tv Cavuto Coast to Coast FOX Business August 13, 2019 12:00pm-2:00pm EDT
reporter: [inaudible]. >> i think chris cuomo was so out of control i would not have wanted to see a weapon in his hands. i guess his fist is not a weapon. or he would have donning is. he talked about it, but he didn't do anything. but i think chris cuomo was very much out of control. reporter: [inaudible]. >> anthony was a guy who worked for me who really didn't have a clue. he worked for 11 days. he made terrible statements and gestures and everything to people that worked in the office. i think you have heard mercedes schlapp talk about it in great detail. anthony didn't support me at the beginning. he was with somebody else. then he went to somebody else. he only supported me after it was a foregone conclusion i was going to win. i am not a fan of his. haven't been for a long time.
i think anthony is really somebody very much out of control. and he doesn't have what it takes. he really doesn't. he wanted to come back into the administration for the last five months, begging me to come back in. anthony, i can't take you in, i'm sorry. he is a nervous, knew rottic wreck. he called so much. i said, anthony, i'm sorry, i can't do that. i can't take you in. and i said you have got to stop all these phone calls. too many calls, anthony. i wouldn't take his call. lo and behold now, he is feels differently. but anthony is upset because he wanted certain things. the main thing he wanted was to come back into the administration. as you remember better than i do, he was a disaster for 11 days. reporter: [inaudible]. >> we have tremendous coming
over from asia, china. it is not our plastic. it places tick floating over in the ocean, various oceans from other places. plastics are fine. you have to know what to do with them. but other countries are not taking care of their plastic use. they haven't for a long time. the plastic that we're getting is floating across the ocean from other places including china. reporter: [inaudible] >> i am convinced mitch wants to do something. i talked to mitch mcconnell. he is a good man. he wants to do something. he wants to do it very strongly. he want to do background checks. i do too. i think a lot of republicans do too. i don't know frankly that the democrats will get us there. i spoke with chris murphy, senator, a very good conversation, we'll see what happens. i believe that mitch and i can tell you from my standpoint i
would like to see meaningful background checks. i think something will happen. look, it is very simple. there is nobody more pro-second amendment than donald trump but i don't want guns in the hands of a lunatic or a maniac. i think if we do proper background checks we could provent that. reporter: [inaudible]. do you really think the clintons are involved in jeffrey epstein's death? >> i don't know. he was on the plane 27 times. he said he was on the plane four times. when they checked the plane log, bill clinton who was a very good friend of epstein's, he was on the plane 27, 28 times. why did he say four times? the question you have to ask, did bill clinton go to the island? epstein had an island, that was not a good place as i understand. i was never there. you have to ask, did bill clinton go to the island? if you ask the question and find
that out, you will know a lot. thank you very much, everybody. neil: you've been listening to the president of the united states. he will be leaving for an event in pennsylvania. let me bring you up to speed, largely about the trade situation with china hoping calm will prevail in hong kong. that is what you're seeing in the left of your screen. the airport all but shut down second day running as protesters overwhelmed security guards who were prepared for this, but simply overwhelmed by this we're also getting reports that carrie lam, hong kong chief executive said protests are dragging hong kong into the abyss. also an interesting development, bringing back the foreign deputy commissioner alan lau, as mr. crackdown they called him. woe go ahead and challenge protesters, get in their face, in some cases having his men dress up as protesters.
there were a couple incident of that. they would attack the protest es. one of those was apprehended by the protesters we saw earlier on. the reason i mention this, context of a trade situation, it has been a push and a pull. the push for stocks right now has been up on the fact that the president might have blinked on the trade front by delaying some tariffs on goods that go into effect on september 1st, most notable, laptops, videogame consoles, some toys, some computer monitors, clothing footwear, that sort of thing, that would have taken effect on september 1st. president essentially pushing it back to middle of december, as sort of a conciliatory effort on his part to sort of juice these talks. but again, much of this, while being greeted favorably at the corner of wall and broad, there is concern whether this will be enough. we do know the chinese foreign
minister was on the phone talking to robert lighthizer and treasury secretary steve mnuchin. so those talks that were in question for september appear to be back on. this phone call would cement that. obviously markets liked the prospect of trade that could be resumed soon. if this doesn't improve, this sort of abusive relationship we have with the trade issue, i don't know what does. markets are drawn to manic extremes. on the talks if it looks like talks are favorable, on the downside if nothing happens. this extreme is punctuated by what is happening in hong kong, how this plays out in the world has a lot to do with perceptions of china the world. china is trying to hold back. every indication, hong kong forces 34,000 strong, alan lau,
all things crackdown. he played a crucial role in that, quiet by deadly they referred to him in the past. he is calling the shots, we hope not literally, but the government answer, hong kong answer. the message he apparently got from china, you deal with this, or we will. right now markets are focusing on what is happening with the trade front. hoping that cooler heads prevail on the protest front. edward lawrence from the white house with latest on both. reporter: neil, the phone call from the commerce ministry, vice premier liu he and trade representative robert lighthizer and treasury secretary steve mnuchin happened a few years ago. the u.s. trade representative says they will go forward with tariffs on number of items, 122 pages worth of items on september 1st. that phone call happened this morning. after the phone call, u.s. trade representative robert lighthizer says other items, some 21 pages
worth of items will be delayed until september 15th. some items are delayed, you mentioned those, cell phones, laptops, videogame consoles, clothing and shoes. what will go under tariff on september 1st, a lot of agriculture, meat, milk, livestock, sour cream. steel products like washers, pipe, art, including painting, sculptures. on the call between the two delegations the chinese made stern representations they did not like the tariffs. they wanted tariffs delayed or removed. two of the trade teams, the two trade teams agreed to talk in another two weeks. the chinese are expecting to come to the united states and the u.s. is expecting the chinese to come to the united states at some point in september for face-to-face talks. today we asked the chinese commerce ministry if they did in fact give up anything to get
delays with tariffs. we were told no. the plan for china, not buy u.s. agriculture, something the president would like to see. the president tweeting he would like to see agriculture going forward. that chinese have not bought it, basically pledged to buy it but have not. hopes that may change some things. the president is on his way. now, in hong kong, you see a little bit after tussle going on here. this is further causing complications, neil to what is going on with the trade talks here. you have tension here with china, basically telling the night to back out, back off on everything they say and do related to it. you see this quickly turning into chaos, quickly, neil in hong kong. neil: edward lawrence. give you idea what you're looking at. this is the hong kong airport, which essentially is shut down second day running. what is causing confusion on part of protesters as well, within their ranks are security from hong kong's better than
34,000 police force, dress pretty much like the protesters. you might see almost to a man or woman, they kind of dress the same. a blackout fit, a yellow helmet on. sometimes a yellow scarf. some might see wearing eye patches to salute a woman who was badly injured, might have lost her eye in an attack. doctors, professionals of all sorts, protesters have begun wearing patches in sympathy to a woman who was badly injured at the hands of government authorities. when protesters are aware of security forces within their ranks, they turn on them rather than what we saw yesterday, those disguysed security guards dressed as protesters turning on them. there was a incident late last night, they raided protesters dressed as protesters. caused a lot of confusion, looked like protesters were
fighting among themselves. that shut down several escalators in and out of the airport. better than 100 whether whisked away. we don't know where they are. "wall street journal" editorial page writer jillian melchior in the middle of all this. she joins us from hong kong via skype. what can you tell us? >> the situation is very on edge here. people are quite concerned. a lot of protesters i talked to today, they headed off to the airport in hope of peaceful protests. they feel like they have two options right now. one is going and protesting outside of police stations which has high potential to devolve into confrontation and violence. a second option, they wanted to draw international attention to move to the airport and protest. they're basically saying our legislators, our legislative system is rigged. we can't directly elect the chief executive.
