Prove it. Got an insanely addictive gain for econ nerds everywhere. Power lunch starts right now. Welcome to power lunch. Econ nerd Brian Sullivan with three hours left in the trading session. Stocks, as you can see, at session lows, mildly in the green. But if this recent trend continues, it may not be for long. Trying to lead the dow higher at this hour, you got merck and other names out there. As you can see, the dow is up just 19 points. Goldman sachs doing okay. And were pleased to have seema mody riding shotgun with us today. Hi, everyone. Im seema mody. Heres what else is up on power lunch at this hour. Housing starts falling more than expected last month after two straight months of gains. U. S. Attorney general Loretta Lynch says this weekends explosions in new york and new jersey are being investigated as an act of terror. And the National Hurricane center says Tropical Storm lisa has formed in the atlantic. It is not expected to make landfall in the u. S. Lots to get to this hour. First, we begin with the big fireworks on capitol hill. Massachusetts senator Elizabeth Warren going after wells fargo ceo john stumpf in a big way. When it all blew up, you kept your job, you kept your multimillion dollar bonuses, and you went on television to blame thousands of 12 an hour employees who were just trying to meet cross sell quotas that made you rich. This is about accountability. You should resign. You should give back the money that you took while this scam was going on. And you should be criminally investigated. Some strong rhetoric being used by the senator. Lets get straight to cnbcs wilfred frost live on capitol hill with the latest. Yes, indeed, strong rhetoric as you rightly say from senator warren. It really summed up the tone of the q a part of the hearing with ceo john stumpf of wells fargo. Thats despite in his Opening Statement him using terms like deeply sorry and taking full responsibility. Once the q a started, it didnt feel like that was the case. Too many moments where he appeared to be dodging questions and not taking full accountability, most notably on the issue of clawback of executive pay, both his own and those of the head of community bank, kerry tulstead. One wonders why theyll be considering wishing they got out ahead of the issue and doing things of that ilk before that hearing because it was a massive question of the focus of the senators. Here is another example of where people felt he was dodging certain questions and not taking full responsibility. Do you acknowledge that the employees who engaged in this activity were committing fraud . You know, im not a criminal, you know, officer, and i dont know the im not a lawyer. I know the legal term. I know this, they broke our code of ethics, they were dishonest, and we did everything we can to support Law Enforcement on these issues. Im not a lawyer either. Neither are most adults in america, but i think most people understand the meaning of the word fraud. Now, that sort of response led senator tester to say that what mr. Stumpf had done was unprecedented in uniting this committee, the first time he had seen that in his tenure on the banking committee. The only other big headline ill bring out quickly now was the fact that mr. Stumpf said, quote, i cant guarantee actions only begun in 2011. They extended the investigation back to 2009. A further development we didnt know about this morning. The stock price which was up over 2 is at its lows of the day, which it were hit earlier when senator warren started that very pointed set of questions. Guys . How would you characterize mr. Stumpf as he left the hearing room . You were in hot pursuit. He took no questions that i could see. What would you how would you describe his body language, his manner . Well, he was trying to stand up tall and walk out i suppose as proudly as possible after a grilling that he just had sceee. And i imagihe managed that pret smoothly. But his tone was calm, collected, also it seemed genuine as he delivered the opening remarks, but there would be a sense of disingenuousness as he went on because of the content of what he was saying regardless of the tone. And it didnt feel like he was really meaning it. As he walked, of course, a somber departure because a tough time in there. He did not seem to get ruffled or lose his cool. I did not hear, how did he injure his hand . Was it shaking hands with Elizabeth Warren . Well, yeah, no, added some attention in terms of when he was being sworn in at the start of the hearing. I have asked about that. It was with his grandchildren over the weekend. Oh, the old grandchildren over the weekend story. I guess youre going to stick around as we bring in jon najarian and larry kudlow. Jon, you were here watching all of it. Ive not seen quite as ferocious an interrogation by u. S. Senator of a sitting ceo in my recollection. Right. And it wasnt just miss warren, but she did a great job. It was also looking around at mr. Brown, at sherrod brown. I thought he was going after stumpf like crazy as well. And everybody virtually said the same sorts of things in regard to the clawback issue. Because there is so much money paid out to top executives of banks like this. Some of it is deserved. Theyre at the very top of the food chain, the top of the pyramid. But when they make mistakes, there should be some issue, if it is not just a mistake, if it is fraud, which clearly this was, then i think somebody has to take responsibility. He says the buck stops there. Jon, the buck stops there. Two questions. Does john stumpf need to be fired right now . And why doesnt the market seem to care . I dont think Elizabeth Warren or anybody else in congress can fire mr. Stumpf. I think that would be a bad precedent. Not that you made the statement that that should happen, im just saying that should not happen. If the board is not willing the board has to listen to the shareholders and they