tv Power Lunch CNBC July 31, 2017 1:00pm-3:00pm EDT
that's it for us "power" starts right now i'm melissa lee. what's on the menu president trump swearing in retired general kelly as his new chief of staff can he bring a bit of that military discipline to the trump agenda we'll debate that. discovery and scripps announcing their $12 billion tie-up does this mean we can look forward to shows like "deadliest iron chef," "fast and loud tiny homes," or maybe a new offering "flip or flan"
make it in america brian set to showcase companies that not only are making their products here in the usa but they're also making money doing it "power lunch" starts right now >> that's right, melissa break out the national anthem and send in the eagles because we're going to america this week all right. stop me if you've heard this one before the dow hitting an all-time high on this final day in july. it has been a red hot month for your money the dow, s&p and nasdaq all on track for their biggest gains since february check this out the dow is now up nearly 11% this year. the ntds really banking some investor coin. up nearly 18% just this year now, if you own these two stocks, you are probably both happy and sad today. boeing soaring again hertz hitting the skids. they got a downgrade we're also keeping an eye on oil atop $50 a barrel earlier in the session. but now it is moving lower tyler. >> thank you very much, brian. welcome, everybody i'm tyler mathisen we begin this day as we so often
have in recent weeks and months, in our nation's capital. the president swearing in his new chief of staff and holding his first cabinet meeting with him in place and the president, as he often does, touting the success of the markets and the economy as this new week begins in washington. let's get to our -- get to the white house and kayla tausche. >> general kelly is not a new face at these meetings he was sworn in on inauguration day. one of two cabinet members to be sworn in on that day but he has a new title and as chief of staff one of his chief jobs on day one is to begin stabilizing some of the factions in the west wing whose micromanagement he's been critical of in the past. it's worth noting he does not have a ledge slative track record from which to draw upon spearheading the president's economic agenda but he does carry a wealth of geopolitical experience a four-star retired marine general. and that's something that the president has said he admires about general kelly.
and that is experience he's going to have to draw on immediately with what the white house calls a grave and growing threat being presented from north korea. here's what the president said earlier this morning >> we'll handle north korea. we're going to be able to handle them it will be handled we handle everything >> president trump feels that china should be doing more to stymie north korea, and new reports say the white house is eyeing new trade actions as a counterpunch, but china today said the two are not related that is just one item on the white house's packed agenda this week russia, meanwhile, is retaliating against a bill carrying tougher sanctions the white house says it's yet to receive the legislation but still plans to sign it despite these new actions from russia. white house officials on health care and cabinet secretaries are expected to make a decision on whether to continue reimbursing insurers for offering certain obamacare plans. that is expected potentially in the coming days. and then finally over on capitol
hill the senate is expected to begin moving a logjam of nominations held up by politics and a packed legislative calendar ahead of potentially taking recess at the end of this week we'll see how that goes. as for the white house calendar, the faa has put a hold on an airport in new jersey. there's an expectation perhaps the president on thursday will begin a two-week vacation of his own up in bedminster still no word from the white house as to whether that is officially happening guys >> all right, kayla. busy week ahead in washington. and we'll be with you following it every pitch of the way. so will the retired general be able to get the president's agenda back on track let's bring in don he peebles, chairman and ceo of the peebles corporation. and steve ovman, former ceo of office depot same question for both of you. steve, since you're farther away, you can take it first. can any chief of staff be effective in the white house if
others on the white house staff have either formal or informal reporting lines that enable them to go around the chief of staff? whether it's mr. scaramucci, ivanka, jared. >> yeah, i mean, that's the question, isn't it this is analogous to a ceo and a strong c.o.o. position and those can be the greatest relationships or they can be dysfunctional depending on whether the ceo stands behind his c.o.o. and truly empowers them but this has been an open door president and he intends to be that way so there's still that room for coming around general kelly in this situation but general kelly comes at this from a very disciplined perspective. he's used to a lot of rules and regulations. he's used to people following orders he's used to discipline. and people hope he brings that to the white house, but he's not a politico and that is the flip side of it. so this is a very political organization and it's dynamic you've got a lot of things
coming at him. the question is not whether he is able to manage the situation but whether in this situation that is highly political and with a ceo or a president in this case that allows people to come around whether in fact that discipline will be implemented or not >> you know, don, we've had businessmen who have been in the role of chief of staff we have had lawyers, politicians. rarely a military guy. alexander haig being the exception there. can a military guy succeed in this environment if again there are others on the staff who have private lines right to the president's desk >> you know, positions require compatibility, and chief of staff is the most intimate officer in the white house this is the perfect chief of staff for president trump because president trump's a big
personality. he's a very strong personality and he needs someone who is strong to stand up to him from time to time but do it respectfully and understand a chain of command to bring order. so you've got general kelly as a contemporary of his agewise, of equal stature in different spaces trump would consider himself the general of business. and this is a four-star general. so i think this is a great decision for him and he doesn't need political skills. that's what the political director of the white house is there for. and if jared and ivanka, who ivanka i consider a friend, they will i believe follow that chain of command as well and then steve bannon i think will either have to follow that chain of command or i think he will find himself walking. you know, there's an old saying in politics, that you can't bring the people who help you get elected to help you govern you bring professionals in to govern and that's what ambassadorships are for. that's what boards are for and everything else, to bring those
people who help you win and put them into your government at a distance >> you know, quietly congress has passed more laws this year than any time in history do you believe that despite all the attention, distraction, whatever you want to call it, around the white house that we will still be able to successfully promote whatever agenda we want to talk about, whether it's the republican agenda, tax reform, that that can still get done >> even if this white house show continues. >> absolutely. look, everyone wants -- >> congress makes the laws, not the president. >> exactly and congress and the american people want tax reform the american people and congress don't want to eliminate obamacare. if they did, they would have done it. what they want is they want to make it better they want to correct it, modify it based on experience that's going to happen and it may be a longer road. and i think trump underestimated the ways of washington and the time frame tax reform is coming, and it will be meaningful >> and in fact gary cohn today said trump is 100% committed to
tax reform by the end of this year steve, you're in the c suite still. you heard about this white house shake-up would you be more optimistic about that aspect of the president's agenda on which so many ceos and investors out there are hanging their hats on for this year. >> well, i think you're right that the business community expects tax reform, especially on the corporate side, and the hope here is that with general kelly in place that there will be enough discipline and enough organization to make that happen the other role of the white house chief of staff is to orchestrate the interface between congress and the white house and hopefully with somebody of general kelly's background and certainly his maturity and gravitas hopefully congress will listen to him and that general kelly will force a policy-based approach because we certainly need tax reform, as don said and that's what the business community expects. >> don, let me ask you sort of an investor question investors often say we look at management in deciding which
companies to invest in would you invest in trump inc. >> yes with this decision, yes, i would. i think that kelly's going to turn things around it's what he needed. and by the way, he's not the first president to have pushed the reset button reagan had to do it. >> carter. >> carter did it not successfully and obama had to tweak w tweaked. herbert walker made adjustments. >> would you have been an investor a week ago also a month ago? three months ago >> i've been around politics a long time. i've known and met every president since carter i grew up in d.c i think i have a good sense of politics and i see the ebbs and flows and this is -- we're a capitalistic emocracy, not an ideological democracy. if the economy does well he does well >> you grew up in d.c., so help us out because we do hear there's never been an administration, this is the most insane thing. i wonder if that's true or not because you know, i wasn't around when millard fillmore was running the white house. nobody had to deal with 24/7 media and twitter hot takes.
