Making the case for why conventional television isnt going away, not so fast, and why cord cutting isnt such a big deal keep that dial tuned here because power lunch is beginning now. Any gains by the major three averages would give them record closing highs, energy is the best performing sector today thanks to oil, crude, in fact, topping 50 bucks for the First Time Since august 10 Tenet Health Care shares soaring. Reporting the company is exploring a possible sale. Michelle got it melissa, thank you. Heres what else is happening. The federal trade commission is opening an investigation into the massive breach at equifax. The companys ceo is set to testify on october 3 before the house energy and Commerce Committee and the chairman of that panel will join us in the next hour on power lunch. Equifax stock sitting at twoyear lows. Facebook is launching a new Crisis Response center to help users during disasters and attacks. And bitcoin is tanking 10 after a big Chinese Exchange said its closing operations brian . Im Brian Sullivan we begin with a busy day in washington, d. C. The president s wheeling and dealing with democrats continues and how Speaker Paul Ryan weighing in. The first Senate Hearing on tax reform also under way. We told you it was a busy day. We have full Team Coverage with all of it. Eamon, lets begin with you and the big dinner last night. Thats right, brian, it was a big dinner in washington, d. C. Last night at the white house. Democrats meeting with the president last night the president has been in florida today. He popped down there to sort of thank the First Responders, cheer on the federal, state, and local response to the hurricane, but a lot of folks in washington here still trying to scratch their heads and figure out whether there was a deal or not between democrats and the president on immigration last night. Ultimately the president had a chance to talk to reporters in florida and give them his sense of whether or not there was a deal, he appeared to add another asterisk to the idea of a deal heres what he said. A lot of people want this to happen, they expect it to happen and well see if it happens but well only do it if we get extreme security, if we get not only surveillance but everything that goes along with surveillance and ultimately we have to have the wall. If we dont have the wall, were doing nothing. The president saying if we dont have the wall, were doing nothing. Democrats who left the dinner at the white house last night said the deal they struck, or the agreement, as they called it, included nothing about the wall, the wall was excluded and would be separate. The democrats said today they expected that the president could continue to push for wall funding but it would be separate from anything on daca, thats defer actions for child immigrants well wait for the president to get back to washington for more details. Thank you, eamon. First Senate Finance hearing on tax reform taking place. Melissa, the Committee Chairman making clear that the negotiations on tax reform are far from over. Hatch is a part of the big six, members of the white house and the administration as well as gop leader shship hatch said whatever they agree to would be guidelines and not a guarantee. Anyone with any experience with the Senate Finance committee knows we are not anyones rubber stamp if a bill particularly on something as consequential as tax reform is going to pass in this committee, the members of the committee will have to be involved in putting it together. One major point of contention remains what happens to tax rates for the wealthy. Hatch says he stands behind President Trumps promise that the wealthy will not benefit any changes in the tax code. I truly dont know of a single republican who, when thinking about tax reform, ask themselves what they can do to help rich people that has never been our focus an its not our focus now. But ranking democrat senator ron widen on t Committee Said theres a loophole the size of a lunar crater depending on whether the rates go to pass through businesses he mentioned the state and local tax deduction, what to do about the mortgage Interest Deduction and whether or not to double the standard deduction i will be interviewing senator hatch tomorrow in an exclusive cnbc interview so hopefully we can get more details out of them then back over to you. Thanks ylan staying in washington, President Trump blocking a chinesebacked private equity firm from buying Lattice Semiconductor. He followed the recommendation of the committee on Foreign Investment in the United States which had National Security concerns about the deal. The u. S. Treasury cited worries about the transfer of intellectual property to china, the use of lattice chips by the u. S. Government and that one of the investors in the deal is owned by the chinese government. China reacted negatively c cnns eunice yoon is in beijing. Chinese had a reaction that governments take when this happens. It cried protectionism the Commerce Ministry expressed its concern saying we believe conducting a security review for investment deal and sensitive sectors is a countrys legal right but it should not become a tool to promote protectionism. We hope the relevant country, the u. S. In this case, can see such normal Business Activities objectively and fairly and provide fair treatment. The state press went one step further with the idea that china is the one being treated unfairly the communist party paper the global times pointed out in an editorial that china is not in the top ten compared to the uk, japan or germany when it comes to Foreign Direct Investment in the