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tv   Varney Company  FOX Business  February 26, 2019 9:00am-12:00pm EST

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it. as you know, the courts are most likely going to intervene with this one. the president landing in hanoi, vietnam for his upcoming summit with kim jong-un. maria: thanks so much. great show today. thank you, everybody. have a great day. seize the day. right to "varney & company" we go. stuart, take it away. stuart: good morning, maria. good morning, everyone. air force one lands in vietnam. president trump prepares for tomorrow's summit with north korea's kim jong-un. we want him to get rid of his nukes. we want proof that he started the process. in return, our president will reportedly guarantee that he stays in power and that north korea could become prosperous like vietnam. tesla's in the news again and it's not good news for stockholders. the authorities have asked a federal court to hold ceo elon musk in contempt. he's not supposed to issue tweets without preapproval. the s.e.c. says that's what he did last week when he tweeted about producing 500,000 cars a year this year, only to retreat
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on that number later. the stock is down eight bucks. so is home depot. disappointing profits and same store sales. it's a big drop for the stock, down over 3%. it's the same story with caterpillar. it received not one, but two downgrades. that stock is sinking. now both home depot and caterpillar are both dow stocks, and their losses take about 70 points off the dow industrial average. so bear that in mind when you look at an expected decline at the opening bell of the dow of, what, about 120 odd points. bear in mind, home depot and caterpillar account for 70 of those down points. all right, everyone. i went out on a limb yesterday suggesting we would hit a new high for the dow this week. please eremember, sports fans, t is only tuesday. stay there, everyone. just wait until you see the price tag on the green new deal. it is eye-watering. "varney & company" is about to begin.
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stuart: okay. the president aboard air force one. he has landed in hanoi. i think we have a shot of the plane. i believe he's about to descend the stairway there. we haven't got there yet but he's landed. he is in hanoi, north vietnam. there's no such thing as north vietnam. it is vietnam. apologies to one and all. mark lotta is with us this morning. reportedly, we will dangle in front of kim jong-un the promise that you stay in power and by the way, we can make korea like vietnam. in return, we want to be sure he's denuclearizing. that's quite a bargain, isn't it? >> it's also something china wants. they do not want necessarily the current regime out of north korea. they want that buffer zone with
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freedom and a prosperous economy of south korea, but they don't want the threat of nuclear missiles, they don't want the threat of refugees streaming from north korea into china should there be any kind of conflict. this is in the north koreans' interests. the world has spoken. the president now is going to reiterate that claim and they could be like a vietnam, who was not that long ago on the wrong side of the united states foreign policy and now look at them prospering as we have seen in south korea and so many other places. stuart: the democrats think he will give away the store by making easy giveaways to -- just for the sake of a good-looking summit. >> i think that's laughable because when you look at all of what the president of both parties have done, they have been played by north korea and kim jong-un and his father and grandfather over the course of many decades. the sanctions that president trump have put in place remain in place. he has not lightened, has not lessened those sanctions. until we see clear demonstratable and irreversible
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steps toward denuclearization. stuart: that's what we want from this summit, isn't it. we want to see that he's doing something. >> absolutely. he's already made the commitment to do it. we do appreciate the fact there have been no missile tests in two years, no bomb testing in two years. i was over there two years ago with the vice president when we were at the height of that rhetorical rocketman exchange and we were sending the strong message. if you look where we have come in the last two years, they actually launched a missile over japan while air force two with me aboard and the vice president were on our way from alaska to south korea. those things are not happening. we have come a long way. this is going to be a long process. stuart: actually, it is a process, isn't it. we think of one summit, two summits, i don't know about a third, fourth or fifth but it's certainly a process which doesn't end after the meeting tomorrow. >> absolutely not. it will be a continuation of what they started and what we need to see moving forward. one thing is absolutely clear. this president is not going to
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reduce the sanctions, give away the farm, so to speak, over some meaningless gesture where they are probably doing the exact opposite behind the scenes. he has his eyes wide open and is going to go into these negotiations that way. stuart: i see. the honor guard has formed under the gangway there and the president will be appearing momentarily. the president has to be the first person off the plane. that's protocol. that's how it works. what kind of an entourage is he taking with him? i ask the question because i remember, i think it was bill clinton, president clinton, when he went to beijing, he took with him an army of handlers and people and i think he booked up every rental car in beijing for a year or something. is our president trump, is he making the same splash when he goes to vietnam? >> there are certain things i can say that happen regardless of who the president is, and they will always come with a massive security detail, they will come with all of the necessary support that they need because regardless of where he is in the world, he is still the
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president of the united states. but he will have his key advisers with him. air force one is a magnificent plane and does carry quite a large entourage but i can also tell you there have been people on the ground for many, many weeks getting ready for this event and so there's no question that this president will be well represented and well protected while he's overseas. ashley: do they fly the beast in or, you know, the armored car? >> absolutely. ashley: that's on the plane? >> it actually goes out ahead of time. stuart: there are several planes. >> i will leave it at that. stuart: i wish we could show the tape. i know we cannot. when kim jong-un arrived, at his hotel -- liz: by train. stuart: by train, it was like 60 hours, i think, to get there. liz: just like his father. stuart: bulletproof train. he's met by an entourage of security people.
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he gets off the train and there are a dozen security guards running alongside the limo. ashley: quite a sight. stuart: yes, it was. now he's got the top six floors of the hotel they're staying at in hanoi. susan: the media center has to be relocated because he is staying at the hotel where the media center originally was. he's causing some traffic congestion. stuart: by the way, michael balboni is with us, former new york director of homeland security, and i don't think you believe we are going to get the north koreans to denuclearize, do you? >> i just don't see it in the cards. if you just take a look at common sense, this is not very sophisticated foreign policy. here's a guy that has spent his whole career basically tortur g torturing, imprisoning, doing all these different things to his public, he stays in power as a result of a nuclear deterrence. he has a sit-down with the president of the united states because he has a nuclear capability or is developing one, and so this is not a situation
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that he would say okay, no problem, because i know there's going to be a peaceful future for me. there's no chalet in switzerland awaiting this guy when he decides to retire. he's got so many enemies out there. the only way he stays in power is to have this nuclear deterrence. stuart: unless we dangle in front of him prosperity and security for him to stay in power. that's quite a deal, isn't it? >> but it doesn't effectuate his position within his own country. he has a lot of people who really -- ashley: here he comes. stuart: there we go. the president of the united states appearing at the top of the gangway there. he makes the gesture on several sid sides. down he comes, down the steps he comes on air force one. there's an honor guard all in white uniforms. i saw them arrive on either side. now, protocol, marc, who has to greet him at the bottom? i don't know, i'm sure it's written down somewhere who it is that's meeting him.
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would it have to be the president of vietnam or a senior official there, or america's ambassador? >> it varies depending, and it's the country's option. if the president, the prime minister would like to do that, i believe if i'm not mistaken, i'm going off memory here, that the president is actually supposed to be meeting with the leader of vietnam later today before he meets with chairman -- with the chairman, so this might be a u.s. ambassador or someone from that level. it might be, obviously there's a number of people who could be there. i have not seen the list of who are the greeters. stuart: michael, i'm reading between the lines of what you're saying here. you are the former director of homeland security new york, et cetera, et cetera. do you think this is a cosmetic summit? >> well, let's take a look at what happened since the last summit. they said we have reached a deal, a lot of things were supposed to happen. they haven't happened. but he hasn't done any testing. so when he's not firing missiles and testing, that is a really
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good thing for not only the united states but for korea, south korea and for china, it takes the pressure off of that region itself. so maybe there's a stasis they can get to where he retains some capability but yet doesn't get aggressive. but again, the only reason why he's relevant is because he has this nuclear capability. stuart: you don't think he will ever give it up? >> i just don't see any reason. look at saddam hussein, right? stuart: hold on a second. you have your point of view. i've got marc with me. you think he will give up his nukes? >> i think it will be a difficult lift for many of the reasons he identified, but i think you can, if you can guarantee that security and the prosperity, i think there is a long-term hope there. i'm not sure if he will ever give all of them up but the key is, we have been looking at this over the last 30 plus years, america has had the advantage. they had the bomb but no way to deliver it. up until the beginning of this administration, very late in the
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previous administration, did they have the capability to do both. that's what pushed this issue to the point where the u.s. had to step in, because obviously, you know, having that capability without being able to deliver it anywhere was fairly easy to contain. stuart: tell me about china. why would china want north korea to keep its nukes? they are on the very doorstep of china itself. >> i think that's one of the reasons why you saw under president trump, china quickly get on board and while they used to always say the right things, and they are still not quite complying as much as we would like them to be, but they really sent a strong message to the north koreans to say, because they did become an outside threat, not just a threat with internally, they became an outside threat to the world that china was going to have to deal with. they did not want it on their doorstep. they were the key to getting this to the table. ashley: on that note, china has asked them to back down. at the same time, it's a wonderful distraction to have the world focusing on north korea.
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while china goes and creates its own military islands, where it's basically coming in and trying to take over the sea lanes in the south china sea. so if everybody is focused on korea and china can go and do its trade issues, right now, a war would be devastating for the region and an economic war would be devastating for china right now. that's really what china wants to play. if you want to go focus on north korea, okay, go ahead. but for us, we need to have normalized relationships. stuart: okay. interesting situation developing. it's nighttime in hanoi, where the president has just arrived. he's off the plane. i believe he's in -- i think it's called the beast, isn't it, the presidential limousine. got all kinds of good things on it. that's now driving off, i guess, into the center of hanoi and wherever the president happens to be staying. okay. that just happened. it's all in progress. let me take you to your money very briefly. we are looking at an opening bell drop for the dow industrials of about 100 points. much of that, though, is taken
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up by home depot and caterpillar, both of which are dow stocks and down sharply. now, that's where we are going to open, on the down side, this morning. we just received the latest reading on home prices. susan, what have you got? susan: not good. we are looking at the weakest growth since november 2014 year over year. again, pointing to weaker home prices and really housing in america and also, month on month, a drop in december from november, so you are down .2% and this owes to higher interest rates and affordability. las vegas, phoenix, atlanta reported the highest year over year gains among the 20 cities they track and this follows existing home sales' three-year low. housing is weak which contributes to about a fifth of the u.s. economy. stuart: housing starts, those numbers this morning down 11%. so there's clear weakness in the housing market. can we say that? i think we can. no recovery yet. let's look at home depot. it is a dow component, yes, it is. revenue, same store sales and
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profit all fell short. come on in, market watcher jason rothman. dare i say that home depot is an economic indicator and today's report is a negative for the economy? can i say that? >> you could also say the reverse, right, that the indicator obviously leads home depot, it's two sides of the same coin. i don't really -- here's what i think about home depot. i think the fears are too high. listen, stocks were at all-time highs, the highest they have ever been in recorded history, several months ago. a pullback is natural. home depot, lest people forget, had record revenues and their guidance, really, it's not that their earnings and revenue fell short of analyst expectations this time. the reason why the stock is down is that guidance was underwhelming. even with all that said, home depot is a growing company. it's just the growth rate in the
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future is a little bit less than expected. i don't see the bottom falling out for this stock. stuart: let me move on to tesla. the s.e.c. has asked a federal court to hold elon musk in contempt over tweets that he made last week, discussing the company's projected production volumes. jason, we often call tesla a teflon stock. teflon tesla. that's what we often say. does that apply this time, where a court could hold them in contempt? >> yeah, you know, here's my opinion on tesla. there's many prongs to a bearish, a neutral to even bearish case against tesla. one of the prongs is the instability of the leadership. obviously, nobody's going to say that elon musk is not a brilliant entrepreneur. that is not what this is about. it's really about the instability coming from the top. elon musk has said i do not like the s.e.c., let me be clear about that. elon musk, even though the
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500,000 cars was maybe accurate, even though he did mention it officially, he's not supposed to do certain things without prior approval. he's doing that, he's like kind of getting more and more of the dunce cap from the s.e.c. and tesla investors need to consider that. i don't own tesla because i would lose sleep at night if i had a large position. what's he going to do, make a tweet and the stock goes down 20%? stuart: good point. talk about a dunce. i went out on a limb yesterday and said -- >> i was a dunce one time. stuart: maybe i'm a big one this week. i said at the end of this week the dow industrials would hit a new all-time high above 26,828. go ahead. tell me how wrong i am. you're wrong. >> we have rallied over 400 points in the s&p 500 since december 24th. it's okay, stuart, that you may be incorrect if we don't break these high levels that you are anticipating. it doesn't mean anything across
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the broader market. the s&p was at 2300 something. the thing is at 2800 in two months. times have been worse than a 400 point rally in 60 days. stuart: you were very gentle with me. i really appreciate that. you could have called me all kinds of names. you didn't. you're a good man. i don't care what they say. jason, come back soon. >> who said anything different? stuart: check futures one more time. we will be down roughly 100 points. some of that loss made up for by home depot and caterpillar. now, coming up for you, the latest out of venezuela. jorge ramos detained by the maduro regime after showing the disputing president graphic video of people picking through garbage to feed themselves. full details coming up for you. this is loma linda, a place with one of the highest life expectancies
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in the country. you see so many people walking around here in their hundreds. so how do you stay financially well for all those extra years? well, you have to start planning as early as possible. we all need to plan, for 18 years or more, of retirement. i don't have a whole lot saved up, but i'm working on it now. i will do whatever i need to do. plan your financial life with prudential. bring your challenges.
