, i guess. welcome to the closing bell, everybody. i'm kelly evans. let's get a check on how we're closing today on wall street. it was positive in the minutes there into the close. it does look like the dow, s&p and nasdaq held on to tiny, tiny gains. the dow looks like it's up, 20,859. still shy of 2100. the s&p, 2364. two point gain. small increase for the nasdaq and the russell did not join them. the dow this morning was down 78
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points. so a real comeback story this afternoon. we'll talk about oil and what's been happening there and other things hanging on this market. the house freedom caucus which largely opposes the american health care act. one of the member votes is up for grabs. ron desantis of florida will tell us what it will take to sway him. joining me now is cnbc's commentator, mike santoli, jim polson checks in and so does craig hodges from hodges capital management. mike, let us not forget the significance of this day? the anniversary of the closing low. >> the ultimate low. we call it now it's an eight-year-old bull market. i think we can quibble when exactly this particular rally we're in, this bull market did start but, you know, kind of amazing when we look at the minimal little incremental gains we're talking about most days
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right now in a low volatility market was back then 1 and 2 and 3% swings daily. it was such an erratic time seemed completely natural. so obviously the fever broke but even still with this entire climb, you've had to kind of drag the believers along with it. i don't think it's a hated market anymore, but it's one where it's had a high burden of proof. >> jim, if you had told people gdp's going to average 2%, what's the market going to do in 2009, they would have said, not much. now it's tripled. >> well, i really think, kelly, that this bull market forever for me at least is going to be the one that climbed the perpetual wall of worry. as mike said, maybe it's no longer hated but it's still highly suspect and has been all the way along. it hasn't been so much from the get-go about buyers but about the lack of sellers. everyone sold in '08. marginal buyers pushed this thing a lot higher.
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>> that's a really interesting point, jim. the marginal buyers have been companies. the buy back piece has been a huge piece of this. >> yeah, it certainly has. that reflects the fact that the other really helping hand in this entire bull has been this massive unprecedented monetary liquidation by the fed and so you've got cash and unused dry powder sitting in all the corners and corporations without a need to do capital spending have been raising dividends and buying back stock. certainly as you said they've been one of the marginal buyers against no sellers that's continued to drive this market higher. >> so, craig, the trillion dollar question now is you've been on this epic run in the markets. especially just in the last couple of months since drumpd was elected. from people who sold in '08 and still aren't participating, is there still opportunity to do so? >> i believe there is. a lot of people are predicting, us included, a selloff, a 5 to 7% selloff. those selloffs are healthy for the market. we haven't had one in quite a
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while, maybe going back to may of last year. of course, we had the big selloff in february of early part of last year. but i hate to keep repeating what everyone else said, but it's an unloved market. the interesting thing, we've had ten years of money coming out of stocks into bonds. >> yeah. >> and what happens when the bond market has trouble and people need, you know, different alternatives? where does that money go? >> yeah. >> that's why i think the next five years could be tremendous for stocks. we'll get selloffs and we'll get setbacks, like at hodges capital we'll use those selloffs to buy good companies on sale. >> mike, that brings up what's happened in the bond markets which is more interesting than the stock markets. by the way, the two year, the levels we're talking about is pricing in serious rate hikes. the ten year, 2.6%. >> right up against 2.6%. how many times have you heard me say right in the advance of a
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big advance the market pulls itself into a neutral spot or fulcrum point. also just with the ultra flat index performance in stocks today so i feel as if they want to get this news out there and out of the way. we've had a lot of these known potential catalysts that have passed and it hasn't been about the news, it's about getting them behind us. i think a couple of other observations on the equity side and how it's behaved. definitely more stocks down than up. this subtle below the surface and also today's lows in the afternoon right before we saw that late little rally, the s&p 500 was down 1 point be point 9% so you can't tell me that people weren't ready to jump on a down high. maybe that's where the muscle memory lies. >> one of the best performers has been alta beauty. that company is out with the latest earnings report. let's get to morgan brennan with the numbers? >> a big beat on the top and bottom line, earnings of $2.24
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for the last quarter versus $2.13 expectations. revenue 1.58 billion and expectations of 5.54 billion. comp sales, 16.6 increase and much higher than the prediction. this is the reason we're seeing the stock trade lower. we've got some light numbers in terms of guidance. q1 earnings a bit light as are revenues. full year revenue guidance is also coming in a bit light of the street estimates. the comp sales estimate for full year, 8 to 10%. also a bit light versus the 9.9% estimates that the street is looking for. that is the reason you're seeing that stock trade down more than 3% despite the fact -- or despite the fact that we have the hours. >> 16.6% comps?
