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tv   The Intelligence Report With Trish Regan  FOX Business  January 21, 2016 2:00pm-3:01pm EST

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it begins on 8:00 p.m. on fbn. we told you with the debates that since network first went on the air, if it is your money and you your life it matters to us. let other networks go into reruns of shows that were stupid when they were first run. trish regan, to you. trish: you see where i am? i made it all the way to davos too. neil: you, you -- very good. trish: it is snowing. neil: i knew it! not anything i did. trish: i waned to make sure you did not have to pay for all of charlie's tabs yourself. neil: i don't know. looking scary. that is the guy that doesn't go to burger king. trish: neil, thanks so much. bond king, bill gross weighs in on these markets. chaos in the hillary clinton campaign as bernie sanders closes in on new hampshire and iowa. breaking right now, we're watching dramatic comeback on wall street with traders bypassing warning signs from global economy and oil markets all in hope we get more free money from central banks. i'm trish regan, welcome to
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"the intelligence report." european president mario draghi out today signaling more stimulus at ecb's next meeting in march. sending the dow higher. it was up more than 200 points. now up 173. pretty nice considering around this time yesterday we dropped nearly 600 points in the session. the s&p 500 also rebounding off the lowest close in over 20 months. even oil is attempting some gains right now but have we really hit rock bottom? or should investors be embracing for the potential bear market? 289 stocks. 57% of companies traded on s&p 500, they are already there in bear market territory. we're talking about names you know well. names like apple, exxonmobil. jpmorgan chase. they are all beaten down over 20% from recent highs. we've got breaking analysis from market strategist mark hogan and fox news contributor gary kaltbaum.
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good to see both of you guys. gary, i will start with you because i know you're worried, that we're facing some kind of a new credit crisis, similar but different from what we saw in 2008. is this something you think can be avoided with the help of lower rates from central banks like the ecb and potentially here at home? >> you mean negative 2% rates? trish: negative rates if that is what it takes. >> to sit here listen to europe wanting to ease even more after 15 to 20 trillion printed money and 0% and negative rates around the globe i don't know what else they can do. biggest shoe for me, first off i believe we're in bear market for equities. i believe it started with commodities in '14. throughout 2015 sector by sector, stocks by stock topped out. now major indices are catching up. shorter term yesterday we hit a pretty decent low. we'll probably ral i up for a few weeks. i think there is couple more legs down during the bear. the big worry there is too much leverage, too much margin.
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if you look what happens to credit spreads and junk bonds in the last few months, it is telling you a lot of what you need to know. things are looking in trouble. i'm worried going forward. trish: this is why i have art here, to counter you, gary because, art, you tend to be a little more optimistic. you have been. are you still. >> trish, i agree with gary the sky is falling and everything is hopeless. >> nobody said that. trish: i'm in davos. >> all right, gary. now you are. snow looks great on you. i thought you were in new hampshire. long and short of it is, gary is right in a lot of ways, and to certain extent say we're going into bear market doesn't really matter. you pointed out better part of 60% of the stocks in s&p 500 have already gone down 20%. when you think about what bear market means. you don't need to pinpoint index down 20%. we may get there, retraced 15% from peak to trough.
