Transcripts For CNBC Power Lunch 20170714 : vimarsana.com

And target amendmenazon a new report says theyre to blame for keeping wages low for the american worker. Well debate that when power lunch begins right now. Welcome to power lunch im Michelle Caruso cabrera. The dow and s p 500 setting record intraday highs. Dow would be higher if not for j. P. Morgan and Goldman Sachs which are lower. J. P. Morgan reporting numbers this morning, the nasdaq is on pace for its best week in two and a half months the. Dow and the s p 500 on track to post their biggest weekly gains in seven weeks check out the movers walmart and boeing are higher on upgrades gap is higher, retail stock being added to j. P. Morgans focus list and a number of wellknown names hitting new alltime highs facebook, mastercard and ebay among them and we begin with j. P. Morgan. That story that tyler told you about. Ceo jamie dimon going off on washington during an earnings conversation call with analysts blasting the d. C. Dysfunction and the impact its having on the economy. Wilfred frost is here with more. Thats right, michelle. And here is the main part of that rant dimon referring to the excessive gridlock he sees in washington. Since the Great Recession which is now eight years old weve been going at 1. 5 to 2 inn spite of stupidity and political gridlock because the American Business seconder is powerful and strong and is going to grow regardless im saying it would be much stronger growth had we made intelligent decisions. Now, instead, well play the right bite which we have now here is the main part of that rant we have become one of the most bureaucratic confusing litigious societies on the planet its almost an embarrassment being an american citizen traveling around the world and listening to the stupid [ bleep ] we have to deal with in this country. Its important to note that he was referring to the last decade broadly, not specifically washington today and his main point as we heard is that growth is resilient overall and has over the last decade grown despite gridlock but certainly its fair to say hes envious of other nations like israel, ireland and china he called out but in particular the one he says was most pro active in changing laws and regulations to benefit growth was france and he praised the impact president macron has had in making the nation more businessfriendly. Guys even though moacron just got there. I know but he met him three days ago and as agift he gave him a bond that j. P. Morgan financed to fund the war in 1918. He did a call with journalist ins the morning where he got angry, right you were on that call. I was on that call indeed and theres been perhaps a little exaggeration what he specifically said was after a question after going on a similar rant as we heard from the analyst call in terms of the fact that we need to see more economic reform to deliver growth, the fallout question from someone was about the last two weeks of trading revenue which his response was to say thats not what is important, you shouldnt be writing about two weeks worth of trading revenue, you should be writing ant what washington needs to do to drive Economic Growth so he had a kickback but it was more light hearted than the seriousness we heard on the soundbites from the analyst call. Have you ever heard a ceo go off that way on one of these calls . Ive heard people get elevated on certain questions. Thats a nice way to put it, elevated. We had an outright swear word so i havent heard that before this is an issue we heard him talk about before so thats why im not super surprised this topic got him going. I think it just came together once and for all today but i put the context on it. He was positive about u. S. Growth saying we have grown regardless saying if we release the gridlock we will grow faster, if we dont, we will grow slower so 1. 5 to 2 is the base case but we can improve from here is his point. Our next guest also heard those words firsthand. He was on the call, lets bring in jeffrey hart analyst at sandler oneil, what did you think, jeff . I kind of liked hearing it. I enjoyed it i think what jamie was voicing was frustration that many have, including myself theyre watching our elected officials find the time and money to fund expanded probes into russia through our president ial election but they cant seem to get around to reforming the tax code and the tax code is extraordinarily complicated and driving companies and jobs out of the country. They cant find the time or money to get around to that but they can get around to side political issues, its frustrating for Business Owners that they have to deal with that tax code. Do you agree with wilfreds point that when you look at what he said, since the Great Recession which is eight years old weve been growing 1. 5 to 2 in spite of stupidity and political gridlock it didnt sound like he was just talking about right now and russia at all. It sounds like hes been talking about whats been happening under the Obama Administration as well. Our tax code has been a problem for a keck cade. Its not like its a new concept and weve never gotten around to addressing it. Dodd frank, theres good things in dodd frank that had to get done but they managed to publish over 22,000 pages of increased regulatory but couldnt get around to taxes. I think probably before the crisis if you look back there is a lot of frustration out there that the government isnt really helping the average person or u. S. Companies be competitive globally in an increasingly globalized world theyre almost kind of hurting as opposed to helping. So you basically think he had it mostly right and i think a lot of people agree that he has it mostly right though they might not choose to use the words he used. Lets turn back to j. P. Morgan and its business hows it doing it was a pretty good quarter. The thing people didnt like was Net Interest Income came in lighter than we thought and they took their full year Net Interest Income guidance down a little bit but that tends to epiand flow with the forward yield curve. Granted the guidance was more conservative but i didnt find it that disappointing and trading revenues were weak but they were literally as weak as promised so netnet to put up a number with those head winds working against you i think are decent results. As we move forward, what were seeing is Interest Rates concerns and lowgrowth concerns rearing their head again its not something new its kind of todays fluctuation. We can get past. It jeff, good to have you on, jeffrey hart, thank you for being with us. Thanks. Despite jamie dimons rant and Everything Else going on, the rally rolls on, the dow and s p 500 hitting another intraday record high in just the past hour Michael Vogelsang is president and ceo of boston advisers and we have a new face to power lunch, welcome, mike but vogelsang, its amazin amazing, if we were waiting on d. C. , we would be waiting forever. We had government shutdowns a couple years ago, we havent had tax reform in more than a decade are we overreliant or overweighting on some miracle to happen inside the beltway while people are getting rich around us by ignoring washington . I dont think this market is going up because this stuff isnt getting done i think the market is going up because theres almost no future in looking at this stuff getting