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this is not a new company. these are unbelievable numbers. they're growing their same store sales. dragging so many more people. there are some unknown factor here which is basically stealing the cosmetic business from department stores. >> i thought you were going to say stealing the cosmetics. some people do a makeover. >> generous sampling. the market is a little bit on alert for just exactly how good can it get. so maybe the conservative or disappointing guidance explains the pull back. this stock has been eamonster. >> late in the beauty space, alta beauty, 8 to 10% are disappointing. elf was up huge. craig, i don't think al at that -- alta is one of your picks. >> jcpenney, i saw mr. ellison our your air. that's a high conviction name for us. they're in a bad area.
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they're doing all the right things. even with closing stores, it is a financial situation and i think they have a lot of low hanging fruit they can take advantage of. the stock at $6, we see a couple years out them earning $1.50. don't have to have a big gigantic turn around in same store sales in order to get there. you can see a big move in something like jcpenneys. >> trading at 6.30. president trump is hosting ceos of community banks today. let's get back to washington for eamon javers to bring us the story. >> reporter: a couple of things to bring you up to date. one is the meeting with the community bankers that you talked about. i'm told in that meeting president trump took a bunch of ideas from the community bankers on banking deregulation. he turned to secretary mnuchin and gary cohn and he asked them can we get this done in six months? they told him, i'm told, we'll do our best. and the president turned to them
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very directly and said, you have to do better than that. i want this done in six months so we'll have to wait and see whether they can meet that ambitious time line on banking deregulation ideas. also sean spicer at the white house giving his press briefing. i had the opportunity be at this to ask him about drug prices, and particularly elija cummings, a democrat of maryland who was here at the white house, who said the president was enthusiastic about his bill to lower prescription drug prices. i asked sean spicer how much pain drug companies should expect from this coming effort? here's what he said. >> i don't want to be prescriptive to the house as to how they work their will, but i know the president has a commitment to that topic and he wants to work with congressman cummings and others who share that same commitment. >> so no specific endorsement there from sean spicer in terms of the bill that the democrats say they're going to drop in the next two weeks on prescription drugs, but that's one to watch if you're interested in drug
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companies. and then finally treasury secretary mnuchin has sent a letter to congress asking them to raise the debt limit. here's what he said in that letter. as i said in my confirmation hearing, honoring the full faith and credit of our outstanding debt is a critical commitment. i encourage congress to raise the debt limit at the first opportunity so we can proceed with our joint priorities. so that limit deadline is looming on march 16th. we'll wait and see what congress does with that. interesting to see now a republican white house pushing for the same debt limit increase that we saw the obama white house pushing for. that doesn't go over well but nonetheless they have raised it ultimately every time they've been asked. kelly? >> that's what the street is expecting this time around as well. thank you, eamon. >> you bet. n.e.c. director gary cohn will join us in a first on cnbc interview around 9:30 a.m. don't miss it. we have to go, gentlemen. jim paulsen, you want to leave us with a quick parting thought?