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russell 2000 got there long ago. we're in better part of a correction in six months. trish: you would say we're in bear market? at least correction? >> we've been for a while. energy recession or industrial recession. you know that is two of 10 segments in the s&p 500. does that mean rest of the broader economy needs to be dragged with it. when gary brought up high yield, back out high yield from the junk bond complex things look a whole lot better. one of the drivers here is overreaction to the energy prices being down and how that will transmit to the rest of the economy. trish: the reason why there is this reaction right now, you take out energy and you take out high yield, i don't know if you totally can take those out though, this is the fear, gary. in other words all energy companies went out there and borrowed so much money, mlps, when you think about it. they wanted to expand and wanted to build new infrastructure so they were lent this money by many investors and the fear is they're not going to be able to
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service their debt and so those loans could he default and once you start to he see those loans default, then that is sets in a kind of a panic. this happened with subprime mortgages. they were more widely-held at the time than anybody was really thought initially to believe. >> here's what happens, if this continues in the debt markets for energy companies, all of sudden all of wall street starts to look at other companies that may have issues also. and that's where you get what we call the spreading of the nausea. so that to me is big worry. for me, look, everything matters. i do believe in watching 200 sectors. i do like separating things out. but there is no way you can walk away from the fact that transports are down 30% even though energy stocks have taken a big hit. if that doesn't tell you about trouble in the economy, i don't know what does. we talk about all the other areas. think about it, transport, down 30, were a crash in oil prices.
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that should buffer transports to go higher. instead they're going down in unison. trish: art's not disputing that it's bad. i think the question is we're disputing or two are disputing exactly how long it will be bad. gary seems to think this will go on foreseeable future. art you think -- >> to gary's point, transports have been down, signaling dow theory we need to go much lower than we haven't. transports especially rails, move product around whether coal or oil, that piece of their business is down. if you look at intermodal, things that move finished goods to stores that you and i buy is up. that has been up three weeks in a row. as we look at overall rail traffic the transportation energy products are going to be down. as we look at financial access or financial exposure to energy, when you think about it, in broader sense, if you look at large money center banks, they have 3% exposure, down 15% in fear of that exposure.
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in broad sense i think probably overdone. trish: i hope you're right. art, gary, good to have you here. >> pleasure. trish: where should you be putting your money right now? are we actually facing a systemic debt crisis a la 2008 gary is suggesting? i will put the question to the guy that knows more about debt than anyone perhaps in the world, bond king bill gross. that's coming up later in the hour. stay tuned for that. from volatility on wall street to chaos on the campaign trail, hillary clinton facing steep uphill battle in a state that was supposed to be a sure thing a few months ago. new poll shows bernie sanders with whopping 27-point lead in new hampshire. he is not far behind her in iowa. here is where she is losing support, young people, specifically young woman. losing to sanders by 13 point to voters under 50. who would have be drawn to a 74-year-old man is women and young people?
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ford o'connell, good to see you again. >> good to be here, trish. trish: is she going to lose new hampshire? >> she is going to get thrashed in new hampshire. she is absolutely done in new hampshire. her biggest worry to make sure she doesn't lose iowa and new hampshire so that bernie catches lightning in the bottle. be honest, bernie sanders is doing far better than we ever thought. right now hillary clinton is feeling the bern. trish: go with this for a second. nomiki, humor us for it, if she loses iowa and new hampshire, does it even matter? because she is going to have so many other states, ford? >> you're right. trish: hang on, get ford's response. i know you're going to have a lot to say on this, nomiki. >> you're absolutely, correct, trish, her firewall is minority voters up by 50 points with. if bernie sanders cracks that firewall and keep this momentum going this will be a long slog i promise you.
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trish: nomiki, what do you think? do you think she could lose in both those states and still win the whole thing? >> right now, other than bill clinton worrying about some of the souper tuesday states, you know, hillary clinton campaign is, has two strategies. just what ford said. because there is the african-american, minority firewall which will give her wins in south carolina and nevada and some of the super tuesday states, if she loses iowa and new hampshire, it is okay, it has never been done in history, modern history for democrats. she would win. ultimately, the thing that you have to look at to be concerned about is, if the momentum of iowa and new hampshire wins for bernie sanders, would play out in a state like south carolina where he actually has had a lot of momentum. he has a very strong ground game in south carolina. the question whether you move quickly enough, organize the support and pull some of that african-american support from south carolina and latino support from nevada. trish: we looked in a report
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today, guys, bill clinton is starting to get pretty nervous. started calling head of the campaign on daily basis what is your strategy for winner-take-all states? nomiki, what is it that president obama did right back in, you know, eight years ago that she's not getting perhaps even now? >> i think there's a few issues here. i mean the thing that, president obama was the perfect candidate, perfect time in history in 2008 when we were coming out of eight years of bush policies and people really wanted something new and fresh and he was that. he is still, if you were to run today, even running today never having been elected before he would probably still do better because he had the obama coalition. >> let me add on to that, nomiki. here's the deal. barack obama was feeling. he had populace feeling and minority voters loved him. he was all about the heart, not about the head. hillary clinton is not a great candidate. she is saying you will lose the white house if you elect anyone from me.