u. S. But that nearly one quarter of the cases involve chinese companies. Eunice yoon, cnbc business news, beijing our next guest says hes not surprised by trump and the decision heres to explain why is mario mancuso. Mario, good to have you here. Good to be here. Why werent you surprised im not surprised at all. I dont think the decision marks a turning point but i think its illustrative of where were at in the u. S. china relationship there are two pieces this. Ones a macro piece which is that geostrategic competition between the United States and china is intensifying and both countries are sensitive to investments by the others. Theres a micro point here which is that their transaction is one of a number of semiconductor transactions with respect to chinese buyers that have run to head winds what makes this transaction no notable is that unlike other transactions, there were no obvious risks. The treasury says there were worried about the transfer of intellectual property and the fact that there was a chinese stateowned Company Backing this investment. Well, there was nothing obvious before the Treasury Department issued the statement yesterday so from the perspective of the parties but typically when you look at these transactions and the u. S. Business on the block, so to speak, you look at whats the u. S. Government sales, where are the facilities located, is there sensitive technologies frankly, lattice had none of that and the company in good faith publicly asserted pretty strongly it had none of that but what is very important to note is that the u. S. Government acting through cfius clearly disagreed and that suggests something that i think on a micro level is important which is that the u. S. Government maintains a pretty strong intelligence function back Office Independently looking at these deals and there may be applications for technology which is to a commercial business person may look frankly benign, reasonably so but to the government that has access to different information, different a different way it uses the information they come to a different conclusion, they obviously did here. They did in 2016 when the Obama Administration blocked a Chinese Chip Company from buying the u. S. Army of a german Semiconductor Company as well. So heres my question, mario you answered michelles question saying theres no real evidence. Under the exxon florio provision of 1998 which requires you to show clear evidence of National Security risk, does Lattice Semiconductor have some kind of an appeal here so i want to clarify that statement. I said there were no obvious issues of National Security. It may be secret or hidden . It may be classified information that the government has and thats the essential point. I think the government rejecting a transaction is kind of a traumatic event theres a sense in a public narrative that this is something easy to do whats stlieking abo instrikingl is that the entire board of cfius recommended unanimously to block this deal and the president did that i do think obviously lattice came to a different view, can i dont think bridge came to a different view but we are where we are and it says a lot about deals for chinese buyers and people who would partner with them, for example private equity sponsors, but i also think u. S. Board rooms that are considering selling an asset to foreign persons, especially if the buy side includes the chinese buyer, i think we have to think twice. Tyler has a question, mario. Sure. As i understand it, lattice offered to transfer ownership of the intellectual to the u. S. Government i may be incorrect and maybe you understand it in a different way. Why wouldnt that have solved the problem and i wonder whether its because even if you do that, if a Chinese Company is the owner of the semiconductor, they could reverse engineer the intellectual property anyway why didnt that get rid of the worry . I am no longer on cfius but theres a new theme in reviews that looks to things called bleeding Edge Technologies in other words technologies that are so sensitive that the u. S. Government hasnt got on the classifying them yet and theres also a trend toward looking at certain know how my hypothesis, my suspicion based on Public Information is that the u. S. Government felt that there was something intrinsic not necessarily about the product but about the alchemy of lattice in putting together those products that would have transferred. I see. So we have i think, again, the noteworthy point is that the u. S. Government is looking at these transactions and they have a much wider aperture. Mario, i know this is not your bailiwick but if im an investor in these companies but if i look at a company and they have this intellectual property, there should be an embedded discount because the sale of that potential property or the sale of the company and therefore the property also is to a limited audience you can basically x out china and probably a lot of other parts of the world as well you know, putting aside the Financial Impacts on equities and how an investor would look, i think your point survives which is that if youre a technology company, a u. S. Technology company or a Foreign Technology company and not just technology, it could be other sensitive sectors that has u. S. Operations, i think you have to think very carefully in this environment about selling to certain buyers i dont want to paint with a broad brush. Chinese deals are getting approved, they will continue to get approved but cfius will always now be a question it may not always be an issue but it will be a question. I should point out that china has a similar