Stocks in the red, the dow about 160 points as you see there from that 20,000 mark. Elusive, it has been. Banks hit hard. On pace now for the worst day since last summer, july. Energy rallying. Oil up 1. 5 . Nat gas on fire, up 5. 5 on a day where its 60 degrees, michelle, here in new york. Its beautiful, isnt it, tyl tyler . It sure is. You could be a naked chalupa in that weather. Im melissa. Shares off by 10 , and more on that in moments. Amazon promises to create 1,000 new fulltime jobs by this time next year. Shares higher on that news. Disney downgraded to a sell. Firm pointed to eroding subscriber base. The stock off by 1. 5 . Delta in the red despite better than expected quarterly revenues. Shares down twothirds of a percent. Melissa . More on the market slide. Hey, bob. Melissa, yields lower, dollar lower, stocks lower. Thats the story. Off the lows, but its been a rough morning. Take a look, for example, for Interest Rates, stocks there, and, of course, with the yields down, banks in trouble, but companies that compete for yield, when yields are lower, that is good for them, telecom and real estate to the upside. Tomorrow, big banks kick it you have, jp morgan, wells fargo, all to the downside today. They had a nice runup here. Theres problems elsewhere. Global industrials like united technologies, down four days in a row. Down 2 so far this week, thats a problem. Big oil, we had saudi arabia announcing they cut production below 10 million a day. Oils up. Exxon day day after day. Chevrons not helping. Thats not good news. Downgraded disney, they had a great year, 2016 right into 2017 so far, but the comment is key here. Downgrades in other companies, valuations of companies we cover do not appropriately reflect environment for stocks, and companies is riskier now than of the case several months ago. Number of people feel that way. The market is a coiled string now, priced for perfection. Where high stocks, we have high Investor Sentiment and High Consumer sentiment and High Expectations for big earnings boost in 2017. Some people talk about 20 . That is an awful lot to ask for the stock market under these perfect conditions, of course, we have the trump tweet risk. It is not surprising were taking a little bit of a pause here. Remember, though, we were down close to 200 points on the dow. We paired a number of those losses, almost in half. Guys, back to you. Good, thanks, bob. Another reason for todays selling, perhaps, market concerns of Corporate Tax reform may be a struggle due to the inclusion of an item called the border adjusted tax. The gop plan in the house of representatives calls for the following, no more worldwide taxation. Set a territorial system, impacting only what happens in the United States. Immediate expensing of investments rather than spreading out deductions over years, reducing the Corporate Tax rate by a lot, 35 to 20 . Heres the controversial part. Its no longer an income tax, instead, for corporations, its a border adjustment tax, to simplify means e e kwif lanlt of a 20 tax on imports and 0 taxes on exports. One of the architects of the tax plan, representative nunez of california, a key member of the ways and means committee. Sir, good to have you here. Great to be here. Tell us why you like this tax plan and why its so important to have, what many people are concerned about, a border adjustment tax. Well, this is really the first time in 100 years since the income tax was put in place that we have a chance to get rid of it. This puts us on par with the rest of the world. The only countries without border adjusted tax is somalia, yemen, libya, its quite small countries that have this. Its not controversial. Its a little offensive some of the Major American Companies that are importers who do business worldwide are even raising concerns of this plan because i dont see them going to germany or mexico or china to raise the concerns, and donald trump has been exactly right to call people out on this. If im a major retailer, why wouldnt i be nervous when i see a 20 tax on imimportaports . This is not a tax. Its border adjustment, what they do in all other countries. I know few people selling retail in the United States that are not selling retail into asia and europe. This is nothing new. Its nothing different. Perhaps if youre just an accountant and youre looking at this statically and looking at your old Business Model, yeah, you see where it would be an added tax, but, in fact, its not. The Business Model changes. Your Investment Strategy changes because this encourages investment in the economy. It creates jobs. We get out of Debt Financing and into equity financing, so its a plan that will really thats a longer term view, but, i mean, for michelles point, for a lot of retailers, basically, you say, for the retailers already operating on thin margins, i mean, as you know, the Department Stores suffer, for one, struggle because of the change to the Business Model, and for some, this is viewed as a nail in the cough tip of the guys. You are telling them its not a tax . Everybody else in the world does it. Yeah. Well thats very unsatisfying answer for the retailers and for the people who work for them. Well, that would be a ridiculous statement, so retailers go out of business if the retailers going out of business. What keeps them in business is growth. Job growth. Economic growth in this country. So if youre a retailer, no matter where you are at, you are all paying the same exact price, whether youre selling Retail Products at a store in new york or in california, everyones under the same system. Youd also have to assume that there would be no currency adju adjustment, and every