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that is logical argument. guess what, elections are about emotions, not logic. >> absolutely. trish: i think so much about this whole process, like it or not who do you trust, who do you feel like you can relate to? for whatever reason, nomiki, i was there in new hampshire, shocked at number of bern nye signs throughout the state. he has been doing pretty well in iowa as well. wonder if it is not coming down to policies. here is paycheck, as much as we possibly can. they are not thinking about his socialist policies, saying i kind of like the guy. right, ford? >> they are saying that. but understand something else. iowa is 893% white. -- 893% white. new hampshire is 94% white.
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where bernie sanders is trashing clinton is white voters. why bernie sanders is doing so well. and that's why hillary clinton, when you start throwing logic, i'm the most electable out there an republicans will run hammer and sickle ad against bernie sanders you're running out of straws and throwing things up against the wall. trish: i will see you guys in just a short moment. do not go anywhere. east coast bracing here for quite a major winter storm after an inch, just an inch of snow in washington had the city absolutely paralyzed. 163 accidents. traffic jams for hours. the storm hasn't even started for real yet. find out how bad it is going to get for the whole east coast coming up. plus protests against academy awards for being too white is getting stronger. reports that the academy will make changes to bring more diversity to the awards but do we really need affirmative
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action in hollywood? stay with me. you pay your car insurance
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to learn more. switch to liberty mutual and you could save up to $509. call liberty mutual for a free quote today at see car insurance in a whole new light. liberty mutual insurance. trish: today washington, d.c. declaring a state of emergency ahead of expected blizzard. ordering public schools closed. you're looking at snow that paralyzed capitol, catching evening commuters by surprise and causing nearly 200 accidents. turning half hour commutes into more than four-hour ordeals. even president obama got caught in the traffic. a drive that takes him 25 minutes in his motorcade, actually took more than an hour. this whole storm is getting started. rick reichmuth at the fox
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weather enter what d.c. and rest of the country can expect. how is it looking for us? >> get inch of snow causes that kind of problems. likely get foot 1/2 to two feet of snow, one of the biggest problems a lot of folks ever seen in that area. will cause big problems. fortunately starts friday evening into saturday. people can stay off the roads on saturday, that will be good news. there is severe side for the storm. severe weather across parts of texas and louisiana. tornado watch into 7:00 p.m. will move across southeast and tomorrow potentially severe weather across parts of florida. anybody to the south you're on severe side. north we're watching big ice storm, areas of north carolina, south carolina and north georgia mountains looking significant icing. back across kentucky and tennessee. worst is here and get snow on top of that. that likely causes a lot of power outages.
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look how vast this area, winter storm warnings are across parts of the deep south and across ohio valley and mid-atlantic. winter storm warnings in effect for washington, d.c. and baltimore and watches up towards long island. a big swath gets a lot of this and a lot of beach erosion. happens same time as full moon. very high astronomical tides on top of a nor'easter. record crests and flooding and bit of a storm surge. snowfall totals, bull's-eye along d.c. and parts of virginia and up towards new york city. take a look at this, we'll see spots over two feet of snow towards washington, d.c. trish: my goodness. at long as we get a little bit here. my kids are so excited. they keep saying when is the snow going to come? >> we'll get some but i don't think it will be blockbuster it in new york. trish: thanks, rick.