investment regime that it applies to investment in its own industries and, frankly, other countries around the world, for example, recently germany, have sort of up armored its own similar cfiuslike mechanisms so this is a global trend. Its about making sure countries economies are resilient and protective of their National Security interests. Mario, thank you so much. Mario mancuso. Thank you all right, on deck, grading the airlines the new report card is out and the numberone complaint by flyers is coming up but first, you may not like banks, but is your best revenge going to be making money on their stocks well get some names for you from mike mayo ahead you know who likes to be in control . This guy. Check it out selfappendectomy oh, thats really attached. Thats why i rent from national. Where i get the control to choose any car in the aisle i want, not some car they choose for me. Which makes me one smooth operator. Ah still a little tender. vo go national. Go like a pro. The airlines track your pack. Set a curfew, or two. Make dinnertime device free. [ music stops ] [ music plays again ] a smarter way to wifi is awesome. Introducing xfinity xfi. Amazing speed, coverage and control. Change the way you wifi. Xfinity. The future of awesome. Dekriclines in the third quarter. Jamie dimon told cnbc that hes very bullish on the industry. Banks are making record profits. Banks are very healthy here. Lets bring in mike mayo, bank analyst with Wells Fargo Securities great to have you with us. I get the fundamental arguments for banks, banks are their Balance Sheets are very strong, the valuations are not very high right now. When will it stop its correlation with the yield curve at this point . It seems like its just simply trading on what the yield curve is doing. When you say banks are very strong, were talking u. S. Banks. U. S. Banks. I dont feel as though the world understands just how strong u. S. Banks are. Banks have the strongest Balance Sheets in a generation, they have enough capital to absorb not one financial crisis but two financial crises and its not dependent the growth is not dependent just on great loan growth or higher but you acknowledge that its a yield curve. You can see where the yield curve is going on any given day practically and determine the direction of trade for that seconder. Well, thats been true but when you pull back the lens the last 25 years the biggest factor driving bank stocks other the long time frame is do banks generate returns above their cost or capital . We think banks are on the cusp of creating value for the first time in a decade so you go ahead and give me a yield curve and less loan growth and not that much of a great margin and no deregulation and we still think banks get back to that point this is back to School Last Week was back to School Others start this week in the new york city area take out your pencil, sharpen it, do the math, weve done the math we have and these banks are resilient. So to melissas point, historically the way you traded banks was bought them below book value and sold them above book value over and other again. If youre going to invest in banks, find me someone who forecasts rates very well. Thats a tough way to urn a living not even the fed is good at that. But our call is it cuts through the cyclical changes this is the biggest structural Risk Reduction the Banking Industry has had for decades and these structural changes are whats going to continue to drive banks and you have in our favorite citigroup and the industry as a whole from value destruction to value creation. And you point out michelle points out book value. Thats important because in your most recent note you say that ive traded an average of 1. 3 times book value or so, historicals 1. 7. Why should we believe that historical book value is permit innocent right now in the comparison of banks . Right now they have different sets of regulations, they have different sort of risktaking appetites at this point in time, whether they want to or they dont. But it is there. Well, you could make the case that some of the value lagss should be greater than historical given a lower risk. Ten years ago today is when for the first time in developed markets in a generation you had queues, lines, at a uk bank waiting to take our their deposits from the bank thats ten years ago today, september 14, 2007 now ten years later the risk profile is dramatically less the percentage of subprime lending much lower the oversight by bank boards of directors and regulators and people like you, any time theres a hint of a problem banks are on that. We think loan losses will be lower for longer, greater earnings stability and that drives a lower cost to capital and higher valuation. So you like chase, citi, bank of america, what other big banks are there . And what dont you like . We love citigroup ive been on your show many times before the financial crisis. There any you dont like . Our target for citigroup is 140 over four to five years we think the stock doubles from here the one we got off and this goes back to 2012 is Morgan Stanley no imminent problems, we love the Wealth Management business, we just think the selfhelp story is done and wed rather go with a name like citigroup where we see more selfhelp to come. All right, thank you, mike. On this tenth i dont know if anniversary is the right word for such an awful event. Good to have you breaking news on new sanctions from the treasury. Eamon has the details. Thats right. The Treasury Department just announcing a few moments ago new sanctions against 11 entities in iranianrelated trading. Theyre saying here that they hav