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stuart: all right. one more check of futures, with about eight, nine minutes to go before the opening bell rings. we'll be down about 100, eight, nine minutes from now. how about macy's. they came in with better profits and i believe the stock is up ten cents. not much indeed. here's an interesting story. univision's jorge ramos and his
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team have been released after being detained in venezuela. take me through it. ashley: began an interview with maduro. ramos and his crew of five. and he didn't like the line of questioning, maduro. he was asked about lack of democracy, the torture of political prisoners, the humanitarian crisis and then that was followed up with a video that was shown to maduro of kids rifling through garbage trying to find something to eat. he got very upset, shut down the interview about 15 minutes in, and took ramos and his crew, put them in a dark room for two and a half hours. took all their equipment, their phones and everything. a little tense. they were still in the palace where this interview was taking place. he was held. i remember last night getting these tweets, it went out around the world. he was eventually released. stuart: because president trump had said you harm americans and you will be held accountable? ashley: exactly right. he's an american citizen. stuart: a big more on venezuela. vice president pence told fbn's trish regan that all options are still on the table.
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roll that tape, please. >> president trump has made it clear that while we hope for a peaceful transition, we hope diplomatic and economic pressure and the voice of nations around the world will result in a peaceful transition. all options are on the table. stuart: all right. marc, all options are on the table. does that mean, putting you in a rather tricky position here, does that mean that if they keep shooting their own people, by the dozen or by the score, we have the opportunity and the possibility of moving in militarily? >> i don't want to get ahead of the president on any decision he may or may not make, but i think the vice president's message yesterday to the dictator and former leader of venezuela is do not test the resolve of the united states of america and much of the free world. we are watching you, we expect you to do the right thing both from a humanitarian basis and listen to the will of the
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people. your time has come. it's time to bring democracy back to venezuela. stuart: that's the official line. i got it. but when there's blood on the streets and there's already been blood on the streets, if that continues and worsens, as some in the maduro regime say it's going to worsen, at that point, won't there be a demand that america step in and fix this? >> i think there are demands from a multiple of parties. you also have the resolve of most of south america and our partners in this community, in colombia and others who all want to see this being resolved. it is the hope of the united states that we can achieve a peaceful transition of power through diplomatic and economic pressure, but if that does not come to bear, then as the vice president and president have said, all options are on the table. stuart: you are the future strategic communications director for the trump 2020 campaign, are you not? >> i am the current. stuart: are you just practicing
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for your future role in the campaign? i think you are. >> well, here, we've got -- stuart: yes, you are. >> -- to be clear. these are very serious issues that are being dealt with at the highest levels at the white house and while my role with the president is on their political side, i know most of america, including many democrats, have come out and said we support what the president is doing to get this situation under control, to bring peace and prosperity back to venezuela, and now is not the time for politics. now is the time to let the experts inside the white house to do the job they have to do. stuart: you are pretty good at this. i have to take off my hat to you. i don't think i could do that. >> thank you, stuart. stuart: i express opinions far too freely. thank you for joining us. check the market again. we are going to be down about 100 points on the dow jones industrial average. lots of things going on today. you've got fed chair powell, he will be addressing the congress. he will be asked about future
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course of interest rates and maybe what influence the president has on this. we will find out exactly what he is going to say at 9:45 this morning. stay with us. we will tell you at 9:45 what he's saying, could move the market. back in a moment. so, they say that ai is the building block of the future. super. but today you're building wind turbines. morning sir. chief, the blade isn't passing quality gate. that's why you work with watson. i detect frictional loss on the midspan. it can detect the tiniest defects from just a few images to help production stay on time and on budget. i optimized the fiberglass finish
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stuart: all right. 14 seconds to go. we will open this market this tuesday morning. we are about 800 points away from the all-time record high for the dow. i said yesterday we might break that record by the end of the week. i want to retract my earlier statements. susan: oh, no. stuart: my former statements are inoperative. the dow industrials have opened with an 80-point loss. there you have it. we are down about one third of 1%. that's the dow, just holding at 26,000, maybe dropping below it but we are down 88, 89, right at 26,000. how about the s&p 500? i will talk percentages here. it's down less than that, .15%. show me the nasdaq, please. let's complete the trilogy. we are down a quarter percentage point. we are down across the board, but the big loss is in the dow and that's because of these two stocks. home depot and caterpillar. they are both dow stocks and both are down sharply. taking about 70, maybe 80 points
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off the dow. we could be at break-even without those two. how about tesla? not so bad. $5 lower. it's still at $293. that's not much of a hit. it's still teflon. i think so. come on in, mike murphy. todd horowitz joins us, susan li and ashley webster. we will know what fed chair powell is going to say in about 15 minutes. mike, are you expecting any surprises that would move the market? >> no. stuart: okay. >> when chairman powell roiled the markets earlier this year, i think he learned his lesson. he came back, he gave more tepid guidance. i think he understood how to get his message across without spooking anything. i would be shocked if he does anything to rock the markets. stuart: todd, you are a debt bond guy. what do you have to say about the fed today? >> good morning, stuart. listen, he's going to say something that's going to be very plain and vanilla which is the guidance they have gone to. the only thing that can happen
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in this meeting is through the question and answers. how those answers get interpreted. the actual statement that they will release ahead of time will be i'm going to stay the course of being extremely dovish and continue to give money away cheap. ashley: don't you love it when you parse every word? the mandate, of course, is inflation under control, full employment. i think we have that, don't you? stuart: looks like it to me. ashley: i can't see him rocking the boat at all. stuart: i don't think so. you never know how the computers will read the headlines. ashley: exactly. one word here and there. stuart: the s.e.c. going after elon musk over a couple of tweets. todd, come back in again. we call tesla teflon, because it never seems to move that much, regardless of the news. will shareholders care about this? >> i don't think they will. i think they should and i think that of course, i think that they should drop the hammer on elon musk because again, only
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because he's a billionaire can he get away with what he's doing with the s.e.c. because at the end of the day they just fine him. they really should take a little bit more action against him because he does a lot of things that are really crippling to the markets themselves, and it's really against market policy and market rules. susan: he does have a legitimate argument that in the earnings call for the last earnings period, he did say 350,000 to 500,000 deliveries in 2019. he kind of said this before. what's the material impact on the stock? stuart: he put out a tweet saying 500,000. then he retreated from that. susan: but i'm saying, he's already set the floor. the target is already out there in the market. stuart: yes, but the objection of the s.e.c. is that he's supposed to get all his tweets preapproved. evidently, he didn't. >> when elon musk came out with the 420 buyout, the agreement part of that settlement as ash was saying is he had to have tweets preapproved. doesn't look like this would be preapproved. stuart: that's the tweet that got limb into trouble right there. got it. move on. slowing sales and profit falling short at home depot.
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but they are raising their dividend. is that some kind of economic indicator, mike? home depot? >> it's not, really. it's that they have a lot of cash on their books and you could argue you would rather that cash go into building the company. stuart: what i'm talking about is the slowing same store sales and slowing profits and all that. >> no, i don't think so. i think the stock has had a great run and they keep moving up guidance. it's going to slide down a little bit, but home depot's a great company. is this a great price to buy this great company. i would argue no. this is a pretty full priced stock. susan: a $15 billion buy-back as well. stuart: as well. $15 billion buy-back. i didn't know about that. that makes a difference, actually. dow component caterpillar, ubs says sell that thing. and somebody is. they are down 3.8%. what's the problem? susan: slowing global growth and their key revenue driver has been in china, also the european union and with the tariff battle, we might be also looking at current deliveries as well
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for caterpillar. also, oil and gas production peak being forecast as well. they won't be using heavy duty trucks that caterpillar makes. stuart: this is a fundamental analysis, not its relationship to trade. susan: a little bit. little bit. >> i think one thing on this, if you see a u.s./china trade deal, caterpillar is one company that could see a nice rebound from that. the stock selling off today, but watch it closely. i think there's a little more down side short term but on a trade deal, this stock could pop. stuart: five minutes in, the dow jones average down 111 points as we speak. the nasdaq is lower, the s&p is lower. this is not a major selloff in the early going at least. the price of oil this morning. $55 per barrel. the price of gas is holding at $2.39 per gallon. that is your national average. how about macy's? better profits, better revenue. macy's stock is up six cents. what do you make of the numbers?
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>> much better profits, better revenue. guidance came in kind of inline to weak. that's why the stock is not having a big pop today. one thing that's interesting, they don't plan on closing more stores. so has the turnaround started to take place. are they in a position now, do they have the right groundwork in place to really grow this company. interesting to see. stuart: todd horowitz, i wouldn't think of buying a retailer at this point. i just wouldn't think of buying any retailer. would you? >> well, if you look at macy's, which is what we are talking about, macy's, because they own their real estate, they are almost more of a real estate company than a retail store. one of the big things is very similar to burlington, they own all their real estate so it brings a lot of value that never gets counted into the books or the earnings. if we are going to buy one, i would certainly consider looking at macy's. stuart: okay. target. i think they are trying to challenge victoria's secret. target's got a new lingerie and
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sleepwear line. does anybody want to take that on? ashley webster? ashley: well, what are you trying to say? stuart: what do you know about this? ashley: in my many years of studying the lingerie market, listen, they are bring out three new lines of lingerie and sleepwear. susan li was talking about this earlier. they are taking on -- let me finish before i get myself in trouble. i want to be careful. this is a line that's not done very well for victoria's secret. they have struggled, right? why jump into a market that has struggled? susan: l brands down 50% in the last year. >> i like this move for target. target did a deal with kcasper,a private company, so they made this move to focus on sleep, it's a big part of the push in this country, healthy living, getting the right amounts of sleep. you have the mattress, the right clothes to wear for the mattress, i like this. stuart: todd, i know you stay up
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late at night worrying about the debt bond. how many hours of sleep do you get per night? >> stuart, i get up at 2:00 a.m. like you do. i get about five hours every night. stuart: i get a bit more but i get up at 2:45. t-mobile delaying its full 5g launch until the second half of the year. how about that? because i think that's the next big thing, isn't it? >> just ask the president who is probably watching right now from vietnam. stuart: i don't think he is. >> this is big and someone's going to get it right. the fact that t-mobile keeps delaying it or keeps pushing this out a little bit leaves the door open for someone else to come in and get it right. susan: they need to get that deal. stuart: you going to change everything? say it again? >> i think 5g changes everything. i think it does a lot of damage to some of the cable companies because again, the power from my understanding, the power of 5g can do a lot more, it brings even the streaming life much more to life which is why a lot
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of these companies prepared for this new streaming tv, even directv which is a dish provider but they have a directv now which is really engaged this 5g network and again, it will change cell phones, it will change everything and the way we use technology. it's really phenomenal when it eventually comes up. stuart: i just want somebody to tell me which stock i can buy now to take advantage of the coming wave of 5g. i haven't found anybody yet. although we will give you a chance. susan: they are waiting for the closure that t-mobile/sprint deal, the $26 billion deal. stuart: all right. time to say good-bye to mike and todd. gentlemen, thanks for being with us this morning. now, check that big board again, please. we are down 80 points. about 70 of those down points are accounted for by home depot and caterpillar. you got a pretty much break even flat market at this moment for the dow, that is. new york democrats considering a new way to tax the rich. they are proposing a plan to slap a surcharge on second homes
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worth more than $5 million. details on that coming up. big vote on capitol hill today. the house expected to vote to reverse the president's border emergency declaration. if the senate follows suit, president trump may have to veto. what does that mean for him politically? good question. we will answer it. moments from now, we are going to get headlines from fed chair powell's opening statement to the senate banking committee. this could move the market. we will have it for you after this.