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do we need affirmative action in hollywood? the academy awards zoom to think so. why should race play a role in determining what films need to be nominated?
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trish: add one more hollywood star to actor boycott, actor will smith is following his wife's lead and will boycott the ceremony over lack of diversity amongst the nominees. >> the industry reflects america, it reflect as series of challenges that we are having in our country at the moment. there's a regressive slide towards separatism, towards racial and religious disharmony, and that's not the hollywood that i want to leave behind. trish: all right. now reports today that the academy will announce changes as early as next week to make the
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nominees more diverse. but does hollywood actually need what this is essentially, affirmative action? chief political correspondent at conservative review and fox news contributor deneen borelli joins me with her perspective. >> hi, trish. trish: what do you think? is this essentially affirmative action if you say all right we want to make sure we have diverse panel of nominees and what we do that, we'll make sure we've got three whites and two blacks and one asian? is that what this is? >> well it is ridiculous. whatever happened to content of character and awarding someone based on their skills really what they have to bring to the table? it is all about talent. also very competitive environment all around and not just in acting. but if they bring in those standards, simply as you mentioned, affirmative action, that will be special treatment. if i'm an actress, i don't want to be thinking, gee, i've been awarded this great award. was it because of my great talent and my skills?
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was it because of my skin color? trish: that is the problem, right? if you're, if you're an african-american and you suddenly then get nominated you will start thinking to yourself, did i get nominated because i deserved nomination? or did i get nomination because they're filling some quota? >> exactly. they're saying what will smith, his wife, spike lee, all of sudden liberal hollywood is racist because they're not being recognized? i also want to point out the amount of money these individuals making. will smith is estimated making 240 to $250 million. >> the reason for that is, this guy puts on movies that america wants to go and see. >> exactly. trish: he has had a lot of action films done incredibly well at box office. he is smart businessman. >> yeah. trish: he has been nominated twice before i understand. >> i believe so. there are plenty of black actors have been nominated and won. sidney poitier.
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denzel washington, halle berry. to invoke the race card i think it is sour grapes. trish: do you think his wife was testing waters when she put this out there initially? now he is out on good morning america carrying torch. >> there is trial balloon. she made the comments and he is backing her. we have this big controversy. trish: spike lee, doesn't surprise me. by the way he is going to the knicks game, maybe you need some white affirmative action because floor of a knicks game. >> sure. trish: he has lead this charge for some time in somewhat angry way. >> yes. >> well, 76% of the nba basketball players are black. i don't hear white americans complaining about that. spike lee has courtside seats all the time. always jumping up and down. because of his fame and fortune he is able to afford those seats. maybe question whether he is racist or not because he made a comment on social media he is not supporting the oscars
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because of the, because it is lilly white. so i mean, i find that concerning. trish: the basketball thing, i'm a capitalist at heart, right? >> sure. trish: you just want to win the game so you will put the best players out there. >> right. trish: what is tricky about the oscars is that this is art. it's subjective. >> correct. trish: i do wonder, if the answer is not to say, okay, we're going to nominate x number of people from these various diverse backgrounds. maybe you need a more all encompassing body from the academy awards itself. i don't know actually makes it up. >> sure. trish: what if you had more women, more minorities on nominating committee? maybe that might do a little bit more? affirmative action type system worry me. >> that is concerning and it is another form of prejudice as well. the president of the academy is black, black female. go figure. trish: go figure. deneen, always great to get your
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perspective. coming up everyone, battle between donald trump and ted cruz is heating up. it is getting nasty. they're going after each other. could that pave the way for another candidate to emerge above the fray? if so, who is best positioned? we'll debate all of that next. see you here in two. we're the hottest young company around but if we want to keep the soda pop flowing we need fresh ideas! >>got it. we slow, we die. >>what about cashing out? no! i'm trying to build something here. >>how about using fedex ground for shipping?