we saw what you -- i liked your points about reagan and everybody else do you think this is a unique -- i mean, it is unique because he's a businessman that's come in with no political experience really do you think this is an unprecedented white house? >> i think unprecedented because his personality is so big and it's nonstop reagan had a very big personality but reagan -- >> what if teddy roosevelt could tweet? >> right i think things could have been different. what did teddy roosevelt say about the critic so he understood that you've got to fight the public who elected trump expects him to fight for them and stand up to the status quo and disrupt it he's a tech stock on steroids. he's a big disruptor >> he's a fang >> and i think now that he's got some discipline and some structure in the white house i think he can be very successful. >> steve, thank you very much for joining us today don, you're going to stick around i'll be able to talk to you later on about snap among other
things later in our program. let's get to sue herera for a news alert >> hi, melissa it concerns the olympics apparently los angeles reportedly has reached an agreement with the olympic committee that will pave the way for them to host the summer games in 2028, not 2024. there was a bidding war between paris and los angeles, and the ioc considered both of those cities very strong contenders. so back in june they made the decision that with two strong candidates it would take a very unusual step of awarding 2024 to one city and 2028 to another los angeles agreed to go to 2028 paris was not willing to do that this would bring the olympic games to southern california for the third time and the last time the u.s. hosted the summer games was in atlanta of 1996. we do expect a formal announcement from the ioc later today. but it looks like, according to a variety of reports, that the
city of los angeles, city of the angels, will host the olympics in 2028. melissa, back to you >> all right thank you very much, sue herera. still ahead, snap shares not exactly being snapped up since going public with insiders now able to sell will it make things worse? we'll tackle that question next. and later a federal judge says enough is enough, it is time for the faa to review the size of airline seats. put your seat, what's left of it, in the upright position, because "power lunch" is just getting started. >> announcer: you're watching "power lunch" with melissa lee, michelle caruso-cabrera, brian sullivan and tyleratseon bc mhin when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time
what america thinks. and finally, following sanctions, russia kicking out 775 u.s. diplomats in retaliation. despite all that stocks keep rolling. perhaps history will refer to this period as the unshakeable stock market the major averages on track to have their best month since february and on pace for
double-digit annual returns. let's bring in burns mckinney portfolio manager with allianz global investors and -- burns, in some ways we are paid to worry. when things are bad we say there's some optimism. when things are good you say there's reason to worry. that's what you have to do but at point do we literally just have to get on the train that earning and the economy are good, politics is a bit of a sideshow, however important of a sideshow it is, and the markets' path of least resistance, yes, is up >> i think that's absolutely the case one of the things we've been referring to this economy as is the tortoise economy and that's because i read in the papers every day that u.s. economic growth is stuck in a 2% rut over the last eight years of this expansion and i don't focus so much on the rut as much as it's been an eight-year expansion. and i think one of the reasons for that is precisely the 2%
growth it means that we haven't seen the excesses that tend to sow the seeds for economic downturns and the end of the recovery and you know, likewise, what that's meant is 2% doesn't sound fantastic but it's been just enough to grow jobs, to bring the unemployment rate down wage growth has been respectable enough to drive consumer spending but yet not so strong that it's crimped corporate profits, which is what's really allowed this economic recovery to go on so smoothly the way it has. we all know how the fable goes at the end of the day the tortoise does win the race >> before we get to paul burns i just have one more question, though in that sort of environment, according to the notes it sounds like you want a rotation to value stocks those kinds of stocks haven't been doing well in this sort of environment and that's exactly the environment you say we will continue to have so why do we need to rotate now? >> well, i think that the catch is a lot of it is just reversion of the mean. the fact that value stocks specifically because of this point, the markets price that in they've lagged to a great degree
so far this year in fact, they've given back all of the gains that they had late last year. and what we're also seeing is outside the u.s. we're seeing really synchronized economic growth around the world, which really does bode well for value stocks just if you go over the last ten years the value benchmark, the u.s. large cap value benchmark has lagged the growth benchmark by about 300 basis points per year which is one of the largest such stretches that we've seen >> so paul, are investors broadly speaking wise or naive in being so chill, so zen when the world and washington are so not? >> yeah, it's generally the case that investors are anything but chill or zen we want investors to be fully invested and take account of the risks but focus on the economy we agree, the tortoise economy, or as i sometimes say the sumo wrestler economy isn't going to win any fast sprints but it's going to stay on its two feet. 2% growth is okay if you have low interest rates and really low inflation. so stay invested
pay attention to the liquidity that's out there there's quite a bit of it till but there are some risks on the horizon. i think you're going to probably get to those in a minute >> so let me just bear down on something here because the president this morning was talking about the rising stock market and proudly pointing to 2.6% growth in the most recent quarter which he said nobody really anticipated and he said i think we can get to 3%. last summer when he was campaigning he said i think we can get to 4%. do we really want to get to 3% growth or 4% growth because of what that could entail or what it might mean for inflation? burns, why don't you take a whack, and then paul >> you obviously would love to see more growth but i think you hit the nail on the head in that when you do see the growth of north of 3%, north of 4%, what that does is it tends to spark inflation and between, it sows the seeds of the destruction of this economic expansion. >> and paul, one of the things rick santelli pointed out earlier today was that we've had 3% or 3.7% quarters episodically
over the past eight or nine years but what we're talking about here is not the stray anomalous quarter of 3 1/2% or even 4%, we're talking about sustained growth at that level >> yeah, if you get sustained growth at that level you get inflation because you start to get excessive borrowing. and with this slow rate of growth you get consumers who really aren't interested in splurging or bingeing on debt. and that's helped prolong the expansion. we think it will prolong the expansion even further, beyond 2018 >> maybe, paul, we should call this the dr. strangelove market. how i learned to stop worrying and love equities. right? because it seems like we grew up in a time, we all did, we're dating ourselves, when america could have been wiped out by russian icbms at any moment. literally we used to have nuclear bomb drills at my elementary school in california and yet the stock market began what was one of the greatest booms in history in 1982 do we overworry because the
constant flow of information >> people do worry a lot about information because it's hard to put it in its proper perspective when it's coming at you so continuously that's why we still want investors to focus on the economy here the economy's not going to grow forever. we'll have another recession in the next two to three years. but we don't think it's imminent and while it's not imminent focus on the market, stay fully invested, get into those cyclical sectors that we like for growth in the next year, year and a half. >> burns mckinney, paul christopher, thank you very much don, you're a very successful businessman. you understand the point that i'm trying to make i'm not trying to minimize what's going on. health care, things like that, they're very important but if you as a businessman were too afraid to invest in anything because of some political headline, you would have never invested in anything in your entire career. >> that's correct. because it's always something coming up at you it's always another issue. so that's why there's a separation between business and politics government -- >> so how do you tune it out to be successful? >> you look through the sound.
you turn down the volume and look through the noise >> except on this show >> exactly >> what's interesting is i was thinking to your point that sometimes we overworry about these things there have been nuclear threats for a long time. and when the soviets got the bomb, america got scared the chinese got it you know the pakistanis have it who knows who else has nuclear capability that we might not like this guy in north korea is of a different sort we think i mean, in terms of his mental stability and so forth but we've been here before we've been here before when people we didn't want to have nuclear weapons got them >> and they've been stronger, superpowers. >> stronger superpower where there's a real threat. >> and we're still here. i don't mean to minimize it because i think it's serious you know what here but it's not the first time we've been down this it's the first time with kim jong un. it is the first time with donald
trump. but not the first time we've been here. >> i would agree with that and i think, look, you're going to see business continue to expand because we've got a constant growth. and i think the 2% growth is better than 3% or 4% >> all right, don, thanks. >> coming up, florida's west coast getting soaked by tropical storm emily. we're going to have the latest on that big storm ahead. but first, it is the first day of trading after snap's lockup expiration we'll tell you what that means for that beleaguered stock coming up. and i had all these points from my chase ink card. so i bought ingredients, utensils, even made custom donut cutters. wow! all with points. that's how i created the ripple: the doughnut in a doughnut in a doughnut. suddenly it's everywhere. i mean, it really took off. what will you create with your points? learn more about the ink business preferred card.