are the voice of the shareholders. If they dont do the right thing here, and im not saying the right thing is to fire him, i think the right thing is to clawback and to discipline the folks. One other thing that seems important here, as they ask the old question from the watergate hearings, what did you know and when did you know it, mr. Stumpf, what did the federal regulators know and when did they know it and why werent they on the case quicker . We spoke last week with the l. A. Times reporter who was one of the first people on the story. It drew the attention of the Los Angeles County city prosecutor, but it took a long time before federal regulators, the occ, the cfpb got on to this. Thats really important point for everything. Not just the wells fargo, but for the entire banking, regulatory, Federal Reserve, thats a really important point. Regulators are always so far behind the curve. Point number one. Point number two, you need to have your own 11 00 p. M. Show on nbc or some place because of your incredible humor. Number three, this remiis, remie if im wrong on this, an Election Year. There is Nothing Better to have a pinata like a wall street bank or pharmacy ceo tomorrow. Yes, going there too. So we can get at wall street, kill wall street, we can shoot them, we can kick them, we can put them on the ground. If that doesnt work, we can string them all up, because theyre all evil, you know that, all wall street people, all bankers, all financial people, in fact, almost anybody in america who is engaged in business during an Election Year like this is bad. Bad, bad, bad. There was Consumer Fraud evidently here. I get that. I think one of stumpfs problems today was he was very poorly prepared for this, and he didnt have he didnt have fallback positions like im going to look at this hard, and im going to look at that hard and i agree. In a Political Year particularly, you have to be willing to go up there, and just kind of cow tail unless you got a much better case. To your point, do you think the candidates, trump and clinton, have addressed this misconduct at wells fargo enough . No. I dont think they should. I really dont think it is that i dont what is at stake here is the broader regulatory questions. Now, this action happened when, in 2011 . Is that correct . Quite a while ago. 2016. So it is kind of yesterdays news. Now if you want to have banking policy, with respect to dodd frank and the reform of dodd frank, perhaps they should. I havent seen anything hillary hates banks, period. Trump tries to hate banks and sometimes he doesnt hate banks, not quite clear. One question, whether the candidates have addressed it or not, wilfred frost, one person conspicuously silent from where i sit is one of the largest shareholders in wells fargo warren buffett. Where is warren . Well, thats a fair point. We havent heard much from him over the last 10 or 12 days since this story broke. I suppose leading up to this hearing we heard from certain shareholders that they werent that concerned with this and from certain analysts that this wasnt so much an earnings issue, much more a pr issue. That might be why we havent heard. Back to larrys point saying the ceo, mr. Stumpf, didnt feel that well prepared, didnt come across as that well prepared, that came across on certain points that came up, in particular the question of when he became aware of this whole scandal saying in 2013, at some point, but he couldnt remember exactly where when you would think like a hearing like this you would do all sorts of research to make sure the exact dates were stuck in your mind. In terms of when the regulators knew about it, that is in fact also part of the hearing that the share senator shelby outlined on the agenda, of course, the first person being mr. Stumpf. But the regulators were being quizzed as we speak. So we might get a furtherancer on that. The final thing, with the other banks watching and thinking because mr. Stumpf was asked, you know, does this highlight the banks are too big and need to be broken up. His response was, this was a thing of focus, not of size. But other banks may be worried about what the fallout of this might be. I know were out of time. I want to come back to johns point, very important point. The u. S. Government does not set pay scales, hiring and firing, thats a private sector issue for the board. Unless you can prove fraud and illegality in which case i do think there are provisions where they can get involved. But i want to make that distinction because i think thats a key point, too many people nowadays believe the government they can say who to hire, how much to pay them, how long their vacations are, et cetera, and that aint right. That just is not goes back in part, i think, to the financial crisis when the u. S. Took stakes in major companies, where they did have the ability to control who earned what and unless you want to turn banking into a complete public utility. Will, thank you, jon, thank you. Larry, youre going to stick around, im told. We have much more to talk about with you. A little politics, little fed and more. Including this election. They were leaning heavily in one direction, but that is changing. The surprising results of the latest cnbc fed survey coming up. And why these eight iphone 7s have literally gone to the dog. They went to this dog. One dog, who just apparently is just texting like mad. Were back right after this. Welcome back to power lunch. Wall street just changed its tune on who may be the next president. Steve liesman has the results of the new cnbc fed survey and, steve, the results are significant. They are, seema. The reason we asked this, this campaign has a big influence on the economy. In fact, 60 say the whole campaign is negative for the economic outlook. We want to show you the big changes in the betting on who is going to be the next president. Before in the august survey, 84 of our 41 respondents had said that Hillary Clinton would win the white house. That is now down to 51 . Not necessarily true, only half of clintons losses are trumps gains. 