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trish: all right. count down's on, 11 days until the iowa caucuses, and the front
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runners are stepping up attacks on each other. donald trump continuing his attacks on ted cruz's citizenship. >> he was actually a canadian citizen, if you think about this, he was a canadian citizen while he was a united states senator. he was a joint citizen of the united states and canada. but how do you do that? and he said he didn't know about it. trish: he also brought up undisclosed campaign loans that ted cruz took from citibank and from goldman sachs while cruz is trying to convince voters they need to doubt trump's credibility. joining me with the very latest on all of this, blake burman. blake. >> reporter: hi there, trish. yeah, so ted cruz, he is going all in now on trying to paint donald trump as not only a former democratic sympathizer, but also a part of the current republican establishment. this comes after the iowa governor, terry branstad, said cruz would be devastating for iowa, along with the sudden
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reemergence of one bob dole. the former presidential candidate said of cruz in a new york times article that was published today, and i'm quoting here: i question his allegiance, speaking of cruz, to the party. i don't know how often you've heard him say the word "republican." not very often. dole goes on to say i don't know how he's going to deal with congress, nobody likes him. here was cruz in new hampshire yesterday trying to strip the outsider label from trump. >> we're saying the washington establishment abandoning marco rubio and unifying behind donald trump. and we're seeing conservatives coming together and unifying behind our campaign. >> reporter: trish, cruz is in a question and answer session right now in new hampshire, i was just listening to it. he went back to the well on this very issue, gave basically that sound bite that you heard there word for word to the audience. trump embraced that article by posting it to his social media accounts, but complicating all
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of this for cruz is trump was just endorsed, as we know, by sarah palin, a tea party favorite. still the argument cruz is trying to make. trish: thank you so much, blake. so could this fighting between front rubbers there -- front runners there, could it actually clear the way for someone else? john kasich. he's overtaking cruz in the granite state, and he's just piling up these endorsements. could kasich emerge as a new front runner? ford and amiki are back with me. ford, i gotta tell you, i was spending time up there this summer, and people were talking about kasich. he's got sort of a fiscal conservativism type approach to things, a little bit more socially liberal, and that has a lot of appeal, i've got to say, in that state. do you think he could wind up coming up second? >> well, he may come up second, but i'm going to tell you right now, basically, donald trump is going to win new hampshire. i'm going to tell you something else.
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if ted cruz does not win iowa, donald trump's going to be in the catbird seat, and he's going to want to run all the way to the table. some of the knocks ted cruz has on donald trump, he's missing his whole appeal. not an ideological conservative. what you have to prove if you want to knock trump down a peg, you have to say he's not a friend of the little man. he is for having the government take your property away with no questions asked. john kasich or marco rubio may strike gold in new new hampshiry coming in second, but right now this is all about cruz and trump and whether or not trump can eke out a win in iowa. trish: amiki, what would you be advising, and i know you're a democratic strategist, is there something to what ford's saying? how do you go after trump if you're cruz? >> my god, ford and i should start a consulting firm together -- [laughter] i absolutely agree with him on two things today. he's absolutely right. look at what bob dole did, and i think that could backfire on
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donald trump, because bob dole is, like, the most establishment republican. so for him to condemn ted cruz, and ted cruz is running as being anti-establishment even though he is a man of washington. so on one hand, you know, if ted cruz can get more criticism from the center of the republican party and establishment, that works to his advantage. at the same time, he's the only republican candidate thus far that's been able to crack at donald trump. and it's been working in iowa. and i think a lot of that is because ted cruz has been focusing on the people, meeting with people and -- >> nomiki, let me make one point about this because i agree with you 100%. remember, iowa's 57% evangelical. this is ted cruz's heyday. >> exactly. >> insert sarah palin. what is her job? to humanize donald trump and say he's not an elitist, a friend to the little man and a family man. and then you add in this whole situation with, guess what, vets are treated worse than illegal immigrants, you are now --
