Transcripts For FBC Cavuto Coast To Coast 20240714

We reach midnight there. China is ready to retaliate again in the trade work. What a rehearing . Trump saying today that any deal with china has to be on our terms after china threatened today to retaliate washington coaster. Promising to take necessary Counter Measures of trump follow through on plans to impose a 10 tax on additional 300 billion in chinese imports, this could lead talks in limbo. This morning, chief of staff mark said this morning that they are looking forward to plan talks between the two countries that fall. I think secretary nguyen continues to have open communication with china and we are hopeful there will be additional talks this fall. I think they are pretty consistent in needing to change the past. Spokesperson telling reporters today they hope the u. S. Works through a deal and builds on term agreed to sing, we help the u. S. Can work with china to work out a mutually acceptable solution for the dialogue into consultation with mutual respect. Donna is not just threatening tariffs in revenge, chinese officials think that pushback may not be limited to just tariffs, suggesting that they continue to hold off on their initial promise to buy a large portion of agricultural product in the u. S. Lets get into this debate about the economy right now, treasury yield back above 2 , just barely today after sink below but threshold earlier. For the first time ever. They have the fears of recession making the rounds. The whole thing is overblown. Brian joins us now. Youve been saying that for a wild. Its good to see you in person today to make this argument that all of this talk is a bit too much. Its not the yield curve or whatever. This gets a little economic geeky and i will go fast but prior to 2008 when the Federal Reserve wanted Interest Rates to go up, what they would do is withdraw from the Banking System and they withdrew too much to fight inflation, then they would realize recession was coming and the fed have to put the liquidity back. The yield curve would invert and the fed with lower it so the fed curve would go back to normal. This time, after they did qe, we now have access reserves in the Banking System, theres no shortage of money. What happening in the bond market today is all they are saying is we think they will keep Interest Rates low forever. I think wrong. I am liking the bond market today, i believe its the biggest bubble weve had in a market since 97, 98, 99 bull market in stocks. Back then, stocks were going to go to the moon and there would never be recession again and this time, i think we have a bubble in bonds mistakingly and people believed there were recessions coming. Theyre just as wrong today as it was in 1999. Will know when it burst. What about when this bubble bursts . What does it actually look like for people if it is in a bubble, bursts . Festival, i would argue anybody watching should get a mortgage, buy a house, walk in the longest rate you can. These are unbelievably low Interest Rates. Interest rates right now, lets say they go up 2 , we are at two and a half , they are still the bow compared to history. Weve had strong housing markets and auto markets higher Interest Rates than this. One and a half on a one year, 2 on the third year, both of those are below the rate of inflation. You cant have Interest Rates that low for long without having Interest Rates go up. I dont look at it being a disaster for the economy but i do think the rates will normalize at some point. It will hurt some people who think this rally will continue forever. Just like it hurt people who thought that about stocks in 99. Is that damage regular people when that plays out . The kind of difference, it wasnt a drop in the stock market that caused recession in 99, 2001, it was that it got too tight. With Interest Rates going up, what matters is its getting too tight and i dont see that anytime in the next few years. As a result, i dont think that shock alone will cause a recession. Get away from the bond market for a second, we have a couple of pieces of data that came out today probably on the economy and the argument is that its an argument about whats happening in the real economy. Manufacturing going down, retail sales going up so theres a split with what businesses and consumers are saying. If Business Investment in manufacturing economy is slowing down, doesnt that spread to the consumer side . They eventually take that hit, too . Why wont that happen . I think its the opposite right now. At manufacturing, its only 11 of the economy. Services are way more important and retail sales are booming. We have one of the lowest unemployment rates in 50 years, wages are picking up. Delinquency rates are down. Consumer assets are the highest ever so when i look at the consumers, theres no reason to expect a big slow down. I think whats happening is that manufacturers and producers are overly pessimistic about the economy. We can see that in the Second Quarter of gdp, inventories fell. Producers are falling behind the consumer today. I expect this to turn. I expect producers to catch up. This is a well thought out argument. Thank you. If you want to argue, walmart give you an argument this morning, i slow down on that side with expected earnings report, there up by four and half . The American Association president , rick is our next guest and hes looking at the trademark. There could be trouble down the line. You heard the conversation brian and i just had. How would you counter that argument . I loved his argument but we dont follow the bond argument, there is a Fair Assessment yesterday of margin compaction leads to earnings being clicked. Youve got some of the retailers reported yesterday, they are truly an indicator of whats happening in our industry, people are worried. Just yesterday i was in las vegas and our semiannual hued tradeshow where buyers, retailers and brands meet in one location, buying and selling going on. People are employed so they are buying. Prices are going up and people are crying because bargains are going down. They cant make money. We have buyers and criers. Are people worried . Retailers are particularly worried. Manufacturers are worried and brands are particularly worried. About what . Tuesday morning i got up in las vegas and i had a big smile on my face because i thought the clinch had given christmas back to us but. The tariff delay . Yes. That happiness lasted about an hour and a half until the list came out. When we look at the list, 91 is still on. Explain whats on the screen. 41 of the increased tariffs ticketing affect, that means the president was going to put on new tariffs, 10 tariffs so of that, 60 is being delayed until the 15th of december. Still, you have 40 that is going into effect. They split it into two lists. Unfortunately, 91 is on eight and 52 of all footwear is on a which means we are hit for holidays, 10 . When you say we, human Retail Industry . When it across the border. Most of them will eat it again. They dont seek they can pass that on because consumers will spend the money so they just eat the tariffs. Retailers, brands, manufacturers, we are pretty savvy as to what the consumer will do or not do. We will all do our best to work it out but this is a biggie putting, bring me some tariffs, bring them right now. Stockings will be taxed. You think we are heading to a recession . Session is a difficult world, youve got an active economy, people who want to buy. People in our industry are going after borrowing money to pay for the tariffs that they have to pay. When they borrow money, they dont have market, they have to lay off people. Theyre the first one to come out of a recession and the first one to go into recession. Look at us and we are bringing the administration, we have been four months. Dont hurt the consumer. We can live with this economy a little longer. We think that what the president is doing in terms of talking to china is a winwin for everybody. But not with the tariffs. We certainly hope the president is getting good advice particularly good advice from peter because the blowback on this will be really bad for the economy. Not a little bad, really bad. The wall street journal is not a big fan but good to see you. The debate everybody is having in the economy right now, listen to what brian said rick said, it adds to uncertainty. Theyre not quite sure what happens next. The market is up today after the decline yesterday President Trump telling him how to protest in hong kong. A little advice from twitter coming up. Well take you there. Dont forget the latest breakdown of this market, well see how things close after the bout. Coasttocoast on a busy day. