Joining us, ylan mui in washington, covering this breaking development ylan obviously, this is a big shake up at the white house. Here are the tweets that donald trump put out. He said that john f. Kelly will now be white house chief of staff. He called him a Great American and a great leader he also said he has done a spectacular job at Homeland Security and he has been a true star of my administration. Now, one interesting question in all of this will be how kelly will be able to handle what is clearly a politically potentially toxic environment for him going forward. When he worked for leon panetta, who was secretary of defense, one of the questions that he had was that he didnt want to go into an environment where there would be political infighting and political sniping. Leon panetta even telling cnn at one point that that was the last place that he would want to be but this is now something that he will have to grapple with going forward. President trump also just tweeted, now i would like to thank Reince Priebus for his service and dedication to his country. We accomplished a lot together and i am proud of him. So, again, big shake up today at the white house. Other open positions, that could now come into question Jeff Sessions, that is another cabinet member that the president has criticized publicly bi well see if anything happens with that position going forward. Guys, back to you. Ylan mui, thank you very much this is fast money, so lets keep this to the market angle, if we can. But tim, weve seen d. C. Drama, some will call it dysfunction, whatever you want to call it, another big change in the white house from a markets perspective might be the white house calling me now is your phone really ringing right now . Go. He could be the next ag right here we almost got through that but again, does this matter for the overall markets or is it just a continued d. C. Show that is separate and distinct from the market show . Well, look, weve been going through a transition all week. And if you think about it, you know, yesterday, the news on the Retail Sector was that the border adjustment tax was dead on arrival, and in fact, you were starting to get some Movement Towards possibly compromise in tax reform so one can make an argument that although, you know, this has been political theater that weve never seen before, that the whole reason for the white house to make some changes was to get on with an agenda that has been badly stalled, so if you think about, again, i go back to there seems to be some posturing within the border of adjustment tax, tax reform, weve gotten some movement on the hill in terms of where will we are with the health care, nothing has happened, but this choppiness is not new for this administration the border adjustment tax is bat is doa that thing is dead on arrival. But that also calls into question, further tax reform, which i think, we can agree, when we talk about the equity markets in d. C. , perhaps nothing is more important than the idea of tax reform, from a stocks perspective. Absolutely. No question. If you look we talk about it all the time on this show. Tax reform, its not going to be reform its going to be cuts. Its going to be tax cuts. The markets giving a pass. First quarter 2018, this administration has this sort of time frame to actually get something done but they need to get points on the board from a confidence perspective. Does this hurt confidence i dont think this hurts confidence at all. This is a nonevent when it comes to trading stocks on monday morning. When you look at numbers, s p, earnings, earnings arent factored in right now at all any of the tax cuts. So that could be a massive, you know, push forward, if we do get some sort of news on that and we feel like the momentum is building heres the thick. Just this week tells us theres no legislative momentum building thats just a fact, right . We have the republicans, they blame the democrats they cant get this Health Care Bill through. But the fact is, every failure that they have on the legislative front theyre all false no, what im saying, im not being partisan here, but makes the likelihood of some grand tax reform unlikely. And then what happens is at best, you probably get some sort of repatriation, but the democrats arent going to give anything at this point so theyre not going to well, they dont need them. They dont need them but their own party is the problem. They need the republicans to get in line. And no new regulation seems to be whats kept the market up here and then earnings kept the market well, how about this. How about this lets flip it, guys steve, how about this point of view the market is reaching new highs every day. Every day we have the d. C. Drama. And every day we make new highs. Maybe not getting much done isnt a bad thing from an equity perspective. Actually, dan and i talked about this when he was elected that gridlock could be thats what i mean. Within his own party, and markets love gridlock. I do think that markets love lack of regulation and theyre not going to get any new regulation with this administration i guess the ultimate question, tim, comes down to this simple one, which is how much of this record run has any kind of tax reform or tax cut plan built into it if its zero, we dont feed to worry about it if its 10 , then we need to worry about it i think its 5 i dont think this is anything the market is trading on i think the market is trading on Central Banks. I think the fed is stepping away from the table a couple days ago. I think the ecb has been wishywashy. And thats where the risks were before all of this i think washington has strangely gotten a pass. But we said this often on this show, the difference between this administration and the last one is enough to make this environment a very healthy one for stocks guys, were going to talk more about the markets and this, but lets get back down to washington, d. C. Where ylan mui has more details on this breaking development brian, nbc news is reporting that a source