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donald trump is actually solidifying his one weakness. if he wins iowa, he's -- trish: by the way, guys, i want to share with you some sound from the campaign trail, sarah palin talking about her son's unfortunate circumstance there, you know, getting caught with a weapon, drunk with a weapon. apparently abusing his girlfriend up there in alaska. but she's actually said this is a result of the way he's been treated as a vet. listen to her here. >> when my own son is going through what he goes through coming back, i can certainly relate with other families who kind of feel these ramifications of some ptsd and some, some of the woundedness that our soldiers do return with. and it makes me realize more than ever it is now or never for the sake of america's finest, that we have that commander in chief who will respect them! [cheers and applause] trish: you know, when i first
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heard that and i saw that she was going after the president for her son's issues, i thought, oh -- and then i thought about it some. and you think about what these soldiers do face and the lack of respect, it seems, from the the administration that they are confronted with, i think she might be on to something there, ford. if you can really tap into this frustration that i think a lot of vets feel, that might also be a very, very much a selling point for trump. what to you say? >> look, i say as horrible as track palin's situation is, this is political gold for donald trump because, remember, make america great is a feeling just like feeling the burn is a feeling for bernie sanders. and with sarah palin sitting there who's very good with evangelicals and tea party folks, she is there to basically shore up any questions, any fence sitters have between trump
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and cruz. trish: nomiki, one thing he has done so well throughout this entire campaign, he's a billionaire. he has more money than mitt romney, he has more money than any candidate that's ever run before. and yet he doesn't seem like the billionaire. or maybe he seems like the billionaire you want to be. how do you paint him as an elitist when he kind of seems like anything but? >> well, it's all illusion for donald trump. even what sarah palin said, that was master political spin. she took it off of an issue about domestic violence, and she spun it away and made it about the president which is what donald trump is running against right now. he is running against hillary clinton's elitist policies and the president being out of touch, all the things that he's saying, to take the eye off of what his issues are which are he is a billionaire. he is somebody that has a questionable reputation in the business community in new york.
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he is somebody who has been a democrat in the past and has given to democratic causes. he is out of touch with the everyday day guy, but he's been able to message it. it's all a message machine. [inaudible conversations] trish: i don't know if he's as out of touch if you think. >> let's say hypothetically you had a hillary clinton/donald trump general election match-up. how is she the friend of the middleman? >> she comes from the middle class. at least she knows who the middle class is, what student loans are. >> she doesn't want to help the little man, that's the whole thing. trish: it's that feeling, right? she's got that sort of elite-type feeling around her whereas he just seems like kind of an average guy who's worked hard, and he's, you know, he embodies -- >> inherited a billion dollars from his father. trish: all right, guys, always good to see you. >> thank you. trish: coming up next, did you know up until this week in new jersey it was actually illegal to shovel your neighbor's driveway without a
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government-issued license? or that in many states you need a license -- which is really government permission -- to do something like braid someone's hair or even to shampoo it? it's government gone wild, and that is next. ♪ ♪ in new york state, we believe tomorrow starts today. all across the state the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. like in the hudson valley, with world class biotech. and on long island, where great universities are creating next generation technologies. let us help grow your company's tomorrow, today at
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marcoto criticize him fornfair missing votes. "but i am going to miss votes, i'm running for president." but he's been missing votes for a long time. "one third of all of his missed votes in 2015 were missed before he announced he was running for president." over the last three years, marco rubio has missed more votes... than any other senator. washington politician marco rubio. doesn't show up for work, but wants a promotion? right to rise usa is responsible for the content of this message. ♪ ♪ trish: how about this? some green on the screen for a
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change, right? let's check these markets. the dow up 136 points. not quite as good as it had been earlier in the session, but you know after yesterday, i think we'll all take it, right? the s&p trading up about 12 and the nasdaq up 14. oil today also trading higher, what do you know? $29.53 a barrel, that's the close there on oil. just happened a few short moments ago. we'll see whether or not it can hang onto this level. shares of union pacific slumping after the railroad reported a drop in the amount of freight hauled and weaker earnings than analysts had anticipated. and the number of people seeking unemployment benefits rising last week to the highest level we have seen since july. however, the number, 293,000, is still at historically low levels. "the intelligence report" is going to be right back with bill gross' take on all this market volatility and what you need to know.