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stuart: 12 minutes into the trading session, down 94 points on the dow, just a fraction
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below 26,000. the house tax writing committee, ways and means, are going to hold a hearing tomorrow with trade rep robert lighthizer. they want answers about the trade deal with china. joining us is congressman buchanan, republican, florida, member of that tax writing committee. congressman, may i ask, what will you ask, what question will you ask mr. lighthizer? >> i think the biggest thing for me is just the enforcement. agreement is only as good as the two parties. you know that in terms of negotiating an agreement. how do we enforce that going forward, that's my concern. because we have been talking about intellectual property theft for the last 20 years. i was in beijing 20 years ago, was involved with the u.s. chamber at the time on the board and that was one of the things we talked about. we have made little or no progress in 20 years. so to have an agreement, it's only as good as the two parties. stuart: do you think mr. lighthizer can come completely clean about all the details that are in the developing trade deal? can he be really clear about
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exactly what enforcement mechanisms there are? >> i think, you know, i understand the document's going to be about 150 pages. they are getting pretty close to getting that done, 90%. that's my understanding. so i think if anybody can do it, he can do it. he's got a good team and a good staff that he's working closely with. but again, at the end of the day, you could have a 1,000 page document and if you can't trust both sides, what good is it. then you got to relitigate it at some point in the future. i want to be hopeful. i want -- hopefully we can work on this bipartisan basis. stuart: i have to leave you in a few seconds but i think you are a hard liner, correct? >> yeah. i just think we have got to be a lot tougher. we have to fight for our jobs and our businesses in america. our trade deficits are monstrous. it's two-thirds of the trade deficits we have in the world. that's got to change and move in another direction. stuart: thank you very much indeed forking jo us th injoini appreciate it. just coming up on 9:45
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eastern time. at precisely 9:45 we will be able to tell you exactly what fed chair powell is going to say in his opening remarks at 10:00 this morning. i can't tell you until exactly 9:45. we are two, three seconds away. there you go. 9:45. edward lawrence, tell us what he's going to say. reporter: yes. chairman jerome powell is going to say that the approach to the rate hikes will be patient as they are going forward. right now, the chairman is getting ready to speak here, telling the senate banking committee he continues to see strong wage growth throughout the next couple months and into the rest of this year. he also is going to say the government shutdown did not affect -- it affected government workers but did not affect the economy as a whole, saying quote, the negative effects on the economy are expected to be fairly modest and largely unwind over the next several months. he will tell the banking committee that he expects the interest or inflation rate to be under their target but very close to 2% inflation, it was
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1.7% in december. he's looking at a number of head winds mainly from other countries. jerome powell saying the head winds coming from the global slowdown, particularly with china and europe. he's also concerned about brexit and ongoing trade disputes. he would like to see those fixed. as for the interest rates and the federal funds rate, the chairman says it will be data-driven going forward. he said the pace of hikes, he hinted at possibly a pause in rate hikes for this year. also hinting that they are comfortable with a larger balance sheet. he did not say exactly when that would stop winding off or unwinding but at the moment, the fed president has said they expect that unwinding to stop by the end of the year. republicans will press him on that balance sheet. also pressing him about the data that is collected by banks on individuals and how they are going to protect that. democrats will hit him on how the weaker rules that they believe the fed is imposing. back to you. stuart: edward lawrence giving
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us a breief idea of what the fe idea is going to say. what i picked up on there was the fed chair is going to be patient with rate increases. i would consider that to be a fairly positive move, certainly for the market. ashley: he also mentioned head winds, global slowdown, china, europe, concerned about brexit, but says pace of the hikes will be data-driven. stuart: yeah. that's because, that's why he would be patient. susan: also gdp for 2018 slightly less than 3%. stuart: the house will vote today on a measure to reverse president trump's national emergency proclamation to build the border wall. back to congressman buchanan who graciously agreed to stay with us. what happens if he goes all the way through the house, through the senate, and they reject the emergency declaration. what would you make politically of a presidential veto? how would that go down politically, a veto? >> i think it's the right thing. i have been in el paso, texas, for example.
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we have 21 million people northbound. we have thousands of people coming to our borders every week, every day in some cases. there's another caravan coming. if this isn't a national emergency or national security issue, i don't know what is. i'm going to support the president very passionately. i have always felt we need to secure our border in the south, enforce the laws. stuart: you made yourself very clear even though competing networks are trying to drown you out with stand-ups of their own about ten feet to your right. sir, thank you very much for being with us today. we do appreciate it. congressman buchanan. >> thank you, stuart, for the opportunity. stuart: come see us again soon. thank you, sir. check the dow. no response at all that i can see to the news from the fed chair that he's going to be patient with interest rate increases or patient with interest rates, i should say, more precisely. the dow is down 120 points now. a little lower than when we heard news of what the fed chair was going to say.
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stuart: i'm going to call it a pretty dead stable stock market. we opened down just over 100 and are still down just over 100 on the dow. better take a look at tesla. the s.e.c. has asked a federal court to hold elon musk in
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contempt over tweets he made last week discussing the company's projected production volumes. judge napolitano is with us. what consequences are there if he's held in contempt? >> he and tesla entered in a consent decree with the s.e.c., as a result of some wild and unprovable statements he made last year about having investors in an enormous number available. that agreement required that he could not put any tweet out there relative to tesla without running it past his lawyers, and he apparently did so the other day, saying they are going to produce 500,000 cars in 2019 and he quickly changed it to 400,000. whether that was material, had a material effect on the stock value or not, it was a clear violation of the consent decree and they are after him and he knows it. they don't have to ask for contempt, but they did. stuart: if the court says you are in contempt -- >> i doubt they would
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incarcerate them. they would probably fine him. it's not an incarceratable offense. the only time they put you in jail is when you disobey an order from the court. they would tighten the screws on him, perhaps require him to run his tweets past two people instead of one. stuart: he ought to know it and play ball with them rather than taunting them. perhaps he enjoys it. >> but they have the power to ruin him. stuart: do they? what, fine tesla? >> well, they already removed him from one position at tesla. they could remove him from the other. stuart: they could remove him from the ceo's position? >> if they can demonstrate to a federal judge that his behavior is intended to mislead, mislead investors. that's their fear. they don't care about his
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histrionics. stuart: that's the whole ball of wax? >> correct. correct. they are not the thought police. they are only concerned with whether or not he's misleading investors. stuart: misleading investors would mean that the stock moves in the way that he wanted it to move. he manipulated the stock. >> not that it moved, that he wanted it to move. whether he wants it to move or not, he made a material misrepresentation intending to move the stock. it may have failed, but material misrepresentation intending to move the stock is enough to trigger their jurisdiction. stuart: does he have a serious problem? >> you have seen the tapes of him smoking marijuana. stuart: does he have a serious problem here? >> that's the way his personality is. he's a charming, challenging guy, but as long as he doesn't mislead investors, the s.e.c. will leave him alone. stuart: they're not leaving him alone. they are taking him to court. >> for making false statements publicly which he can't do in that position. stuart: they slap him down. >> yes. stuart: it's only going to be a
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fine? >> i think this will go on and on and on because that's the way he is. stuart: teflon tesla. >> you admire him, don't you? stuart: i didn't say that. >> oh, all right. stuart: i admire him as an entrepreneur. no question, he's brilliant. but he shouldn't be the ceo of a publicly traded company is my position. >> i think there are people in the s.e.c. who agree with you. stuart: time's up. here we go. big headline in the "new york times" today. 2019 is a sensitive year for china and xi is nervous. that's the chinese premier. maybe america has more leverage in the trade talks than we thought. my take on that is next.
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stuart: breaking news just coming to us, it is about the economy. ashley: we're waiting. stuart: don't have the number yet? ashley: no, talking about consumer confidence which is an important indicator for this economy. ashley: it has been on downward trajectory. december was 126. january, 120. hoping for small up tick. 131.4. which is a huge jump. stuart: yes. that is significant upside. when the number came out the dow was down 81 points. has it made any difference whatsoever? big jump in consumer confidence last month.
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the market not responding to this. susan: that is not bad. stuart: it's a jump, a nice jump. ashley: we're only down 70 now, 66. stuart: made a difference to the market i think. ashley: very strong sign for the economy. it is a big plus. that is what it is. revision upwards for january so look, consumer confidence is in pretty good shape. ashley: very good shape. stuart: it is strong. consumer feel confident about the economy now and in the future. important economic indicator. what do you say? susan: power 2/3 of the u.s. economy. stuart: so all we got now is a 60-point loss for the dow but all of that loss is accounted for by two stocks, that would be home depot and caterpillar. they are dow stocks, both of them down sharply. now the dow is off just 54 points. any moment now we'll hear from federal reserve chair jerome
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powell. he is about to testify before the senate banking committee. we know part at least of what he is going to say. going to say this, quote, the economy grew at a strong pace on balance last year. employment and inflation remain close to the federal reserve statutory goals. gross domestic product, gdp, rose less than 3%. that is what we know he will say momentarily. kevin frommer is with us. you represent financial services companies, what do you make of the statement from fed chair powell that he will be patient on interest rates? >> very consistent what we heard him say previously, stuart. again thanks for having me this morning. so i don't see any significant change as you remarked aecialer. this is a fed data dependent as they say they are going to be. market data included with that i expect. very consistent. stuart: picture being painted of
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the economy right now is pretty good. fed chair powell says -- momentarily we will take you to jerome powell so you will hear exactly what he will say from his own mouth. let me paint the picture here. we already had jerome powell saying gdp growth, 2018, will be just below 3%. that is still pretty strong. moments ago we heard from consumer confidence. now powell is speaking. >> i'm happy to present the federal reserves semiannual monetary policy report to the congress. let me start by saying that my colleagues and i strongly support the goals congress has set for monetary policy, maximum employment and price stability. we are committed to providing transparency about the federal reserve policies and programs. congress has entrusted us with an important degree of independence so at that we can pursue our mandate without concern for short term political
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conversations. we appreciate that our independence brings with it the feed to provide transparencies so that americans and their representatives in congress understand our policy actions and can hold us accountable. we are always grateful for opportunities such as today's hearing to demonstrate the fed's deep commitment to transparency and accountability. today i will review the current economic situation and outlook before turning to monetary policy i will also describe several recent improvements to our communications practices to enhance our transparency. the economy grew at a strong pace on balance last year and employment and inflation remain close to the federal reserve statutory goals of maximum employment and stable prices, our dual mandate. based on available data we estimate that gross domestic product or gdp rose a little less than 3% last year, following 2 1/2% increase in 2017. last year's growth was led by strong gains in consumer
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spending and increases in business investment. growth was supported by increases in employment and wages, optimism among households and businesses and fiscal policy actions. in the last couple of months some data have softened but still point to spending gains this quarter. while the partial government shutdown created significant hardship for government employees and many others the negative effects on the economy are expected to be fairly modest and eventually unwind over the next several months. the job market remains strong. monthly job gains averaged 220,000 in 2018 and payrolls increased an additional 304,000 in january. the unemployment rate stood at 4% in january, a very low level by historical standards and john openings remain a abundant. moreover, the ample availability of job opportunities appears to have encouraged some people to join the workforce, some otherwise might have left to remain in it.