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>> one thing i'd focus on is the sort of refreshment that we've got to the inflation plates within the stock market. materials, energy, industrials. i think that's going to be the next battleground is watching inflation go to the new highs for the cycle and that's going to drive the stocks back. >> getting excited thinking about it. jim paulsen, jim hodges, thank you for joining us. now president trump has promised a border tax to prevent companies from moving abroad, but some think the best way to even the playing field is to cut corporate taxes for, get this, raising it on investors. we'll take a close look at that. the republican health care bill is under fire from federal gop members. we'll hear from one who has not made up his mind yet. we'll see what it will take for him to support it. you're watching cnbc, first in business worldwide. de.
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say carl, we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.
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pretty heavy volume, i might add. we've got a miss for fiscal third quarter for finisar.
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61 cents. $381 million in revenue. that was also a miss. also seeing weak fourth quarter current quarter eps and revenue guidance. if you take a look at shares of telecom equipment maker, they are down 16.5% right now in after hours. kelly? >> huge move lower, morgan. thank you. i'm looking at their products. optical trans receivers, components, instrumentation, wavelength management, amplifiers to see if there's any read through. >> it seems like a grab bag on a certain sleeve of enterprise hardware. it doesn't seem like it's growing end markets. even cisco is not growing the end markets. it's higher xtds. >> dropping 16% after its miss. senate majority leader mitch mcconnell at a breakfast hosted by politico saying tax reform will come after health care. >> i think finishing on tax reform will take longer but we do have to finish the health
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care debate up or down, win or lose before we go to taxes. >> meanwhile, in his latest piece, greg offers up an alternative tax plan for the gop. here to explain it is greg ib from the wall street journal. joining us is forbes media chairman steve forbes. it's great to have you both here. greg, first to you because this is, you know, an outrage. what are you talking about these investor shareholder taxes here. are these on dividends? how's it going to work? >> the whole challenge is everybody knows the u.s. corporate tax return is too high. it's 35%. that's one reason we keep losing head offices, jobs, profits to other countries. everybody is trying to find a way to get the rate down. donald trump wants to get it down to 15% but he doesn't have a way to pay for it. paul ryan wants to get it down to 20%. his way of paying for it is tax reforms. we'll get the corporate rate down to 15% and we'll get the
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money back by taxing the shareholders instead. right now if you get dividends or capital gains you have a special rate on that. >> right. >> how about making them pay the regular rate and you come out because the share prices are higher because of the lower corporate tax. >> steve, we know you don't like the import tax. what do you think about this proposal? >> it's a non-starter having a capital gains tax as high as almost 40%. those are rates we haven't had since the 1970s, which was a disastrous decade, especially for venture capital. so i don't think that's going to work. and shareholders and what do you do with non-profits. are you still going to deduct money for them? nice academic idea, but i don't think it's going to fly in the real world. i think the republican base will go up in arms even more than the bat tax. >> greg, this obviously comes up because of the funding issue, but there are others in washington who say there's plenty of ways you can kind of move money around here, there, the other way.
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given the comments by mcconnell and others it sounds like closing the deficit isn't the top issue. >> that's it. everybody wants to cut taxes. nobody wants to pay for cutting taxes. mr. forbes just said even as an economic matter you're coming out ahead. nobody likes the idea that it's a statutory matter. i would add if the republican plan lowers the personal -- the top rate on personal income, then that would at the same time lower the capital gains rate in under this and sort of related plans. the bottom line is if you don't want to find a pay for, if you don't want a value added tax, a carbon tax, if you don't want to tax imports and capital gains you have to basically blow up the deficit. the issue is that it puts upward pressure and it negates the positive growth effects that you get from lowering the corporate rate? >> right. steve what would your solution be? >> go ahead and pass a big tax cut. one, it gets the economy going and eventually revenue comes in.