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ivanka trump posting a picture of retired general john kelly being sworn in in the oval office that posted about 20 minutes ago to her twitter account here is a photo of general kelly being sworn in all righty snap's ipo lockup period expiring over the weekend, allowing for early insiders and employees to sell up to 400 million shares big test for the company and julia boorstin is live in los angeles with the details hi, julia. >> hey, tyler. that's right snap shares tumbled to a new all-time low this morning. down as much as 5% before rebounding the stock is now down about 2% this is just the beginning of a flood of shares that could hit the market on august 14th, which is four days after earnings, employees will be able to sell 782 million shares and then at the end of august another 20 million shares will become available to sell, according to jpmorgan.
now, analysts have been mixed. barclays anticipating a sell-off around these expirations warned investors to hold off on any purchases until after august while stifel says investors may be overreacting and that anticipation of these lockup expirations could be more impactful than the actual expirations themselves now, the next catalyst for snap shares will be its earnings, which are a week from thursday the company is under pressure to show it's growing its user numbers as well as its engagement and its revenue as well now, this comes on the heels of snap's much larger rival facebook just last week reported better than expected user and revenue we'll have to see if facebook and instagram's gains come at snap's expense guys, back over to you >> thank you very much, julia boorstin joining us now is james chalkmock, analyst at mines cress p/e hart still with us is don peebles don is here because he chose snap in our cnbc stock drop a few months ago and that is one of the big reasons why you're
not doing well in this competition. what has -- >> it's early, don, don't worry. >> it's early. look, my son was at our table for the draft, and i had -- and told me to pick facebook and i did. then i called it back and picked snap because i felt better about snap i should have listened to him and his investment adviser -- >> i thought you were throwing him under the bus. my son did it. >> no, just to make his point, he shorted snap and he's up 45%. i didn't believe him, and i had his broker send me the report to prove it to me because i didn't believe him. so look, i think the risk here is facebook. facebook is killing them with instagram and with facebook stories. and that's limiting snap's growth i think that the market has reacted too severely to unlocking these lockouts who knows what the employment agreements are with these employees and the like but also i think their business model, they've got to -- they've got the opportunity to make some improvements and innovations
>> in terms of the stock acting seve severely, james, it's been a 24% decline over the past one month. you're sticking with a buy rating and a $25 price target. at this point is it simply that the stock is down 24% over the past month and so you missed that opportunity to downgrade? >> yeah. i mean, look, the setup this quarter is different than last year because you have a situation where estimates have come down materially versus kind of more heightened expectations heading into one cue but what i'd point out is i think a lot of snap's success is less predicated on what facebook is doing and more predicated on what they're willing to do because the reason we even came out positive on it was because of the fact that they had a better pulse on mobile content than we thought competition. so they're not really investing as aggressively there as we would like to see. and then secondly you have this monetization opportunity where twitter actually monetizes five times higher than where snapchat
does that was a delta we thought could get closed but ultimately we think this is a make or break quarter because if you hear any excuses on seasonality for a secular growth story like this i think that's going to raise red flags that may be irreversible. >> you know the lockup numbers are staggering when you think about 400 million shares and another 700 million plus eligible in a couple of weerkz, james. but really if you drill down do we understand how many shares are held by company founders who probably will not sell like an evan spiegel for instance? can we actually whittle down the number of shares that will even possibly be sold on these two expiratio expirations? >> i think the expirations is a greater risk for the former employees and some current employees. but to your point, melissa, that's a good one and you have 700 million shares between evan spiegel, his co-founders, imran khan, as well as big holdings from the initial d.c.-backed companies -- backers that we think may be stickier than some
people expect. i think the pressure that we are inclined to see, if so, would come more from former and lower rank and file. >> don, your company advertises, right? >> yes >> would you as an advertiser buy time on snap >> it doesn't hit my demographic. but as we get into more rental apartments, yeah, we would >> you would >> absolutely. >> how do you look at that because isn't that the ultimate answer are advertisers going to go -- we know they're going to go to facebook >> yes >> they're going to instagram. to a point are they going to snapchat would you? >> as snapchat matures because their customer base and their client base is younger >> do you think the people will age up with snap or they will age out of snap? >> i think there's a danger that they age out but you know, look, i think there's some that will age up with it. the concept -- facebook has -- why i focus on facebook a little earlier is facebook has so many places for that customer to grow within the facebook family, and
snap needs to come up with something to retain that customer base as they mature and based upon that, then yeah the demographic they have is growing into the demographic we will want for our micro units that we're building. >> all right, don, thanks so much best of luck to you for the rest of the stock draft it's a long road ahead, though, still. >> yeah. hopefully deregulation will save me mr. president, i hope you're listening. deregulation >> you're doing great. >> james, thank you. >> let's turn to another stock in the news and that would be tesla which delivered its first model 3 over the weekend our own phil lebeau got to take one for a spin, and he will join us next. plus the case of the incredible shrinking airline seat that's what one judge calls it he's part of a court panel asking the faa to get inlvvoed that story ahead you always pay
the second stop of their three-nation tour. the trip is meant to reassure nato allies of america's continued commitment to nato amid mounting concerns about russia's growth in that region the kremlin says it will be up to washington to choose which of its diplomatic staff in russia will be cut it added that russian citizens working for the u.s. embassy could be among the 755 staff to go as well as u.s. diplomats more than a million and a half magnetic dry erase whiteboards are being recalled due to a laceration hazard. the recall involves write again whiteboards sold through the really good stuff catalogs nationwide and pulitzer prize-winning playwright and oscar-nominated actor sam sheppard has died. a family spokesman says shepard passed away on thursday from a.l.s., which is commonly known as lou gehrig's disease. his 1979 play "buried child" worn the pulitzer for drama. he was 73 years old. that is the news update this
hour melissa, back to you >> all right, sue, thank you sue herera let's get to courtney reagan for a market flash >> shares of scanus. south carolina electric and gas company are sharply higher after the company voted to stop building 2 billion nuclear reactors the reactors were set to be among the first new nuclear reactors built in the u.s. in decades. but the project has been plagued by delays and cost overruns. the vote to stop nuclear construction will likely end the project completely scana also reaffirms its targeted earnings growth race of 2% to 4% the stock is higher by 3% on the news tyler back over to you >> courtney, thank you very much florida getting 2kre67d by tropical storm emily weather chabl's mike seidel is in ft. lauderdale with the latest >> tropical storm emily made landfall just after 11:00 a.m. near bradenton, florida. they've had over six inches of rain and the winds in nearby sarasota gusted to 40 miles an hour our winds here at st. pete beach have come around to the
northeast they're running 15 to 20 miles an hour but look off to the north and all that blue sky, that dry air coming down through the sunshine state therefore, along and north of i-4, orlando, jacksonville, those areas will get little if any rain certainly from this storm. but we got the rain here earlier. this whole intersection was a lake take a look at the pictures. this is about 9:30, 10:00 a.m. eastern this morning water as much as a foot deep slowing vehicles down. once the rain backed off, the water drained away for the rest of this afternoon and this evening again, with a weak tropical storm it's all about rainfall points east, east of 75, and all the way over to i-95, the palm beaches and flight delays have been mounting in miami and ft. lauderdale i'm weather channel meteorologist mike seidel for cnbc in st. pete beach, florida. tesla delivering its first model 3 vehicles over the weekend. our own phil lebeau got to take it out for a spin. phil, interesting. the stock was up before. now sitting close to session lows >> you know, it's almost like one of those -- you hear of this
all the time the -- buy the rumor, sell the fact now that they've delivered it everyone's saying, well, you know, do we really think that this is going to be a game changer for tesla? look, when they unveiled this friday night we were there outside fremont, california. they delivered the first 30 of them going to tesla employees who bought them. the big question is, a, what's the demand out there and can they meet that demand? they have told us friday night they now have over a half million of the model 3 reservations here's elon mus oon musk talkin meeting that demand. >> if you order a model 3 now you'll probably get it toward the end of next year but because the s and the x are in production if you order them now you can get them in about one or two months. >> so you get them a little bit sooner if you want to order those or if you want to wait for the model 3 it will be a little bit longer here's the production totals as we see them right now. 2017, this is an estimate based on talking with various people on wall street and what tesla has told us. about 110,000 vehicles