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trish: okay. we have got a big snowstorm coming. i'm pretty excited about it. i told you already, my three little kids are pretty excited about it, and i'm betting there are some teenagers in new jersey that are pretty excited about it, because guess what? for the first time, they're going to be able to make some money shoveling snow. this week ahead of the big storm new jersey went out on a limb here and repealed a law that had banned the shoveling of snow for money without a license. can you believe there was
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actually a law that required a license for this? the whole license thing, it came into question because a couple of entrepreneurial teenagers went door to door last year offering to shovel people's driveways and their sidewalks for a fee. i mean, hey, that's what you do as a kid, right? well, not in new jersey. police stopped the kids and told them they needed to get a $450 license first. you know, this is what you call government gone wild. occupational licensing, it hurts entrepreneurship. it hurts the little guy. a lot of states have these ridiculous rules. you know in tennessee if you want to shampoo hair -- i'm not even talking about cutting hair, i'm just talking about shampooing hair -- it's going to require 70 days of training you have to pay for, a -- sorry -- $140 fee, two exams and a minimum age of 16. other examples in other states you need a license to arrange flowers as a florist, give a
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massage as a masseuse, assist people as a funeral attendant or fix someone's furniture as an upholsterer. in the 1950s only 1 in 20 u.s. workers needed a government permission slip -- we're calling it a permission slip, because that's what it is -- to pursue an occupation. today it's almost one in three. how does this happen? you know, finding a job or creating new jobs should not require a permission slip from the government. as millions of americans struggle right now to find productive work, one of the quickest ways legislators can help them is to get out of their way, get rid of all these regulations that force job seekers and would-be entrepreneurs to spend their precious time and their precious money earning a license instead of actually working. that's today's intel for you. coming up, we have the guy who understands debt markets better than anyone, bond king bill gross. we're going to get his advice on
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where it's best to invest right now. that's coming up, bill gross, right after this, everyone. ♪ ♪ you pay your car insurance
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call liberty mutual for a free quote today at see car insurance in a whole new light. liberty mutual insurance. trish: with many pig name stocks plunging -- big name stocks plunging and spheres of a systemic -- fears of a systemic debt crisis driven by investors' once insatiable appetite for yield, is there something bigger and more problematic going on than just a selloff? well, the guy who knows more than anyone about debt markets is legendary bond investor bill gross, janus global bond fund, and he is here now with a look at how you can best position yourself. bill, welcome. >> hey, trish. good to be here. trish: you know, i've got to say, it's a really tough market right now, but i know your fund
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has beaten about 80% of your competitors since you started. first of all, a big congratulations to you on that. >> hey, thank you. trish: and second of all, we want to know how you've done it. >> well, we've done it by lots of research, lots of hard work and being conservative. you know, obviously, in the past several weeks, in the past several months markets are moving down as opposed to up, and it's just what we expected. we basically were looking at a highly levered global economy that was subject to, you know, pockets of downdrafting in terms of prices once the federal reserve started to raise interest rates, and we're seeing just that. and so it's a conservative fund. it isn't intended to yield 5 or 10%, it's intended to, basically, save your money and to earn a modest return, and that's what it's doing can. trish: you know, bill, over the last couple of years you've repeatedly told me that you were worried about the dangers of
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central bank planning, that you just couldn't leave the spig got on forever, and there were a lot of unintended consequences for leaving the interest rates too low for too long. do you think the chickens are coming home to roost right now? >> they are. and there are negative aspects to low interest rates as opposed to positives. the negatives, basically, are that savers, you know, your viewers who have invested their deposits in banks for the last six or seven years at basically 0%, you know, basically are getting shortchanged. and that extends not only to individual savers, but to insurance companies, pension funds and other institutions that you need higher interest rates. so, yes, the chickens are coming home to roost, so to speak. trish: how big a deal could this be? i mean, we've had some people on this show, and i want to get your perspective on this, that