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investments takes time. by the mid to late 1990s we are in surplus because of the actions taken in the early 1980s. in terms of having pressure on cutting spending, that's a good thing. the other thing to keep in mind is asset values will go up. in the 1980s, for example, even though the national debt more than doubled, went up $1.7 trillion, the you get a vibrant economy. you get the 15% corporate tax rate. you're going to have capitol flooding into the country. we'll have the best in the world to the worst in the world. >> the effective tax rate paid by u.s. corporations is roughly middle of the pack in terms of developed countries. it's just the fact that you have a very high statutory rate and a ton of deductions and incentives to keep profits over seas. i think almost everybody in
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principle would say let's get rid of them. say cut the rates, simplify the code. >> right. >> that seems to have stalled altogether. >> if i could make a point here. you're absolutely right. the people who have tried to do a revenue neutral tax reform, the lowest they can get the rate down is 25%. it's double ireland. that's why you have the out of the box ideas out there like paul ryan's plan like the one i wrote about today. >> greg, wouldn't something like let's call it a shareholder, investor tax make us more like europe, stagnant, make us less dynamic, less innovative, less capitalistic kind of economy? >> no, it wouldn't. first of all, what matters is how much your taxing capital investment, not whether it's paid by the company or shareholder. it would result in a lower burden on tax in capital. we'd be more competitive vis-a-vis the rest of the world. you would see a lot of
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investment come into the country. there are quite a few other ways to do it. paul ryan has a way out there. like mr. forbes said, if you don't want to from the time about the deficit and worry about paying for that later, put your faith in the positive growth effects. cut the rate, don't worry about finding the money elsewhere and let her rip. the problem is we haven't heard any proposals on that front from this president or this congress really. >> yeah, other than cutting -- >> i shouldn't say that's not entirely correct. congress has proposed some things, the president has not. >> i don't know, steve. he's making some good points. don't you think? >> well, i think the key thing is to get this economy moving and then good things happen as we saw in the 1980s and 1990s. on the capital gains, even if the top personal rate goes down to 33%, that's still a capital gains tax rate if they put in that pass through as one of the highest if not the highest in the western world. it would be a disaster. just go for broke.
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go ahead. >> i mean, doesn't it matter though that at that higher capital gains rate is coupled with a lower corporate rate? yes, you have a higher tax on the capital gain but the capital gain is larger because the share price is now discounting the lower tax rate? >> the lower corporate tax rate would be a good thing but in terms of taking a venture capital, having risk taking, that 39.6, 40% rate would be a disaster. investing especially startups is risky enough but having a 40% penalty if you actually score is going to be a huge disincentive. so lower them all and good things will happen. >> all right. >> we've done it before. >> steve, thank you for joining us. steve forbes is a forbes media chairman. greg ib firing everybody up joining us from the wall street journal. >> thanks, kelly. well, repealing and replacing obamacare was one of president trump's biggest promises on the campaign trail and the replacement bill is
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facing stiff backlash. we'll hear from one outspoken congressman on what he wants to see in the final bill and several retailers who dropped ivanka trump's clothing line, she said, cited weak sales but new data finds sales of her products are actually surging and we'll have more when we come back. imanage my portfolio.nd since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit to see what adding futures can do for you.