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you preorder a new samsung note. Click, call or visit a store today. President trump is urging president of china to meet with the protesters in hong kong. The latest on the hong kong. We have trump tweeting about this, urging him to meet with the protesters and maybe we can get a deal done. Trade has been linked to these ongoing protests. The offer includes the foreign ministry, trade and yes hong kong as well. They are saying you want to work out at solution for dialogue with mutual respect. You see that turned around the market. As for how it links back, trump talking about trade in some of these tweets, lets bring it up on the screen. They had a really great car. The tariffs and currency and money into the system. They are fine with or without or after infecting expect to china trade as youve been hearing from the president as well. Despite the fact that it is now the trade tax, the hong kong situation here, doesnt mean these will end anytime soon. The latest schedule i got from the protesters suggest there will be a big march this weekend. That is having a big impact on hong kongs local economy here. We heard from finance minister think he expects almost zero growth because of the ongoing protests especially into 11 straight weeks. Hes had to unleash 4 billion package into this goes to one month free rent for low income families are subsidies for kids and for income taxes and an extra months payment for Social Security and that may also turn around the general population because it is winning hearts and minds right now. Drop your stakes, livelihoods at stake in Hong Kong Government looking by giving cash back to the local residents here. Maybe they are trying to buy off more anti protesters so hopefully the Hong Kong Government will end soon. Anything about the public support, not necessary. , just around the hotel, nothing to do with protesters in terms of what they think of it . That might be with this stimulus packages. 2 million joined the march a few months ago and by and large, there has been general support for these protests and protesters but after the destruction of the airport, a Main Transport and in effect on the economy, if you like it is turning and people are thinking, lets just get back to normalcy. That will be important to see how that plays out. I want to bring chris into talk more about this and what should happen next. Let me start with where susan ended there, the public support would be important and there was some debate about whether protesters going to the airport was a good strategic move. Some said it brought more attention the cards are argument is that the people said this is now disrupting our life. The Business People said they dont want to put up with it anymore. Now you have the stimulus, or defect you think that will have . Its interesting that it was mentioned the Main Transportation hub at the airport that was cut off by the protesters. Maybe we can compare that to perhaps the manmade islands that china is building to try to control transportation to and from with the one road initiative. What we have to look at is the distinct difference between the u. S. System of freedom of liberty, protection of our civil rights and that of tennis. This one nation, one country Systems Foundation has led to this conflict. We have to understand that what we have done in the u. S. , we unleashed the creativity of man. Thats not what we see in hong kong. Rather than intervening in a direct fashion, we just have to sit back and watch this play out. We have spent a lot of time talking, not that its not a fair question, what should the u. S. Do or President Trump say but at the end of the day, this welcome back to the people we are seeing here on the screen but it does come back also to the people we are not seen. The people in Mainland China may be hearing about this but censored from coverage or getting spined version. Whether they supported or not, i wonder if the government is trying to get them on the side, i wonder if that will work. The more eyeballs we have, just like we saw the eyeballs out there, this is connected to trade. We are not trying to have a pro quote, one or the other, this is the same values, free system versus what china whats the next thing . If i were to guess, or take because of the visibility on hong kong, there will be western influence that president g will find a solution. He knows that and that probably lays into it, too. Good to see her. In a moment, President Trumps biggest asset becoming his biggest handicap. Concerns about the economy and whether or not we are heading into a recession have been growing. What that means for 2020 when we come back. President Trump Holding a political rally this evening. Paul dropping to 43 . The economy helped his approval throughout his presidency but what if there is a slow down . All talk of recession and foreign policy. What this means for the president you know hell be blamed if the economy does slow down even if it doesnt go into recession. What you think . I think there are some Economic Data out today that there should be some concern. The economy seems to still be strong, Consumer Spending being one of them, that is the driver of the economy right now. People feel comfortable enough to open their wallets to go out and go on vacation, i think that is Still Holding up our economy. Thats something the president can still hang their hat on. A lot of it comes down to timing. By next july, thats when people will think, how do i feel about the army in my situation . To make a decision into the fall about the president ial campaign. Thats the debate. If we are starting to slow down and the consumer starts to feel it, something the president to do to get out of it, it comes down to what the Federal Reserve does. He will lean on powell and hopefully before the next Federal Reserve meeting to cut rates and do so in a significant way. I think continue to remind americans what the administration delivered, it will be important. People who voted for trump, they love tax cuts and deregulation and how it stimulated the economy. They want to deliver the products he delivered on. The courts in general when you look at pushing back on the changes in social policy and culture, those are things that will be in peoples minds. People who despise the election, the big three states that we always talk about, theyre kind of similar. If its pennsylvania or michigan or wisconsin, if you look at manufacturers slowing down, those are the people impacted by that. The trade work, what china is doing is hurting our farmers. Some of those people were getting hurt by the policies are so far sticking with the president. You wonder if that will be the case a year from now. They may think of the longerterm impact when it comes to real fair trade, not just trade deals that china backs out of or stealing intellectual property, they maybe have other issues, one of the premises the president made to the midwest focus is around roads and construction. Is it pop possible to get a bipartisan movement on infrastructure . Thats an issue. Weve already had those talks. That is big ticket spending. Thats an area where we would be like wait a minute. Good to see you. The same guy who raised alarms is sounding a new alarm. Its a big one in the stock market today. Well talk about that when we come back. Retailers in the world economies, walmart now, heres a big one. U. S. And china. These are big ones. Big companies, walmart is exceeding expectations on the top and bottom line, raising their guidance for the cure. Successfully managing, this is a huge take away but u. S. China trade tensions over supply chains. Essentially they are managing the trade and showing investors they can go with the trade work. There showing the u. S. Consumer is alive and well. Packing all of this up, we had the july u. S. Retails this morning. Biggest exchange in months. All my purchasing strength, a big part of that, some of that was amazon. Speaking of online, you mentioned ali baba, that is betterthanexpected quarterly revenue. It is increasingly competitive in obtaining market in china. Its a difficult home economy saturated with online retailers while it continues to outperform there. Its also doing well in the Cloud Business which is growing pretty quickly. Talk about buying back, 6 million over two years. The intention is there. Look at the other retailers, jcpenney, target, costco, they are all moving higher. The one thats really not, tapestry, kate spade, coach, down more than 19 . Thats because of a disappointing. Office strength in sales, walmart earnings, the recession talk thats out there. Even in the walmart numbers, did you see that they are dealing with trade work . My first question would be, or how long until it is a bigger issue . There is no question that the trait tension between the u. S. And china and having an impact and the impact is going to continue to grow, if you look at the tariffs the u. S. Put in place so far, most of them havent been directed at Consumer Products but we look at september and december, they will be areas where it will be harder for consumers to bear that cost. I think thats something to be worrisome on the horizon but you got to remember our economy is coming from historically strong position even if the administration did deregulation, talk about Consumer Spending remaining strong. Unemployment is still out of your flow. We are coming from a strong position and it will take more to take things