we want democracy, freedom. we don't have a political system responsive to us. the only way they can register complaint is protest the way they are right now. neil: jillian, this was over the extradition ruling, where carrie lam, the hong kong chief executive said, all right i'm going to shelf this plan. this would have said if you're arrested in hong kong many are any offense, it was largely open-ended rather than being questioned in hong kong, they would ship you off to china. god knows with would what happen to them. she has shelved it but it has escalated beyond that? >> she refused to fully withdraw the bill. a lot of protesters don't trust the government. they are afraid it will be brought back. in addition to that we've seen escalating police brutality. it began june 12th. i was there. there were 1800 canisters of tear gas deployed. rubber bullets. a woman was hit in the face by a rubber bullet or a bean bag.
will probably lose her eye. police firing tear gas indoors. harrowing footage of police beating protesters, firing pepper balls at them from a pretty close distance. very dangerous stuff. protesters are responding to the police brutality. they feel the direct election only way they can prevent future -- they want the government accountable to the people. neil: it is interesting, jillian, the chinese government while working behind behind thes made it very clear enough is enough. the fact that carrie lam, that hong kong chief executive you were discussing is saying that the protesters are dragging hong kong into the abyss, she is aware of something. they're getting marching orders from someone. they bring back alan lau, deputy commissioner breaking up prodemocracy sit-ins their 30 and 2014. he is a take no prisoners guy.
very hard-line coming to deal with this the message we hear from china. hong kong better get on top of this or they will. been sporadic reports, a number about chinese soldiers have arrived in hong kong, dispersed among those security forces. have you heard anything about that? >> yeah. there is a lot of concern about that. i think one thing important to keep in mind, protesters really changed their tactics. so what you were referencing earlier, the now fourth umbrella revolution, they were occupying downtown hong kong. they were camped downtown. neil: right. >> the way protesters are acting right now, they're making decisions spontaneous in the hour, organizing online where to go. that makes it much more difficult for police to come down to crack down on them. there are smaller crowds. in june it was one million,
2 million on streets. right now there are couple hundred thousands. protesters are assuming if it's a smaller crowd there is safety in numbers. it is more easy for police to overwhelm. this is kind of a give-and-take. you see them innovating, responding to police. this will be something much more difficult for the chinese government to put down. every time police use pressure tactics it galvanizes protesters, they take to the streets more and they're determined. neil: this is way beyond what happens in the extradition law, whether they shelf it or get rid of it entirely now. it devolved into the whole democracy movement we saw 30 years ago in tianamen square. that raises same type of concerns. now the differences, images are being beamed around the world from hong kong, something very different from what those in mainland china are seeing. if they're allowed to see much if any of this. i wonder how that is being
handled? >> the things i keep hearing from young people here in hong kong, they feel like this is their last chance to stand up for their freedom. when hong kong was handed over by the british to the chinese the agreement was, this will be one country, two systems. that it would have legal autonomy. it would have a legal system that is separate. so what hong kong people are basically saying that the chinese government is breaking the international agreements. if they don't stand up now, they will not have a chance to fight for freedom later. by the way, if the u.s. is concerned about china abiding by international commitment. here you have a case in point they're breaking a significant international agreement. the communist party fighting against freedom for hong kong people. i think u.s. should sport it. it is -- support it. it is strategically important to hold china to keep its international promises. for a country cares about freedom in the world, we should be caring about what happens in hong kong. neil: it was unthinkable 30
years ago, to envision, given the tianamen square uprising at the time, that china would end the way it did, cracking down, mowing down literally, some say hundreds, some say thousands of protesters back then. they say china is a different economic juggernaut. it can't do, we're told doing something crazy with the world watching. i was talking to a wall street analyst early this morning, do you think these images give china pause here? because they do know the whole world is watching. it's a very different china now. they are going to be careful? >> i think you're right. the protesters know that the world is watching what happens. they also know that mainland china has a lot of economic interests in hong kong. there is much more difficult to crack down because the international community has treated this as one country, two systems. they relied on hong kong -- which is different than mainland china f china goes out, does
something like this, cracks down, there is no difference, economic opportunity will. hong kong protesters are betting their lives basically. they are pretty determined to fight for freedom. neil: jillian, great reporting as always. i enjoy your analysis of this in today's "wall street journal" as well. she is a hell of a reporter, a brave one at that. i do want to focus on this for a little while longer, if we can. these are pro-democracy demonstrators who have for the second day running all but shut down the 8th busiest airport on the planet. it handles better than 74 million passengers a year. that pace picked up with the economy and the markets of hong kong. i mentioned markets in hong kong, they were tumbling this morning again on this they're down 11% since just beginning of july. the hong kong market better known as the hang seng, the equivalent of our dow was tumbling as was the south korean
market here on fears, by the way both markets in negative territory for the year, this could escalate and go beyond this back to the united states and this, you know, push and pull here, most traders are hoping because this is a focus of international media attention and cameras, are focusing on this, they are not shut down, china can't shut them down yet, that will give chinese authorities some pause and they won't get violent. that was the same hope some 30 years ago in tianamen square. how that worked out. that is a very, very difficult china right now. the catalyst in surge of buying, 444 point advance today, the fact that the president blinked on some tariffs that were to go in effect on september 1st. that was a september tariff rolled back to at least middle of december. affecting things like cell phones, laptops, toys, computer monitors, computers themselves. almost anyone, everyone attached
to that, or companies that make that, apple, up smartly on the news development here. i described this as sort of the markets abusive relationship on this trade issue. it is too manic extremes. probably not good for buyers and sellers alick because it can be so volatile. it's a buy, sell polar market. we have market watchers sean o'hara with us, lenore hawkins. sean, what do you make of what you're seeing and in a weird way the images coming to us from hong kong beamed around the world are actually a good development because, you know, in the light of day the chinese can't pull anything, what do you think? >> thanks, neil, for having me on. it is not identical, i was thinking that this is similar some ways to russia and you crane, including tactics being used by the pro-russia units inside of the ukraine, embedding
people in the protester groups to try to weed them out. this situation is far more difficult i think to solve, you know. this one country, two systems approach, leaves one part of the country with more freedom than the other. i don't know how you can be partially free. so, this is going to be probably more problematic going forward for the markets than the trade on trade off issues. because if we can't figure out, if china can't figure out a way to unwind this situation a way where stability gets regained, the financial impact of having hong kong under attack like this is going to be much more dramatic impact. neil: he raises a very good point, lenore. hong kong is a vital economic juggernaut of its own. it has had this separate status under china rule, that is very similar to what it enjoyed under britain more than 20 years ago. now that is being called into question. so china has to be careful but,
i talked to a number of, you know, china experts, gordon chang, among them, who predicted way back in 2001, china at its core would be a military entity, than economic one. when push comes to shove it would push the dominance more than its economic dominance. do you agree with that? is that something we should worry about? >> absolutely. this whole one country, two systems thing would never work out indefinitely. we're seeing two forces here. one, that china knows at a time where there is a big trade war, the world is watching to see if china honors its agreements. right now china is not honoring its agreements. on the other hand how do you have one country, two systems, one hand, mainland china, where you say things the government doesn't agree with, you end up in some sort of reeducation camp a couple years or disappear entirely? on the other hand you have hong kong where they don't even, as opposed to the united states,
they don't even have their taxes withheld from their paychecks. they hold their government so accountable they write the checks out for taxes every year. they often get a refund, government says, hey, you're keeping us on a short leash. those are two systems so far apart. china doesn't know how to handle people who demand something from their government because, that is not chinese culture. neil: as you folks are speaking we're getting some english versions of chinese press that i'm reading as we're looking at this. and a number of protesters gone after some of the security officers who kind of secreted into their ranks. you might notice, not across the board, that a lot of these protesters are dressed in black. some wearing yellow helmets, if they're wearing yellow helmets at all or wearing scarves or eye patches much the young woman beaten badly by a security officer outside after train station, she might lose her eye.