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as a result the labor force participation rate for people in their prime working years, which is to say the share of people ages 25 to 54, will either working or actively looking for work has continued to increase over the past year. in another welcome development we're seeing signs of stronger wage growth. the job market gains in recent years have benefit ad wide range of families and individuals. indeed recent wage gains have been strongest for lower skilled workers that said, despairs persist across various groups of workers in different parts of the country. for example, unemployment rates for african-americans and hispanics are still well above jobless rates for whites and asians. likewise the percentage of the population with a job is noticeably lower in rural communities than in urban areas. and that gap has widened over the past decade. the february monetary policy report provide additional information on employment
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disparities between rural and urban areas. overall consumer price inflation as measured by the 12 month change in the price index for personal consumption expenditures is estimated to have been 1.7% in december, held down by recent declines in energy prices. core pce inflation which excludes food and energy prices and tends to be a better indicator of future inflation is estimated at 1.9%. at our january meeting my colleagues and i generally expected economic activity to expand at a solid pace albeit somewhat slower than 2018 and job market to remain strong. recent declines in energy prices will likely push headline inflation further below the fomc longer run goal of 2% for a time but aside from those transitory effects we expect inflation will run close to 2%. while we view current economic conditions as healthy and the economic outlook as favorable over the past few months we have
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seen some crosscurrents and conflicting signals. financial markets have become more volatile toward year enand financial conditions are now less supportive of growth than they were earlier last year. growth has slowed in some major foreign economies, particularly china and europe. and uncertainty has elevated around some unresolved post policy issues including brexit and ongoing trade negotiations. we will carefully monitor these issues as they evolve. in addition our nation faces important longer term challenges. for example, productivity growth which is what drives rising real wages and living standards over the long term has been low. likewise in contrast to 25 years ago, labor force participation among prime age men and women is now lower in the united states than in most other advanced economies. other longer-run trends such as relatively stagnant incomes for many families, a lack of upward
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economic mobility among people with lower incomes also remain important challenges and it is widely agreed that the federal government debt is on an unsustainable path. as a nation addressing these pressing issues could contribute greatly to the longer run health and vitality of the u.s. economy. over the second half of 2018 as labor market kept strengthening and economic activity continued to expand strongly the fomc gradually moved interest rates towards level more normal for a healthy economy, specifically, at our december and, sorry, september and december meetings we decided to raise the target range for the federal funds rate by one quarter percentage point at each, putting the current range to 2.25 to 2.50%. at our december meeting we stressed that the extent and timing of any further rate increases would depend on incoming data and the evolving outlook. we also noted we would be paying close attention to global
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economic and financial developments and assessing their implications for the outlook. in january with inflation pressures muted the fomc determined that the cumulative effect of these developments along with on going government policy uncertainty warranted taking a patient approach with regard to future policy changes. going forward our policy decisions will continue to be data dependent and will take into account new information as economic conditions and outlook evolve. for guideposts on appropriate policy the fomc routinely looks at monetary policy rules that recommend a level for the federal funds rate based on measures of inflation and cyclical position of the u.s. economy. the february monetary policy report gives an update on monetary policy rules. and i continue to find these rules to be helpful benchmarks but of course no simple rule can adequately capture the full range of factors the committee must assess in conducting policy. we do, however, conduct monetary
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policy in a systemic manner to promote the longer run goals of maximum employment and stable prices. as part of this approach we strive to communicate clearly about our monetary policy decisions. we also continued to gradually shrink the size of our balance sheet by reducing our holdings of treasury and agency securities the federal reserve total assets declined 310 billion since the middle of last year. currently stand at close to $4 trillion. relative to the peak in 2014 bank reserve balances within the federal reserve declined 1.2 trillion a drop of more than 40%. in light of the substantial progress we've made in reducing reserves, and after extensive deliberations the committee decided at our january meeting to continue over the longer run to implement policy with our current operating procedure. that is we will continue to use our administered rates to control the policy rate with an ample supply of reserves so that
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active management of reserves is not required. having made this decision the committee can now evaluate the appropriate timing an approach for the end of balance sheet runoff. i would note that we're prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments. in the longer run the size of the balance sheet will be determined by the demand for federal reserve liabilities such as currency and bank reserves. the february monetary policy report describes these liabilities and reviews the factors that influence their size over the longer run. i will conclude by mentioning some further progress we have made in improving transparency. late last year we launched two new publications. the first, financial stability report, shares our assessment of the resilience of the u.s. financial system and the second, supervision and regulation report provides information about our activities as a bank supervisor and regulator.
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last month we began conducting press conferences after every fomc meeting instead of every other one. this change will allow me to more fully and frequently explain the committee's thinking. last november we announced a plan to conduct a comprehensive review of the strategies, tools, communications, and practices we use to pursue our congressionally-assigned goals. this review will include a broad outreach to a range of stakeholders across the country. the february monetary policy report provides further discussion of these initiatives. thank you, i will be happy to respond to your questions. >> thank you, very much, chairman powell. as i mentioned in my opening statement you said that the balance sheet normalization may end sooner with a larger balance than previously anticipated and if i understand correctly the ultimate size of the balance sheet will be principally driven by financial institution demands plus a buffer, is that correct.
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>> that's correct. >> reserves increased from 43 billion in 2018, to about 2.8 trillion in 2014 if i understand correctly. before falling now down to about 1.6 trillion currently. do you have an estimate of the amount of reserves estimated to be necessary to achieve the fed's monetary policy objective and how does the fed's postcrisis regulatory policy affect this amount? >> the quantity of reserves before the financial crisis, mr. chairman, was 20 billion, in that range, plus or minus, a relatively small amount. one of the important things we did after the financial crisis was require banking institutions, particularly the very largest ones to hold quite large buffers of highly liquid assets. one of those assets that the banks like to hold to satisfy this requirement is bank reserves. so the demand for reserves is going to be very substantially higher than it was before the crisis and will not go back to
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those lower levels in any case. we have only estimates based on market intelligence and discussions with, with financial institutions and those estimates have actually gone up substantially of just over the course of the last year or so we don't have a precise notion but, you know, we believe that the public estimates that are out there of around a trillion dollars, plus a buffer as you mentioned in your remarks, will be, is a reasonable starting point, estimate where we might wind up. >> all right. thank you. as you know i've been a strong critic of the quantitative easing the fed has been engaged in and appreciate your explanation how you intend to reach the appropriate balance of what the fed's balance sheet should be and i will continue to work with you on understanding how we get to the right spot as soon as we can. you mentioned in your statement and in your report that the labor force participation rate
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has started to grow. that has been one of the reasons we've seen such low economic performance in my opinion in the past years. do you expect that the labor force participation rate growth that we have seen will stablize and even possibly increase as we continue to move forward? >> so labor force participation, if i can provide just a little bit of background was an area where the u.s. was at least comparable to other well-off countries and in some cases at the high-end as far as women labor force participation by women was concerned. we are now at the bottom end of the league table for both men and women. it's a very troubling concern. a big part of it though is driven by something we can't really change and that is just demographics. as the country ages, labor force
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participation should decline at a fairly steady level. nonetheless, even allowing for that we're lower than where we need to be. so the gains we've seen over the past year have been very positive and very welcome from our standpoint. we don't know how long they can be sustained but we hope for a long time. i would just say that, i think we need a broad policy focus on how to sustain labor force participation, including not just through fed policy but through legislative policy as well. >> i agree. i think that's a critical part of our ability to maintain the growth and strength of our economy. i have lots of questions for but just one that i will have time for in the remaining amount of time that i have, this will get to regulatory relief an implementation of senate bill 2155. as you know senate bill 2155 provides smaller institutions with relief from the volcker rule. regardless there are still significant issues with the rule for institutions of all sizes.
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i and six of my banking colleagues wrote to our financial regulators in october of last year urging further revisions to the rule to address outstanding issues such as rules cover funds definition and broad application to venture capital. other long-term investments an loan creation. in addition i'm concerned that the proposed accounting test may make the volcker rule more complex than necessary. would you submit regulatory discretion provided by statute to promptly address these outstanding issues? >> yes. we received comments on those issues and more and we thought some of those comments were very well-taken. we're working hard to try to address them. i assure you we'll do our best to do that. >> i appreciate that. senator brown. >> thank you. thank you again for being here, chairman powell. yesterday your predecessor janet yellen said she doesn't think president trump has a grasp of
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macroeconomic policy. is she right? >> i won't have any comment on that for you, senator. >> i guess i'm not surprised. it is troubling that the former fed chair, the woman that sat in your job and was very good at that job tells the press point-blank she doesn't think the president of the united states understands the economy. i think the american people continually and more and more understand that this president, that many americans, gm workers in youngstown and ham tramic believe he betrayed workers in this country. that has become clearer and clearer. let me he shift to another question. last week former fed chair you paul volcker became concerned that the culture of banking only focuses on profits of the firm and pay of ceo. i share this concern. since 1979, you know these numbers, mr. chairman. worker productivity has i don't know 70%. compensation for workers grown
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just 11%. top .1 of 1% saw their earnings grow by 343%. this disparity as you know is even worse for women and people of color. so do you think, mr. chairman, the fed's employment mandate is just to insure that people are employed or do you think full employment imply as dignity of work, that is, meaning workers earn a salary and benefits that let them fully participate in the 2019 economy and our country? >> our mandate as you well know is maximum employment and we try to take that to heart and you know our tool for trying to achieve that is monetary policy. i think, i think we're at 50-year low at unemployment. there are many other issues in the country. you managed some of them but honestly to achieve some of the things you're talking about, we need other tools. the fed can't affect every social problem as you well know.
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>> is that a social problem, that fewer and fewer people, even though they're employed, wages are stagnant, is that just a social problem? >> well, i would say wages do go into our assessment of maximum employment. we look at wages, i'm happy to say wages while they were very sluggish in the aftermath of the crisis started to move up in a way that is more consistent with past history and with inflation and productivity. >> but not even close to productivity? not even close to gains in productivity for most workers? >> so today, i know the char you're talking about. talking about over longer run. wages are now going up a little better than 3%. inflation is right at two. productivity was, has been running, sorry, inflation has been at two, productivity has been around one. so 3% is about right from that narrow standpoint. wages have moved up. we welcome that we don't find it troubling from and inflation
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standpoint at this point. so we do look very carefully at wages as we assess maximum employment. as we assess whether we're meeting our maximum employment goal. >> let me put it a bit of historical perspective. will rogers during the great depression provided a lesson i think we could learn from today. he said unlike water, money trickles up, not down. the government's response to that economic crisis of the great depression, he said, the money was all appropriated to the top and in hopes it would trickle down to the needy, give it to the people at bottom, the top will have it before night anyhow, but it will at least pass through the poor fellow's hands. they saved big banks, the little ones went up the flue. seems like the fed still thinks the best way to help workers is shore up big bank profits and hope the prosperity trickles down. over the last decade it has been, it has been creative how it accomplishes this.