close to the president said that Reince Priebus had got an short reprieve when the motion to proceed on the Health Care Bill passed however, once the Health Care Bill went down in flames, that was, quote, the final straw. So some insight into exactly how dramatic this situation has been and how quickly this decision might have been made a retporter for the Washington Post also tweeting a picture of the van in which President Trump was departing in from joint Andrews Air Force base Reince Priebus was in that van with the president so, clearly, he was still in the inner circle until these very final moments. In addition, President Trump did talk about secretary kelly today, in his speech, in new york earlier he said he wanted to congratulate kelly hed done an incredible job as the secretary of Homeland Security and called him one of the great stars of the administration back to you guys ylan, thank you very much, guys so donald trump seems to be blaming personally Reince Priebus for the failure of health care. Lets flip that around john f. Kelly, who is now the new chief of staff is a lifelong marine right i know where youre going here political independent i wonder if trump believes this strongwilled marine can now get done with priebus could not get done why would that be the thought . And why is the chief of staff responsible for passing the Health Care Bill hes not, but the chief of staff could be responsible for getting the gop in line he knew strong arming the gop definitely reince has a relationship with the gop, of course, we get that. And theres no shot that mr. Kelly, that general kelly, has anything to do you said shot i thought it was or would have any ability to he was the head of the rnc. No kidding what are the things that have caused volatility for Financial Markets is really the question here and to me, what this signals is very soon, well have Jeff Sessions out republicans have already said they would be disappointed about that ref reince out, former head of the rnc. Well have sessions out. Then hes going to fire murelle woe okay thats the thing but does that matter hold on a political roundtable there is a chance but back to the markets i actually think this is the sort of thing. Youre talking about legislative gridlock im talking about a constitutional crisis. Im talking about something far greater here and thats the source of like that could be the source of a lot of volatility, at a market thats alltime highs, very complacent alltime lows i hear what youre saying and im not minimizing the importance of whats happening, but i do wonder, when we look at whats supposed to drive the markets, earnings, corporate earnings are henry and mabel in the midwest not going to go buy a new car because theyre watching tv and theyre angry about the d. C. Dysfunction i dont see that happening people are guy to buy homes, theyre going to buy cars, theyre going to sell things we got the confidence boost from the fact deregulation or even the thought of less regulation but importantly, you talk about 5 potentially being priced in for earnings ill give you an example Chris Krueger is our washington, d. C. , you know, strategist he took, as a base case, took out cuts in 2018 took it out of his estimates market didnt move and they listened to him people listen to what he says. Market didnt even move. Didnt even phase him, because im sorry to cut you off. Look, what the equity markets are moving on is the fact that Interest Rates on the tenyear, at 220 tha theyre at 50 basis points across the european union. Weve had pmis and manufacturing data around the world that are at five, six, seven, eightyear highs. Unemployment near record lows. And Central Banks that are complacent in the shortterm, it means asset go higher and equity allocation out of fixed income continues. Thats what this comes down. And if you had Central Banks on the warpath, theyre trying very hard to normalize. Thats whats going to hurt stocks more than whats going on in washington. If theres a sniff of repatriation, a sniff that some sort of tax cuts could be on the horizon risk is to the upside boom. And by the way, there are democrats that are on board with repatriation we spoke with john delaney on capitol hill, where hes got a plan to use repatriation dollars that would go into some kind of an Infrastructure Bank the other way to think about this, too, might be this which is, ive personally spoken with members of congress who have sort of whispered to me that all of this drastic gives them cover to kind of get stuff done, because the attention is focused yesterday. Steve liesman said this yesterday. What is wrong with 26 on tax reform that apparently is rout theout right now. That would be a victory. Its not the aggressive numbers we were talking about. Youre not getting to 15 absolutely not. I agree. Yeah. It would be the market is factoring in at least so, a 26 number would be very favorable. So anything better than that, we take off theres another angle here too. There have been reports that gary cohn may be in line for a chief of staff job maybe. Hes obviously not getting that. There have been other reports that gary cohn may be in line for the fed job. He does not want he now does not have the chief of staff job dan nathan, do you think theres a chance gary cohn becomes the next fed chair and is he qualified . Heres the thing, at the end of the day, i think what you said, tim, is really important we have record not record low rates, but very yenear we have Commodity Prices that are very weak and a dollar that is very weak all of those are the ingredients that should make risk asset prices go higher so to answer your question, who cares about gary cohn, no offense his family. But the biggest drawdown the u. S. Equity markets have had have been 3. 