to a negative place. Thats true and china is coming from a position thats not as strong as us. A lot of people make the argument. I go back to timing again. Just because they are not a strong position doesnt mean they will collapse tomorrow. They could, if they want to continue to push this off into they would acknowledge that yes, its painful for us and that puts the president in a bind. When you cut a deal versus how hard you push with the election coming up in 2020. How would you advise them to handle that . Things are softening in china, have numbers coming out yesterday in the industrial sector and how it was the lowest in 17 years, he saw the Currency Movement and i could go on and on. That is certainly a factor and the advantage is the u. S. We are hurting, you and i think its still on both sides interest economically to get a deal well in advance on the election. China needs a deal, i dont think they can do this forever. Theyve been pumping bad credit into the market. They wanted to push it to november 2020, right . Its possible. There are a lot of wildcards on the horizon. Look at hong kong right now, theres a lot of talk about how its emboldening nationalism and that will reduce the incentive for a deal but if hong kong does go sideways, that will hurt the chinese economy more than anyone else. Their incentives will be there to mitigate whats happening with the u. S. We are going to get a break but you are predicting a deal before the election is the most likely deal . Im optimistic but i more cost but then stick because of the factors. I think they need to manage the politics of this. This isnt about keeping china down, this is about creating a level playing field. He needs to be clear, we didnt start this in hong kong. This isnt just u. S. Versus china, we want to work together. Good to see her. A lot about the administration trade policies, in a moment, apple connected to whats going on in china. Our next guest is the leading analyst. Could still be a big advantage to the company. Up next. A quick note, we talked about the bond market, thats a low 2 . Thats down about 194, now 198, 80, we are back below 2 . Glass halffull would be money still coming into the u. S. , pushing down Interest Rates but they were back below 2 which is crazy. More on china now but i want to talk about it in the context of apple and possible china retaliations. How about apple . Stock is down a bit today but is apple connected to china . Hes been think the connection to china is still a big advantage over the other tech companies. They cant even operate there. The most basic level, thats exactly right. I think its important when we talk about apple versus china, a complex topic that we take clearheaded in trying to step away from my speculation. I want to base the conversation and that starts with how much of apples businesses is related to china. 17 is china, 10 Mainland China. The number from last quarter went from 13 to 17 from march to june. That actually improved. This concept, this is my core view is that china is a net positive for apple. Understand that yes, durability that china, next one, two, three years will have anxiety for investors. That could have a negative impact on the multiple but i dont think it is clearheaded thinking. The clearheaded approach would be to look at it as a longerterm opportunity. The u. S. Accounts for 24 of that, china is second at 17 . Japan is third at 6 . This is a huge market. To get away from day to day headlines, bigger picture, we were in china for a week or so talking to people in on that side, were talking about decoupling and the idea that the economies would go into Different Directions with these different, especially in technology, resistance and if that happens, what does that mean for a company like apple . I think thats unlikely but lets take the approach that that does happen. I put this in a category of speculation, we can go there, bottom line is that even in a decoupled situation, china will remain a powerhouse when it comes to global economy. In the general field, eventually china will surpass the u. S. In terms of gdp. China more or less stays at 17 . That is still a large market. Consider this three times the size of the japan market, three times the size of germany. This is something that even in a decoupled situation, when it comes to the conversation about apple and china, the real factor in question is about competition from little to do around trade. And that comes locally. I thought there would be more people in china who said im out of it for nationalistic reasons or whatever and i will go with that device. A lot of people who spoke to love apple devices but they will tell you they are pricey. Absolutely. We monitor that online media in china and the Chinese Government curates that. The message is still supportive of apple. I was surprised by that. Good to see you. Shifting gears completely, this Jeffrey Epstein story, their new question that has come up with the autopsy now, charlie, more on his interview. More on that in some of these new developments when we return. Welcome to the place where people go to learn about their medicare options. Before theyre on medicare. Come on in. Youre turning 65 soon . Yep. And youre retiring at 67 . Thats the plan well, youve come to the right place. Its also a great time to learn about an aarp Medicare Supplement insurance plan, insured by Unitedhealthcare Insurance Company. Heres why. Medicare part b doesnt pay for everything. Only about 80 of your medical costs. This part is up to you. Yeah, everyones a little surprised to learn that one. A Medicare Supplement plan helps pay for some of what medicare doesnt. That could help cut down on those outofyourpocket medical costs. 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In advance. New development today, the autopsy report by the Jeffrey Epsteins neck, that brought up questions what really happened. Charlie has been here and is following test. We talked with jeff epstein, if you go to my twitter feed, which will lead to my facebook feed, you will get another side. I think he killed himself because he realized that being accepted into society was a big thing for him. When he got out of jail after the first conviction of the state charges, a single charge of procuring a minor for me, he was readily accepted back. People started doing business with him but the onslaught of publicity that kept going, a lot of it brought out plaintiffs and warriors and other media investigating, the daily beast did an acceptable job, that made him toxic. It still seemed like he thought he could still get away with it. Thats what started his fever pitch in march. After craft got busted, he compared himself to craft. Interesting four or five years ago, hes having lunch at a rich guys house, i wont say his name in palm beach, Jeffrey Epstein walks up with a young woman, he didnt card her but figured she was 17 to 23, russian, eastern european, tall, model type. Hes welcomed into this atmosphere like nothing happened. He walks up with these weird loafers, on one loafer, theres a screw. On the other is a you. He wasnt hiding, obviously he didnt care. These other people when the upper crust thought, part of the whole scene, he only became toxic easily. I think thats why he killed himself. I think its crazy, you said the name epstein, right away you think of the accusations with these young girls. People associate him with that. People liked hanging out with him. For the most part, he wasnt picking out with teens, he was hanging out with models and women and he was good at his job. He only had the one client not because he wanted the parties, its because i dont think he went to a lot of the parties, was a very good wealth manager. He would understand every part of rich guys life and he could manage that. He only had a few, he only needed a few. He was good at that and thats kind of why he was invited back because then he also rationalized it. A lot of that came out in the conversation with me. Im not a pedophile. Ridiculous quote but it does speak to your early appointment, he only wanted to see clients, he wasnt going to be a hedge fund profile, he was only going to have rich people. Mere millionaires, he wanted to do that, i think what we are doing is putting together the pieces of who he really was. There is an arrogance that he could get away with it. Again, so far, he killed himself in jail the bones were broken and the Washington Post said it happens when older people think themselves but its more associated with someone who was murdered. I think he killed himself, the question is why he was taken off suicide watch. I dont think he knew he was done when he flew back to the u. S. Otherwise he would have stayed there. He had money, he was really in arrogance that he thought he could beat this and get away with it. The loafers i think i will write the screw you loafers up on the web. Got to run. Well have more on what is going on with the markets. Consumers braces business is and how much the economy is slowing down. Well vo the hamsters, run hopelessly in their cage. Content on their