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products. courtney ragan has more for us. courtney? >> hi there, kelly. yes, that's right. january was a rough month for the ivanka trump brand. you'll remember, of course, that nordstrom decided not to place new orders. t.j. max and marshals decided to pull the signage. online sales for the brands fell 26% in january from the month before. however, exclusive data provided to cnbc from slice intelligence shows a sharp reversal in that trend. in the month of february 2017 ivanka trump branded sales online increased 207% over january 2017. so that's a month-over-month comparison. this data comes from slice intelligence panel from more than 4 million online shoppers. the brand has sold at more than 20 retailers and sites. amazon is the number one seller of ivanka trump branded
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merchandise by revenue surpassing nordstrom. slice says ivanka sales surged 332% on amazon in january and february combined to the same period in 2016. amazon owned zappos is the first online seller and its sales grew more than 18% in january and february. again, over that same period in 2016. macy's is now second behind amazon when it comes to revenue for who sells the most ivanka trump branded products online and macy's online sales of those goods increased 148% in january and february. macy's ones owned blooming saw ivanka trump sales grow 32% in the first two months of the year. nordstrom did choose to drop ivanka trump's brand going forward but there is still some inventory left. that is still available on the website but the sales were down
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55% in february over last year. back to you. >> and, courtney, i'm just wondering, do you think -- did they give any data on whether the sales increase was driven because people either said i can't get it at nordstrom, i need to get it somewhere else or simply because of all of the attention and having kellyanne conway go out there and promote it? did that drive sales? >> that's the hard part. it's hard to know what the motivation was behind the sales. there are a couple of ways to vote with your wallet. we know there was a big movement with grab your wallet. as you mentioned, kellyanne conway, adviser to donald trump came out and side, buy ivanka trump goods, you can buy them online, and that was a month ago. we did see the surge happen in february. it's hard to know exactly how or why it happened but, again, those goods are available in about 20 different retail stores
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and websites. many more beyond nordstrom. >> only to try to figure out, not that we're inspector gadget over here, but when the company say they're dropping the line was it because they felt the political pressure? because they cited the sales. they did not say -- was that like a one-time boycott that showed up for a few days and left? >> i wonder if it's a matter of differing customer sets. like policies and politicians, if you have a high approval rating with one end of the spectrum, you definitely have a low approval rating with the other end. it's not necessarily a nordstrom customer that was going to take to it as much as i'm going to stick up for who was mistreated. >> amazon wins, isn't that always the end of the story in retail? >> yeah. you know, we know that amazon certainly also makes up -- they have their own merchandise but there's also many third party sellers on amazon. >> true. >> that's a mix in the amazon data which is something we should remind everyone. amazon doesn't flat out recognize all of that revenue because it's third party
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sellers. >> they do all right though. courtney, thank you. we have an earnings alert on zoom. morgan brennan has those numbers. >> take a look at shares of zoom zuhmiez. it beat in earnings 74 cents per share for last quarter, that was an 8 cent beat. 264 million in revenue. however, this is why the shares are trading lower right now, really disappointing first quarter guidance. seeing a big loss. the company expects a big loss, 17 to 21 cents per share versus what analysts were expecting, a loss of 3 cents. also want to draw your attention to verifone. earnings of 21 cents per share beat by a penny. revenue of 457 million also better than expected. second quarter, quarter earnings
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outlook was in align. so shares of the payment systems provider are up almost 2.5% after hours right now. >> thank you, morgan. really interesting about zumiez off. time for a cnbc news update with sue herera. >> here's what's happening. legal challenges against president trump's revised travel ban are mounting. washington state saying it will review and renew its request to block the executive order. it comes a day after hawaii said it would launch its own lawsuit. two men have been arrested and police are looking for more suspects after what appears to be an axe attack at dusseldorf's train station which injured five. the owners of a washington, d.c., restaurant have filed a lawsuit against president trump and his hotel. the owners of the cork wine bar claim government officials and
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lobbyists and foreign dignitaries feel pressure or an obligation to frequent the hotel and its restaurant because of its ties to the president. delivery service postmates is using knee high six wheeled robots to deliver food to customers in the nation's capital. they're made by starship technologies and for now the robots are accompanied by a person but eventually they'll be monitored by remote. i'm not sure if it's faster, kelly, than those guys on bicycles in mid town manhattan. >> at least they can't run you over. >> that's true, and they're computer. >> hey. >> i didn't mean -- you know what i mean. it's a cute little guy or gal. >> yeah, sure. uh-huh. >> yeah. yeah. >> they're not bad on the upper west. i know. every now and then you get -- never mind. thank you, sue. >> you're well dock, kelly. up next we'll head to the front lines in the battle over the new build to replace obamacare. ron desantis's vote is up for
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grabs. find out why he hasn't taken a stand yet. and trump has said he wants to spend as much as a trillion dollars to fix our nation's crumbling infrastructure. we'll head live to a levy to show you how costly ignoring the problem could be. during the lexus command performance sales event, experience our most elevated suvs ever. including the lx, gx, rx and nx.