economist has said that the currencies would quickly adjust to this change in the system. So how, congressman, trying to wrap my head around this because i find it complicated and accept on some levels its unfamiliar and complicated. Yes, i think thats accurate. How would the tax apply to a large American Corporation in the Restaurant Business that sells only american sourced food to american consumers, has no foreign operations at all . Would they pay no Corporate Tax because theyre not in the business of imports or exports, or pay some Corporate Tax, if, for example, they got avocados from mexico . Oh, let me explain. Theres two components to this. So you have the border adjustment, okay, thats for things that are exported or products imported. On the other hand, you still have whats called a tax flow tax. Everyone company in america, if youre a ccorp. , you pay 20 tax on cash flow. If youre a passthrough, its 25 . In addition to that, you have import and export border adjustment that essentially what it is for things that you import it is no longer it can no longer be deducted. Thats the difference. As a cost . Right . Thats correct. Okay. If you export, you no longer pay tax on that. So then explain to me, because, again, i have a hard time wrapping my head around it, a company like bmw that manufactures a very complex product in spartonburg, South Carolina with components coming from the United States, components that come from asia, components that come from germany, how does that get figured out . So lets say the third of the products come from the United States, well, those would not be taxed. If a third of the products come from asia, those are not deductible. If a third come from europe, those are not deductible, so on the price of the car, twothirds of the components are not deductal. Representative, we heard a lot from the house, and, clearly, many members of the house of representatives, authors of the better way, the blueprint supportive of this. It is not clear to me that the Trump Administration would be or is supported of this. Have you heard anything from any members of the Transition Team that he likes this idea or they like the idea, and what if he doesnt . Well, what youve seen is that you saw donald trump clearly state that the tax systems that are in place in Foreign Countries are very unfair to u. S. Job producers and job creators, and he wants to fix that. Theres really only two ways to fix it. You can either put our tax structure on the same field as everyone elses tax structure, or you can go the tariff route. Those are really the only two ways to fix the problem if you are really looking at the unfair systems in other countries. I think its a Fair Assessment from a couple of you that said it, that this is really a new, completely new tax regime. We are doing away from the income tax in a sense. So all Business Activity in the country would be under a simple tax system thats going to revolutioni revolutionize, i think, tax structures all over the world so i think other places around the world would have to move to a similar system like ours. Representative nunes. This is larry kudlow. He was going to be on after you, but we just sat him down, and he disagrees. You dont think its eliminating the income tax for corporations . Well, if you want to repeal the 16th amendment, im fine with that. I said this a million times down through the years, but what youre introducing here is theres a problem that exists, but this is not the right solution, my view, at least, and i dont want a National Value added tax. I dont want a National Sales tax. I dont even want partial value added taxes. One of the issues here is mexico renagged on the original deal back in 93. They had a 5 back tax applying to imports from america, and they said they would not raise it, and they did. Raised it twice. Its now 16 . Our imports, you know, mexican imports to the u. S. , duty free. Our imports to mexico, 16 . Thats wrong. I agree with you thats wrong. I dont agree that we have to have border adjustability and subsidize exports and go through a rig ma roll, and i strongly, congressman, with all do respect, disagree. We are not getting rid of the Corporate Income tax. Thats in no plan, not the ryan plan, not in the trump plan. This is an addon. Yeah, larry, were saying the same thing, and were in complete agreement. No one wants a vat, and at the same time, no one wants tariffs, what this border adjustment does is simply put in where its nondeductible or nontaxed, and that essentially does the same thing, creating a simple border adjustment scenario. When i talk about getting rid of the income tax, what im talking about, larry, is the traditional income tax, the traditional complicated income tax, and as you know, youre a fan of expensing the way that were moving to a cash flow system versus this archaic income tax that we have, so, yes, Companies Still pay tax on the income that they earn, but they will be encouraged to invest, and if they invest, as you know, rates become very, very low. I think we are actually saying the right thing or the same thing, and what we have to do is familiarize the American People with how this system works because we will accomplish the very goal that you have, larry. Yeah. I just got to say, look, this is a keep of thing that could doom business tax reform, which, in my opinion, is the most important progrowth element, and, really, the heart of president elect Donald Trumps plan, to spur economic growth, add jobs, okay . I think this why do you say that . Why do you say that . Because i think were going to get hung up on it like we are now. I think what congressman nunes said, for example, about