guys, they're planning to make five times as many, roughly five times as many next year. that is a huge jump in production and that's the challenge that's why elon musk says look, we're in production hell, at least for the next six months. as you take a look at shares of tesla, you can bet there will be a lot of questions on the conference call after earnings on wednesday about where they are in that production rampup, how they're doing and how they're proceeding i think that's where the bulk of the interest is. in terms of analysts right now, that's where it lies it's less on the numbers from the second quarter and more on what's happening with the production rampup. >> phil, you've driven the car, the 3, right or at least sat in it. >> we drove it >> i wrote about it this weekend, which is the dashboard or lack of, people hate change the dashboard has no instruments on it. is everything coming through that -- how do you tell how fast you're going is everything done that effectively through that giant tablet computer? >> it's a 15-inch touchscreen display. it's basically if you had a giant ipad horizontal. and you see right there in this
video it says 70 that's the miles per hour. guys, when i drove it, i did not feel uncomfortable at all. i thought maybe i would feel a little awkward not seeing anything in front of me. there's no instrument cluster. not at all and let me tell you something, the map that you get on that tablet there, sensational. i mean, it is one of those maps that makes you say okay, i get, it i know where i'm going. if you're in an area and you're trying to figure out where you want to go between navigation -- >> do you think that will be a turnoff to people? >> look, not every vehicle appeals to every person. i don't think it's going to be a huge turnoff i have to be honest with you i did not find it awkward. i found it very comfortable to drive. look, i thought it was an impressive vehicle it was a limited drive we had with it. i think it's going to do very well and the initial reviews so far have been very positive. i think that that tablet is not going to dissuade people i don't think they're going to get in there and be like oh, this is weird, this is strange i think we're a society that's adjusted to life through a tablet
>> it's also probably a buyer base who wants change. they are very amenable to change, people who are buying a model 3. it's a different demographic >> so when you spill coffee on the screen and it shorts out and you can't tell how fast you're going or do anything with the car, what happens? when your grubby kids' little fingers smear french fry grease on it and it -- i'm just -- that's all maybe it's awesome elon, i'm available for a test >> you get in line with a lot of other people who would love to do an extended test with it. >> all right phil, it's a big story it's getting a lot of buzz today and everybody cares about it a federal judge, whoever this person is is a national hero, says it's time for the faa to review the size of airline seats. what more do we know >> that's it at this point it's a review. it is not a mandate that they have to make the seats wider or bigger it is simply a review tied in with the idea of are the seats capable of allowing people to exit a plane if there is an emergency? and that's a legitimate point
that the judge is bringing up. look, do a review and see if the seats need to be a little wider to allow people to get out of a plane quicker. one thing i should point out, though, guys, over the last five years whenever there has been a plane that has gone off a runway or there's been a bit of an emergency, no catastrophe but a bit of an emergency, and people have to leave a plane in an emergency exit like the delta flight in new york about a year and a half two, years ago, look at how many people are scrambling to have their carry-on bags. you're not supposed to do that when you get off a plane you're supposed to get up and leave. but it's clear that people time and again are like, let me find my bag, let me see where i've got to grab something as opposed to getting up and getting out. >> what's the history of airline seats, professor lebeau? have they literally gotten smaller? it certainly seems that way. or there's less distance between the back seat -- back of the seat in front of you and the cushion. >> that's where you're seeing the biggest change, is in the pitch. they used to be much farther apart, the rows. they've become much closer together and that's where you see the
largest number of complaints but there are also people complaining about the width of the seats as they become a little more snug on people and yes, we are getting bigger as a society i mean, that's proven over time. >> all righty. thanks, phil >> sticking with airlines, one of them just got a big upgrade today from one of the street's most respected analysts. the name and the opportunity straight ahead but first, we are kicking off our week-long series "make it in america. highlighting companies who make it and are making it right here. and up next, the company heating things up. the front lines tofhe u.s. economy. stick around "power lunch" will be right back that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they pick up some of what medicare doesn't pay
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these kinds of plans could save you in out-of-pocket medical costs. you'll be able to choose any doctor who accepts medicare patients. and there are virtually no referrals needed. so don't wait. with all the good years ahead, look for the experience and commitment to go the distance with you. call now to request your free decision guide. this easy-to-understand guide will answer some of your questions and help you find the aarp medicare supplement plan that's right for you. many say it can't be done, if you want to make and sell something yeah, you can sell it here but you can't make it here. it's just too expensive and too hard to be an american manufacturer you can't even compete with china and other cheap imports, forget it. don't tell that to our guests. all this weekend a special series we call "make it in
america. highlighting entrepreneurs and companies who are ignoring the chorus and making it right here. your first company, capital cooking established in 2001. they build ovens, ranges, barbecues and other kinds of cooking gear right out of santa fe springs, california joining us now from the golden state capital cooking's executive tom caulfield. you're the first guest on our series congratulations. >> thanks for having me, brian appreciate >> why is there such a chorus of boos the yankees would call them the boo birds i guess. that say you can't build anything in america. you guys are doing it. how are you doing it are you selling on price are you selling on quality are you selling on patriotism? >> brian, we sell on quality the price really isn't in our wheelhouse we manufacture high-end cooking equipment for the profrgs home chef and we're more interested at that point in terms of providing the quality that those people
expect and letting the price go where it goes. >> do you have a hard time finding workers, tom >> you know, we don't. california is a tremendous market for hiring creative people we do all the design and manufacturing in-house as you stated and the plentiful amount of people here in the u.s., especially southern california, really works well for us. >> when we look at prices the american consumer's been trained by the walmarts and everybody else for 30 years that you've got to have a low price. you're not going to be the lowest price, are you? how do you -- >> no, we're not >> -- convince people to spend a little more money to buy the made in america, to buy the capital cooking? >> the main advantage -- or the main reason why people come to us and buy our types of products is the quality and the hand craftsmanship that goes into the product each and every day the stuff that is brought in from overseas doesn't measure up to our quality and therefore, that's the reason why we're able to build what we
do and the people purchase our products because of the quality that we put into it. >> you pay -- sorry, consumers pay a higher price, though, price point for these products do you have the luxury of sort of eating the costs of being made in america because you're at a higher price point whereas if youpoint. i would think it would be difficult to do what you are doing right now >> yeah, i would agree with you. the lower price is driven a lot. where we are at is really being able to move within the industry and being able to produce products that is ever changing for us, tof what we do at capitl cooking enables us to build the product and we stay at the types that's out in the market right now. >> if i were to compare head on head on one of your product with a product that's not made in the united states by some other
manufacturer that's in your competitive set, how much more would yours be, head to head i would say 20% higher >> you know it is a feel good story, we love to hear it tom, we got stories like this all week long. one sort of bug-a-boo in the room is automation we are concerned that automation maybe taking our job and maybe all. how much automation have impacted your work >> we use lasers and mcs a lot of our products is hand finished and polished and going through qv check and it is a handmade and comes out like a fine piece of juewelry as far as the manufacture process, it is a different typ s that you would see in a commodity type viz
the assembly and the polishing of a product is all hands down still with the type of product >> capital cooking of our first guest, tom, thank you, good day and have a great day at the golden state >> thanks for having me. what you need to hear today including an urapgde of the airlines' stock, we'll give you the name and the daily dose of "street talk" next d? picnics are delightful. oh, wish we could. but we're stuck here catching up on claims. but we just compared historical claims to coverages. but we have those new audits. my natural language api can help us score those by noon. great. see you guys there. we would not miss it. watson, you gotta learn how to take a hint. i love to learn.