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welcome back. rifs emerging in the republican party as members of congress voice worries about the gop's american health care act. it's not just lawmakers who could be concerned. the new bill could hurt the voters who helped elect president trump. john harwood has more. hi, john. >> reporter: hi, kelly. the old saying is to the victor goes the spoils but the house republican health care bill turns that maxim on its head. let's first take a look at who vote the for donald trump. just 10% of donald trump's voters last year were people who made more than $200,000 a year. 48% were whites with no college degrees. 51% were voters over 50 years old. now take a look at the tax cut winners in the republican health care bill. people in the top 1% would get
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an average of $33,000 a piece. people in the .1% bracket would get 197,000. now let's look at 9 health benefit losers. the people that would come out on the short end of the stick when you move from the obamacare subsidies to the republican health care tax credits. the average enrollee in the affordable care act would be down $2400 by the year 2020. the average 55-year-old and over would be down almost $7,000. you've also got big cuts coming in medicaid. 22 republican senators, kelly, represent states where medicaid beneficiaries, a majority of them are white. that introduces a new element of the equation. nationally, of course, most medicate beneficiaries are non-white. it's been a target of republicans. non-whites vote for democrats in disproportionate measures. this bill has big problems. >> thank you, john. joining us now to talk more
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about the american health care act as it's called is republican congressman ron desantis of florida, a member of the freedom caucus which largely opposes the bill but he has yet to take a position on it. how are you? >> we are well, how are you? >> talk us through your mental process. you get the bill, looking through it and you know where everybody pretty much stands so far and what are your thoughts? >> well, it's over 100 pages. when you're talking health care bill, it's very complicated. i got it monday night. i'm going through it. i have a lot of questions about some of the provisions, both in terms of are we expanding any of the obamacare programs under medicaid. there's a program that allows the expansion for three years. that will hurt taxpayers. what are you doing to drive down costs? we're told you can't do some of the obamacare architecture, remove it because of senate budget rules, but as i'm reading the bill, there are examples of
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where they're changing some of the insurance regulations. i'm trying to get clarification on can we do more in that regard? at the end of the day, do one, fulfill our promises that both republicans in congress and president trump made to repeal and replace obamacare and then also the reason why you want to replace it is because it costs too much and we want to drive the costs down. so i want to make sure that this is going to put a downward pressure on costs. i'm not sure that it will do that. >> yeah. so, you know, i mentioned this earlier, but you may have seen it. the journal's editorial on this was basically saying, look. it's not perfect. we can't start from scratch. if we don't do it now, it may not get done. >> you don't have to start from scratch. i think you should do a bill to repeal and replace. that's what president trump has asked for. so i'm fine doing it, at least this first part in one bill, the question is are we repealing enough of obamacare so that our place -- that our replacement is coherent as a matter of policy.