endless quest, to nowhere. But perhaps this year, a more exhilarating endeavor awaits. Defy the laws of human nature,at the summer of audi sales event. Get exceptional offers now. Their medicare options. Before theyre on medicare. Come on in. Youre turning 65 soon . Yep. And youre retiring at 67 . Thats the plan well, youve come to the right place. Its also a great time to learn about an aarp Medicare Supplement insurance plan, insured by Unitedhealthcare Insurance Company. Heres why. Medicare part b doesnt pay for everything. Only about 80 of your medical costs. This part is up to you. Yeah, everyones a little surprised to learn that one. A Medicare Supplement plan helps pay for some of what medicare doesnt. That could help cut down on those outofyourpocket medical costs. Call Unitedhealthcare Insurance Company today to request this free, and very helpful, decision guide. And learn about the only Medicare Supplement plans endorsed by aarp. Selected for meeting their high standards of quality and service. This type of plan lets you say yes to any doctor or hospital that accepts medicare patients. There are no networks or referrals to worry about. Do you accept medicare patients . I sure do see . Youre able to stick with him. Like to travel . This kind of plan goes with you anywhere you travel in the country. So go ahead, spend winter somewhere warm. If youre turning 65 soon or over 65 and planning to retire, find out more about the plans that live up to their name. Thumbs up to that remember, the time to prepare is before you go on medicare dont wait. Get started today. Call unitedhealthcare and ask for your free decision guide. Learn more about aarp Medicare Supplement plan options and rates to fit your needs. Oh, and happy birthday. Or retirement. In advance. Connell were back. Im Connell Mcshane filling in for neil today. This hour, we have strength in retail but economists warn a threat of recession is still near. Steve morris coming up on why he says china is not to blame. Then a democrat drawing big crowds with a big push against the rich. Maybe you can guess who that might be. And the man who blew the whistle on Bernie Madoff sounding an alarm about a major american company. Connell lot of crosscurrents out there which makes for good debate on whats happening with the economy. Walmart had strong numbers. The retail sales figures overall were also strong. You say maybe were not slowing down. Then you have china, china ready it says to retaliate if tariffs are implemented next month, could fight back and there are still plenty of tariffs that are going into place despite the ones that were delayed earlier in the week. On the panel, Small Business and Entrepreneurship Council president Karen Kerrigan joins us. From the New York Post Michael Goodwin and market watcher David Bronson as well. Welcome to all three of you. Karen, you have a good read on this talking to Small Businesses, whathave you. We had this debate last hour about businesses are worried, consumers still feel pretty good. What are you hearing out there . The retail numbers are pretty much aligned with what main street has been feeling for some time. They still continue to be optimistic about the economy, they continue to be optimistic for 2019. Very very confident. I mean, obviously they know theres some head winds on the trade front. Connell i was going to talk abo about, a retail guy was on last hour and his point was a lot of the businesses, they are kind of eating up the concerns about the trade war themselves, not passing them along. Businesses are concerned even if consumers arent yet. That is fair . It is. It is. But they are still very confident about where we are going but the longer this goes on, the deeper the impact. Obviously the bigger the concern. But they are not buying into the doom and glam oom recession typ message right now. Connell one of the things we talked about here earlier, yesterday, especially when everything was so crazy, is that oh, if you Start Talking yourself in a recession, the next thing maybe you have one on your hands. I think the president in his latest tweet might be picking up on that. A few minutes ago he said something along the lines that the fake news is doing everything that they can to crash the economy. This idea of people rooting for a recession, then you bring it on. What do you think is really happening . Politically, that is certainly an element of this, that the left would love nothing more than to see a recession if only because they have no argument against a Strong Economy. The jobs numbers, all of that, are embarrassing to the democrats. Connell they know thats the only way two sides to it. Thats the only way if you come at it from the left to beat trump would be the one argument. If youre trump, you say thats the only way i can win reelection because on a number of other issues he struggles. The economy is key for him. I think its key for both sides, because a Strong Economy always helps an incumbent. So you have the left trying to pick apart numbers, trying to go after corporations, doing everything they can to try to put a dent, try to make people think its really worse, dont believe your eyes, believe what were telling you. I think jobs numbers, things like that, they dont lie. Those are real jobs and real people have those jobs. Connell whats really going on, david . I sent a loving note back to the president after his tweet when we first sat down here saying the news media didnt pass Corporate Tax reform which helped the economy a lot. He did. But the news media also didnt start this trade war which is now starting to hurt the economy. He did. So the reality is a little bit of both sides there. He deserves credit where he deserves credit, but in this particular case, the consumer is not feeling it yet and the consumers a lagging indicator. I always say there are only two times that the consumer will spend money. When they have money in their Checking Account and when they dont. The consumer is not a problem. The businesses right now are clearly seeing a decline in confidence, manufacturing orders have dropped, durable goods have dropped and i think that Small Business optimism that the president drove so successfully the first 18 months of his administration is under threat from the trade war. Connell lets talk about that more broadly, get everybody involved. I will pass along a little piece of breaking news. If anybody can been counting on governor hickenlooper to be the next president of the united states, that will not be the case. He just put out a news release, the former colorado governor just put out a news release saying hes dropping out. Thats official. It was speculated i know this morning, maybe he runs for senate or whatever the case may be but hes out. Lets pick up on what david just talked about. Theres no doubt the economy in terms of where we are going on at a crossroads right now. Small Business Optimism has been very high. Even the latest indexes that have come out, a whole range of different indexes still show high Small Business optimism and their biggest concern continues to be finding the quality hires, the quality staff. They need to take advantage of growth opportunity. Connell what about the trade issue . That is why we see a waning sort of lowering in confidence. They want an end game. They want the know when this is going to end. I say if its not done by the end of the year, you do sort of impact confidence further. But look at the productivity numbers. They came out, you know, as well, we havent seen backtoback numbers this strong since before the recession. Connell i know. Thats right. Second quarter number, its a lagging indicator. The issue, productivity comes out of Business Investment. Business investment comes out of business confidence. Connell if Business Investment is falling, if thats where we are struggling, whats the next step . Productivity will drop. Its inevitable. Thats what we have to be concerned about. Connell the timing is anybodys guess. Thats right. You are feeling it now and i think it can accelerate into the later part of the year. Connell timing is always the political argument about how it affects reelection. Go ahead. Look, i take davids point that this is the president s trade war. But lets rewind and remember why we got into this in the first place. It was this deck aced of china literally stealing information, taking jobs away, bad trade deals. These are things now that Bernie Sanders agrees with. Connell everybody is talking about methods versus if you agree on that. The fact is china does not abide by the wto rule. You can go to court, you can win these things, it has no impact on china. They are really a rogue nation when it comes to these international agreements. I think you are right. This is the problem. The president said a trade wars easy to win. The president said if we are making a ton of money off of this connell right. China is paying for the tariffs. This is where i agree china was a bad actor and needed to be dealt with. The problem with the president s style about it is it set an expectation that this is not