Server while she was secretary of state. A server that had information that was classified. The Clinton Campaign responding now. Lets get straight to john harwood in the nations capital. John. Hillary clinton as you suggested is off the hook legally, but not so much politically. Now, first of all we just gotten a response from brian fallon, her press secretary, to james comey, the fbi directors statement. And he said in that statement that the Clinton Campaign is pleased that no further action will result, was recommended by the career professionals that Hillary Clinton has said it was a mistake to use a private server and wouldnt repeat it again. But theyre glad to move on. And they consider the matter resolved. But the surprise today was not that no charges were recommended by the fbi, the surprise was how strongly james comey the fbi director criticized Hillary Clinton for how she handled email. And with that in mind let me just go back to an interview i had with secretary clinton in march when i asked her about the question of how careful she had been with classified information. Would you concede that you and the people who work for you at the state department were sloppy in the way you handled no. Top secret information. No. Because lets be clear about this. There wasnt a single one of those that was marked classified, either sent or received. So that was Hillary Clinton in march. Heres fbi director comey on how careful she was today. Although we did not find clear evidence that secretary clinton or her colleagues intended to violate laws governing the handling of classified information, there is evidence that they were extremely careless in their handling of very sensitive highly classified information. Now, tyler, the significance of this is that, you know, Hillary Clinton has been running as somebody capable of governing on day one whos competent and experience as compared to donald trump whos somewhat of a loose cannon. That was not a flattering picture that he painted of how she handled classified information. Obviously shes relieved not to face the possibility of charges. Donald trump quickly came out and said it showed that the system was rigged. But the argument about how she handled that classified and secret information is not going to go away any time soon. And james comey justified republican arguments against how she did handle it. And he was very specific, john, in talking about, i believe it was 110 different or 50 some different email chains where the information when it was sent or received was in fact confidential, should not have been used on a private server. He said he went out of his way to say they may not all have been marked as such, but any reasonable individual in the secretarys position should have sensibly known that they were classified documents. Thats the question. James comey said they should have known that the information that they were handling should have been handled in a different manner. Right. And that is something that is not a strong credential for being the next commander in chief. As you heard james comey unfold his statement, he indicated at the beginning that theres the question intentional misconduct, theres also the question of gross or willful negligence. You could almost hear as he described how the information was handled, the justification for a charge of willful negligence or gross negligence, he didnt get there. He said in the end that a reasonable prosecutor wouldnt bring the case. That the elements of cases that have been brought in the past werent there. But the discussions going to go on. One final question here. People are acting as though this is all over with in terms of legal jeopardy. But as i understand it what the fbi director said today was he and on behalf of the fbi, the fbi is not recommending that the Justice Department bring charges. But it is really still up to the Justice Department, isnt it . Thats right. Loretta lynch as the attorney general who has not recused herself from the case despite that meeting on the airport tarmac with former president bill clinton, Hillary Clintons husband, she is not recused. She will have the final say, however she indicated as the furor broke out over that, she will follow the recommendations. I think we heard what james khomeicom comey thank you, john. Lelts bring in cnbc contributor larry kudlow, what do you think, larry . Dont hold your breath Loretta Lynch is going to reverse the fbi. Having said that i thought John Harwoods report is spoton in every dimension. Legally hillary is off the hook. I presume today shell be on her knees praying to her higher power in gratification for this decision. Because it will keep her campaign alive. However, as john noted, the politics here are very tricky. Shes getting killed in issues like trustworthiness, and i dont think this is going to staunch that. Maybe shell find the bottom, maybe she wont. The odd thing to me, and im not a lawyer, is when you watch jim comey, and im a big fan of jim comey, no two ways about it, but it sounded like he was making a prosecutorial tape, said were not going to make the case, a lot of people are interpreting this as gross negligence which would be a case for indictment. You know who brought that up . Rudy giuliani, he was on last hour. Yes. He said, comey worked for me and i am shocked by what he said because when i listen to what he said, to me there are absolutely grounds for prosecution. And he was very, very specific about the statute. Whoever being entrusted with or having lawful possession or information relating to National Defense through gross negligence permits the same to be removed or lost or stolen, abstracted or destroyed, bring on the next one, fails to make a prompt report