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i believe the fed has the authority and duty to be creative, to help workers share in the prosperity they create. my staff will follow up with your staff on ways of doing that one more question. it seems to, too big to fail is alive and well. we are seeing potential merger, we're seeing growth in most of the largest money center banks. two regional banks, suntrust and bb&t, each with over $200 billion in assets decided to merge. saying it was difficult to compete with the mon sy enter banks investment and technology. what message does the fed send to regional and community banks about their future if the fed eventually approves this merger? >> well we have a process that we go through in evaluating any merger. it is set forth in great detail through the law and our guidance. we will go through the process
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carefully, fairly, thoroughly, with a lot of transparency. when we do get an application we don't actually have an application yet on that matter. we expect to get it sometime in the next few weeks. so we will do all of that. i would just say we haven't prejudged anything and we'll do our work on that professionally, carefully, fairly and transparently. >> okay. >> senator shelby. stuart: concludes the testimony of jay powell, federal reserve chair. question from the senate banking committee chair, senator crapo. then as you just heard from the ranking member of the senate banking committee, that would be sherrod brown. chairman powell, senator crapo, steady as she goes. no news created there on the interest rates or state of the economy. sherrod brown, in my mind was pure politics. ashley: pure grandstanding.
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he mentioned trickle down theory, doesn't work, ceo pay. he says the president doesn't understand economics quoting janet yellen former fed chair who made the comment. made it as a statement. of course chairman powell said i'm not going to comment on that. it was an opportunity to bash the president. stuart: what do you think, susan? susan: economic standpoint, nothing we haven't heard before, inflation close to 2%. however only statements might be a bit of a surprise is trillion dollars in reserves. we had concerns about runoff of the balance sheet and if you have a runoff of the balance sheet that takes money out of the economy. if he holds a trillion dollars, plus a buffer, a little less than what people were anticipating on the balance sheet. stuart: it did not make any difference to the market, whether it was his testimony or from senator crapo or from senator brown, made no difference to the market. right now we're down 38 points on the dow jones industrial average. what did make a difference to the market was the consumer
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confidence report at the top of the hour. precisely at 10:00 which was strong, it was a very strong consumer confidence. ashley: keep getting conflicting data. had lousy housing market. this mainly strong consumer confidence number which helped to bring the market back. stuart: we're down 38 points. that's where we are after the opening statement on jay powell on capitol hill. now this, new york lawmakers considering a new tax on second homes worth more than $5 million. supporters say it is a way to get money out of people who have a home in new york, pay nothing on tax. kristin tate is the author of, "how do i tax thee? ". she joins us now. sounds like a cash grab for me. what do you say. >> surprise, surprise. cash grab from new york politicians. new york has been losing residents in droves for years. this proposed new tax on
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part-timers will speed up exodus. since 2010 new york lost more than one million residents. the state was biggest loser in overall population loss. wealthy people don't want anything to do with new york increasingly. it is too expensive, taxes are too restrictive. this tells me new york learned nothing from new jersey and disasterous effects of millionaires tax. there. stuart, you live in new jersey, right? you saw how first-hand how the millionaires tax worked out. new jersey lost thousands of wealthy families in one year. stuart: we did. it astonishes me how you push people away. you tax them more, you push them away. don't they realize that? i'm astonished. but i have to move on to another subject, kristin, it is an important one. the is says the average tax refund is down 17% from last year. i think that could be a problem with the way the tax plan is
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perceived by ordinary people. what do you say? >> yeah, well, a lot of people, particularly millenials, assumed that if they get a smaller refund it is because the wealthy are keeping refunds and getting richer but in reality most people did get a tax cut even if the refunds were smaller. there are would primary reasons refunds are down this year. the first is that people are just paying generally less in taxes in every paycheck. so many americans are seeing benefit of the tax cuts through higher paychecks throughout the year, rather than through a refund, which simply represents how much you have overpaid the government. second of course is the salt deductions were capped at $10,000. this is a cap that many wealthy americans in high-taxed states easily exceed. a lot of people, particularly young people, don't understand these reasons. so when they get the smaller refund, they simply blame rich people because they're ignorant but you know, a lot of my
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parents friends were baby boomers. i see them on facebook making same campus plains about their refunds too. they're just as economically ignorant as millenials. we don't have a monopoly on ignorance here. stuart: that is a little harsh. kristin, ignorant is a very harsh word? >> well i mean the tax foundation found that 2/3 of americans are benefiting from the tax cuts. it is just that people don't realize they're benefiting from it. they get smaller refund. many young people don't realize they're basically giving the government interest free loans all year. again i think it's a lack of understanding. stuart: got it. kristin tate, thank you very much indeed for jumping in today. we appreciate that. >> thank you, stuart. stuart: this is coming at us right now, an appeals court has upheld a lower court decision that at&t's deal to buy time warner is legal. come on in scott shellady, tjm
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senior director and jack hough, baron's senior editor. what is the significance of this deal, allowing at&t to buy time warner? >> allowability was presumed. the deal whether it was a good deal seemed to change over time. when the deal was first conceived the idea if you were a telecom operator you had to get into video. that was the place to be. at&t found itself with props on its hands in terms of subscriber losses. they're looking at verizon from afar, remember when we used to just run a phone business? that were simpler times. outcome for the deal going forward was pretty much expected. stuart: this is what would happen. scott, anything to add to that? >> i don't think there is any surprises here. i agree with jack's comments as well. at the end of the day, what happens today we'll talk about, but what is more important what will happen overtime. stuart: well-said. i have to move on to this. new report on facebook content
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moderators. they're reportedly developing posttraumatic stress because of all the horrifying videos they have to watch. some are reportedly turning to drugs. also they are underpaid. scott, this is, more bad publicity for facebook. these poor young people, minimum wage, basically, looking at horrific videos deciding what is good, what's bad, that is a terrible thing. >> it's a terrible thing. i actually read the story a couple days ago, and i was shocked what these poor kids had to look at. i shouldn't be surprised what is out there on internet but surprised it makes its way to facebook. here is the problem, facebook is left alone to monitor themselves and they're not doing a very good job about that i think they will fall under regulators hands lake they have already done in europe. stuart: that is exactly right, they will fall into regulators hands. do you agree with that? >> this is lead runner for worst job in america. facebook gone to outsourcing
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company. if it doesn't go well, switch outsourcing companies. people pay 15 bucks an hour, in polite conversation i cannot describe videos these people are forced to watch for 15 bucks an hour. stuart: what about artificial intelligence? wouldn't that allow a means of reviewing these videos without a human being have to say that is awful, get rid of it? >> it has got promise long term but there has to be a transition where these poor workers will be forced to sit there and view these atrocious videos just to determine whether the public ought to see this or not. i wish there was a way to get people more -- ashley: therapy? that they have to observe the worst of humanity in this job. stuart: terrible thing. i have to say thank you very much indeed to scott and jack. thanks very much indeed, gentlemen. heavy news day. that is why we're cutting it so short. appreciate that. the house is expected to vote today on a resolution to block president trump's emergency declaration at the border. joining us now, tom bevin,
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cofounder of "real clear politics," the polling people. tom, how do americans feel about the emergency deck ha race? >> well they're not in favor of it. there is a poll out from npr-marist, about 60-40 split. folks say they don't approve the trump approving a declaration. they don't think it is an actual emergency and don't like the wall. trump is on sort of losing end of this public opinionwise with his declaration of national emergency. stuart: now i don't want you to speculate too much but going forward, if he has to veto this anti-emergency declaration, i presume that would not be popular in the polls, right? >> correct. i mean it is most likely again, the public doesn't approve of him using this national emergency declaration for corder security. it will pass the house. it may in fact pass the senate but there is no chance, once trump vowed to veto, there is no
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chance they will override it. that would be the end of it. it will certainly be an issue moving forward. democrats think one they can exploit moving into 2020. stuart: tell me about the president's approval rating. i think it has been stuck in the mid 40s quite some time. is that accurate. >> it has been although he did get a rather significant bump out of his state of the union address. he went from about a net minus 14% to about net minus 8 1/2. so he picked up about six points net overall but his approval rating, this is something we've seen been unique to trump we've never seen before is that it has been relative -- really rock solid in terms of, he has had support from republicans. he has never had support from democrats no matter what he has done, no matter the issue. there is movement among independents and moderates on the margin. trump's band in terms job approval rating is remarkably narrow, low 40s. stuart: that is the base does
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not desert him no matter what? >> exactly right. look to 2020 election, look to the base, where does he stand with folks in seven states that matter, wisconsin, michigan, pennsylvania, north carolina, florida, ohio and whether he can expand his approval rating in those states, get it up north of 40, 45% among independents, that would put him in better shape than where he currently stands. stuart: tom bevin, "real clear politics," always a pleasure, sir. appreciate it. >> thank you, stuart. stuart: russian state television showing a map of possible nuclear targets in america. tell me more. ashley: unusual even by russian standards. this actually aired on television sunday. as you say listed five places that could be hit by russian missiles. their new hypersonic missiles. as you can see, usual, pentagon, camp david, fort ritchie, maryland, mcclellan air force
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base in california, jim creek communications naval base out in washington state. this is kind of follows on what putin said in his speech, saying, warning u.s. not to put intermediate range missiles in europe. if you do, then we will respond. if you try to strike, this is what we can do. and said one commentator on this particular show, this will not allow americans to come across the ocean. by the way the u.s. has no plans to deploy the missiles in europe. putin saying if you do, this is what can happen. stuart: got it. thank you very much, ashley. market going nowhere. see what big tech is up to. mixed bag there. apple at 174. that is up a little. amazon 1628, down five bucks. alphabet, 1115, microsoft biggest gainer among the big techs up a buck at $112.
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now this, maybe china is in worse shape than we thought. maybe america has more leverage than we thought. lead story in today's "new york times," 2019 is a sensitive year for china, xi is nervous. now look "the times" is no friend of president trump and would not normally give him ammunition for any fight but the article does just that. it details an emergency meeting of hundreds of communist party officials called by xi xinping. he told them to batten down the hatches. .s of risk are multiplying he said. with the economy slowing there is serious risk of social unrest. now that is trump's leverage. they really do need to put this trade fight behind them. there is another problem that troubles china's leaders. their population is aging fast. there are 250 million people age 60 or above in china right now and that goes to 390 million in
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10 years. however, there is a baby bust. rapidly declining fertility. which means more people retired, fewer people working, fewer babies born. and that means china must keep growing rapidly and that gives america leverage in the trade fight. of course there is enormous political pressure on our president to get a deal done but in china the pressure is economic. the authoritarian government must keep the economy growing. it is life and death for the communist party and that is real pressure. that's my take. coming up, our foremost authority on china, michael pillsbury. he has advised the president on china policy he is with us today. plus a dire situation in venezuela. four clashes with the maduro government on the border over aid. i want to know will america intervenes militarily if this gets worse? i will talk next hour, to
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or dental procedures and any kidney or liver problems. learn all you can... to help protect yourself from another dvt or pe. talk to your doctor about xarelto®. stuart: all right, we have got breaking news happening now on tesla. ash? ashley: a u.s. judge ordered tesla chief executive elon musk to explain by march 11th, why he should the be held in contempt in the sec case. the securities & exchange commission want him to be held in contempt because they say he violated an agreement that was settled last year. basically on tweets. this is been prompted back on february the 19th i believe. tesla, this is the tweet that he put out. tesla made zero cars in 2011 but will make around 500,000 in 2019. hours later he sent out a follow-up tweet saying they will actually deliver 400,000 cars this year. part of the settlement, you have to have those tweets vetted
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before you start doing this, clearly they believe that was not the case here, a violation. now they are applying to put him to be held in contempt and a u.s. judge has just ordered that case. stuart: if he is found in contempt, according to judge napolitano, tesla could have to pay a fine or it is possible that elon musk be removed from his job as ceo. that is a possibility, a remote i suspect. susan: last time in august he paid a 20 million-dollar fine, nothing for him. removed as chairman and remains ceo. he mocked the sec in a tweet after that settlement as well, they're the short seller enrichment commission. stuart: you're on dangerous ground doing that. they're very powerful, rightly so regulators have to be powerful. they have no power they have got nothing. don't mock them. susan: also again i think the defense here he already stated this in the earnings call. this is not material for the
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stock. that is what el argue. i think the stock is trading down 1%. pretty contained, don't you think? stuart: if he did not have the tweet vetted he is in violation -- susan: vetted by who? his communications team and the board. given they're loyal to him, couldn't they raise their hands say, we approve? stuart: only time will tell. i want to get back to my editorial on china trade. again the headline in "the new york times," 2019, a sensitive year for china. xi is nervous. michael pillsbury with us, fortunately. he knows what he is talking about. author of, the 100 year marathon. he is a hudson institute china strategist. michael, i looked a the headline in "the new york times," read the story and it seems to me they're in bad shape economically and also to some degree politically. i think that gives us leverage. where do you stand on this? >> i think that's right, stuart.