kicking off of facebook pivotal. facebook is downgrading to a sell rating. the firm believes the market is looking up -- advertising and highlighting the marketing is becoming ing saturated. too expensive, price is facing at 140 ouch >> second stock is american airlines american is already great, lets enjoy it >> if the employees by into
management, higher pay makes better employees and make more customers and should out perform the competition. lea american it not getting caught up in a price war right now between united and spirit airlines it is something. >> third class, ululta, ignore e fears and buy ulta believering in the stock's loyalty brand access and driving traffic. their competitive mode for the company, a recent pull back of 336. yeah, final stock of the day is icon plc of 126, from 93 to say iclr accelerating revenue
growth and recovering fee business and a recent streak of shared games icon demonstrates the ability to control cost and sustaining and lowering tax rate. mid teen eps growth of comfortable. going british. >> yeah >> avs on "street talk." >> american depository share >> the sond urecho of power will begin in two-minutes and 47. for your heart...
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and see it through-with digital. president trump trying to pivot for healthcare to taxes and treasury secretary talking about the plan right now, we'll tackle that coming up. shares of boeing helping powering the yen another al time high, jumping over 15% collapsed last week. we'll go inside their first to
find out why emo "emoji" the movie got crushed. second hour of "power lunch" starts right now >> welcome everybody, thank you for joining us for a monday. checking the market right now, the dow is hitting an all time high and the day is boosted by boeing dillar dillard's are falling , small capitol is pushing the company to lease its states. right now steven mnuchin is
speaking >> we are going to make business tax competitive again and bring back trillions of dollars money that's offshore that's going to invest in america in jobs and factories and capitol. >> he's speaking at an event that's hosted by freedom partners and americans for prosperi prosperity those are two conservative groups affiliated with the cope brothers that's the same theme that i heard from gary cohn he said the next three to four weeks are quote, "crunch time" for tax reforms. that was the topic of the white house cabinet meeting that was held earlier today everyone was talking about how to get it done sometimes this year he said he's still working on the baseline of 15% corporate
rate there is been some mixed messages from the administration president trump tweeting just this weekend, the nasenate shou vote against on the healthcare before taking on big votes ga gary cohn reassuring the real estate group telling them the president is 100% committed and we'll see what mnuchin has to say. thank you, joining us to discuss this of the white house shake up is senator of the chai finance committee. senator, thank you for joining us, we appreciate it there is a lot to cover. lets kick up of what's going on in terms of the headache up sha
white house. >> stop tweeting, stop focusing on trauma, he's a leader and he's certain of north korea and don't keep blaming china and don't blame other countries. get to work and sit down with the state department and the event department and find good solutio solutions. he's got to stop the drama and work together. the big problem i have of my experience in congress is things get done only when you work together one party cannot do it alone you go to work across party lines. >> i think i can anticipate your answer to my question. >> mr. trump's tweet, i am
disappointed in china, yet they do nothing for us, we'll no longer allow this to continue. china could easily solve this problem. could china easily solve this problem, number one? number 2, does china respond well to that kind of approach? >> easier to answer the second question china is not responding well and china is a proud country just like we are a proud country. strong traditions, they don't like pressure of the united states at all. can china alone solve this i don't think so north korea wants to empower the world and i don't think china alone is able to do it because if china tried to do it alone, kim jong-un would find way to
get rid of china i think frankly president kim played president trump dawn at marg marg mar-a-lago they do it with sweet words and then resume its agenda in its own way. it is opec. that means we have to i think be much smarter, the united states, we have to develop expertise in the state department you got to sit down and smart people and get to work and stop the drama of the white house and stop the tweeting and get the job done >> you have been at the center of a lot of tax discussions over
the years as part of the chairmans finance committee whach, what do you think the odds are as oppose to something that's less reform and merely a reduction in tax rates for corporations for individuals and maybe some changes in what's deductible and what is, will there be a real reform or the odds on something that's a lot less first, we do need reforms rates are too high and complex we do need reforms reforms usually only happens in my experience when the president is pulling games as ronald reagan did back in the '86 reform and george h.w. bush did i don't think this president at least the question whether he has the knowledge of code and second whether he got the
tension span to get the job done some republicans are starting to resist what he's doing so you need strong, solid presidential and not a lot of tweets going on and sitting down and working on both sides and both parties same thing with bush reforms you got to work together >> mr. max baucus, thank you very much for your time. breaking news right now, soft bank continues to pursue charter communications david, i know you had an interview with qualcomm, tell us about everything >> yes, we'll start with charter. despite what appears to be a distinct lack of interest, soft bank continues to make efforts to acquire the giant company
reports of soft bank interest and combining sprint which controls with charter for service late on friday charter areleased a statement making it clear it has no interest in seeking a union. the founder masayoshi son, soft bank would contribute a soft amount of money which would use that money and offering holders a premiums of their share. the offer is at least 15% cash and the remainder is shares in this new company which we combine of it. sources telling me that soft bank has lined up financing from
three global banks and would be comfortable leveling up the new company's balance sheet between five or six times. as i reported many times, tom rutledge has a pay pact when the stocks hit $564 a share and he indicated his belief that he will collect those options by following his plan that number certainly will garner a lot of interests from shareholders including the 20% shareholder liberty media and its chairman john malone he has no interest in pursuing a hostile deal to require charter. it is likely that he's to move on
masa is intrigued and in f intrastructure of charter, it attracted verizon to discuss the anthropologi possibility of buying charter last year. finally why masa maybe showing strategic flexibility and pursuing a merger partner for sprints. his action is receiving by some as having a hint of desperation, given his talks of merger partner t-mobile have not really gone anywhere. tyler. >> how would you handicap the likelihood of a deal actually happening here what you just described sounds like a five cushion bank shot. >> that's a good one i think you are probably right it is unlikely, however, masa to the extent that he knows he's
got to do something for sprint is willing to try to do a lot of thing and a lot of shots but however they run and actually go in i would never discount it completely he's an extraordinary determined person it makes it unlikely charter is out there right now and there areme a lot of potentials >> it seems like sprint options are dwindling at this point. >> if they can get things back online with t-mobile some of this can be designed the give them leverage or t-mobile in the words of flexibility. i think the concern about antitrust for a deal like that which would bring together number three of the wireless market the desire of t-mobile to buy sprint in a transaction and not pay a lot and not value sprint
in a highly deal maybe making difficult for them to make great progress >> you have been working hard today, a bunch of deals, you discovered scripts what's the reaction that you spoke to people about this i guess you can call it a fifth super channel? >> you know they believe that they had such devoted viewers that while it may not be as broad as some of the other networks that they'll be able to transfer those viewers where ever they go and we'll be able to present an interesting value proposition whether it is over the top or direct consumer offering that just includes their network alone. in fact, brian, i asked david sazla of course, which would be running for this company, what
the process are and it is unbundling and here is what he had to say if you are a college student, you can prescribe to netflix or 99 well, we can put together a skinny bundle and other distributors that's $10 or $12. so if there is sports in it, you are fine if you look at the skinny bundles around the world, this is the only country that has sports and retrans stuff into that eventually that'll rationalize >> it is all about skinny bundles, you know that >> i guess putting a foot network in a skinny bundle does have some sort of weird -- [ laughter ] >> before we go, we should point out discovery shares are getting beat up today. >> they sure are and concerns of the scripts lower the guidance
right before the announcement and discovery is having some changes having to do with the league, which i am sure you know a lot about. they are carrying that and moving it from euro sports to their own direct consumer offering that's pressuring the shares so it has not been a good day for discovery holder >> i stopped watching the first relegation here is what's coming up on "power lunch" and the dow is hitting at an all time high. can anything stop this rally could that threat come from over seas we'll watch all the global hot spots and anything you need to know before of apple, all that and more coming up at this hour
>> we want to hear from you, visit us as cnbc.com or visit us on febk.m/weacoocoporlunch a lot more ahead on "power lunch" right here on cnbc. first in business worldwide. y i. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.