of such loss shall be fined under this title or imprisoned. He said for up to ten years. He really felt like the phrases used by comey could have easily justified a prosecution, larry. Well, as i was watching it, that was my thought. I dont know how Rudy Giuliani knows the law, but it sounded like mr. Comey was making a strong prosecutorial case and then backed off. Look, to John Harwoods point which i think is extremely important, for the moment she gets a legal pass, but not necessarily a political pass. Let me add this, there is a separate investigation going on of the clinton foundation. And that investigation includes bill clinton and this whole rig ma roll about going on to the airplane last monday and then wont release email tapes for clintons hillarys top four people regarding discussions with the clinton foundation. That stuffs still out there. And that has not yet been evolved. Having said all that, let me get this said, look, Republican Party, theyre going to take whacks at hillary as they must. But, but, but, this is just my view, this election is going to be fought over the economy, wages, jobs, growth and its going to be fought over islamic jihadism and terrorism and security. And i dont think the gop should completely obsess about hillarys legal position because those are the big issues of this campaign. And they must attend to those issues. Larry, to be machiavellian about it, if youre donald trump and if youre a republican whether or not you want him to win, who do you want to run against if she were to be indicted, that would mean potentially a joe biden ticket instead. I mean, what candidate do you want to run against . You probably want to run against a weakened Hillary Clinton. Well, mcc great conspiracy minds think alike. What i think youre inferring, that in fact joe biden would have made a tougher candidate to run against donald trump. Yep. And so therefore the Republican Party might actually have some daylight here. They might see some good about. She still runs and shes damaged. People want to like their president. They like to like their president. And they are now confronting two candidates with the highest negatives going in of in my memory. And they both have reasons for people to dislike them. Joe biden, i think john harwood would say, is one of the most likable guys on the political scene. Right. I know joe biden. I really like joe biden by the way. Ive interviewed him down through the years. Ive spoken to him. Hes a wonderful human being. I want to just come back to this key point. This is a kudlow point, just me speaking, the issues in this campaign are going to be economy, jobs, wages, and theyre going to be national security, terrorism, isis. Those are going to be the big issues. And the gop cannot let up, dont lose sight, dont take your eye off those balls because if they are to win in november, thats going to win it for them. What about this you see donald trump tweeting about president obama using air force one with Hillary Clinton on the campaign and taxpayers are paying a fortune for the use of air force one on the campaign trail by president obama. Of course he refers to her as crooked hillary, a total disgrace, thats the next tweet we have. Larry, there are a lot of private planes out there all of a sudden. Weve got hillary riding on air force one, youve got president clinton whos now a former president whos clearly been made extremely wealthy by having been the former president traveling around on a private jet, were paying for Loretta Lynch to travel on a private jet. It just wreaks of the whole elitism thing that the world is so angry about right now when you look at the brexit vote, et cetera. Well, theres that. Listen, michelle, if your plane was parked next to my plane, i would go over to a visit with you and i would love to say hello as i have these many, many years. So is this a smack of elitism . I dont know particularly. Youre probably right, theres some of that in here. I think the issue of i think little low class warfare there what . Im sorry . Private jets are incredibly expensive to maintain and to run. And bill clinton is clearly very comfortable flying around the world in one. And we use it for members of the cabinet by the way under republicans and democrats, but it speaks to the whole issue. John harwood, im only jealous because mcc has never offered me a ride. I dont have one, larry. I aspire to have a private jet. Theres no more expensive private jet to operate than air force one. John harwood, could there be a worse day for president obama to be flying on air force one with Hillary Clinton and campaigning for in light of whats going on . Hes down i gather in North Carolina today. Well, you know, if youre Hillary Clinton, maybe youre glad that something can blot out the words of james comey today. But, no, its certainly an awkward situation. Well wait and see if either one of them either to the pool that gets close to them as they go in or out of the event or on the public stage itself whether they will address these or not. Id kind of be surprise firstdegree thed if they do. I think Brian Fallons statement will stand for the Clinton Campaign reaction. No doubt about it its an awkward situation especially no doubt about it one of the things james comey said is if an incumbent official had been looked into for handling information this way, they might face some sanction. So if Hillary Clinton still worked for president obama, would she be admonished, would she be fired for what comey described as her handling of the information . We dont know. But it certainly makes the meeting awkward. Let me just remind, i believe, maybe im wrong, someone correct me, there is a separate investigation going on conducted by the