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as i'm reading this bill i think there's a lot of somersaults done to get around the budget rule so as not to offend the mythic call parliamentarian in the senate. i want to be aggressive with that. if you're laying over some reforms which may be good on top of the obamacare architecture, i just don't know that's going to have the positive effect on consumers that we're saying is surely needed in the health care market. >> congressman, i guess in addition to whatever somersaults are being done to avoid the sort of parliamentary complications, there's a political complication of how much of a perceived cost you're willing to shoulder if you repeal and radically change coverage amounts, right? people who are potentially covered. where do you come down on that in service of whatever principles you think should be followed in a new bill? you know, what's the acceptable cost on that side? >> we want to empower individuals and patients to have a variety of plans. for example, you may want a higher deductible with a very
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low prem yum with a health savings account. that makes sense for people who are younger and healthier. the obamacare doesn't make sense for them because the premiums are high and they have a higher deductib deductible. obamacare said you can only do the insurance that we tell you to do. i think that's part of the reason why the costs have gone up so if you allow people to choose from a variety of different plans and not impose this essential benefits test on them, i think that that would be good. and so some people may choose to pay more out of pocket. other people may want plans that cover a lot more but giving them that freedom i think is a core principle that we've got to follow. >> why then would some of your republican colleagues in the house and senate not say -- well, that's okay. they clearly believe there will be a group of people left out not by choice. >> i'm not exactly sure. i think it depends on what you're talking about. my fear with the way it's structured is that if you're not
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removing some of the mandates and some of the obamacare bureaucracy that is driving the prices higher and then we're, quote, replacing on top of that, you could end up in a situation where the costs aren't coming down enough for the tax credit to make an impact. they're really premised on a more competitive market that allows costs to come down. maybe the bill delivers that, as i'm going through it i'm not convinced that it does. >> congressman, what was the support in your district for president trump in this election? >> he got 56% and i got 59%. >> wow. so it's not like he was elected with 60 or 70%. if the president supports this bill, if he even came to you and said, i need you to support this? >> well, i'm have hvery interes trump succeeding. he's been laser focused,
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following through on his promise the. he's been very interested in taking input from people and i think he's definitely open to some improvements to get us where we need to go. and he's shown a willingness i think to work with the congress so if he does that and we can advance this, then i'm absolutely willing to work with him for sure. it's very important that he succeed legislatively. i think he's succeeding in terms of some of the executive actions he's taking in terms of his supreme court nominee. ultimately, you have to pass laws. this is important. we want to get it done for him. >> congressman ron desantis, an impressive background here. harvard, yale, j.a.g. officer in the navy. in iraq. congress since 2013. it will be very interesting to see how you come down on this. thank you for joining us. >> thank you. >> congressman ron desantis of florida. new appliances, high end finishes and a fresh coat of paint. a newly flipped house might look like a steal but some are
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finding the problem when a flip becomes a flop. donald trump has promised to spend a trillion dollars on the nation's infrastructure. we'll go to california right after this. you're watching cnbc, first in business, worldwide.
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the reports coming at a time when president trump has made rebuilding the infrastructure a key part of our plan. aditi roy has the results of the study. >> reporter: hi there, kelly. i am standing on a levy in the sacramento area. it may look sturdy but make no mistake, experts say this levy is aging. in fact, it was being monitored 24 hours a day during this past winter's severe storms to make sure there wasn't too much water seepage. as many neighbors behind me were watching seriously. this is one components of the infrastructure report card that was just released today. the organization grades 16 types of infrastructure every four years. overall america received a d plus on its infrastructure, the same grade it got in the last report card in 2013. dams received a d. so did roads while ports and bridges earned c plus grades and rail scored a b.
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the nation's levees got a d up from a d minus. the national levy database only 1.8% are rated acceptable. they protect an estimated $1.3 trillion worth of property. a lot at stake. the report card says that it would cost $80 billion over the course of the next ten years to improve the country's aging levys. >> desperately needed. be safe out there. aditi roy on a levy in california. house flipping's popularity is at an 11 year high. buyers should beware. we'll have the details next. coming up on "fast money", president trump's first full jobs report is tomorrow. someone with intel says there's one important number wall street is watching. he'll tell us what that is at 5:00.