that is rallying force. video played on hong kong television. didn't make it back in china of the these images are not being played out in china. to lenore's point, two different systems under the same control sounds good on paper. worked fairly well, bumpy across certainly many years, particularly a couple years ago when we had insurrection of the pro-democracy sit-in, squelched by the same guy called back to try to squelch this one, former deputy commissioner, alan lau, known to mr. crackdown. that is what he is known as, mr. crackdown. what are your thoughts about hong kong itself? you can't fly in and out of there. it is impossible. cathay pacific says if you don't have to fly, don't. that is unusual piece of advice for a carrier that has to make
money. people are concerned. they get to the airport. all the protesters tell them, shout them down, get out of here, get out of here, so they leave. that is shutting down an economic powerhouse. that can't go down for very long? >> i don't think so, neil. i think that is the big issue. you know, if this stretches to a week, two weeks or a month, the economic impact of that restriction of commerce through such a vital hub is going to have an effect on the markets. neil: now their markets, we talked about how they sold off, how they're now a negative market on the year, along with south korea, a couple others close to that, this is having a distinct effect on asia, sean. is it your sense then, that this drags on, it is going to continue? obviously you can't do business when, when you can't do business, when your markets are all but shuttered, when businesses are told if you don't have to come in don't. nothing is getting done? >> you know i think what is going on, the people are talking
about the president blinking. i'm not sure the president is blinking here. if you add up all pressure on china, whether manufacturing leaving the country or whether what is going on in hong kong, i don't think he needs to play particularly hard as ball as he has been so he is giving them a little room to come to the table f the trade war continues, the trade spat continues, china may get hollowed out from the inside by losing manufacturing. there could be when russia and the night had their cold war, ronald reagan essentially hollowed out russia by forcing them to spend militarily. trump could potentially drag this on with china, really hurt them economically. that puts all the pressure on them to get this solved quicker rather than later. neil: that is a good point, lenore. one of the things that came up, the president was being advised of china trying to deal with the hong kong thing. for wont of a better term threw beijing a bone.
i will delay some tariffs to go into effect to get us back on track and get cooler heads to prevail here. obviously the latter doesn't appear to happen just yet but what will the impact be on us, do you think? >> what we've got, there are two games being played. china very much plays the long game. they do not play to win this year or next year. they play to win over decades. the u.s. has a very different system because we're a democracy. we elect our leaders. trump is facing an election coming up in 2020 as we all know. at the same time you have two cars going at each other, playing chicken, engines are falling apart in both of them. in the united states the economy is really struggling. we're seeing a shrinking work week. we're seeing factory oh time hours down to an eight-year low. organization for economic cooperation, leading economic indicators, things when you look at data, what does it tell you about what is coming up. it is declining for 18 months. you never see that unless you're
headed for recession. those indicators at 10-year lows. you have hammer analytics, their assessment for risk of a recession 12 months out. that was 50% at start of the year. today it is 80%. whenever we see that we've been heading for recession within the next 12 months. trump knows that. what did you see the tariffs come off of? they came off of stuff people will give each other for christmas. he is facing pressure internally. this is a game who will give up first. china, china will be tough to have them blink first. hopefully they do. but i don't think it is an easy thing for president to be pushing through. neil: we're watching this very closely. i want to thank you both very, very much. we're watching protests continue in hong kong. there are other airports in hong kong, certainly as they are in the united states. this is the biggest one. one of the world's biggest. if you come to fly into or out of that country, good luck on that front. everyone sees protesters. they turn around and go.
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73, 74 million passengers a year, picked up pays of late but , hong kong, to my memory, one of the most cleanest, organized airport i've ever been in. wouldn't top switzerland. the point about that airport, when you get there, everyone goes to the same place, the the arrival hall, your area or zone, to fly out of the country. they have another point for all point europe and then towards south america, europe, africa. very rigidly organized. if you disrupt people in the arrival, they can't get beyond that, that is exactly what the protesters did starting yesterday. the thing is, they sent out word to the fellow protesters, everyone meet outside of the airport. flood the arrivals hall, which is this gigantic area that almost from above, it just looks like a large baggage handling
area although it is not a baggage handling area. it is a cavernous area of the airport where people first check in to go to all of their other point its very design feeds this activity. if you shut down that, them can't get to their terminals, can't get to their gates, can't get to their airlines. doesn't matter, if protesters are screaming at them, get out of here, you name it. that is kind of what happened. to add things here to gal van nuys the protesters were comments from hong kong leader carrie lam, who said, and i quote, stability and well being of 7 million people are in jeopardy of residents around the region. protesters, take a minute to look at that. look at our city and our home, do we want to push your home into the abyss where we smash into pieces? clearly reading a line from chinese authorities they have had it with this. to add a little bit of drama to
this, there is a 34,000 hong kong force which i'm told the chinese have been very critical, they have been like a one-armed paper hanger dealing with the protesters. you have to get some moxie, get in their face, penetrate their ranks, you have got to stop this good luck on that. the then the protesters realize, some of them dressed like them are not among them. in other words they're security forces. so yesterday, these security forces, garbed in the same black outfits, yellow helmets, they were going after protesters, arresting them, carted away better than 200 yesterday. we don't know their whereabouts right now. the response of the protesters, no, we know what you were pulling yesterday. you will not pull it today. they have gone after the security forces. again during this time, the airport, not surprisingly has been shut down. you cannot get out of there because that's the central
processing area where you come in, it might work for crowd control, getting people in and out of the airport very quickly, when enough people fill that area, surprisingly nothing can get done. protesters have been told repeatedly, you've got to go. you had 10 weekends in a row. cover ited it live, 10 straight weekend on and you will not go. they will start using as they did tear gas. these things called pepper balls. which they're pretty painful. a lot of people have been choking on that. we have stories on of older people who couldn't breathe. this was permeating the entire airport. this is happening in an international airport. it is there for the world to see. all of this at the same time we are trying to talk trade with the fellows who were overseeing all of this, the chinese. bank rate senior economic analyst, mark hamrick on that, there is the conundrum, mark, think about it, for global
markets, trying to see if china is what it says, an economic powerhouse that won't resort to the military thuggery for which it has been branded ever since tianamen square, or goes, just back to that, because it can't do anything else, what do you think? >> i hope for the best, i fear for the worst, neil. i don't know that, that thinking that beijing will remain patient on this is a safe bet. and, you know, we think about the fact here in the united states, you know, it is the job of all of us to try to make sense about what is happening all around the world. neil, i think about this in the context of yet another downside risk for not only the global economy but the u.s. economy at a time when that is not what we were hoping for. obviously our hope is that, human lives can be, you know, maintained, that safety remains the watchword of the day there. it feels like when we're looking at pictures like this, we're not
moving in that direction right now. neil: you know to think about it, china is a military power, economic power. i'm reminded about gordon chang's famous words, just like ancient sparta at its core a military power. they will revert to that to protect everything else. that is the fear here. one of the reasons why the market there is are in a freefall and hong kong market is in negative territory. it is depressant for the world. the trade issue that is quasi-attached to this. and it is showing up in lower interest rate across the globe. i'm just wondering if this festers, the effect on trade will fester, and i would imagine so will the slowdown? >> absolutely, neil. you know, it is easy to be an economic power when you don't have the same commitment to civil or human rights that let's say we have in the u.s. and the western world.
you are empowered to gain traction in ways that essentially, it is very difficult for others to compete against. so, that is the challenge for the u.s., trying to trade with china as well as every other democracy and economic powerhouse around the world. but, neil, we're watching the dow bounce today. the stock market bounced with the news that is welcome, that at least we've been able to punt on these tariffs from september to december, but, again, for business leaders, ultimately consumers, this is not a reprieve. it is just that the governor has put off, you know, the would-be execution for a couple months here and we really need for the u.s. and beijing to come to a substantial agreement on trade for us to have some, better confidence which would obviously be helpful for financial markets and all of us as participant in the u.s. and global economy. neil: you know, mark, i was talking to an investment banker friend of mine who was to go to hong kong this week.
he said his firm told him, you're not going to hong kong. i imagine that playing out. as it was in puerto rico, a night and day situation. i grant you, where a lot of firms were telling people, puerto rico, state department warning put it out, maybe not the best place to go. apples and orange here a tenuous situation, when people get nervous about the place, they avoid the place. seems protesters are compounding that, making this, again i'm not pro or anti-protester. i'm saying it is making it more of anathema to business interests worldwide. that could compound troubles for china, couldn't it? >> absolutely. all of asia. we've seen how the rest of asia is dependent on commerce moving through china. you think about cargo moving through hong kong as well. so, there are a lot of things that are weighing on the global economy and now, including
obviously the relationship between the u.s. and china and if nothing else, the uncertainty about what is happening in hong kong right now, not to mention the fact that obviously their economy has aftereffect tiffly ground to a halt there. you you mentioned decline in markets in asia overnight. that is something going to be weighing on economic performance as well. neil: your thoughts on interest rates collapsing in the middle of this. every time we see the images, we say nothing will get done there today or nothing get done tomorrow and it feeds on the narrative, it's a crazy environment and it is not even able to enter into trade talks or complete trade talks because it has a mess under its own umbrella? >> right. i don't think any of us predicted that the interest rate environment would be as it is right now, if someone did i would like to know who that person was. neil: good point.