supposed to be happening. But i do think your question about the timing of the economy and the political implication, we get something in our country that answers it for us politically. I wrote an article at National Review over the last hundred years, its the stock market. The stock market tells you politically how the candidate is being perceived about economic behavior, because the recession may not come until later, but if its starting to be felt sooner, thats the key. It isnt enough for the economy to still hold up. The unemployment number could still be really low. People have to feel like the economy is good. Connell maybe its an overused example but its in everybodys head about 92 when we were coming out of recession technically but it didnt help george bush senior at all. Inversely, 04 and 12, the economy, is it really doing that well, but people felt like it was better. You have both sides of that. Connell no matter what the argument is, a lot of people agree with you on china, do you think the president has a political problem with whats going on in the economy, or how worried do you think they are at the white house . I think he needs to get something out of it. So that it can get off the front pages, so that the threat of tariffs, chinas retaliation, but its clear by the same token that china intends to try to wait him out. They are never going to give up the gems they are keeping until they are absolutely forced to, which means he has to win a second term i think to get a really great deal. Connell so see, that to me is one of the most interesting things out there right now because there are guests that come on and tell us that he needs to cut a deal before the election and this and that. There is you think about it from the point of view of say a farmer in iowa. I interviewed a bunch of them, i was there a couple times last year, you know. You would think well theyre going to turn on the president because they are getting hurt by the trade war. The truth is, many of them arent. Many of them have been loyal to the president. I just wonder whether if we can hang in in the u. S. And obviously, its going to hurt us, its hurting china as well, whether the political motivation for the president , to michaels point, is as it is with china, to push this off for awhile so you cant have Elizabeth Warren or somebody else coming in saying you know what, you shouldnt have it wasnt worth it, why did you fight all this and then cut a deal at the end that isnt even a good deal . I think hes smarter than that. Given what they did in backing off on the tariffs leading up to christmas is an indication of that. Connell its also an admission that china is not paying the tariffs and all that kind of thing. Right. And its having an impact, an economic impact. But you know, i just think that im one that thinks the economy is going to be the number one issue and given that it will, always its the number one issue, that the president needs to do some type of deal. Connell better to get a deal. Okay. So that business investors will pick up more certainty, stability in the market and then that will, you know, continue to drive growth. Connell definitely. A lot of people think that. What do you think . I think one thing the president can do, one argument he can make against the lefts arguments which is this is an Important National issue. If we have to sacrifice in the short term, we should sacrifice. Connell he hasnt really made that argument. This is an economic war. Connell right. He hasnt made the argument about suffering. I think that was probably a mistake to say you wont suffer because eventually, i mean, it wasnt true and eventually hes going to have to acknowledge it, as he sort of did. But i do think it is such an important issue that the public and those farmers understand it even though they are personally suffering, that this is a generational conflict. Connell david has one more thing to say. I do. History has not been kind to president s who try to tell the truth in the first term about these sorts of things. This is a second term issue, second term fight. I agree with michael completely. It has to happen. Jimmy carters malaise speech, barack obama saying now is not the time to go to las vegas, americans as consumers do not like being told they have to cut back. We have to get this thing fixed. Connell history is not kind to those who tell the truth. Guys, we will continue here in a moment. The fears of a Chinese Military crackdown in hong kong have been building as these reports of troops building on the border. President trump warning against that and we will talk about what he said, then talk about whats happening in hong kong as well. Catch us after the bell 4 00 p. M. When melissa joins me to see how things close up. We have had crazy times in the market. Up about 70, 75 points on the dow right now. Well be right back. Driverless cars. All ground personnel. Or trips to mars. 4. 95. Delivery drones or the latest phones. 4. 95. No matter what you trade, at fidelity its just 4. 95 per online u. S. Equity trade. Who used expedia to book the Vacation Rental which led to the discovery that sometimes a little down time can lift you right up. Expedia. Everything you need to go. Can the past help you write the future . Can you feel calm in the eye of a storm . Can you do more with less . Can you raise the bar while reducing your footprint . 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Connell looking at hong kong, where the protesters have been talking about the fear of a military crackdown happening soon as economic worries are growing there. Susan li is still in hong kong and rejoins us with the latest there at 1 00 in the morning. Susan . Susan yeah, we do have that video widely circulating at this point. Yesterday we were showing you satellite images of possibly a troop buildup, tanks being crowded into a soccer stadium in shenzhen, about four or five miles away from the hong kong border here. Shenzhen is the Silicon Valley of china. Yes, they are set to celebrate the 70th anniversary of the founding of the communist party. They are rehearsing what they say are military exercises and there are tanks there. We are looking at 100 personnel armed carriers, apparently, being gathered in the city of shenzhen as well. Thats what the prc and beijing are saying, these are just military rehearsals as has been indicated in state media. Maybe that timing is a little bit too convenient, given that we are in the 11th week of protests here in hong kong and even President Trump himself has been tweeting saying that u. S. Intelligence suggests there might be a chinese troop buildup in shenzhen just across the border here to hong kong. We also had a stern warning from the Chinese Ambassador in the uk as well. Take a listen. Due to the situation in hong kong deteriorating further into unrest, the Central Government would not sit on its hands and watch. Susan okay. So basically, i have been asking people are you concerned about a possible maybe military intervention and tanks rolling in from beijing here to hong kong. I would say that most people still think that possibility is probably remote, not even above 50 , but you cant ignore it. However, is that deteriorating and is that deterring the protesters, no, because we still have big protests and marches planned for this weekend as well. They have one being called for sunday and last time they called for an actual march, we saw one million to two million of hong kongs seven million residents taking to the streets. So i wouldnt say there are Major Concerns at this point. Connell susan, hang with us for a moment. Our panel is still here with us. Susan is talking about the fear of the military moving in. This may be a distinction without a difference. I was reading the Financial Times reporting on this earlier. Its not the pla which we associate with the Chinese Military. Its the china Peoples Armed police which would be a police unit that would move into hong kong but again, that looks like a military unit. Its Michael Goodwin, susan. Whats your sense of the four to five Million People who are not participating in these demonstrations . Is there Popular Support, widespread Popular Support for the demonstrations . Susan i feel like there was, especially if you go by the hong kong media, especially when an extradition bill was introduced, widely unpopular. However, as we were entering the 11th week of protests and as these protests have gone on, and the disruption its caused to the city and also to the economy, i feel like there has been a change and a turn in general support for these protests, especially when you are basically attacking the Main Transport vein of a Financial Capital which is the airport, and i think the protesters also recognize that as well because they did something rare which is apologize for their behavior at hong kong airport terminal after we saw the scuffles and the fights break out there. They have to be careful about winning hearts and minds and keeping the hong kong public on the protesters side. Connell yeah, thats kind of an interesting