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a new report shows it's back to the future. house flipping is at an 11 year high. there could be some hidden risks. our diana olick has more. hi. >> reporter: from the outside this historic dc row house looks like it's been renovated and flipped with the greatest of care. go inside and it's even more stunning. and that's what the mcguires a couple of empty nesters saw when they bought it three years ago but later they found out that from the lights to the floors to the beautiful gas fireplace it was filled with major code violations and major mistakes. >> we purchased a three bedroom, three bath unit and then found out that the bump out that holds two of the bedrooms and two of
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the bathrooms, this addition is illegal and the city has the authority to make us tear it down. >> reporter: don't freak out. the mcgierz are working with d.c. government to get the house up to code but it's likely going to cost them more than $100,000 and that's on top of the $630,000 they originally paid for the property. unfortunately, stories like these are becoming more common as more and more flippers get into this business. kelly. >> i can't believe this didn't occur to me earlier. i've watched these shows with these -- some of them it's insane, you know, i never thought about wait a minute. what really happens after it's all spruced up and they feel glad they finished the project. are they living it in good hands for the next group? >> reporter: it's absolutely buyer beware. we have a checklist on of things you should look for. number one, pull the permits and find out if everything was fully inspected and up to code.
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we put that story online this morning, i never got so many comments of people saying the same thing happened to them. >> is there more of a role for house inspectors to play here now that we're aware how big these risks are? >> reporter: it's tough because the inspectors go through and they see what they see. they can't see what's behind the wall, they can't see the permitting or code violations that are within some of the system. they had a house inspection. they didn't see any of these violations. >> that's a little scary. thank you for bringing it to our attention. that's our diana olick in washington. you can read more about it online. big coin has been on a tear this year, it's just march. the key decision tomorrow could have a major impact on the chiropractoro currency. we'll tell you about it next. alpha seems more elusive today. is it because so many go after it the same way? chasing after short term returns.
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we all know to keep an eye out for that jobs report. here's something else to watch for. the scc is expected to decide whether to approve a new bitcoin. you can see there. an approval could send bitcoin which is already up 24% this
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year up even further and it's not just the winkle vie if you want to call them that. >> some three years in the works and so this is the deadline. generally some suspense as to whether the sec will improve this. is the underlying market on the up and up? the exchanges have had some problems and the use of it. the winkle voss twins they're company would be sourcing the bitcoin and holding them in storage so to speak. it's obviously untested and that's why i think it's taken so long but on the other hand you can see the virtues of having some kind of vehicle to own this kind of emerging -- >> a lot of people want to speculate but at the same time the whole point of bitcoin was some of the advantages and features that it offers, the encryption and the inscrutability. if you want to hold that the way you want to hold gold there's
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two different plays here. you want the physical electronic asset or you just want to make a call on which way the price is going. >> this is the asset play through this etf. it would become more valuable if the technology gets into greater uses. it's all very much speculation and conjecture in terms of whether it's going to fly. i still think that probably the price is run up incorporating up plenty of chance that, in fact, it does get -- >> if it doesn't for some reason just because the speculation around it, the build-up makes it sound like it could happen. there's three right now that exist. if you look back at the gold, it went out first, it had a huge advantage of hovering up advances. >> i think the difference between that gold had thousands of year of history in terms of being an accepted asset class. and, in fact, many people have kept it in storage as an
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investment for a long time. this is a different deal when you just capturing electrons. >> there's bitcoin up another 14% today. >> i heard the sec is going to come down to a coin toss. >> stop. let's talk about these earnings movers after hours. you will ta beauty which came out amazing results. the stock is down 4.5% because its guidance said it's only going to grow 8 to 10%. zumiez is down 12%. zumiez is it's guidance dramatically disappointing. >> you will ta so the one month that we know about is february for these retailers because they have a january fiscal year so
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maybe that's just forcing management to say traffic fell off, we don't know why maybe we just have to on some level assume that it's going to be a soft quarter if not year. >> and that's a tough way to begin at all. >> very hard to separate the trends. >> see you tomorrow. that does it for "closing bell" and "fast money" begins right now. "fast money" starts right now. live from the nasdaq markets overlooking new york city's time square. traders on the desk. happy birthday bull market. the bull turned eight today. we've got names you can still by right now. jc penny is doing something very surprising. later in starbucks too political for its own good. the note making the rounds on wall street we've got all those details but first we start off with the drama in d.c. over the gop's new health care bill where we've seen split


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