>> so here we are, with that feeding into the global and u.s. economy. neil, you know, we have talked before about the hope for example, lower interest rates, lower mortgage rates will help the housing market. we've seen essentially only been something that helped refinancing, at least substantially. i think that is a bit of a template to think about how that applies to the rest of the u.s. economy. lower interest rates or the situation with interest rates over the past year have not primarily been the issue. restraining u.s. economic activity. so we don't look at this so much as a gift, but rather a proxy on confidence about the direction of the u.s. and global economy. that confidence right now could use a little help. neil: all right. it is about 12:42 a.m. there tomorrow in hong kong. where crowds are dissipating slightly. but there is still plenty of them. we should also let you know that the more we see of this, there is counter argument, better
looks the united states as a safe haven where this kind of stuff doesn't happen. a lot of stuff happens here. there is hope, in a weird way, because of images beamed around the world, it would be unthinkable for china to try something. that is the hope at least. we'll see. metastatic breast ca, which is breast cancer that has spread to other parts of her body. she's also taking ibrance with an aromatase inhibitor, which is for postmenopausal women or for men with hr+ / her2- metastatic breast cancer as the first hormonal based therapy. ibrance plus letrozole was significantly more effective at delaying disease progression versus letrozole. patients taking ibrance can develop low white blood cell counts, which may cause serious infections that can lead to death. before taking ibrance, tell your doctor if you have fever, chills, or other signs of infection, liver or kidney problems, are pregnant, breastfeeding,
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neil: you know whenever we have a crazy day as we do right now, with everything going on in hong kong, invariably i get a lot of questions, emails, texts, that sort of thing, i'm big on social media, not. can you please tell me why we're up so much, when it looks like the hammer is coming down in hong kong? well these images, distressing as they are, is the hope that they don't get violent, that it is a different environment than 30 years, the hope of mainland china, but certainly hong kong and rest of the world, will give chinese authorities pause but the real reason for this is something the president did
early this morning. some said he blinked, others said because of what was going on in hong kong he threw a bone to the chinese, nevertheless he would delay 10% tariff on some chinese consumer products on september 1. those that got a pass, include a lot of smartphones, and a lot of cell phones that is one rhine why now apple is a big beneficiary. that stock is up 5%. i don't know how it is doing now. do we have a chart on apple, guys? it is up, boy, looking at my bad eyesight, 4% here. let's go to market watcher dan ives on this. dan, the idea being apple benefits, a host of other key technology players like computer monitor makers, computer game-makers, videogame console makers, the smartphone makers, they will do okay, because the day of reckoning with them for these tariffs is put off. do you agree with that? >> the darkest cloud over the tech sector was the 10% tariffs.
you've seen it in apple, across semis, across the food chain. this is a major positive for the markets, especially for the bulls, not just for apple but across tech going into year end and i think that is front and center especially with a massive iphone upgrade coming in september. neil: that is going to be an interesting time if you think about it because i don't know how important the chinese market will be to apple for that launch. we heard a lot of reports of patriotic fervor buying huawei products, not so much apple products be obviously would be in apple's interest, a whole bunch he have other people's interest to have that solveds right? >> no doubt. apple is the heart of the u.s.-china trade scuffle. 20% of iphone demand will come out of china. apple and cook continue to be center not just on supply side but demand side.
given what happened the news this morning really came out of let field and this is something the bulls will run with for the coming quarters. neil: if you had any doubt that trade rules the roost on the market, this proved it. i was referring to trade as being sort of like the abusive relationship issue for the markets. it could be extreme. we put up with a lot when all of sudden looks like a deal isn't favorable. we celebrate the slightest hint could look a tad more favorable. what is it about this issue, disproportionally walloping these markets to upside or downside? >> a lot comes down to pure numbers. for apple it was a 20, 25-dollar overhang for the stock. you would think 55 cents of eps, i put a multiple on that, that is a huge overhang on the stock. you have seen disruption on semis across tech. you look at leaders in this market is tech. this is the dark cloud that was
partially cleared. some say it is still there. for the market for year-end it went from yellow light to green light in terms of risk on. neil: dan, thank you very much. a read from vince coglianese "the daily caller" editorial director. vince, as the president heads off to pennsylvania for an event, was he looking at markets, was he looking at yesterday, seeing increased volatility, i have to dial this back a bit, was he being pragmatic about it, how would you describe it? >> he wants good economic news as he heads off to pennsylvania. he wants to speak to ago cultural, manufacturing base that sticks with him in 2020. to do that, he needs the economy to be strong clearly. if you look back into the 2018 midterm polling, issue across all voters, high 70s, trump scores well on issue of economy. no issue comes closer. as long as he beats that drum going into 2020, at this moment it is perilous thing as he deals
with the stray battle with china. neil: a lot of union workers in the very union state, not as union as it used to be, pennsylvania i'm talking about, they share his concern about china, whether china plays fair. people can share your concern until they start feeling the pinch. obviously would like to head that off, but where do you see this going? >> luckky for him he bought himself room with the strength ever economy he had room to play with to get china behave. whether china comes to the table and does that is another question. at the moment, especially farmers, gotten a lot of their support, they're holding their nose and holding their breath, hoping this works out in their favor, but still by the polling shows donald trump has confidence he can land the plane. union leadership stand apart from leaders, many of leaders stand by democrats but the rang and file, they see him as
authentic message but democrats have gotten grief from this election cycle. neil: he could pick up more support for the president. what is going on in hong kong and eu, our position has been very reserved. we urged cooler heads prevail, don't insert ourselves into this, a lot of supporters with american flags, sending a clear signal, they want the world and particularly the united states to stand behind us. what do you think of the president's posture, hoping just that, maybe with overtures on trade and low-keying a lot of what we see going on in hong kong it will pass? >> that is the secret to the president's negotiation, you've got it. to date, think about this, the president on the south lawn, talking about supporters asking what he is seeing on hong kong, he gave it the old, we'll see what happens. he was not committing either way. that is an ovation to china, hey, beijing i will not get involved in this, i will not
condemn what you're doing to your own people. you should see that as sign of good will, good faith, come to the stable to deal with me on trade negotiations. go back to the g20 summit in july when he met with xi xinping he got false promises about agricultural purchases. just before that, vice president mike pence was supposed to in june give a speech about china's human rights violations. they did not give that speech. neil: you're right. >> now the images we're seeing on tv, that is doing the whole speech for them. we're watching as china is violating human rights and threatening to violate human rights of people there in hong kong. the last thing they need is the united states calling more attention to it. neil: the most powerful weapon the president might have in the trade front, this is what i'm dealing with, guys, what do you think? vince, thank you very much, my friend. >> thank you. neil: peter brookes with us, favorite guess, former bush 43 deputy defense secretary, so much more. peter when i look what is happening with hong kong here we
say no rational country will respond violently to stuff like this because in this case the world is seeing it. but maybe mainland chinese are not seeing it but the world is. it will not be like it was 30 years ago, because everything's different, do you buy that? >> look, china has a lot at stake in hong kong. i think there is a number of issues they're concerned about. obviously reputational costs. if they do move militarily with the people's armed police into hong kong, this would affect them across the globe. there is other countries that are watching. for instance, taiwan, who china has tried to tell them to come back to china, and unify with them under one country, two systems which is what is goes on in hong kong. they certainly wouldn't be happy about this. we could also see capital flight, neil, out of hong kong. people leaving. china has to be very concerned. what happened in 1989 in tianamen had a long-standing effect on china.