up section bob permissiisani is joining us now. is anybody there saying things are a bit too con plamplacent i get it from my trader friends but not the average viewers. banks are taking the lead and this is a historical year. you got something lagging like texts so there is the bank having a nice day here wells fargo is down. all the big seminames that moved and micron and energy is doing little better as oil gets to $50. banks is going flat. there is a major problem with
the transport down of 3.7% this is happening again today, transport are under performing take a look at some of the big names in july. it does not matter what you are. whether you are an airline or railroad kirby, which of the marine transport, these are all a mess. there is a major divergence that started in the middle of the month. the dow is moving slightly upside you can say this is part lyanly overall issue. it is a very long transport, back to you >> bob, thank you very much. what is next for the market. will the dow continue its push to 22 k or what? lets bring in eric freedman. our u.s. bank well management person and mike lobella at qs investor let me start with you. you are a little cautious here
if best place to go right now is in value and defensive areas, where do you find them >> that's great, tyler >> we don't hit new highs in the start of rallies we hit new highs, we think it is a great idea right now and allocating of a more -- you don't have to go into those traditional sectors. you can go into stocks like general motors and has been low volatility and has great earnings for potentials and really go into those stocks that have earnings in terms of those that are lay up in the line and facing of more expectations. >> would you put ge in that cat kboi category >> absolutely, those are the types of investments that you
want to invest in now. volatility in of itself is not a bad hing it does not make people sell, it makes people to continue to participate and the rally. the problem is it makes it more and more difficult and identifying risks in the market. when technology stops trading, something like a stapable, that makes it much more difficult to determine risk in the market >> eric, you said your biggest concern is of complacency. there is a degree of cmplacency. but if you look at stocks and look at even oil, if you look at
currency pairs that in general crossed assets, comlacency has been the norm. revenue growth will deliver. until proved wrong, we'll stay in those camps >> how much of a risk is the your owe, it hits a level that we have not seen since january '15. we have seen it going down in the back of a stronger euro. >> we have seen a sharp move in the euro up from earlier this year and you know, this is really two things. one is really part of the future growth expectations in the euro zone the european union as a whole is surprising upside. the new york times have a great article this weekend and looking
at the unemployment rate sustained and how unemployment is close to 50% and now it is lower to that. now, we still see it is a big opportunity but currency risk is something to be aware about. as your point before, one o f the main reasons, people are afraid to go to europe or japan. they also get hit when the dollar rises by heading that exposure, you can get much lower volatility international exposu exposure >> gentlemen, thank you very much lets get to the market rick santelli. >> thank you, unchanged for the entire month of july
for now, wathis is a dollar indx one week chart it continues to drift. it is now down on the day and we are about a fifth away from an important bottom opening the chart up to middle of april and you see on the left side, that's cmyk spiked on may 2nd. 1962 is the closing for that move everything is based on the closing bases to give you the extra horsepower we'll be going about the same time the euro was here against the dollar which is the beginning of 2015. we continue to monitor maybe lower volatility in the market anything euro is special currency is the last two seems to be where investors are aiming rick, back to you. thank you very much.
it did not turn out that way but maybe not the reasons you think. we'll explain why. and chris christie confronting a fan at a baseball game that full story coming up on "power lunch." ♪ there's nothing more important than your health. so if you're on medicare or will be soon, you may want more than parts a and b here's why. medicare only covers about 80% of your part b medical expenses. the rest is up to you. you might want to consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company.
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keep an eye on shares of twitter. they have been weak. twitter stocks down nearly 20% the past week. many of the social name haves been down as well. >> facebook and snap it is really taking a hit since then and that hit continues wit the snap lock up that's putting a pressure on the entire structure. as the weather gets warm, people go house shopping diana olick is joining us now. >> hi, home sales saw no gains compare to the first half of last year. call it a side way spring.
pending home sales, etching you will slightly in june but only after falling the past three months so despite low mortgage rate home sales did not see any big gain the problem is supply, which is down 7% compared to a year ago prices are surely playing as well and we have seen record sales and prices nationally for seven months part of playing affordability. first time buyers may want to get in but saving for a down payment is difficult that's adding to the supply crunch more online, check on realitycheck.com >> diana, thank you. >> this one keeps flying high. violence in venezuela is just
herrera, security in austria on high alert after federal police there announced they have stopped a plot to attack an aircraft four men were arrested in sidney tropical storm emily has formed in the gulf of mexico causing florida governor rick scott to declare a state of emergency of 31 counties in that state. high winds are hitting the west coast of florida areas of sarasota and st. petersburg have flooded. entrepreneur on amazons have sold 2 billion worth of items. more than half of items sold on amazon.com were from those two categories bart man is remembered for r tipping a foul ball, during game
six of 2003 national league championship prechtiventing thes from getting into the world's series that's the news update back to you guys >> sue herrera, thank you. the mark is closing for r the day. lets head over to jackie deangelis. >> good afternoon to you, melissa. >> an interesting session today. we got over 50 for early in the morning. the last two-minutes as we headed into the close. new session highs and $50.27 is what we saw. the close over $50 is key. we did not touch it, we were able to hold we can see the momentum is to the upside here. there are concerns of potential sanctions coming on venezuela. remember their producers of 2 million barrels a day. that's certainly something to watch here
the weaker dollar is supportive of this trade. we are seeing summer dragging demands are coming around and lifting the demand for gasoline. we did not expect to see prices rise as well >> that's according to aaa yeah, $50.15 that's remarkable today. >> back over to you >> it is jackie. thank you very much. we are following the latest development out of three major global hot spots first, violence turning deadly in venezuela as that nation is holding a highly contested election that many is calling a sham a politician shot dead tensions continue to run high in north korea. another icbm vladimir putin ejecting 775 americans diplomats and retaliations and sanctions over russia joining us now to dive in
what's happening in these three hot spots are, robert collins of foreign relations. dan and robert, thank you very much for joining us. if we had to pinpoint one of those threes as one of the biggest near terms not threat to america but maybe threat to, excuse many e, excuse me guys, i have some breaking news. i got some breaking news, you will find it interesting >> president trump has removed anthony scarramucci off of the communication director role. this is what we know right now according to the new york times the president has removed scarramucci from the communications director roles. he was on the job for a week and a half or so this report is correct >> obviously, one o f the reasons i have been hesitant is
that anthony scarramucci, well known, friends with many of us a anthony is giving an unfortunate interview to new yorker magazine and of his use of choice and language >> that's fair to say. if this is accurate, it would be very shorted live. maybe the most short lived remember that initial white house brief in live. maybe the most short lived remember that initial white house brief live. maybe the most short lived remember that initial white house brief in -- he wowed people and thought he -- he seem to come down hard on leakers and threaten to fire anybody who thought was leaking.