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i've been quoted three times in "the new york times" this past week. i helped them with a story, i wrote a book on this, hawks and reformers china and struggle for better policy to keep their gdp growth rate up that is the foundation of the communist party now. they don't say eliminate class distinctions or stop inequality. they say we want to make china strong economically. that is the mandate of the communist party. president xi is in trouble the longer these talks drag on. i think a lot of us here in washington have noticed that. the chinese have been quite forthcoming as the president has said in most recent rounds. even in details, stuart. stuart: they need growth. their economy must continue to grow and that keeps everybody quiet and that stops social unrest. but in a trade fight with america, it is very difficult to keep that growth going. that is the source of this leverage that i'm talking about.
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>> that's right. stuart: they're not growing as much as they say they are. that is what i'm hearing? >> yeah. there is some degree of slowdown. you can debate how much. but the slowdown itself is not the problem. the pro is the employment rates dropping in certain key sectors. the fear that these peasant revolts which they kept uncontrol the last 20 years, the peasant revolts tend not to contact each other. so you could have a strike of several thousand people in one province but they don't do anything about their colleagues 1000 miles away. where that starts to become very dangerous to china is if strikes and revolts of peasants link up, begin to challenge the party to come out in the streets. this is one of the nightmares the chinese have. the hawks in china say don't worry about this. we have to maintain the system. don't make concessions to president trump. the hawks versus reformers are having quite a few debates over last self months since the
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american position was presented in may. remember in may, this is humiliation. this is 21 points demands of the japanese. they were very, very angry. they calmed down, they become to make serious concessions. they have demands on us to, to break into our e-commerce market. they want us to stop suing them at the wto. they want us not mutt anymore tariffs on ever. some of these demands we can't meet. stuart: are you optimistic a deal will be done to satisfy both sides? >> overall. yes. i think it's a sure thing. stuart: a sure thing? >> a sure thing. the president is -- stuart: intellectual property and -- >> already, a lot it already has been agreed to. when the president says we'll have a signing summit, that is going pretty far. i think the reason for that the number of chinese concession is. we made some concessions too. we wanted a, this was leaked in may, i'm not going into secret area, leaked in may we wanted
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quarterly reviews on progress on agreement. chinese were saying no, no reviews. a review means you can put tariffs back on. stuart: yeah. >> there are 20 areas there has been progress. stuart: michael pillsbury, revel laboratory interview. >> i'm usually a hawk, stuart. stuart: you see the surprised look? >> thank you. stuart: next hour we'll have a little fun on the show. we'll have sports memorabilia up for auction like kobe bryant's championship ring from the year 2000, going for $45,000. mike trout's rookie trading card. you never believe how much that is going for. hint it is more than kobe's ring. look at the big board. minor leagues loss. we're down 40 points. above 26,000 on the dow. there will be more "varney" after this. ♪
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stuart: we're down 79 points. much of that loss is taken up by home depot and caterpillar. two dow stocks. that is why we're down 80 points
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on the dow. without those two we're virtually break even. big pharmaceutical companies partnering with social media influencers to sell new drugs and devices. ashley: rose has 600,000 followers. has a husband, baby. people like her life-style. so they tune into her on instagram. she has paired up with a company that sells treatments for psoriasis. she also has psoriasis is. big pharma is doing this because these big influencers have the kind of audience drug companies want. basically, 18 to 29. more than 50% are. influencers get $1000 for per, 100,000 followers. she bets 6,000 followers. what about the fda, what about ftc, what about regulation of
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promoting products may not always have proper recommendations and okays? just relying on influencer, and what does the influencer foe about the medications? do they know the whole story? stuart: does it matter? ashley: could be more regulation is coming. all i'm saying. stuart: real fast here, several retailers are in danger filing for bankruptcy. susan: retail ice age. this is bricks and mortar. some are more local. fairway group, the supermarket chain. j. crew, apparently j. crew is saddled with $1.7 billion in debt. pier 1, pet smart, neiman marcus. closing down stores. jcpenney part of that 2,000 expected this year, according to reports. that is on top of retailers filed for bankruptcy, including just recently pay source, discount retailer, payless issue source. stuart: retail ice age lives.
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shrinking retailers. susan: bricks and mortars. stuart: we do finally, now got a price tag for the green new deal, $93 trillion. leading presidential candidates, some of them support this thing. i'm saying if joe biden and or mike bloomberg don't get into this race as moderates and soon, the democrats could be in real trouble. my take on that, top of the next hour. ♪ hoo!
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stuart: presidential candidate kamala harris says of course we can afford the green new deal. she says it's not about the cost. she says it is an investment. now we have a reliable price tag for the gnd, green new deal. it's an eye-popping $93 trillion or $600,000 for every household in the country. this is not some off-the-wall estimate. it comes from douglas holt egan, former director of the congressional budget office. he and his colleagues at the american action forum broke down the deal and looked at the cost of its parts. for example, $36 trillion for universal health care. $5 trillion for a ten-year transition to a new electricity grid. $1 trillion to $2 trillion for the high speed rail line that will make air travel unnecessary. look, it's a long, long list, a
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trillion here, a trillion there. pretty soon you are talking real money, like $93 trillion total. this is fantastical economic nonsense. even if he is wildly wrong and it's only, say, $50 trillion, it is still fantastical economic nonsense. its supporters bring in children to confront senators who won't back it unconditionally. when an exasperated senator feinstein told them she knows what she's doing, alexandria ocasio-cortez fired back with her now famous, i'm the boss. that exchange reveals a lot. first, ocasio-cortez really does lead the democrats. her green new deal wraps together all their goals, tax the rich, universal health care, a job for all, et cetera, et cetera, et cetera. second, it reveals the extremism of several presidential candidates. senators harris, warren, booker, sanders and gillibrand support
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all or major parts of the green new deal. do they think it's worth $93 trillion? will america vote for fantastical economic nonsense? i think not. if joe biden and/or mike bloomberg don't get into this race soon, as moderates, the democrats' red tide will sink into the oblivion it deserves. the third hour of "varney & company" is about to begin. stuart: you heard what i had to say there about my take, my editorial there. coming up in about 15 minutes, we will get reaction from senator john barrasso. i want to know if there's any part of the green new deal he supports. i also want to know what his climate change plan is. not sure what that is on your screen right now. we will try to fix that for you. what is that? okay.
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check the big board. that's reliable. we are down 93 points as we speak. the dow, just a tad below 26,000. at the top of the 10:00 hour, we got a nice boost for the market from consumer confidence, strong consumer confidence numbers that came in. since then, the selling has resumed. now we are down 90 points. fed chair jerome powell reaffirmed that the fed will be patient with interest rates. okay. now listen to senator sherrod brown, the ranking democrat on the banking committee. here's what he said at the hearing. roll tape. >> it's troubling that the former fed chair, the woman that sat in your job and was very good at that job, tells the press point-blank that she doesn't think the president of the united states understands the economy. i think the american people continually and more and more understand that this president, that many americans, gm workers in youngstown, for example, believe he has betrayed workers
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in this country. that's becoming clearer and clearer. stuart: betrayed workers. time to bring in mercedes schlapp, director of strategic communications in the white house. your reaction to senator brown? >> i don't know what rock senator brown is living under these days but let me tell you, president trump has a firm grasp of what is happening in this economy. he understands and clearly has implemented economic policies that we have seen massive growth in our economy as well as incredible benefits for the american worker. i mean, we have seen wage increases. we have also seen blue collar workers have more labor or job gains as well. this is something that the numbers just tell the story. that's because we do have a strong economy. our fundamentals are strong and at the end of the day, american workers have strongly benefited, especially the blue collar workers, have benefited from what president trump has done. stuart: mercedes, it seemed to
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be a political statement from senator brown, who is considering a run for the presidency. he used -- i think he used the occasion to put out a very political speech and directed it at someone who has nothing to do with that he was talking about. >> that's right. there's no question that when you see these potential democratic candidates and you have seen those that already said they are running, their plans for the economy is that of taxation. it's that of moving towards far to the left in terms of moving this country away from capitalism and towards socialism, where the government decides how the economy is going to run and function and basically tie the hands of our businesses. this president has been -- president trump has been the most pro-business president, pro-small business president as well. we have seen the enormous benefits of the lower tax rate for small businesses and corporations where we're
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bringing back investment into the nation and as we know at the end of the day, it's that effect that leads to growth and wage growth, more job openings than we have seen in decades that benefit the american worker. stuart: can we move on to vietnam? the president is there now. big summit tomorrow with kim jong-un. mercedes, democrats have demanded verifiable moves to denuclearize north korea. i mean, is that what we're going to get? is that what the president will walk away with from this summit, proof, verifiable proof that they are now denuclearizing and are going to keep at it? >> well, i think as we have seen, we made progress. i think you have seen that we are looking forward to productive discussions with the north koreans. obviously, the goal is to lead towards complete denuclearization in the korean peninsula. we have seen some success in the sense that you have had over 400 days of the north koreans not
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testing missiles or nuclear weapons. beforehand you would see these missiles being tested over japan and other areas like guam and here we have an opportunity to really have these discussions and ensure that we move and make progress in allowing for, for example, monitoring teams to go in and ensure that these north koreans are moving towards denuclearization on the peninsula. stuart: the house is scheduled to vote today on blocking the president's emergency declaration. if congress blocks it and it goes to the senate and they block it as well, is the president going to veto it? >> the president has made it very clear that he will defend his national emergency. you know, we are looking at the realities of a humanitarian and security crisis at the border. we know that congress has given us the authority, presidential authority, the legal authority, to declare national emergencies. wasn't too long ago that
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president obama declared a national emergency on trans-national criminal organizations including drug cartels on the southern border. so we have plenty of these examples that national emergencies have been declared and -- stuart: can i just jump in for a second, mercedes. the polls show that the declaration of emergency was not popular and it is likely that if the president issues that veto, it will be even more unpopular. >> look, the president is doing the right thing. what we have seen along the border is an increase in terms of illegal criminal activity, gang members, human traffickers, who have benefited and abused our broken immigration system, our broken immigration laws that we know for a fact have created this situation. i mean, we know that our border patrol agents and officers need the resources to be able to have operational support and control of the southern border, and it is why the president used his
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legal authority based on the statutes by congress to declare a national emergency. so the department of homeland security has requested time and time again for the department of defense to provide additional support and they have done so. it's why we have troops at the border. it's why they are providing the support to our border agents, because we know that the situation at the border has gotten worse. stuart: can i just bring up the case of jorge ramos, univision's guy in caracas? he shows maduro some nasty video of kids eating out of garbage trucks, then they keep him in a dark room for a couple hours, him and his whole team. eventually they release him. i suspect that is because president trump said look, you mess around with americans and you will face the music. you will be held accountable. i think they let him go because of president trump. >> well, i wouldn't even give maduro a moment on television because he has no legitimate claim to power and it's time for
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maduro to go. what he has done to venezuela, once a prosperous nation -- stuart: would we use the military, if they shoot people by the dozen, if they start doing that, will we use the military? >> the president has said all options are on the table. at this point, what we are providing are support. we are standing with the interim president juan guaido and as we know, more and more of these military leaders from venezuela are siding with president guaido, so again, we are standing firm. we saw that vice president pence was down in colombia at the lima group, gave a very strong speech, and we also garnered the support of over 60 nations who now recognize president guaido as the legitimate leader in venezuela. stuart: terribly sorry to cut it short. hard break coming up. n you know all about hard breaks. mercedes, we appreciate you being with us. thank you very much. now this. dozens of environmental
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activists stormed mitch mcconnell's office yesterday. they demanded he take action on climate change. just as the bean counters put a price on the green new deal, $93 trillion. we are on that story. millenials reportedly in over their heads with debt. over the trillion dollar mark. that's student debt, by the end of 2018. $1 trillion just for the millenials, that is. the main culprit, student loans. new york democrats considering a new way to tax the rich. they are proposing a plan to slap a surcharge on second homes worth more than $5 million. you want to drive people out of the state, that's how you do it. the market now down 27 points. it's a narrowing loss. stay with us, please.