point, david. If you lose the public, its a different protest movement. I really dont think they are going to lose the public, though. I think first, to that issue of china, it is a distinction without a difference, youre right, that police unit sure looks very militaristic, but the last thing china needs is another Tiananmen Square photo op at this point. I think that i support the hong kong protesters. I am always in support of people wanting greater freedom. Theres a real profreedom bias about me. Connell you dont have to apologize for that. Not here. Not here. Although you never know. I will say this, it is just another reason to have enhanced volatility in our standpoint from market observation. Its not driving markets, its not maybe even in the top three, but its just another factor that gives an undercurrent connell if it affects trade we are hearing yesterday, something else, people singing our National Anthem in the streets. Nobodys taking a knee . Connell well, in terms of the economy and the markets, you think its top three, top five issue . Maybe a top five. Depends, i think, in terms of how the president and the administration tie it to trade and the agreement. I dont think that would be a good thing to do at this point. They could just talk about whats happening on its merits and that, you know, china just does not keep its deals, its agreements. You know, the 84 accord was supposed to give the people of hong kong 50 years of autonomy and thats not happening right now. So i think the president can continue to send a message of supporting democracy, supporting market oriented reforms that enable freedom and also the International Community and the u. S. Can, you know, start pressuring china to say keep your deal that you made back in 84. Connell we will watch this weekend. As susan reported earlier, another march supposedly planned for sunday. Good reporting. We will get back to you and the panel in a moment. Bernie madoff, well, one of the whistleblowers of the madoff case has a new whistle that hes blowing supposedly. A new warning about a major u. S. Company that we will talk about when we come back. Connell we talk about how, you know, markets may be less worried about recession today than they were yesterday. Goes back and forth day by day. Oil, though, continues to fall. Its down about a dollar. Thats a 1. 7 drop in the price of oil. 54. 31. Before the break we told tu guy that had warned us, one of them, about Bernie Madoff has a new warning, and the warning is about general electric. Whatever you think, Kristina Partsinevelos joins us now, people are clearly listening. This stock is getting hammered today. Clearly. You are seeing it down almost 12 . Thats because the accounting expert came out saying that ge is facing the largest accounting scandal ever, that hes ever seen. Hes been researching this with his team for the past seven months. He published a document, research paper, on gefraud. Com. Its about 175 pages, making allegations that ge has a massive accounting fraud totalling 30 billion and that its potentially even bigger than enron. Thats what you are seeing on the screen right there. Before we get to the allegation, i want to get to the comment i got from ge this morning. Their spokesperson said the claims made are meritless. The company has never met, spoken to or had contact with mr. Markupolis and we are extremely disappointed that an individual with no direct knowledge of ge would choose to make such serious and unsubstantiated claims. Some of the claims in the document are, these are the allegations from the whistleblower, that ge has been hiding roughly 29 billion in longterm care losses, that pertains to their Long Term Care insurance unit, think Nursing Homes and all that, then they need an additional 18. 5 billion in reserves. They have issues with the baker hughes accounting. They also went on to say in this document that ge changes its accounting reporting every two to four years, making it much harder to prevent comparison, and they argue that the company could potentially go bankrupt from all of these changes in Accounting Practices. There is a big but, though, and that is markopolis was looking into ge for an unidentified hedge fund so hes being paid by a hedge fund. I asked ge specifically about this hedge fund and they, the spokesperson said that such funds are usually financially motivated. We know this, to attempt to generate short selling. Thats how they can turn a profit and what is happening today . The stock is dropping, meaning short sellers are benefiting. Take a look at the stock again. We are seeing it down over almost now even down more, down over 12 . The company, though, is arguing that they are well supported, they have reserves, they do adequate testing to make sure they have enough money but we know the Company Currently is being investigated by the department of justice and the s. E. C. For Accounting Practices related to their power business. Connell thats a big move in the stock. Huge move in the stock. Huge move. Connell before we move on, on that last point, on the motivation here, you want to Say Something . I think, i dont ever want to bash short sellers. Sometimes they shine a light on things that are bad and need to be revealed but in this case, it is a difficulty in our system that you dont need the fundamentals to be true. You dont need the story to be right. Merely saying it creates the result for the short sellers. The fact hes working for an unidentified hedge fund, if someone did this on the long side they would be going to jail. It would be called inside trading. On the short side you are allowed to do it. I have a problem with that. Connell we havent had an investigation yet or we dont know what really happened. All right. We have to get to steve morris. Hes coming up next, as a matter of fact. We will talk about stocks moving with every headline on trade so steve is saying issues have nothing to do with trade. Hes next. All right brad, once again i have revolutionized the songwriting process. Oh, here we go. I know i cant play an instrument, but this. This is my forte. Obviously, for auto insurance, weve got the wheel route. Obviously. Retirement, were going with a longterm play. Makes sense. Pet insurance, wait, let me guess. Flea flicker. Yes howd you know . Studying my playbook . Yeah, actually. Now you can, with shipsticks. Com no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. Sending your own clubs ahead with shipsticks. Com makes it fast easy to get to your golf destination. 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Former trump senior economic adviser steve moore has some other thoughts on that and so as you know, everybody not everybody, a lot of people said this is the president s fault, the trade policy with china is to blame and the president has said no, no, no, this is all the feds fault, he said so much in a tweet yesterday. Is that where you stand . Little of both. Look, lets go back to that issue you just mentioned, the 2 30year bond. What is that telling us . Im amazed so many economists get that wrong. It is telling us we are in a deflationary environment. Nobody buys a tenyear bond at 2 Interest Rate unless they think we are going to have very very low, zero or even negative, you know, inflation over the next decade. So i think most of the people who have looked at this have kind of analyzed it wrong. Also, by the way, an inverted yield curve, thats a clear example of people worried about deflation and its the easiest problem to solve. All the fed has to do is inject more liquidity, dollar liquidity, into the economy and that problem of inverted yield curve and the extremely low longterm rates goes away and the so do recession fears. But sorry to interrupt, it is true the china trade war is having a negative effect on the economy. I think trump is doing the right thing here but look, this is a tough battle. It is the epic struggle of our time. Trump cannot cave in here. Connell i asked the point about intellectual honesty and whether if you are the administration you should come out and make that argument. We were talking with the panel, they can jump in and ask you a few questions in a moment, but if you are the president and you believe that, some people have different views on china but if your view is yours on china and you say we have to fight them on this, this is the battle of our time, why not come out and make that argument to people its going to be tough for awhile as opposed to saying china is going to pay for it and everything else, but make the argument to people and then maybe you would have more buyin. What do you say . I tend to agree with that. I think President Trump should make a speech to the american people, say look, we are up against communist china, this is the new cold war, everything we see that theyre doing is contrary to americas economic and National Security interests, and you know, they trying to act like a bully when it comes to hong kong, im worried about taiwan, but im also worried about the fact they violate every principle of International Law when it comes to trade