>> fascinating here. >> mr. scarramucci meet general kelly and mr. scarramucci meet general kelly. it does not sound very well. we are getting the news in our ears and trying the figure it out how to put nit tit in our sw i will ask you and the white house with all of the personnel changes have seen to be a little bit soap opera-esque, 30 military men hard to otherwise, characterize them such as, daniel, do you believe that we'll see more stability finally from the white house and the personnel? >> i will say that if they manage to get rid of scarramucci, that's a signal of some what stability. scarramucci had only been there
for ten days and certainly an event ten days you don't want to get rid of someone quickly because that means you are acknowledging you are making a mistake first, john kelly clearly is a powerful chief of staff than reince priebus was second, donald trump is clearly okay kelly's request that he would be able to get rid of scarramucci. >> nbc has confirmed that anthony scarramucci is out as white house of communications director after ten days on the job. nbc confirmed that scarramucci is out we want to get to dc on this developing story there is going to be a briefing here that's going to be on camera or at least it was expected to be led by sarah hucklebee sanders just ten days have you been
reporting. scarramucci is out his appointment in the beginning ruffle feathers before he got here in the west wing. it was a decision made by the president and his daughter ivanka and her husband, jared kushner. it forced the resignation of sean spicer and forced the ra resignation and around reince priebus leaving as chief of staff. the comments he made, the vulgar comment that he made when he was talking about other members of the president, close advisory staff that at first the president really liked him but then anthony became the story and all the conversations continue to talk about him and his permsonality and reports of page six in the new york page posting about his story and the
drama. perhaps he felt it was adding to that perception. cayla, i am sure we'll have more for us john harwood is joining us now as well. john, you can read this two ways well, brian, i think the ladder of what you just said is in fact the likeliest scenario that this is something that john kelly who means to impose discipline on the white house staff insisted upon now, we'll see as cayla was indicating what sarah has to say and we'll see what anthony scarramucci had to say whether
he's getting another job or leaving all together any normal white house, he would have been fired as soon as that interview took place and the fact that he stayed on was seen as evidence that donald trump likes this kind of turbulence but general kelly, he made the choice of somebody different with a different style and perhaps some brief period of time he's going to heed what general kelly had to say and we'll see how long that time is. >> is there the possibility that he will stay in some other capacity you dangle it out there of one o f t of the times story said something similar. that does not sound like part of the reporting as of this second. >> we don't know he had a job of the export import bank before going to the white house. i think it would be humiliating for him to take a much lesser
job since he thinks he was practically white house chief of staff himself. this is an unpredictable circumstances and after he did his rant against reince priebus and steve bannon, that meant that reince priebus is going to hang around longer because the president was not going to be pushed around by his community occasion director. he clearly did not there is consequence to every personal choice you make and when you put in a strong chief of staff and empower him then he's going to try to sort out problems that maybe reince priebus left faster. >> cayla, an interesting day at the white house beyond this breaking news that we just had a cabinet meeting this morning where mr. kelly was sworn in with the president for the first time in recent days came face to face by mr. trump's own
language, jeff sessions. >> reporter: in terms of general, kelly's role, it is clear he's a no nonsense leader. the words used to describe him is someone who's disciplined and commands respect and who rules and some say with an iron fist he's definitely not someone that if ru in the white house you want to be messing with. he on day one appears to be calling the shots here one thing i want to know of scarramucci's role is that he said on the first day that he will not start until two or three weeks. he was in the process of selling his funds to chinese investors and he announced that sale back in january that still has not closed. that's under going of the process. one of the reasons why he went ahead and started before he originally supposed to because the president and the white house did not want opposing politicians to be able to under
mind him in the intervening weeks. >> and also simply pulling out with these developments. we want to bring in tony fatto who's joining us on the phone, what's your take here? >> we are not seeing the leadership in terms of what the direction of the white house that wants to go a chief of staff on the way out, i wonder how that was going to go with a new chief of staff that you have named. you know anthony scarramucci who we all know and he's got the talent and it is not clear that he's never been in that job of communications director that you know, you cannot just parachute
into that job. it takes certain skills and talents and experience to do that >> you would not know if somebody, any of us could run hedge funds for ten days and do okay you sort of make it up as you go >> i guess it is not even ten days with anthony scarramucci. he's supposed to start >> potentially, tony, as we and outsiders see it, it is not his lack of political knowledge or knowledge of the political landscape. it is simply bad judgment, is it bad judgment for the language he use. >> yes >> flaunting the fact that he will report to the president and not the chief of staff and all sorts of bad judgment. >> a specific way with that interview. with anthony coming in and the questions is whether he was or have the background to do the job and you stumble on an
elementary kind of thing that you know getting sourcing right with the reporter, that's something a communication corre director should be familiar with >> there is a number of angle on this bannon in the interview, anthony went after bannon pretty hard, using language that's unsailable on national television bannon is my guy and you offended by guy and i am not going to have a fight and one of you have to lose and it is going to be anthony. >> it is hard to know. if you think about lockioking at the white house from the outside, what we see is a lot of different power center and the chief of staff and reince priebus was not particularly powerful, he was the chief of staff, he's a power center and people liked jared kushner and ivanka are power
centers also it is hard from the outside to know who's in charge over there. that's why you see things where a lot of people in the administrations spending a lot of time at the white house to make sure you get the door and get into see the president and there is that kind of entry that happens because you did not have clear line of authority and process. that's what they are looking at from kelly and they hope that kelly will provide >> it sure looks like to me that this is the first step in that direction that there is somebody who's now asserting that he's in charge and that'll be general kelly who sounds like, perhaps, as a condition of him taking the job. >> it won't. if the phone rings in the next hour, what would you do? >> it won't but i am happy to
take advise. >> would you take the job if the position is offered to you >> i don't think they'll be offered anyway >> by the way, john harwood, are you still does sean spicer comek >> no. >> there's no white house communications director right now. that job is open to tyler's point. >> i don't think he's coming back i don't think tony fratto is going there, but i do want to say for the record i think tony fratto would be good as a brain surgeon or as a shortstop for the pirates. there's pretty much nothing he couldn't do within ten days, as you guys were just talking about. >> very kind, john. >> you know, john, the other story, too, anthony was at the export import bank in sort of a semi-high roll, scott garrett, the former new jersey congressman, who is in line to become the head of the export import bank, should he be confirmed, which many are calling contentious, there's been some chatter out there, i've heard it, i'm sure you've heard it, that perhaps scaramucci could go back to