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the scientific consensus that the lives of children are going to be very difficult and it does lead i think young people to have a legitimate question, you know, is it okay to still have children. stuart: alexandria ocasio-cortez talking about whether people should -- sorry, what?
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oh, elizabeth warren is now questioning jay powell on the senate banking committee. let's listen in. >> how many mergers and acquisition applications for the banks have you received since 2006, do you remember? >> no, i don't have the number. >> would 3,819 sound right? >> yes. >> good. okay. and do you remember how many of those 3,819 applications you denied? >> no, i don't. >> would zero sound right? >> if you say so. >> well, you said so. it's your letter. chairman powell, has the board denied any applications since you responded to my letter in may? >> i would just, if i can offer a little context -- >> let's get this part out. because that's what i'm trying to do. >> i don't believe we have. i think what happens is that people don't apply or they withdraw their application. >> that's exactly what i'm going to talk about. so 0% of the applications for
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mergers and acquisitions since 2006 have been denied. now, that doesn't mean that all potential mergers and acquisitions make it through the process. 13% of applications are withdrawn before they get a decision. according to your letter, chairman powell, quote, prospective applicants may discuss a proposed transaction with federal reserve system staff prior to filing and applicants will be discouraged from filing applications where it is apparent that the applications would not meet all of the statutory factors required for approval, end quote. so you think that -- if you think that a proposed merger won't be approved, you discourage the bank from following through, is that right? >> in some cases. i think that would be in cases where it's clear that there's a statutory problem, you know. for example -- >> okay. but you approve 100% of those
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that go ahead and apply. >> unless they're withdrawn. >> that's what i said. so you encourage them to withdraw if they're not going to get an approval? >> but they can file and withdraw. >> the point is they withdraw if they're not going to -- because of a conversation you had that's a non-public conversation. so this is a formal process required by regulation. in order to do an approval, people who object to the merger have an opportunity to file a protest. that's how the process is supposed to work. that would include, for example, communities that are worried that local banks may close following a merger or acquisition, employees who are concerned about losing their jobs, state officials that may be concerned about decreasing competition and so on. so chairman powell, you have explained that consultation with a bank starts -- can start before the merger is announced publicly. when is it that the public can
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actually file protests, before or after the merger is announced? >> so i think the process is that we receive an application for a merger, which we have not received yet. i think we expect to receive it i'm told sometime next month, and -- >> and when will the public have a chance to -- and that's true in all of these, right? the public doesn't get a chance to comment until after the application is already filed. but the application is only filed after the banks have had a chance to have this quiet conversation with the fed. i just want to get this straight. you and the banks get together in the back room and grease the wheels before the merger is announced and if you're not going to approve the merger, you tell the bank in advance and then they go figure out something else. if the public wants a chance to weigh in, they have to wait until you have already made a decision. no wonder you approved 100% of
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the merger applications. not a single no. your approval process itself appears to be a rubber stamp, that everything is happening behind closed doors. so the question i have is about the sun trust and bb & t merger. is this one just going to be another rubber stamp? you have already made the decision behind closed doors before the public gets a chance to weigh in? >> no. not at all. no. we are going to conduct a very fair and open, transparent process. i think, you know, our obligations under the statute are clear and they are quite broad. we will be hearing from groups of all kinds and going through our process carefully and thoroughly. >> so it's just that in the last 3,819 merger applications, which were all approved without a single one for which you said no, this time you're going to be listening to comments from the public that might cause you to
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say no? you know, i just have to say that i bet suntrust and bb & t looked at that 100% merger success rate and saw what everyone else sees, and that is that the fed works for big, rich banks that want to get bigger and want to get richer, and then everyone else pays the price for diminished competition, for less service, for higher prices, for employee layoffs, for the risk we have yet another too big to fail bank on our hands. i just think it's time that we put down the rubber stamp and that we really let the public and everyone else weigh in before we create yet another too big to fail bank. >> senator cotton. stuart: senator warren questioning jay powell, chair of the federal reserve. senator warren sits on the senate banking committee. looks to me like she does not like big banks and she doesn't like them getting bigger and she doesn't like them making money. what do you say?
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>> yeah, i think she's really nit-picking at this point and in fairness to the fed chair, of course, standing his ground but in context, she created, proposed and created this consumer financial protection bureau so in my mind, she's talking her own book. she is there kind of defending this idea, okay, the banks can get bigger, watch out for the little guy but i'm not sure that the questions that she was asking there specifically lead to anything better for the average person. stuart: very political speech. >> i think so. yes. stuart: she is running for the presidency. >> that is the headline. yes. stuart: thank you. welcome to the show. now, before we heard from senator warren, we showed you this graphic, rather dramatic. this is the green new deal and the cost thereof. $93 trillion. $600,000 per household. that comes from a reputable source, too. senator john barrasso is with us, republican from wyoming. senator, kamala harris says climate change is an existential threat. a threat to human beings. that's why it's worth $93 trillion.
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do you agree, climate change is a threat to humanity? >> well, i believe the green new deal will drive a stake through the heart of our strong healthy and growing economy. it is not workable. it is not affordable. we should not do it and you just had elizabeth warren on. she has rubber-stamped the green new deal which accomplishes nothing of what those liberals who bought into this want to accomplish, but it costs our economy and our country dearly and it plays right into the hands of vladimir putin, who uses energy as a weapon. stuart: is there any part of the green new deal, because it's a vast plan that includes all kind of things, is there any part of it that you could support? >> well, certainly not as it is written. you know, republicans have bipartisan legislation to actually make energy cleaner and deal with carbon capture and sequestration and utilization, deal with new phase nuclear programs. all of these things, some signed
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by president trump, these will actually work to address climate issues worldwide, but what the democrats are talking about with this green new deal, you know, with solar and wind, that's only 8% of the electricity that we use, and the united states only creates about 13% of the emissions. it's china and india that are putting out 33% of the emissions. stuart: mr. senator, i'm terribly sorry to cut this short. as you know, it's a very busy news day. we really appreciate you spending this limited time with us. you can blame it on senator warren, if you like, because we had to take that testimony. >> she wants to take the country in a hard left turn and it is not the right place for america. thanks, stuart. stuart: thank you, mr. senator. we appreciate you being here, always. thank you. listen to this. big pharma companies now partnering with social media influencers to sell new drugs and devices. we will tell you all about that in just a moment. these influencers have
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influence. we are also dealing with student debt. huge problem, especially for millenials. how do we get that number down? it's over $1 trillion of debt for millenials. new york democrats considering a new way to tax the rich. they want a surcharge on second homes worth more than $5 million. full details coming up.
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stuart: we have now turned dead flat. we were down 20, 30 points. now we're down one point but right there at 26,089. two drags on the dow. number one, home depot, dismal earnings report. same store sales disappointing. they are raising the dividend but that doesn't count. home depot down 1.6%. caterpillar machinery, construction company, missed earnings, downgraded by ubs, who said sell it. evidently people are. down 2%. big drag on the dow, both stocks. new york democrats are considering a new tax on second homes worth more than $5 million. seems like, what is this, tax
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the rich and run them out of town? >> if you were going to buy a second home in new york, basically you are going to be taxed, especially as the value of your property increases. i think it's half a percent, if you buy a $5 million home, that's a second home, then that price goes up and up and up. you can blame the hedge fund manager ken griffin because he bought this record close to $240 million property close to central park south. a lot of eyeballs went there. you can get around this if it actually does become law which is a big open question. this has just been proposed. but you can get around it either by renting the apartment out or by becoming a new york state resident, then thereby paying full on taxes. i think if you are going to pick a second home, long story short, if this becomes law, choose somewhere else. stuart: i'm not going to go to new york. they are just running money out of the state. >> it does seem like the idea. stuart: thank you, deirdre, before i explode.
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millenials reportedly in over their heads with debt, over the trillion dollar mark by the end of 2018. what's the culprit? student loans. that's the problem here. let's bring in columnist peter maurici, scott martin and deirdre standing by as well. peter, you first, how do we get that number down? a trillion dollars worth of debt just for millenials. how do we get it down? >> i think we have to have debt forgiveness. something like 40% of young college graduates are not in positions that require a college diploma. if you are working at starbucks or driving for uber or whathave you, a college debt of $50,000 or $100,000 is absolutely insurmountable. where do i get the money from? the colleges that gave them the bogus degrees. they are sitting on huge amounts of assets. sue them for fraud. stuart: so it's debt forgiveness with a college that gave them the lousy degree to pay. scott martin, how would you get that number down? trillion dollars worth of debt. how do you get it down?
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>> i don't know if i would go as far as to sue them for fraud but i appreciate the effort. what i would probably do is really tie the colleges to really helping these kids, men and women, getting some rate of return. rate of return, by that i mean getting them into a job or into a job market that actually is going to get them money to pay back the loans. a lot of things i run into as a financial adviser is folks that have these loans, about $30,000 on average per borrower, and they don't have the jobs or the well-paying jobs after paying for all that education that helps them pay back the loans. a lot of these folks are carrying these loans into their 40s, even sometimes 50s because of the fact that the colleges haven't educated them well enough, haven't hooked them up with a labor market or employment market to where they can actually get employment to pay back what they borrowed. stuart: get them a better job but that's way down the road. that's in the future. deirdre? >> there are also some people who say give students more time to pay it back but i do understand what peter is saying, even if you are working at
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starbucks, presumably you hopefully won't be working there for a decade but if you go to germany, i think you have 20 years to pay back your debt. in the uk, you have 30 years. australia is the same. sort of in between. so it seems like other countries try to give the students a little more time to get on their feet. stuart: so spread it out. >> spread it out. stuart: peter, what's your reaction to that? >> well, it is actually getting spread out and it's not really enough. if you are making $30,000 a year and you have a $30,000 student loan debt, and by the way, if you are making 30k now you will probably be doing the same in five or ten years, it just doesn't work out. as for the future, my feeling is that colleges have huge amounts of assets that are basically debt-free. they should be able to mortgage these to provide half of the capital on student loans. if we did that, then colleges would become infinitely more focused on educating people and providing useful stuff. how would they pay for it? college tuition is up since 2009 twice as much as health
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insurance. most of that is for club med facilities. students don't go to class very much. stuart: i know. i know what you're talking about. >> it's to impress the parents, i think, when you come in and say we have this new swimming pool and new cafeteria. stuart: you are exactly right. that's exactly what they shower students with. 24/7 japanese food. good lord. i'm out of time. thank you very much. i will move on to another issue with you, scott. i want to talk big pharma, because top execs from big pharma companies are on capitol hill right now testifying about drug prices. let me give you a quick example. the maker of humera, best-selling drug in the world for arthritis, they put the price up 9% in january last year, another 6% in january this year. how are they going to justify that? what are they going to do about this, scott? >> well, it's hard. that's one area that president trump has talked a lot about is drug pricing reform.