policy as well. Look, lets be very clear about this. Trump is right on the trade situation. China is wrong. Connell how long should he fight it . Should he fight it because thats the other debate. Do you cut some sort of a deal thats not the best deal in the world or do you fight it, you know, to the end which hurts us both, what everybody is acknowledging you both get hurt economically if you have that fight. Is it worth it to go that far . Well, ill tell you what i advise the president on this and i talk to him every so often, get the best deal you can now from china. Its not going to be a great deal. We know that, because the chinese are, if anything, back dragging but get some kind of deal we can announce that has some concessions from china, and once that deal is announced, the economy will roar back to life, we will have a very Strong Economy in 2020. The fundamentals of the economy are really really strong now, then you spend your second term, i wonder what your panelists think about this, use your second term in office really getting aggressive. Connell thats what we were talking about earlier. By the way, i wonder if the president is listening to people like steve or people like Peter Navarro which may be a different issue. Go ahead. Steve, i made the comment this would be a great second term issue to fight but let me ask you about the comment that the yield curve, the 30year treasury being so low is showing us deflationary challenges and yet, all the fundamentals of the economy are good. How do we reconcile those two things . How are we in a deflationary spiral and a Strong Economy . Because the two things actually go in hand. When you do what trump has done, im proud to have been part of this, we cut tax rates, we cut regulation, we expanded American Energy production, we have a probusiness platform. What that has done is shifted out the supply curve. That means theres more goods and services. It means theres more demand for dollars internationally. Where the fed has screwed up royally over the last year is they have not accommodated that demand for dollars. In fact, they did exactly the wrong thing last year. They raised rates when they should have been cutting them. Therefore, you have a shortage of dollar liquidity. Im not really interested in what the Interest Rate is that the fed is charging. Im interested in any policy they can use to get liquidity to stop this rapid disinflation and the threat of deflation. Look at whats happened to commodities over the last year. They have fallen back 15 . Thats deflation. Connell you agree with that . [ speaking simultaneously ] steve, im sorry first of all that youre not on the Federal Reserve board. Thank you. [ speaking simultaneously ] i have been right for the last year. If anything, the last couple of weeks have really shown, i have been making this argument the fed has to cut rates and do it more aggressively and if they had done that, you know, i dont believe we would have seen this thousand point decline. Connell let me switch quickly to china. What role do you think the hong kong situation and also north korea are playing in the president s mind in terms of making a shortterm deal or does he see too many big issues bound up here . I think that the president is really focused on the trade angle and not so much, you know, i dont think he wants to be distracted by whats happening in hong kong. Personally, i wish he would take a harder line on the hong kong situation. But no, hes really focused on getting the best deal he can with respect to trade and i think hes tried to push, you know, not intermingle the issue of trade with whats happening connell by the way, have you talked to him recently . Half joking but is he listening more to people like you or more like navarro type . Look connell peter miss the administration and its clear peter has had a big impact in his thinking on this. I think the administration is somewhat surprised on the negative reaction in the market to the latest round of tariffs hes announced which is one reason i would like to see this thing get resolved, but i dont want to see i dont want to see the president cave in here either. I think in the long run, that would be the worst, you know, if you got a schoolyard bully, you dont cave in to him. Connell thats the hard point. Knowing when to cut that deal. Exactly. Connell youre in the fight but when do you cut the deal. We have to run. Always good to see you. We will come back with the panel in a moment. We have a story about that hacker that hit a hundred million. Well, may have been even more than that. New details on that story when we return. Patients that i see that complain about dry mouth, they feel like they have to drink a lot of water. Medications seem to be the number one cause for dry mouth. Dry mouth can cause increased cavities, bad breath, oral irritation. 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To Grady Trimble with more on this story. Reporter hey, connell. It was already considered one of the biggest breaches ever, and now federal prosecutors say you can add dozens of other companies and other victims to that list. Theyre not naming any of them right now, but they say they have overwhelming evidence on the suspected hackers computer servers that she not only committed the capital one breach, but she had all sorts of info from dozens of other companies, educational institutions and organizations, and on top of that, they say she actually admitted to the breach when investigators searched her home. All of this is from newly released court documents. Heres an excerpt from those documents. It says the government is continuing to work to identify specific entities from which data was stolen as well as the type of data stolen from each entity. The government expects to add an Additional Charge against thompson based on each such theft of data. We are also learning more about the accused hacker, former amazon employee page thompson. Court documents show shes been accused of all sorts of troubling things, including stalking people many times, repeated threats to kill others and threats to commit suicide by cop. For all of those reasons, and out of fear she might hack again, prosecutors are asking the judge to keep her in jail. As far as the files that shes accused of stealing go, prosecutors say a lot of it actually isnt personal information so thats good news. In addition to that, if shes to be believed, prosecutors also say she never spread or distributed or even sold any of the information shes accused of stealing, but again, we still dont know the companies that are on this newly updated list. Connell real piece of work. Grady, thank you. Lets get to google now. With employees there pushing back against a Border Control contact. A story Jackie Deangelis has been covering. Whats the deal here . Jackie well, google employees are petitioning the search giant to not bid on contracts, to provide their Cloud Services for u. S. Customs and Border Protection and i. C. E. More than 500 workers said that u. S. Immigration officials are quote, perpetrating a system of abuse and malign neglect with respect to the border. Google makes roughly 8 billion in sales from its Cloud Business, but the employees are demanding it not be complicit by working with the agencies. Now, its not the first time this has happened. Actually last year, a similar situation arose when workers protested googles work with the pentagon. In that particular case, it was over project maven which uses a. I. In conjunction with drones. So in that case, we had more than 4,000 signatures on a petition and even some resignations coming after that. Now, with respect to the current petition, google hasnt responded to my inquiry with a comment yet. In the last instance, the ceo created Guiding Principles for a. I. Thats used with weaponry but google did pursue the contracts nonetheless. Google employees now say working with cpb and i. C. E. Would be facilitating its human rights abuses and raises an interesting debate about how people feel about their work contributions, especially in the field of controversial technology. Connell that is some story as well. Jackie, thank you. In a moment, we are back and want to point out again the breaking political news that we told you about earlier. John hickenlooper, former governor of colorado, getting out of the 2020 race on the democratic side, and talk about where any donors he might be might have had might flock to, and talk about President Trumps rally tonight in New Hampshire when the panel rejoins us after a quick break. From the 5am wakers, to the 6am sleepers. Everyone uses their phone differently and in different places. Thats why Xfinity Mobile created a Wireless Network that auto connects you to millions of secure wifi hot spots. And the best lte everywhere else. Xfinity mobile is a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Click, call or visit a store today. Connell so Elizabeth Warren we will get to that in a moment. Let me get to the bond market. The bond market has taken over our coverage of the stock market and been the big story this week. Stocks are still down a little bit but the tenyear treasury yield, now, 1. 