5 this year so it comes back to the level of complacen complacency. It may be fair to say, its the most politically volatile year weve had in a long time and the least market volatile year this is really important. Overnight, north korea fires an icbm, right off the coast of japan. And the big story is that our rexit, you know, we may have the secretary of state leave this week so were missing a lot of really important stuff here, is the point. That used to be the source of market volatility, right when we would have some sort of rogue nation firing off maybe because everything is etf and the computers are in charge lets bring in senior cnbc contributor, larry kudlow. Thank you very much for joining us on such short notice. Do you think that priebus being out and john f. Kelly, a very strongwilled marine coming in, maybe can resuscitate some of the things, the tax reforms, the infrastructures that we just talked about well, i think youre going to see a more disciplined white house staff. John kelly will probably be closer to, lets say, isa james baker or an andy card, people like that, and have a tougher process. Youve got all these people who are assistants to the president , you know, walking in, at any time and circumventing the chief of staff my guess is the former marine will, in fact, change all of that and you will see a more disciplined process. Thats what i guess. By the way, i think its remarkable scaramucci telegraphed this what he said in his temper tantrum against priebus, i believe, must have come from the president and that was a leading indicator and so now im guessing, this is just guesswork, brian, because im not in washington right now, aisle guessing other shoes may fall such as do you want to care to speculate, larry rihymes with cannon. Pardon . Does it rhyme with steve cannon the other shoe that might drop yeah, i dont know. I mean, it could steve bannon, maybe. I dont know this. The president has been in a rhetorical verbal war with his attorney general, Jeff Sessions. That has not been resolved yet i dont know how thats going to turn out there are a lot of rumors that the president is unhappy with his special counsel, robert mueller, and hes gone too far already and hes gone fishing into trumps finances, et cetera, et cetera. The president has the authority to dismiss his attorney general. The president has the authority to dismiss a special counsel the president has the authority to dismiss the Deputy Attorney general as well. So those could be shows that fall i honestly dont know. But, you know, nick, you have to look back at the tweets. Now it looks to me like theres more reason than rhyme all of these things may have been leading indicators, especially this scaramucci assault on maybe, but, larry, lets look lets look at ive often said that washington, d. C. Is the biggest corporation in the world. So lets take a look at d. C. As a business and if you and i were sitting on the set at cnbc and analyzing a company where the top executives kept coming and going, every couple of months, we would say, that company is in trouble or doesnt know what its doing is it fair to look at d. C. That same way and say, this white house needs some order well, i think it is fair. Youre past the sixmonth period, so, that theyre not kids anymore. Theyre not kids anymore. Sure, if youre looking at a corporation who cant hang on to its top executives, you would look askew at that and you wouldnt like it one bit but no corporation ultimately, this was a rookie team that took power and on some level, you had to expect welcome this isnt a partisan statement at all these are all people that wasnt been a position like this. You would have to expect there would be some attrition and churning within the ranks. Well, i think thats right, and i think thats whats happening. And i guess the messenger was scaramucci thats what i find most interesting about this now you have to go back and take another look at the president s tweets whos on that list by the way, i heard mention of gary cohn. Cohn trump himself, in his interview with the wall street journal, put gary cohn in play for the fed chairman, okay that was trump mr. Cohn did not say that. That was the president , who said that so i think that gives some credibility to the possibility, the likelihood im not saying its a done deal, all right . But trump did that and i think from what i gather in my own visits to the west wing and so forth, trump has been very impressed with gary cohns performance and his abilities to run a good staff and get briefing papers and so forth and so on. But in Anthony Scaramuccis rant, interview, whatever you want to call it, he also called out bannon so, to steve grassos point here, larry, if you believe that scaramucci was the messenger on priebus, can we also discern that he is the messenger on bannon because he went after them sort of equally in that interview well, its an interesting hypothesis, brian. Its an interesting hypothesis and what would you believe if its true. Does that mean theyre tightening ranks in a positive way, or do you believe theres so much fighting, that its not going to get cleaned up . Well, look, these are hard questions to answer. I think that President Trump, as you put it, is tightening up i think he wants more discipline my guess is, he wants fewer people running in to resolve this he probably wants more message discipline, more policy discipline a lot of those things have been lacking. My opinion, most of his policies have been rather good. But executing the policies and messaging the policies, not so good larry and i think i think priebus so how does this though, larry steve grasso, how does this, when you really start to look at getting stuff done, we chatted about it a couple of minutes ago, how does this new chief of staff really carrier the ball this is a guy that doesnt have extensive relationships on capitol hill how does that even move the ball, other than just clearing the deck well, look, i think he does have relationships on the hill as homeland secretary, but also in the chain of command in the marines. I think he knows a lot of people on the hill. So im not so sure about that. I think this im just guessing here, but i think potus want a simpler operation a more stream lalined operatio