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i will tell you, we are starting to see the chips move on the board when it comes to pharma. you are starting to see some of the smaller pharma companies, you talked about big pharma. big pharma buying smaller pharma that have drugs that they can jack up in the meantime before they go generic because they have a little bit of leeway there, little bit of runway on the patent, for example. what you are starting to see is i think the government rightfully so, going after the mylans and so forth with respect to some of the drugs they have, that they have pricing power on because they have the market cornered and are therefore a little erroneous in the fact they jack up the prices on those who most need it. stuart: okay. now you are hot on some smaller drug companies with experimental products. give me the name of a company, a drug company, i believe there's merger possibilities, give me a name and tell me what they do. >> yeah. there's two of them. yesterday we saw a big deal with spark pharmaceuticals being
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bought by roche. i think there's a couple other ones that we own for our clients and myself alone that are similar in the sense that we're not going to see a deal tomorrow and these are risky. in the sense they have some hot prospects on their books. but i think there's a couple names that are interesting. blue bird bio is one that's in gene therapy, blue is the symbol, gene therapy and oncology. another is focused on blood disorders, blood clotting and so forth. the interesting thing about both companies, especially portola, they are small. what happens, like i mentioned earlier, is some of these big companies that don't want to develop the technology, realize some of the smaller companies have good things coming down the road, they are potential takeover candidates at some point this year, i believe. stuart: can i go back to blue bird bio, they are in the gene therapy business like the one yesterday, what was the name of the one yesterday? >> spark pharmaceuticals. yes. it's so interesting --
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stuart: what therapy are they working on? >> they are working on gene therapy to effectively try to cure cancer, believe it or not. they are working on kind of changing the genes before, you know. here's the other thing, too, about spark. what's interesting about spark yesterday is everybody was concerned about a cure for blindness that spark was working on. they have some hemophilia drugs in the pipeline they got purchased for. you are looking at a lot of concepts with these companies which is why they are very risky and speculative. the reality is a lot of these bigger companies like roche and bristol-meyers, they need to buy these companies that have research in the pipeline because they aren't going to spend the money to do it themselves. stuart: what do you make of pharma companies partnering with social media influencers, influencers, people who influence people, to sell their products to followfollowers? it sounds a little dangerous. you don't know what these products are. >> i agree with you there.
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the influencers certainly aren't experts and i think you're right, you know, it depends who you are getting your information from these days. hopefully people aren't going on social media saying hey, somebody i follow on twitter or insta, instagram that is, as the kids say, somebody they are following on those platforms aren't somebody -- isn't somebody that's basically getting them to do treatment or getting them to take a drug because they back it. i would tell people to do their own research before they follow something or take something because kim kardashian think it's a good idea. stuart: well stayed. we appreciate that. good news. see you later. thanks a lot. a couple corporate stories for u firyou. you better look at tesla. a judge giving elon musk until march lefrp11th to respond to contempt charges. the s.e.c. says musk violated their agreement with some tweets last week. we have breaking news from fiat chrysler. they just announced a huge new improvement to their michigan plants, adding 6,500 new jobs,
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investing $4.5 billion in that area. check macy's. evidently they have dodged the retail ice age. it's been phasing out socme of their competitors. they have announced a restructuring plan aimed at saving $100 million. the stock is barely reacting. to the developing lingerie battle between victoria's secret owned by l brands and target, yes, target. they are trying to capitalize on victoria's secret dwindling popularity with millenials with three new lingerie brands launching next month. that is target. got it? got it. moody's just posted a list of 17 brick and mortar stores that they say are the most vulnerable to filing for bankruptcy. companies like pier one, sh shoemaker thom's and fairway
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market. ouch. big vote on capitol hill today. the house expected to reverse the president's border emergency declaration. if the senate follows suit, the white house tells us president trump will veto it. he's doing the right thing, says mercedes schlapp. next, someone who works on the border. i want to know, is it truly a national emergency? comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast.
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stuart: throughout the morning, the chairman of the federal reserve, jay powell, has been testifying on capitol hill. one main point is he said he would be patient on interest rates. a little later, we heard from senator elizabeth warren, she's on the banking committee. she appeared two minutes before question time, asked a series of extremely hostile questions about banks, and left two minutes later. no damage done to the markets. right now, we have the dow industrials down a mere 20 points but at 10:00 eastern time, we received some very positive economic news. consumer confidence -- >> consumer confidence up, february index 131.4, much higher than estimated and building on what we saw from january. that's why you are seeing some of the general losses. stuart: if it wasn't for the home depot and caterpillar -- >> we would have another -- yep.
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stuart: we will be back. each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.
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stuart: on capitol hill today, the ceos of the big three credit reporting bureaus, experian, transunion and equifax, all getting grilled because of the very damaging hacks. the latest, please? >> yeah, this is all about our data. if you remember when equifax, some 150 million people were
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affected, names, social security numbers, birth dates, people are asking the ceos of the big three how are you going to prevent that from happening again. one of the spicier comments came from representative al green, democrat from texas. do you let consumers know that you have a flawed business model, why would i assume that you are now going to repent. i think the ceos will have a little bit of tough day on capitol hill. stuart: that was a pejorative question. thanks for the update. good stuff. let's get to the board. brandon judd, national border patrol president with us. tell me, make the case there is indeed a national emergency at the border. because the democrats say it's not really an emergency, not a crisis at all. >> yeah. if you look at 2014, everybody agreed that we had a crisis at the border. we have more numbers now than we had in 2014. we are on pace to shatter those numbers. but not only that, all you have to do is look at the opioid epidemic in the united states.
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we have more people dying today of opioid addiction, opioid overdose, than we ever have in the history of the united states. those opioids are coming across our border illegally, whether they are coming through ports of entry illegally or between the ports of entry, they are coming into our country illegally. that is a crisis. by declaring a national emergency, president trump is putting the spotlight on the border where it needs to be so that we can hopefully get the resources that are necessary for us to finally secure the border. stuart: look, if in 2014, everybody agreed there was a crisis on the border, why now does one major political party and all its leading characters say no, there is no crisis? look, in my opinion, it's because they detest president trump. what do you say? >> that's what -- yes, you're absolutely correct. what's unfortunate is the way the politics are and the way we polarize everything to where you have so many different sides.
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the fact of the matter is this position the democrats are taking is going to hurt them both in 2020 and in the long run, because people see what's happening, as your neighbor dies of an opioid addiction or you lose a job because there's lower wages to be paid for those people that are here in the united states illegally. that affects people. stuart: let me come at you for one second here. the emergency declaration was not popular in the polls, and if the president vetoes the anti-emergency move that's going through congress now, in other words, upholds the emergency, it's likely to go even further down in the polls. how do you deal with that? >> well, he's going to have to manage that going into 2020, obviously, but he has a plan to do that. and again, most of the american public, they agree that we have to secure the border. as long as he continues to hit on that, it will resonate with the voters. again, that was his major issue
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in 2016, talking about the border, border security, and he continues to do it and again, hopefully we'll be able to get people to agree that border security is absolutely necessary. stuart: brandon, always a pleasure to have you on the show, setting us straight. we appreciate that, sir. thank you very much indeed. do you remember when we were lucky enough to have jackie robinson's original contract on this set? we did, you know. it was a huge piece of sports history and american history, too. we have an update on it for you. we are also going to get a close-up look at the championship year 2000. it was given to his parents, then sold. now that buyer is selling it again. the ring is controversial. we have it on the set with the auctioneer. we'll be back. as the one who is always trapped beneath the duvet i'm begging you... take gas-x. your tossing and turning isn't restlessness, it's gas!
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stuart: we love this. big ticket sports memoribilia a few weeks back, we had jackie robinson's original contract with the dodgers, valued at more than $36 million. the auctioneer, ken golden, is back with us. update me, please, on the contract. >> we are finalizing a transaction with an organization that we hope to conclude very
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shortly that will be a boon to jackie robinson's fans and legacy as it will allow the contract to be on display permanently. stuart: you can't give me a hint? >> very likely in new york city. that's the hint i can give you. stuart: it set a record for sports memoribilia? >> it certainly should smash one. yes. stuart: smash it. all right. now, what else you got? let's start with kobe bryant's championship ring from the year 2000. okay, how much? >> we expect the ring previously sold in 2013. this is the actual ring that kobe bryant was given this ring by the lakers -- stuart: the one on the left? >> right there. yes. let me, if i can with the cameraman, just turn it so you can see the name bryant right there. stuart: okay. he gave it to his parents? >> he gave it to his dad. stuart: he sold it? >> they needed the money so they sold it in 2013. it originally went for about $175,000. kobe is going to be in the hall of fame next year so we
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certainly hope it approaches that same $175,000 level. stuart: okay. i really want to talk about mike trout. >> yes. stuart: you've got his rookie card. >> yes. stuart: how much is that again? >> the card is currently above our expectations. it currently has exceeded $100,000. stuart: over $100,000? >> i believe it's $110,000 now. it's one of only 25 cards. it is the number one mike trout card to own and people are buying these cards, they are even exceeding prices like mickey mantle, ty cobb and babe ruth. stuart: you have a ty cobb card. i know him. how much is that? >> this card is a rare ty cobb with a ty cobb king of tobacco bat. a very rare bat. only 20 of these are known to exist in the world. this card is currently about $105,000. stuart: 105? >> slightly less than trout. stuart: that's crazy. >> here's the key. five years ago, five years ago, this card was about $100,000. this trout card was about $3,000. stuart: go figure.
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>> that's what's going on with modern cards. some of these really rare modern cards, trading cards are going up faster than a biotech company that discovered the cure for cancer. it's crazy. stuart: steady on. last one, that's a ring there. that was kareem? >> that was kareem abdul-jabbar's championship ring. we are auctioning his entire collection to benefit his foundation, skyhook. stuart: we are out of time. i wish we had the entire show. >> so do i. i could talk the whole time. stuart: i know you could. we noticed. ken, thank you so much. >> thank you so much. by the way, the auction closes march 2nd at goldenauctions.com. stuart: got it. thank you very much, sir. which one? that one. yes. selena gomez no longer the most followed woman on instagram. we will tell you who holds the number one spot right now. new reports that colin kaepernick could have played football with the xfl until they heard how much he wanted.
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we'll be back. . .
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stuart: all right. we asked you to guess who is the most followed woman on instagram and answer is, ariana grande. the singer has 146 million followers. just ahead of selina gomez. she is on a hot streak and has
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the number one album and single in the country. colin kaepernick reported he hadly to play in the xfl but he wanted 20 million bucks. he was also reported to play in the alliance of american football. those ended because of money. jason mamoa said he is okay with his picture on a package of girl scout cookies. he says he wants them to send him short bread cookies because they are his favorite. we're down 14 points. most of the loss is what? >> caterpillar and home depot. without that we would have a difficult color on the screen.
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stuart: jay powell commentary, hostile question to jay powell and great consumer confidence report and we're dead plat on the market. >> there are concerns are the two dow members. stuart: two dow members get you every time. neil, it is yours. neil: thank you very much, stuart. we're following the jerome powell hearings on capitol hill. there would be drug industry titans getting a browbeating but appears jerome powell is getting hit hard. first of all from those who want to run for president. others wonder about what the jurisdiction should be for the federal reserve. powell himself did make market friendly and unfriendly comments at the same time. take a look. >> the fomc determined that the cumulative effects of these developments along with ongoing government policy uncertainty warranted taking a patient approach with regard to future policy

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