5 or thereabouts, it just hit a new threeyear low. Talking about the 30year below 2 , tenyear at 1. 5 . Thats where we are in that bond market. All the money coming into u. S. Assets, u. S. Treasury bonds. Now, started to talk about Elizabeth Warren. She continues on the democratic side to draw some pretty big crowds. Here in the state of New Hampshire, shes there ahead of President Trump who is heading to New Hampshire for a political rally tonight. Our panel is still with us. Karen, michael and david. Been great to have all of you guys. And its interesting, the president obviously put on his normal show, im sure, in New Hampshire tonight. The democrats tr one where you have the real competition. Its a state i would assume Elizabeth Warren feels like she has to win. Oh, absolutely. Absolutely. You know, i just think its going to be tough for any democrat candidate if we, you know, the economy continues, not only continues as it is but if we sort of walk in, again, we talked a lot about trade, if we lock in some type of agreement that will drive Business Investment and continue to drive growth connell seems like you really think, steve moore was kind of talking about this, the key to the president s reelection is just cut this china trade deal. Be careful not to give in too much but get something now. I think definitely on the china front and the trade front but also theres other trade agreements in the works. Usmca is incredibly important, that that get passed through the congress and theres good positive movement with democrats, at least a lot of the House Democrats i meet with on that issue. I think its very very important. Particularly for Business Investment and where we are going to be once the economy comes around, you know, during the election and the growth that we are seeing. So it will be very difficult for a democrat i think to beat him, particularly a democrat that is advocating socialism. All of them have different variations, you know, of how much they actually push connell you would put sanders and warren in the far camp. Obviously biden or Kamala Harris or whoever it is. Even the bidens of the world are sort of absorbing a lot of the socialistic policies and advocating and promoting them. Connell the race will be about the president , right . I would think. Sure. Connell when we poll, the last fox poll, he was 43 on approval for President Trump. Even his own people, when you talk to the data people, say we got to get him up from their point of view to 50 . So that comes down to the economy, right . Its one issue. He struggles on a lot of other issues so if the economy goes south you dont get to 50 . If it hangs in there, maybe you do. I think the economy has been propping him up to the extent that hes gotten into high 40s. I dont know that he actually has to get to 50 but i think he needs to be in the mid to high 40s, you know, in a twoperson race ultimately because then it becomes a referendum. Every candidate tries to make it a referendum on the other person. When you are the incumbent its pretty much a referendum on you, always. So yes, i think it will be about him. It will be about the economy. But of course, on the other side, the personality, the democrats will shoot at that. They will be talking about impeachment, talking about corruption, you know, russia, russia, russia seems to have faded but they will throw the kitchen sink at everything to make it look like its not about the economy. Connell so will the economy, david, be something that helps the president as most people thought it would, up until, i dont know, yesterday. No, you know, until recently but again here today, even as we are on the air, there go the treasury yields again. Depends on your point of view but the money is flowing into u. S. Bonds and these yields are hitting new lows. Whats it going to look like by 2020 . This is the way i would kind of mix the political story with what you are asking about the economy. I have really shocking news for our listeners. 40 of the people in the country are going to support President Trump, no matter what. 40 are not going to, no matter what. Connell who are those 20 . It is absolutely people that are mostly, as the midterms showed us, turned off by his temperament and twitter but turned on by a lot of his policy agenda. He cannot have a declining economy and get reelected. Connell doesnt have to be a recession, just no, it needs to be an asset, not a liability. Hes at risk, i actually believe that there are democrats that i personally could not even stand the idea of them being president , that are licking their chops at what they think they see happening in the economy. Stock market volatility, treasury yields collapsing, the trade war fits into it, the fed fits into it but regardless, the point is the narrative will become the economy is not an asset for the president. It will be very difficult for him to get reelected if that doesnt turn. And i believe it still could, but i dont think its going to be simple. Theres a lot of work that has to be done here. Connell just to point out what you are seeing on the screen, the data is now turning that way. Who knows how it goes the rest of the day. But the yields are going down again on treasuries. We are hitting all new lows there. There go stocks, little bit at least, nothing compared to yesterday, of course, but we are up and down and down again, 121. Pick up, michael, first, then karen, on what david is arguing there. Look, for every president , there are two issues, National Security and the economy. Its bread and treasure. Butter and treasure, right . I think thats what the president has to focus on are those two things. I think he is. I think theres no question. I mean, no president has ever talked about the stock market the way he has. No president connell be careful, right . But hes invested so much i think of his Political Capital in the market, in trade, in all of these things. Theres no question that he will keep his eye on that and he will be focused on that. Connell your point, keep his eye on it. The other side of it is the risk is on the way up, if you are talking about it taking credit for it, you take the blame on the way down. Which by the way, you probably would even if you never said a word about it. This president talks about it all the time. He does, he talks about the market, he talks about the economy. You know, look it, keeping these great reports coming out on retail, on employment, on productivity, you know, what do we hear with those reports . These great reports . Oh, theyre defying expectations or this is not what was expected. Thats what you want to continue to see leading up until the election. Connell argument is the bond market tells us a different story . Tells us a different story from more of a longer term perspective. Thats where Business Investment comes into play and we get some clarity, some certainty on the trade agreements, you are going to pick up, you know, continue to drive Business Investment more. Connell we only have like 30 seconds left. Real quick, you guys think theres a play here for the president politically, you know, besides just putting pressure on the fed, some kind of infrastructure thing or something, i mean, something he can do to keep the economy going, theres a political play or something that he goes to . In terms of other than yield . Connell just saying the feds got to cut rates. I think hes been saying plenty of that. The infrastructure bill, the problem he runs into is spending. Also, he runs into a Democratic Party that does not want to give him anything that looks like a victory. The big lever right now connell deficit issue . I forgot about that. We got to run. Great, guys. Great hour. Thanks to all three of you for coming on. Well be right back to wrap it up. Limu emu doug mmm, exactly Liberty Mutual customizes your Car Insurance, so you only pay for what you need. Nice but uh, whats up with your partner . 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So no one needs to know youve got gas. Gasx. Connell the last few minutes have been interesting in the bond market, below 1 1 2 , new three year low on the ten year treasury yield. Below 1 1 2 there. Back below 2 on the 30 year. Stocks starting to sell off again, down 116 as we speak on the dow. See you back at 4 00 p. M. With melissa after the bell. Right now all of these issues fall in charles paynes lap. Its all you charles. Charles thank you very much, connell. Good afternoon. The American Consumer comes to the rescue yet again, buoyed by the strong job market and higher wages pushing retail sales well above wall streets consensus and walmart they just simply crushed it. We just went negative moments ago. We will discuss all the issues including one that everyone is missing today. Plus we are live in hong kong with the latest on the protests that have been taking place there as a stimulus package is offered. President trump weighs in on what else china can do and proposes a possible meeting with president xi. Renewed trade