export and import and take a higher role. do you think that is possible? >> doubt it. you know, i -- i would think that once you have been in the place that anthony -- anthony scaramucci was for a few days and have the whiff of the power that he was assuming for himself, everything else is pretty weak tea after that, but, you know, things are unpredictable. i wouldn't be surprised if somebody else, say one of the people who participated in the campaign, corey lewandowski, somebody like that, get brought into the administration and take some of these roles. >> he did make the rounds on the sunday shows today. >> yeah, that's right. >> very interesting thought there. >> let's bring in patrick buchanan, former white house official, communications guy, speech writer and sort of poly math in our world of politics and media. pat, explain what's going on here what just happened >> what happened was the general came in, general kelly, and he
basically was rappelled by what scaramucci said and how he said it and what he said about his colleagues this is not the kind of operation or individual that the general wants in his operation, and he exercised immediate and swift and decisive command and got rid of an individual, and it sends a message i think out to the country that you have a man in charge who is the chief of staff, who does decide on people who are, even those close to the president of the united states, i think it's an extremely healthy sign of the potential of the general. the general's job is obviously going to be a very, very tough one, bringing that staff under control and frankly moving to bring order, discipline and a chain of command to the white house, but his first step was dramatic and impressive and correct. >> you know, pat, one criticism of the white house before reince priebus left, before even anthony scaramucci was appointed
as white house communications director is there's so much infighting, there's factions within with the white house. with general kelly chief of staff, with him, you know, making clear who, you know, is in charge, are you more confident that perhaps this white house could be more united behind the president and the agenda >> i think the potential is clearly there because of who the general s.four decades in the marine corps, i think he's going to bring a touch of paris island to the west wing, and i think the west wing clearly needs, but your problem is basically -- look, the american people elected the president and his style of management in this. of course, he calls ivanka and jared into the oval office and they have oval office privileges when they want, but other staff members, what the general's got to do in my judgment is this h.look, the president's going to call people in on his own, but once you come out of there, you come down to my office and tell me what you've been instructed to do, and we decide on what we're going to say in the morning staff meetings that i
will chair, and so i think you get order and discipline there, and you can get everybody working off the same people, i think. but i think that's what -- look, nobody is going to tell general kelly how to organize a staff, for heaven sakes >> no, exactly john, and kayla, let me ask you. there was some chatter over the weekend in light of the -- of the kelly appointment that potentially jeff sessions would be asked to move over to homeland security because in part he has experience and passion for border security and immigration matters. have you all heard anything beyond sort of rank speculation about that is that a problem-solver or a bigger problem waiting to happen were it to happen? >> reporter: we will not necessarily. >> go ahead, kayla. >> reporter: i was going to say nothing more than speculation. the idea is that the department of homeland security is one of the utmost -- of the utmost
important jobs to have filled. the secretary of homeland security and the secretary of defense were the two cabinet members who were sworn in on inauguration day because they are invaluable to an administration, and you do not want to have that job vacant, and perhaps the idea was that it would be easier to play musical chairs with someone who has already been confirmed than to scour, you know, head hunter files through other people who have been suggested and start from scratch there. >> john? >> i would just added to, that tyler, all i have heard is resistance to that idea from republicans, from supporters of sessions you would have to then have two confirmation processes, republicans in the senate are signaling very strongly they want jeff sessions to stay in his job. now, obviously the president's got that decision to make, and -- and speaking of that decision-making by the president, on pat's point, pat buchanan is exactly right. general kelly can impose order and discipline on the staff, but
the problem is not the staff the problem is the president of the united states who john kelly reports to if he can't prevent the president from behaving in ways that has encouraged this kind of chaos, it doesn't matter what he fires anthony scaramucci or makes sure that kellyanne conway goes through him before she goes to the president. >> well, i mean, john harwood, listen, we might have a little bit of recency bias, because president obama went through four chief of staffs, rahm emanuel left, another left after three months and bill daly came in and replacements -- that was a report, by the way, for number of chiefs of staff in four-year period, trump is eight months in and he's gone through two so this is not historically unprecedented. >> what's historically unprecedented is the nature of the president's behavior the short attention span, the tendency to pit rival factions
against one another, the tendency to say things that officials in his government are ignoring or contradicting. this is a -- a disorderly white house from the top, and that's really the problem. >> you know, "the washington post" robert costa tweeting right now saying that apparently according to his sources the president did not like the vulgarity in the "new yorker" article that may have linked to his white house. you know, you can say what you are want about the president, kayla, but many people next to him will note for everything people dislike about him, he's a man who does not drink or smoke and does not necessarily curse and it's perhaps that vulgarity that anthony used, it seems a little basic for this high level of a ismissal, but perhaps that's what it came down to. >> reporter: well, i think one of the threads of this presidency, brian, is that it's okay when it's coming from the white house. the president sort of likes to turn the screws on member of congress he likes to tease and joke
around, but when his white house or when its agenda or when its personnel becomes the butt of the joke, that is what he really has a hard time, and that appears to be what robert costa is reporting with that statement. one thing about general kelly being in this job is there's been a lot of will angst spilled about how he'll be a check for the staff. he's going to be someone into whom the staff will report he'll stabilize these varying factions, but to a certain extent he'll also be a check on the president because it was the president who hired anthony scaramucci, and it is that decision that general kelly is basically at this point saying i'm not okay with. perhaps that was bad judgment, but this is someone who should not be in that job and i'm going to make that call at this point. >> quickly in terms of the market reaction. not too much reaction on the equity front the dollar index has made a marginal new low, marginal meaning it didn't dip too much but it did hit a new one-year low after the "new york times" initially reported that white house communications director anthony scaramucci is in fact out. pat buchanan, we go back to you because it seems like since that
initial friday press briefing at which mr. scaramucci first spoke and introduced himself to the world, a lot sort of got revealed about him that the white house may not have liked first of all, the vulgarity in that interview, but also the press reports about his -- about a messy personal life, a potential divorce. what do you think was the tipping point for the white house, vulgarity, the interview? >> i think it was two things i think it was really the extraordinary obscenity and vulgarity of what he said, and secondly it was a direct attack on his -- on fellow members of the staff. it wasn't just some outburst at a ball game so that really made it incompatible with really working with the staff and also, look, he's not a traditional director of communications where our job used to be to organize and structure the communications for the white house and coordinate with the cabinet and the president of the united states he seemed to offer himself up as
chief surrogate and voice for donald trump and you can't be that voice after you've cut loose with that kind of language on all your fellow members of the staff, so, again, i think the real swiftness, the terrible swift sword that the general delivered i think is -- just sends an excellent message to the country. >> so let me -- i'm going to bring in bill grist and sara eisen as we turn 3:00 here on cnbc with this breaking news about the ouster of anthony scaramucci, the recently appointed director of communications for the white house. pat buchanan, john harwood said that maybe general kelly's biggest challenge is the president himself. do you agree with that, and if you do, how does general kelly manage up? >> well, i think that that's a job for the general himself. i don't think he's dealt with anyone quite like donald trump