we still have sanctions on china over tee enmen. some other countries do as well, especially on military systems, military weaponry and high-tech. china does not want to go back down this road again if they can contain the situation in hong kong. neil: a number of financial entities, the runup in the dow notwithstanding are concerned whatever tensions of between the u.s. and china today, with this overture on part of the trump administration on trade, moody's says the de-escalation, ongoing tensions within the u.s. and china, may be only temporary reprieve. they go on to say the u.s. and china will remain contentious, punctuated with occasional steps towards compromise, but not very optimistic it would seem there will be? >> we're competitors, there is no question about that. we're talking about economically, politically. china is trying to increase its influence around the world militarily. think about the south china sea. issues over north korea. china's military buildup. these are great power
competitions that are going on between us and china followed by us and russia. so china plans to replace us as preeminent power in the pacific and globally if possible. this is their plan. naturally there are going to be tensions with china over a number of different areas. neil: thank you, my friend, peter brookes on all of that. we are told that the 34,000 hong kong force has been told to make it very clear they're not going anywhere. they're not leaving until the protesters leave. but the protesters aren't leaving. this sort of mexican standoff, albeit one in hong kong continues. there are indications they are not, that is hong kong authorities going to conduct business as usual. they have been using pepper spray, tear gas, pepper balls. they have been dressed as protesters themselves to make it known they are not taking this as they have before. quietly or remotely. right now very loudly and increasingly violently.
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we'll see what happens. but i'm sure it will work out. i hope it works out for everybody, including china, by the way. i hope it works out for everybody. and i hope it works out for liberty. i hope it works out for everybody, including china. i hope it works out. hope nobody gets hurt. i hope nobody gets killed. neil: all right, the president saying i hope nobody gets hurt, i hope nobody gets killed, referring to the second uprising in as many days at hong kong's international airport. essentially shut down as protesters storm the airport, making it impossible for anyone else to get into the airport. as a result, a lot of businesses, a lot of airlines are telling their passengers, their workers, just stay home. avoid the area and hopefully cooler heads prevail. we got this, of course, on word that carrie lam, the hong kong chief executive, is saying protesters are dragging hong
kong into the abyss and they should watch and measure what they do quite carefully. lot of people deem that to be a threat coming not just from miss lam but from higher up chinese authorities. we are also told that a number of the troops involved in actions against protesters today might be from china itself. a lot of them wearing the garb of some of these protesters. you might see them dressed in black or they'll have, you know, a helmet, it's usually a yellow or off-white helmet, and a lot of the protesters have discovered even yesterday that they were right in their ranks. authorities are in their ranks and today, the protesters turned on them. now, so far, they had a measured response, that is authorities at the scene, by not escalating this even though they had escalated the response, they don't just take it anymore. they have been using tear gas, they have been using a host of other things. they have arrested better than
200. a lot of these protesters want to know, reading some of the english versions of the chinese press, where the heck these people are right now because much of what we've seen in the ten weeks of protests prior, a lot of people rounded up and arrested but they don't know where they end up. this was the source of friction, you might recall, over the whole extradition law that started all this, where the chinese would say if you are arrested in hong kong or picked up or questioned by authorities on any one of the potential breaking of the law or maybe just looking at officers the wrong way, that was the protesters, you would be carted off to china, not hong kong. that was suspended. i say suspended because it wasn't outright canceled. that law is still on the books, that extradition order. it's just been delayed. the protesters at a very minimum want to see it ripped up and put away, that they don't even attempt to do that. this has gone way further than that. we've got dinene borelli here,
john lonski, max burns. a quick peek at the corner of wall and broad, i want to get your guys' thoughts on that, so far our markets are dealing with it. one thing that's interesting, john, we are dealing with it because we like maybe the trade blinking on the part of the president, made the trade overture on his part to help the chinese or at least give them something to ameliorate this hong kong, who knows but it did put off tariffs on some of the chinese imports that were going to go into effect september 1. the markets like that. >> you can also say trump is listening to the markets, you know. he wants to keep this economy growing so he's backing off a bit on the trade front. of course, that's good news for u.s. equities. neil: what do you think of that? it could be a good or bad thing. what do you think? >> i think it's a good thing. the market did respond because of the announcement coming from the trump administration that the tariffs, additional tariffs had been suspended. so really, this goes back to the president looking out for the
forgotten men and women in america because china has been getting away with many, many years of cheating and stealing and lying and now it is time to call them out on their actions. neil: all right. but he was the one that made this overture, maybe for perfectly sound and valid reasons, the markets were getting worried. >> worried about the sustainability of the current economic recovery. he's got to keep that unemployment rate moving lower. neil: he had to know that would happen when he suggested the tariffs in the first place. >> maybe he thought the response would have been more muted for whatever reason. but when you have major banks coming out with upwardly revised forecasts of recession risk, you had that drop in treasury bond yields, my goodness, yesterday for awhile, the 30-year treasury bond yield was just under the federal funds rate. that's ridiculous. that shows a lot of fright in the financial markets as far as the outlook for the u.s. economy. neil: and globally, rates have
been declining. i'm wondering, democratic candidates maybe with the exception of kamala harris have been largely silent on this issue. i think she was the one who came forward to say in the last debate the fed had to cut rates to sort of clean up after the president, i'm paraphrasing, and no doubt the fed might have to do that again and again and again. i'm wondering how this does play out politically, because there are a lot of democratic voters who like what the president's doing with china. what do you think? >> there are very few people in the country that seem to like what the president's doing on trade. certainly not the farmers who have seen their contracts go away. neil: union workers. >> well, i mean, this is not just a farmers' issue. this is construction, this is materials for industrial work -- neil: why don't they speak out more? >> they have. there have been a flood of stories just this week on farmers, on construction workers saying their contracts are gone. these are contracts that they worked on for 10, 20, 30 years to build trust. those aren't going to come back
when the trade war stops. neil: i'm not disputing the fact they are concerned at all, but i think a lot of the candidates themselves get concerned about maybe supporting the farmers but being very leery of ticking off union voters who increasingly do like this president. are you worried about that? >> the numbers in pennsylvania don't seem to bear that out. he's under water there by 15 points. so this is much more i think damage control than anything else for the president. neil: what do you think? >> with regards to the union workers, look at how democrats want to implement the green new deal. what is that going to do to jobs, especially to union jobs and raise energy prices and all the other things that they want to do to really disrupt our way of life, and be more onerous on americans, hard-working americans, especially the union workers. joe biden, the coal fight. come on, he said years of no more coal in usa and he's still trying to bring back that mantra now. he has a war against coal again from the previous administration. >> you know, i would go ahead
and add, too, that the democrats with this issue on trade, with china, intellectual property theft, said nothing about it. they didn't seem to care much that these communities in pennsylvania, michigan and ohio, where else manufacturing areas down south were being clobbered by the movement of production facilities from the united states to china. that should have been an issue. maybe that had to happen eventually but you can't ignore it. neil: when they were in iowa for the state fair and all that stuff, the farmer thing, the impact there, was very pronounced. that was a big issue. now things are improving on that front while almost every sector, we will be rifling through a lot of these, from retail doing well, all dow 30 stocks are up for the time being, but when it comes to a lot of the issues near and dear to farmers, they're not doing too well. a lot of corn futures down, soybean futures down, wheat, barley, down. so there's optimism, to your
point, about this getting resolved, funny way of showing it. >> we can talk about what the green new deal might do to the economy or we can talk about what president trump's trade schizophrenia is doing now. the bond yields aren't going down because i'm buying bonds. institutional investors -- neil: i thought you were. >> -- are fleeing out of the market for fear of recession. we have the smart money and large investors already starting to cover their positions for fear of what might happen. neil: all that money is coming here for the time being. we are a safe place to park -- >> that's definitely the case. as the federal reserve goes ahead and cuts interest rates, that reduces the cost of hedging for these foreign investors and it makes u.s. bonds all the more attractive relative to bonds from germany that now have a minus one half percent interest rate. bonds even from the uk with brexit, you know what the interest rate there is on a ten-year bond? one half of 1%. we are still way up there at
nearly 1.7%. i think there's a lot of room for u.s. treasury yields to move lower. i think we will be in a rage eventually. neil: we don't have a lot more to go. >> hey, 1.25%, 1.5% is lower than where we are today. i think there's a very good chance that at some point in 2019, we are going to set a new low for the ten-year treasury yield going back maybe 50 or no, excuse me, longer than that, going back 60, 70 years. neil: really. >> yes. neil: politically, the president, you know, is trying to say he did what he did today to help american consumers so they won't be shocked, you know, right before the holidays with these sticker increases which is the first time i ever heard him quasi-acknowledge that there is a bill for americans to pay as a result of tariffs. he has said we dodged that bullet because china's paying them. of course, the truth is u.s. entities pay them. it's how much they can pass along to consumers.