replacing our tax system with a cash flow system, thats entirely different concept. Right. Senator cruz ran on this in the republican primaries and lost, very unpopular. Americans dont want a National Sales tax. Polls show they do not. Candidates who let me ask you this, though were taking a problem, i agree, it exists, but the solution is vastly greater than this problem. But what if the choice is this versus a punitive import tariff, larry, to achieve Donald Trumps goals, and what you heard the representative nunes say, he doesnt want tariffs. You see what im saying . Is this a better choice . No, its not a better choice. This is systemic. I dont want systemic. I want to deal with the problem. We may have to renegotiate every single one of the agreements, and nobody better than donald trump, in my opinion, okay, but i dont want to change our entire tax system right now. Countrys not ready for that. I will say this, with respect to mexi mexico, just focus on that, plus china and elsewhere and representative nunes has to go soon. Cant be here all day. Look, the issue here is mexico reneged on the original nafta deal with respect to border taxes, okay . They said they would keep their vat at 5 i dont know if thats precisely the right number, but it was a low number and they did not. They raised it two stages to 16 . Thats unfair. Trump is right about that. Every step of the way hes been right, but to renegotiate this into some kind of border adjustment which will penalize imports and subsidize exports, that is an exercise in government planning and complexity that i believe is doomed to fail, and if you stay with this, congressman, the whole Corporate Tax reform thing, the most important progrowth measure goes down the drain over this. Let me give congressman nunes a final word here because we have to move on. You can address what larry said or address the question that id like to pose to you. What would you say to what i think is implicit to what larry just said, that this proposal is a National Sales tax or is basically a back door tariff . I think this is a very simple way to border adjust. Its not a vat. Its not a sales tax. Its not a tariff. Actually, i think we owe this to larry because larrys been great throughout the years. A lot of people have worked on this over the decades, larry, going back to David Bradford who you knew well. So i think part of what we need to do is get larry over here to congress and talk in depth about this behind closed doors because what we are saying is the same thing. We want economic growth. We want to have business taxes completely revamped in this country because we want to encourage people to invest in the economy so that jobs can be created so donald trump can be successful, and at the same time, we dont want to have this trade war of any kind, even though i do agree that a lot of these trade agreements need to be renegotiated. All i would ask, ill come down for that conversation, by the way, thats a great idea, thank you. My dear friend, kevin brady, hes the best, best of the best. Read steve forbes column in forbes about the issue. He absolutely trashes this idea. He makes the points that are good supply side points, we want simplicity, not complex my. All right, gentlemen, thank you for the enlightening conversation. I love you, youre a great man, a great american. Talk about this for days. Well talk more, im sure. We have breaking news. Tyler, thats right. The independent Inspector General of the department is justice announced hes going to be conducting a review of how the fbi and Justice Department handled what they call certain aspects of the clinton email investigation ahead of the 2016 president ial election. This is an independent bodies within the department of justice which is tasked with looking into all sorts of potential violations of growth and conduct by department of justice and fbi employees. They say they are going to be looking at several different aspects of this including one, allegations that the department or fbi policies or procedures were not followed in connection with or leading up to the fbi directors public announcement of july 5th, 2016, and the directors letters to congress on october 28th and you remember thats all about the fbi director jamecomey looking into emails and informing the public just up ahead of the election he was going to conduct further review of Hillary Clintons emails that the Clinton Campaign felt badly done by that. They felt this was possibly a determinative event in the election. The Inspector General says hes going to be now investigating that. Hes going to be looking into allegations that the fbi director should have been recused from participating in certain matters, allegations that the departments assistant attorney general improperly disclosed nonpublic information to the Clinton Campaign or should have been recused from certain matters and allegations that department and fbi employees improperly disclosed nonpublic information. Well see where it goes, but a Significant Development in washington. Oh, mied go, this never goes away . It never goes away . Were still talking about this. We will be for years. Something historians will be looking at to figure out what happened here, and now we know that the Inspector General and department of justice is looking at it in short time. I got it, yeah. History. Great history. Jfk and the reagan revolution. Haha we know a story like that. I hear it was decent. Another emissions scandal, Fiat Chrysler. The stock tanking. Peter says the age of apple is over. Is he right . Why he said that and what did apple do today firing back at the claim. Shares of Energy Company hess taking a beating t