fbi with respect to the clinton foundation, their procurement of cash there have been reports of that about whether theres pay to play going on. Pay to play. Everybody tells me thats going on. And i still think this story is not over until that story is over. And i think that one is going to continue to cook. All right. Larry, john, thanks so much, guys. Could be a pivotal day in this election. Yeah, it is really wild. All right. This could be bigger than brexit and disastrous for the european economy and the big banks. That story is next. guy oh man, the shows pretty much over. friend wish we could start it from the beginning. jon bon jovi with directv, you can. You see, weve got the power to turn back time lets start over, lets rewind and lets go back and not quit the gym and have a chance to say goodbye to grampy tim oh, thats the power to turn back time. vo get the ultimate allincluded bundle. Call 1800directv. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Welcome back to power lunch. Im michelle carusocabrera. Stop trading for a minute. Get your hands off that keyboard. Look at a story that could turn out to be bigger than brexit when it comes to the European Union. Italian banks are in a lot of trouble, and the ramifications if the situation isnt handled well could be serious for the entire European Union. While we were all off yesterday, tyler, there was news a bank in italy heard from the ecb that they had to figure out what they were going to do with their nonperforming loans. Look at the Italian Bank Index in the last year. It is down 56 yeartodate, a huge percentage of that happening in the wake of brexit because of concerns of lower Interest Rates and the future of the European Union. The banking question very small, monte paschi happens to be the oldest in the world, down 99 , a very troubled bank. Whats at issue is the entire italian Banking System probably needs more capital. And there are new rules that went into effect january 1 that could punish bondholders and junior bondholders. And in italy many retail investors, mom and pop, hold bank bonds. Spoke with the bank of italy today, theres 29 billion worth of what you call bail inable bonds that in theory could get hurt and do you want individual bondholders in italy taking losses in the middle of this situation in the European Union. You would think, what, those are eu rules that caused me to lose money, another reason to be worried about the future of the eu. So as people worry over the italian banks, concerns are raised just over how deep this problem can run. Lets bring in brian jacobson, chief portfolio strategist with wells fargo. Good to have you here. Thank you. Great job summarizing all the issues facing the italian banks. Thank you. Im flattered. So its not so much the italian banks themselves, right . Its not like american banks have lots of exposure to them or american shareholders have a lot of exposure to them. But its this issue about whether or not youre going to see bigger issues for the European Union as a result. Do i have that right . I think that is the bigger issue here because everybodys been aware of some of the problems in the italian banking sector. But now you have the problem where matteo renzi has what he calls a plausible solution to the problem which involves recapitalizing the bank with Public Sector money. However the germans are saying nine, they dont want anything to do with it because of the new eu rules. I think this is calling a Major Political issue here where the banks are the focal point of it and people could be talking about italeave instead of brexit if they dont come to an agreement about how to capitalize these in a way matteo renzi is rolling out. You can use as an excuse brexit to say, listen, weve got a systemic problem here. Would this not be a problem if for the fact there are lots of individual italian bondholders out there that could lose a lot of money and hence hes so worried politically about votes that are coming up . Thats correct. I think that is the bigger issue here. The fact you have so many pensioners and depositors who under eu rules would effectively need to be wiped out before there could be a recapitalization. Matteo renzi wants to avoid that because theyre voters as well. Thats why this becomes a Major Political issue. And its not really painting the European Union and especially germany in the best of light when they are apparently obstructing what could be a potential solution. Now, im not a big fan of having the Public Sector stepping in to bail out the banks in this situation. I think there are alternative solutions to look at, but some of those alternative solutions might take a lot longer to play out. Like for example setting up a bad bank to securetize some of the nonperforming loans and such. If they want a big bath approach to fixing the banks seems theres going to have to be a compromise here. Got it. Brian, thanks so much. Thank you. All right. Another focus is the major decline in 10year yields here in the United States. The lowest levels since 1953. I wasnt even born then. Just by one year. Just missed by one year. Over the last decade any time the u. S. 10year has made a move of this magnitude in one month, moving lower yields that is, the markets have not responded well. Lets take a look at some specifics from our team. Dig into the sectors 56 of the time in the past decade only one major sector etf has traded positively. When that has happened, that would be the utilities etf, ticker is xlu, as for the worst performer that goes to the financials i suppose unsurprisingly. Stock specific goldman and j. P. Morgan have posted average losses greater than 7 when this happens. 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