15 points to those who say 26 saying trump will win and 23 saying theyre not sure. More than half of that went into the dont know, unsure. But it had been a very easy and comfortable bet on clinton, now down to 51 . Lets look at the next screen here. What you see here is the idea of who is what is best for the economy on the election outcome. We had a big story here that there were more comfortable with the democrat winning, thats not true anymore. More comfortable now with a republican winning. Which, by the way, historically is where you expect this group to be. Big story here they moved away from trump and now theyre back more where they had been previously. Interesting split. Who has the best policy for the stock market versus the economy. Take a look at this. In september, 49 now say it is trump on the economy. That is up, so the policies that trump has been talking about, hes been sitting there, essentially talking to our audience where as i have to say, the democratic nominee has not been there has been no pivot to the center from clinton where as trump responded to the criticism, look, still a lot of criticism about his policies and how his numbers add up or dont. But hes talking about tax cuts, talking about Regulatory Reform. Those are registering with our audience here, 49 saying that trump would be better for the economy. And still clinton wins on the stock market 26 . However, 53 . The reason is because when we ask people why do you make this split between the economy and the stock market, clinton is a known quantity, her ability to relate to foreign leaders is also comforting through the stock market. Overall, the ideas of Regulatory Reform and tax cuts are thing s registering with our audience. Interesting. And i have to say, we look for the Corporate Tax numbers for Hillary Clinton, does she even glom on to the ones proposed by president obama . We cannot find it. We dont know what her middle class tax cut would be. Shes not talking about the issue. Therefore you get guys like jack welsh who come on our air this morning and make a cogent case and i want to just larry kudlow said this to me, and advised my thinking about the political side. Hes on set there. He said to me, the election is not going to be an omb debate. It is not going to be that. What youre going to do is get the public will get a general sense, this guy wants to cut taxes and reduce size of the government, and that person wants to do other things. Raise taxes and increase the size of the government. And thats the choice people are going to make. I think trump is talking to that, clinton is not. Steve, stick around. Lets bring in larry kudlow. Some political strategists say the rise of trump in the polls is due to the speech last week outlining his Economic Policy. What part of the Economic Policy do you think is resonating with americans . Is it cutting the Corporate Tax rate or renegotiating nafta . I think it is the whole picture. I think steve hit the nail on the head. Trump gave very good speech to new York Economics Club. By the way, hate to tout my own book, but john kennedy gave his speech at the new York Economics Club in december 1962. Do you have a book . I dont have a book. I should. You have a book. The book is out there, folks, please buy it. Enough of that. Detroit and new york, very strong thematic message speech. Tax cuts, particularly by the way, middle class tax cuts, rolling back regulations, which really helps Small Businesses. And growth. Basic message is growth and jobs and wages. And it is starting to hit. Hes done a good sober job on this. Hes put out a lot of can i add a third choice. Hang on. Mrs. Clinton to steves point, does not have an Economic Growth message and when she does talk about it, it is all about raising taxes on rich people and rich corporations, not what people want to hear. And i will just say this, editorially, you know my bias here, you cant tax your way into prosperity, we had a 15year slump, republicans and democrats, you cant tax and spend your way. There are a lot of problems with this. Does it affect Small Business, the trump plan, and thats unclear and murky according to there are other issues about whether or not you make 3. 5 growth. Let me say, let me say, as somebody who put some time on this, as you know, for a bunch of months, hes cutting taxes for Small Business. All right. Virtually all Small Business iterations will be eligible and available for the tax cuts. Now, i understand the details and the tax rules and the all the various laws. Im not a tax attorney. That complicates matters somewhat, this will all be this is a matter of pass through income and yes, this can all be worked out to the betterment of Small Business across the board. I got a comment on this, but we have to get to sue herera with breaking news now. It concerns exxon, brian. Thank you very much. The s. E. C. Is investigating exxon on Climate Change and accounting practices. Specifically the investigation will explore how the Company Valued its assets given the massive drop in oil prices earlier this year and late last year. So they want to see how the Company Valued its assets in the price crash in oil. And it is also going to exam how the Company Values its projects due to climate risk. Exxon right now is down just about 58 cents on the trading session, but once again, the s. E. C. Is going to investigate exxon on several fronts here. Back to you guys. Sue, thank you very much. Guys, i can add a little color to this as well. Ive been following the oil and gas industry closely. There is two issues here. Number one, the Climate Change thing, did exxon appropriately make shareholders aware of the possibility of risk to the value of projects because of the change in climate . Number two, t