what do you think of that? the president's pivoting on this issue? >> i think he's really putting the facts out there. i think that is what his supporters like the most. first of all, who in america, how many knew this issue with china was so bad? who knew that it was $500 billion a year we were losing because of china lying and cheating and stealing intellectual property -- neil: we were also getting a lot of investment here, also. >> sure. that's right. neil: you lose that. >> i'm sorry? neil: you lose that if china is all of a sudden at odds. >> but the thing is hopefully this is a short-term -- neil: hopefully. been going on a year and a half. >> true. but how many years has it been going on? they have been stealing from americans. >> well, i think from the political perspective, the important thing to note, too, as i stated earlier, the democratic party didn't seem to care all that much that these people were being left behind in middle america, the middle west, whatever, and they didn't really come up with ideas such as training programs and so on. take money from other programs
and push it into these areas so that these people could reestablish that standard of living that they enjoyed for so long. neil: republicans [ inaudible ] including me in charge of the ponderosa buffet. >> let's be honest, democrats did propose job retraining programs, the economy of tomorrow initiatives under paul ryan's house. it didn't even get a vote. >> by you saying that with hillary clinton, she wanted to kill coal jobs, kill the industry, retrain the coal miners? no. they like doing what they're doing and want to provide for their families and support themselves. who was she to come in and tell them we are going to do away with your industry? that's outrageous. neil: you are a young guy. do you worry about, i know you're not a fan of republican tax cuts, making the deficit worse, all that, are you any less concerned when you hear your party talking increasingly about all these big budget-busting programs that are
going to exponentially add to the burden you're going to pay? >> when we talk about budget busting we look at president trump's spending so far. we added $2 trillion to the debt. that's slightly less than president obama, but you look at what president obama spent on was the largest recession in my lifetime, certainly. neil: but it doesn't bug you that -- they are all spending us into oblivion. >> it bugs me it's not helping the vast majority of americans. these tax cuts that put us $2 trillion in the hole are great if i have a membership at mar-a-lago. it's not helping me. neil: that's cliche. you will know that unemployment rates among all groups, i'm far from a trump apologist, is way, way down for key demographic groups in the equity diddic party. you can't argue that. >> it is, but that doesn't make the spending on the tax cut wise. the fact we had the longest economic expansion in history -- neil: pretty good performance, you areal al you're right to say it started with barack obama, donald trump put on it steroids.
>> we are doing our best to turn it away. look at the bond yields. look at the 35% prediction of recession by the big banks. neil: has it happened? >> it's happening right now. neil: would you have taken what happened the last couple years? >> i'm sorry? neil: would you have predicted what happened the last couple years? >> i don't think anyone can predict what donald trump thinks the next couple hours, much less the next couple years. neil: believe me, he's no fan of mine. i'm looking at raw numbers, raw data and it's continued. it's the reason why we are a mecca for a lot of this nervous global cash. if we were in such bad arrears ooshgs , we wouldn't be enjoying that. >> the things you are talking about, 35% probability of recession, are the very same banks who at the start of this year were predicting three to four rate hikes, interest rate hikes for 2019. neil: we can go back and forth on that. we are talking about this trade and whether we get a deal certainly with the chinese. there is a little more optimism we will. in the middle of that, we have
some promising developments on a separate trade pact with the brits as they formally get ready to break away from the european union. and they hope to have it hammered out in short order but again, separate trade deal, one that would be just between the united states and britain, to help britain deal with that separation. we'll see if that succeeds. right now, the dow up about 449 points. almost anything attached to trade is doing well. almost anything attached to anything is doing well. the only area of the market that is weak, a lot of the commodities, agricultural commodities that we touched on. they're not doing well. farmers are getting the shorter end of the stick on that one. at least that is the perception. more after this. d the songwriting process. oh, here we go. i know i can't play an instrument, but this... this is my forte. obviously, for auto insurance, we've got the wheel route. obviously. retirement, we're going with a long-term play. makes sense.
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tariffs that were to go into effect on september 1, the fact that he did and offered a reprieve to a variety of goods largely in the technology arena was a boom to technology stocks, certainly a boom to retail stocks. but there was a method to this and it might have been telegraphed by the president hearing from a lot of these corporate folks. kristina partsinevelos with more on that. reporter: you're right. a lot of corporate folks have reached out to the president, asking him not to increase tariffs. you have this list of toys to clothing goods that right now, the u.s. importers of those goods can breathe a small sigh of relief until december 15th. but according to the new york federal reserve, just this year alone, they are estimating households have to pay an extra $830 per household just because of the tariffs. washington said they have delayed these 10% increase on china nie chinese goods because of security concerns but to your question, what you are alluding to, could this be because corporations have been asking
the president not to increase tariffs because it's hurting their goods, causing their goods to go up. why? because they have to pay that 10% tax. it's up to them to decide if they are going to pass it on to consumers. what you are seeing right now is a letter that was sent on behalf of 600 corporations and trade associations, including macy's, nike wrote to the president, all saying that if the tariffs continue to increase, you will start to see job losses and it will hurt the u.s. economy. like you say, you have the technology going higher today, retail stocks are climbing higher because of the suspension of the 10% increase in tariffs. but there is some weakness we are seeing across the board. it's not all due to tariffs. you have bankruptcies that are causing job losses in america to the tune of 43,000 job cuts thus far. that is up 40% and that's not even the full year. that is just up until july. we haven't seen an increase like
that since 2009. so overall, we have this suspension until december 15th for these tariff increases but a lot of that, right now the president is listening and picking products that will do well in the holiday season. if you look at the list, laptops, toys, some clothes, all goods we want to buy during holiday season. back to you. neil: indeed. thank you very, very much. by the way, the president is still tweeting on this. his plane just landed in pennsylvania but that hasn't stopped him from sending out another tweet that might have taken some of the zing out of the market just a little bit here. he's saying that our intelligence has informed us that the chinese government is moving troops to the border with hong kong. everyone should be calm and safe. you heard him earlier today when he was boarding his plane at morristown where he's vacationing in bedminster on the way to this event, that he hoped everyone will just calm down and they will get past this and china won't do anything disruptive. but there are these reports, i believe in "the financial times"
talking about the fact the chinese military has sort of pierced the hong kong security ranks. there are better than 34,000 hong kong soldiers, some of them dressing up as the protesters to get in their midst. they rounded up better than a couple of hundred of them when they actually surprised the protesters and attacked them. today the protesters responding in kind and attacking them. again, it's still going on in hong kong international airport. the president as i said arriving right now in pittsburgh, pennsylvania. he might add to that on what he just said. we have our panel with us. the president is making it clear, look, i know what you're up to. there had been these reports that china has been sending more, you know, security to hong kong with the clear message being you, hong kong, deal with this or we will. where do you see this going? >> i do hope things don't escalate and hope things don't
get any worse than what they are. what this comes down to is people fighting for freedom. they are making their voice heard for freedom and democracy. i was listening to your interview earlier with gillian melchior, she made some great statements about what's going on, she's there on the ground. but the extradition possibility, this is something that's a great concern.extradited to mainland china. neil: they round them up, some were rounded up weeks ago. they don't know where they are. >> it's a sad situation and of course, china is running the risk of deterring direct foreign investment into factories and whatnot as perhaps western-based companies believe there's much more political risk in china than was the case previously. this could prove to be costly. this has been bad for the hong kong stock market. that's down 9% for the month to day. i think china is down 4.7, u.s. is down a lot less, only
1.8%. so the political tensions in hong kong could be costly to china and perhaps china will take that into account. neil: the irony would be in that event that we score a trade deal, potentially, with the chinese and they tumble into recession. >> given the strained relationships we have with china now, dineen is absolutely right, anybody who cares about liberty and expression and democracy should be standing with hong kong. this is exactly the same situation of the american revolution, the british sending americans to london for trial. it was considered unconscionable then. neil: you saying we should send troops to hong kong? >> i'm saying the silence from the state department on this is indefensible and it's because when rex tillerson was secretary of state, the state department as policy deprioritized human rights as one of our major priorities. so they deserve something much more than the president saying hey, i hope everything works. neil: would they do anything differently in that event? >> i think we have a statement
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learn more about aarp medicare supplement plan options and rates to fit your needs. oh, and happy birthday... or retirement... in advance. jackie: i'm jackie deangelis on the floor of the new york stock exchange. take a look at the dow, trading up by 387 points. off session highs. but there is some excitement here on the floor today as a result of that announcement from the treasury department about delaying some of those new tariffs that were set to go into effect on september 1st. those now delayed until december 15th on things like games, toys, computers, some clothes, cell phones, all before the holiday season. traders are looking at this back-and-forth in the trade war and seeing this as a positive step. we do know that lighthizer and mnuchin said they will continue the conversation with the chinese vice premier in september and that's a positive sign as well. take a look at tech.