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are quite concerned because the feeling is the fed is out of ammunition right now. our economy is still in lousy shape, and there's all this high-yield junk out there that could potentially dedefault. i mean, you think about mlps and some of the loans that maybe have been made to chinese companies, some of the sovereign debt that exists out there. what's your view of the credit quality situation for some of these? >> sure. those are excellent points. and i would say from 30,000 feet that there's simply too much supply relative to demand in the global economy. not just in oil, but in most commodities and related investment in producing them. you know, that supply has been fostered, as we mentioned, by years of 0% interest rates and quantitative easing. at the moment, you know, policymakers -- which include central bankers -- they have no conceptual model to explain why 0 president interest rates -- 0%
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interest rates produce relatively little, if any, growth. they look to the job market and they fear inflation two or three years forward, yet financial markets expect much less than they do. so, you know, i think part of the problem is monetary policy has reached sort of a dead end. i think central bankers are following the wrong road map and are reluctant to call home for directions. trish: are you worried about a credit crisis, a debt crisis similar to what we saw -- different from, but similar to 2008? at all? >> well, we see that in certain pockets around the globe. and you see a potential crisis when you have too much debt. in the united states, debt has been reduced in the terms of household debt. a lot of mortgage debt has come down, some of it as a result of defaulting. but in any case, the homeowner, the u.s. consumer is in a relatively good position with low interest rates and low debt, so i don't worry about that. there are some countries,
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however, that have taken on a lot of debt. you mentioned it a few minutes ago. you know, brazil, for example, in dollar-denominated terms. as the dollar appreciates and their currency goes down, their liabilities go higher and higher and higher. so there are pockets around the world where there's a lot of debt, and it's dollar-denominated, and we're seeing some of that this terms of the problem areas -- in terms of the problem areas in markets. trish: does it matter to us, you know, if brazil's struggling or even china for that matter? how much should it matter to u.s. investors? >> oh, it should matter a lot because the markets these days and these years, you know, not 20 years ago, but these days the markets are basically interlinked and interconnected. and they're relatively highly levered, too, meaning hedge funds, meaning, you know, investors that have borrowed money in order to take higher yielding positions. as prices come down, this isn't
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hard to explain and it's relatively easy to understand, as prices come down there are margin calls and levered investors basically have to sell things in order to meet margin. sometimes they even sell high quality investments because those are the easiest things to sell. and so -- treasure trish and that's what we're seeing. >> high debt basically leads to a downdraft when interest rates start going up. trish: okay to. so if you're one of those worried investors right now that is scared about this scenario you're playing out, i just have 30 seconds, but what would you tell them to do? >> well, you've got to be safe, and you've got to buy assets at a discount. i like closed-in folks where you can buy assets at 85-90 cents on the dollar. bbm is the example, it yields about 7-8%. does that mean the prices go down? no, but it's been relatively secure -- trish: bill, thank you so much. good to have you here, sir, as
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always. >> thank you. trish: we'll be right back. ♪
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>> neil and i have have been fun with the backgrounds pretending we're in davos but let's go to the woman there right now. liz over to you. liz: yeah, come on, trish. we'd love to have you and neil next time. okay?, listen, i can smile because the bulls are charging ahead as the bears retreat behind oil. the dow jones industrial average jumping about 156 points right this second. what a far difference picture from this exact time yesterday. here's what remains the same, though. oil is still driving these markets. briefly rising higher than $30 per barrel. crude $29.53 slightly above that right now at $29.78 we see it's up about 4.2%. that's the biggest gain since october. we are live in davos,


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