that was a sector that was beaten down. it is coming back today. it's coming back strong. apple leading the dow higher as well. meantime, the toy makers, they are seeing a boost here. mattel, hasbro, the delays on those tariffs certainly having an impact and retail stocks are seeing it as well. best buy, nike, nordstrom and we will hear from walmart later this week on its earnings. it is trading up higher this session. when you said earlier that this is an abusive relation with the markets and china and trade, i couldn't have said it better myself. luckily today, it happens to be to the upside, this knee-jerk reaction. neil: but it is screwed up. you sort of wonder hey, i've got to go out with somebody else here, this is not working. all right. jackie, thank you very, very much. all right. we have a lot more on this. you heard about it. john was talking about it. negative interest rate phenomenon, rates going lower and lower. obviously you don't get to save much in that environment. in fact, you have to pay the bank for the honor of holding your money, but, but, but if you're in debt, if you have a
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mortgages that are attached to negative rates. in other words, you're doing okay. to mark avlon on whether this trend picks up steam here. what do you think? >> i think surprisingly, the ten-year is back to its nearest lows of all time basically we saw in this past cycle and we think that's going to continue. the u.s. cannot continue to have rates that are significantly higher than overseas. there's just too much of a currency differential. foreign countries are using it for trade advantage and i think that the rates here are going to continue to decline to be more in global balance. neil: what would that mean if you take out a mortgage and this is the same phenomenon? how does that work? >> it's going to benefit people who are borrowing and it's going to hurt people who are saving. the people who are saving are then going to be forced to take more risk. and more risk means higher -- higher allocation to junk bonds, lower quality bonds, more stocks for retirees and that creates risk, sure. the people who are borrowing at the bank, that puts more cash in
their pocket. can be more stimulative to the economy but on a net basis, eventually there's a tipping point and we are getting close to it. >> so this to me, the negative loan sounds counterintuitive, like the bank is paying you to take out the loan but perhaps the thought is that they would provide more loans to people by doing so, but what about those whose credit rating isn't so great? would they be more at risk to not be able to get a loan if that makes any sense? >> yeah, well, credit risk is always a factor in the availability of credit. that's not going to change because the term structure of rates is lower. what it's going to do is it's going to encourage more people to take on debt or at least buy a home in the case that you're citing which the desire from the central banking groups is that it's stimulative to the economy. when in reality, what they could do to stimulate bank lending would be to reduce bank
regulation, maybe reduce bank capital requirements, and give them more incentive to make loans and have a growth and demand-driven, more organic driven economic recovery as opposed to saying here, here's cheap money, go borrow some. that's where i think they're missing the boat, especially overseas in europe, at the european central bank. neil: who wouldn't want to sign up for that? >> i want to raise an issue i think is very important. mark brings this up. john lonski here speaking. that is that you cannot look at price earnings ratios without also considering the level of interest rates. i think some have the problem where they look at very high pe ratio for the equity market, historically high, but they overlook the fact one of the reasons why the pe ratio is so steep is because interest rates are at historical lows and there is a reasonable chance that interest rates may remain low well into the future, if only because of unprecedented
demographic change, where never before has the u.s. economy, will it age in the same way that it will over the next ten years. >> well, what's happening, that's right, when you're looking at these low rates on bond yields, you're forcing people to make decisions and say well, stocks are reasonably valued, they are more attractive, even though the historical forward pe is at full valuation, maybe even inching a little higher these days, so you are forcing people who otherwise would not absorb stock risk into the stock arena. it's also just as importantly forcing them to buy lower quality bonds. many people don't know what they're getting when they're in an income fund and how much junk bond is in there, what emerging market debt is in there. they're not understanding the underlying mechanics and they are taking on more risk just to generate adequate income or retirement cash flow. >> you are making an important point. if i was an individual investor and i was looking at corporate bonds, maybe i would want to have a well diversified
portfolio of triple b-rated bonds. you want to go into high yield, make sure you have plenty of diversity in your portfolio, because eventually, there's going to be a recession, profits will contract and the high yield default rate will soar above 10% and at least leave you stuck with some pretty deep temporary losses. >> yes. and for now, being in the u.s., u.s. high yield market, i think it's a relatively safe place to be for now but that could change, of course. without a recession on the horizon, i don't anticipate an immediate surge in defaults of high yield bonds so people that are stretching for yield are getting a scienense of false comfort. when you look out to the inevitable economic cycles which do include a recession, bonds will take a hit. neil: you raise an interesting point. what happened to the people who save for a home? they don't need to do that now, if a bank is entertaining
entering a mortgage with you. it changes the dynamic. >> i don't see why i would take $60,000 or something of my own money and put a down payment when i can borrow that, then pay less. what concerns me is -- neil: you sound like a republican. >> i'm so sorry. what concerns me is what happens even if you are locked into this negative rate when rates go up more broadly? that's going to have a downward pressure effect on housing prices. even if i'm locked into a cheaper mortgage, i may not be getting back what i put in to buy my more expensive house. neil: good point. go ahead. finish that point. >> but that's a risk, whenever you take a loan out, that's a risk whether you are paying interest or not, that at the end of the day the value is going to hold relative to movements in rates and certainly a higher interest rate structure will put downward pressure on stock -- on housing prices. i think if you can afford the cash flow and can afford the payment, some of these gimmicks should be ignored. the underlying factor here that
investors need to realize is there's deep trouble over in europe, they are giving money away, and they need to take deeper structural reforms in order to resurrect that economy, especially relative to the u.s. which continues to be stronger on a relative basis. neil: a flight to quality here. mark, thank you very, very much. you might have heard mark mentioning about how in a very low zero, even negative rate environment, what that means for stocks, it makes that multiple all the more affordable and people can get risky and devil may care and that's the concern that they go nuts. right now, with the dow 395 points, some are going nuts. more after this. do you have concerns about mild memory loss related to aging? prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.
but how do i know if i'm i'm getting a good deal? i tell truecar my zip and which car i want and truecar shows the range of prices people in my area actually paid for the same car so i know if i'm getting a great price. this is how car buying was always meant to be. this is truecar. neil: all right. in the midst of this market run-up, cbs and viacom have kind of sealed their merger deal. charlie gasparino saw this coming before anyone else. hey, charlie. >> what we know is this, that
they have a preliminary deal. cbs and viacom are finally merging after years of negotiations on and off again. shari redstone from the controlling redstone family's national amusements, that's the controlling company of both of these media outfits, this is a big day for her because it's likely to be announced today. here's what we know. they are scrambling, meaning the boards of both companies are scrambling to complete the deal either before the closing bell or after the closing bell. that doesn't mean they are going to get it done but i'm hearing there's a very high likelihood they could get it done today. the deal would be announced and lu have bob bakish, the ceo of viacom as ceo of the combined companies and for at least now, the company is either going to be called cbs viacom or viacom cbs until they figure out, i guess with branding experts, what's a better name to call the combined entity. joe ianniello, ceo of cbs, this is one of the sticking points from what i understand. they trying to lock him in for a longer term deal, they are trying to get a compensation
package that he accepts. from what i understand, that's what kind of delayed it from yesterday which was the target date to today. so again, from what we understand, they are working through that and this deal is essentially done. they do have the pricing of the deal which was another sort of sticking point. for every -- cbs shareholders get .5 of viacom shares so the deal has been priced. again, big deal, creating a pretty big company, $30 billion. still, when you think about it, big names, viacom controls mtv, nickelodeon, cbs, great sports programming, "60 minutes" and lots of great sit-coms. in the scheme of things, this is a rather small company. it will have a market cap of about $30 billion compared to time warner which -- excuse me, which at & t which owns time warner, now called warner media, which is something like $400 billion. comcast is in that $400 billion
area. again, it's small but the question is what is the future for cbs viacom. do they expand. some people say they will go out and buy discovery. others say they are going to sell themselves to a deep-pocketed tech firm, like amazon or apple which are essentially media companies themselves. necessity ha they have market caps which approach $1 trillion. you get what i'm saying. cbs might be too small right now to survive even in this combined state. but they are pushing the companies together. shari redstone who now runs the company for her ailing father sumner redstone, believes the best way to create synergies and cost savings is to put them together and maybe the best thing to do is sell them after she does that. again, keep an eye out. i hear they are trying feverishly to get this announcement out before the closing bell. maybe they can't do it today. maybe they can. i know they want to. in that announcement, we will get not just the final details on price which we kind of know but also the management
structure. exactly how long does joe ianniello who ran cbs from the business side while les moonves ran it from the sort of operational and talent side, how long he's going to stay with the combined entity. back to you. neil: thank you, my friend. charlie gasparino on that. also waiting to hear from the president of the united states. he will be in pennsylvania, pittsburgh. it's an energy conference, to talk about alternatives. he will have with him the secretary of energy, rick perry, the administrator, epa administrator andrew wheeler, also executives from royal dutch shell and a host of others, looking and expounding on energy alternatives to opec, traditional, new, you name it. the president saying without me, none of this would have happened. more after this. there's a company that's talked to even more real people
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neil: very shortly, the president will be speaking in pennsylvania, talking about america's energy independence and dominance and if you think about it, whether you're on the right or left, the fact of the matter is given some of the global tensions, normally oil prices would have erupted on that and we would have been paying for that. but because of the global slowdown or trade or because the fact so much of or energy is produced right here in the us of a, the environment changed substantially. back with us, our panel. john, to your earlier point, the president will pound the theme we are attracting capital, you had touched on it, too, but nowhere is that more pronounced a change than our energy independence. what do you think? >> right. this is unimaginable, the change that is taking place in this industry. my goodness, we still have the price of crude oil stuck under $60 per barrel. a lot of this is because of fracking. not only does this help u.s.
industry, u.s. manufacturing, u.s. consumers, but it also changes the geopolitical landscape. opec simply doesn't have the power that it did 10, 20 years ago. of course, that reduces the pressure placed on the u.s. military to be prepared for some sort of intervention in case things get out of hand. this has a dramatic change in so many different ways. this reminds us of how much technology powers not only business activity, economic activity, but also the political landscape. >> i agree. also, it comes down to jobs as well. manufacturing jobs are booming now, you have lower cheap energy prices that is helping with the manufacturing. so the president really put this on the map, i would say, cheap reliable energy, to be energy
independent from foreign sources of energy is good for the country and that is also rolled up into why the economy is doing so well also. >> me, i get off track a little bit. i'm going to go back to the early 1980s when we had energy crisis after energy crisis. in 1982, predictions of oil at $200 per barrel by the late 1980s were widespread. the listeners have to take that into account, when you have experts, these are experts from the oil industry, experts in any field that are making long-term predictions about the impact of this or that, not to take them all that seriously all the time. neil: well, i mean, my late dad used to say neil, never buy the consensus or you'll be broke. >> you know -- neil: the president is here in pennsylvania, a state he won, flipped into the republican column, now depending on the
poll, you might call them fake news but he's down to your point by double digits. the latest one has him trailing joe biden by 12 points, i think. what do you make of that? why is that happening given the economic turnaround, given the improving energy picture? what's going on? >> the president's big challenge in pennsylvania is explaining to what's left of the coal industry why his promise a few years ago to bring coal back hasn't worked out. i mean, according to his own bureau of labor statistics, there are 837 coal miners in pennsylvania. the rest is mechanicization. there's not going to be another time in history where we have 10,000 pennsylvania coal miners and they are almost radicalized by the fact they have been deceived, as shown by the fact that in pittsburgh and around there, the democrat that has raised the most money is brn ib sanders, not joe biden. neil: is that right? >> that's absolutely right. neil: biden has the biggest advantage in the polls.
as things stand now, the president has an uphill battle in pennsylvania. >> look, i think with the president, you are looking at the economy, you are looking at the jobs situation, and i think that is one of the challenges the democrat opponent is going to have to try to argue why they are going to push for bigger government and more taxes and more spending, when we have a booming economy because of the rollback in regulations and taxes. neil: they're not paying a lot for anything these days, if you think about it. talking about the average american. gas is relatively inexpensive. oil, as you indicated, down, down, down. home prices are hardly going up double digits. so he's got a sanguine environment. yet he's not capitalizing on that. it's still very early but what do you make of that? >> in large part, this is because the president can be his own worst enemy. i think the american public is getting tired of these tweets, the anger contained within these
tweets. they want something more positive and encouraging from their leader. neil: dineen loves the tweets. >> i think the average american gets getting very tired of that. >> i don't think the president can win either way. if he says something, it's always going to be something people are not going to be -- neil: people are haters. >> they could try being honest and just telling people this is a challenge. >> the challenge is the anti-trump media. he is able to get on social media and get his message out no matter how you think it's brash or whatever, he's able to talk about the booming economy because the anti-trump media is not going to talk about that. they're too busy talking about racism. neil: let me ask you about that, actually. because the consensus, you remind me it's joe biden's nomination to lose. do you agree with that? he's the one poll-wise who does the best against the president. but he's had his issues. what do you think? >> at the moment, that's true.
i'm certainly not thrilled with a lot of what joe biden has said, but until other candidates can break away the african-american voters in the equity diddic par democratic pae rallied around joe biden and not only supported him but his support deepened after the second debate, until they can figure out a way to break that stronghold, these are just people debating cabinet positions. neil: that is odd, it actually picked up. he's right about that, with the african americans. he has a lock on that vote. >> we'll see when it happens election time. like you mentioned, it's early. it's all about jobs. so where are the opportunities, especially in these urban communities, that the president is pointing out like baltimore, for example. neil: you never know. by the way, she was one of these who did not routinely dismiss donald trump in 2016 while everyone dismissed him and everything else. a lot more coming up. the dow, 414 points. chip related stocks having a wonderful day, tariff related day, after this.
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neil: every dow stock is up for the time-being. we're up a little more than 400 points here but the attention seems to be on a trade deal that might happen. they could get ahead of themselves. who knows. charles payne knows. charles: an inkling. neil: there you go. charles: i'm going with that. i'm charles payne. this is "making money." stocks are soaring after the u.s. trade representative announced tariffs on certain products will be delayed. remains to be seen if this is relief for the markets and longer term rally resumes. we'll show you how to deal with the crazy swings in the market. president trump warning china is sending troops to the border of hong kong. how will beijing deal with the impact of hong kong and economic data? we have that and so much more on "making money." ♪