done washingtons proven themselves to be completely dysfunctional and unable to establish any management of our economy, our infrastructure, our tax code, anything that is sort of reasonable, responsible and fair, its very clear. Thats what dimon is saying. Before we get into your stock picks. When was washington functional we had government shutdowns three or four times in the 80s, a couple times in the 90s, a couple times in the 2000s, were longing for this time of government function and im thinking when was that meantime, Corporate America chugs along. Are disneys earnings going to be hurt because were not getting Corporate Tax reform not yet. I dont think so. What were looking for as citizens first and investors as well is progress, right . Just being able to get stuff done thats reasonable and, frankly, for what the kind of taxes we all pay we should expect and every poll, every social view of the country shows that its more polarized than its ever been and thats basically whats driving washington and i dont see anything that sort of quickly will be repaired here. I mean, you know, look i was listening to the previous show and all these guys were talking about the individual stocks i got a couple to chat about but oh, my goodness, theres nothing else except equities to be interesting from an investment perspective. We just keep grinding higher and higher and higher. I think were in uncharted territory. Mike labella, you say dimons comments about the Trump Administration are a big red flag for the markets and investor confidence. Explain that thought but i go back to what michelle said what i heard him talking about was not necessarily pointed particularly and certainly not exclusively at the Trump Administration but more broadly at a kind of systemic dysfunction that he thinks has infected washington for the better part of a decade if not longer. It highlights a really, really important disconnect that weve seen in the market and thats been the disconnect between consumer and business optimism, which really took off after the election, and the hard Economic Data which has been pointing to more of the same slow growth. Dimons comments that the fact is that this stuff is not getting done, every time theres a new distracting tweet, every time theres another scandal it makes it less and less likely that this congress is going to get anything done whether its infrastructure, whether its tax reform, health care, anything else we need to focus on so its not a matter of this is something new, its about are we actually going to move away from this lowgrowth rut that weve been in the in the last decade. How do the tweets connect to discussion about health care or a discussion about tax reform . Its just another distraction. You look at the congress and every time they have to sit there instead of talking about Health Care Policy theyre replying on how they feel toll a particular tweet or the newest thing dwump might have said. The idea that s that doing things in congress is difficult enough, with all this distraction it makes it more unlikely anything will get done. And the media is complicit because were asking how they feel about the tweet so what do you do with your money . Labella im calling you labella because youre both mike labella, what do you do with your money do we just keep grinding higher here. This is the question that everyone is asking, what do i do valuations are starting to really creep up, were just in this 1. 5 2 gdp growth. We think thats likely to continue so investors need to focus on two things. Do they need to be in equities many people are underfunded. Legg mason came out with their Global Investment survey one of the startling things was 50 of baby boomers dont have half the amount of money they expected to when they were going to retire so that means investors have to relook at income and also relook at defensive equities so in other words things where they can get inflation protection but be more of a stable exposure if there is that market correction. Michael vogelzang, leave us with some great stock. I just worry, right i mean, stable stocks, utility stocks trading at 23, 24 times earnings, i understand why but oh, my goodness when those go back to ten times earnings, they wont be stable and safe thats the biggest worry we have we think equities are expensive, theyre going to continue to grind higher but were probably looking at 15 or 20 chance of a decent correction some time the second half of the year and im not sure people are ready for it. Thats not a stock pick he was trying to give you a warning. I asked for good news give me one name to help us make money with a macro market decline. You wanted a stock pick people dont use stocks anymore, they just use etfs and passive investing. Why do you want to talk about stocks thats your job. No, i understand. I mean best buy is a wonderful idea theyre fighting the good fight against amazon and the internet. Weve owned it for a couple years and are very happy with it they theres more ahead there. We like disney for the antiest opini antiespn crowd, once disney figures out what to do, there will be value there. There was a stock pick. Well, you beat him up. Mike and mike, also the name of an espn show, but thank you very much. Pair of mikes. Its friday so that also means the weekly rig count numbers are out, jackie de angelis, how are they coming in . We added two oil rigs according to baker hughes for the week so thats two weeks in a row that were moving back higher remember, we had the opec output cut and here in the United States they added, added, added for like 23 weeks. All of a sudden we had one down week it was a head fake for the market and now were going back up again one analyst i spoke to said, sure, why not . At 46, u. S. Producers are still profitable so that could continue to happen until prices become more depressed. We are up about 1 on the day, this didnt move the needle much, a little hortcovering a we go into the weekend and there will be up days throughout the summer but overall the feeling is if nothing really changes, these oil prices are headed lower. Back to you. Jackie, thank you. Coming up, the latest projections show Social Security will tab out in 17 years unless we fix whatever its problems are. But our next guest says theres not really a problem calls it a phony crisis and that we should leave it alone is he right . Well debate that one next ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. The future isnt silver suits anits right now. S, think about it. We can push buttons and make cars appear out of thin air. Find love anywhere. Hes cute. And buy things from, well, everywhere. How . Because our phones have evolved. So isnt it time our networks did too . Introducing americas largest, most reliable 4g lte combined with the most wifi hotspots. Its a new kind of network. Xfinity mobile. Social security will tap out in 17 years unless we do something to fix the program, medicare, quicker. How dire is the situation . With us are michael tanner, senior fellow with the Cato Institute and mike wisebrot, codirector for the center for economic policy. Mark is the coauthor of Social Security, the phony crisis. So lets start there, mark why do you think its a phony crisis do you not believe the numbers that treasury secretary mnuchin and others presented yesterday saying that medicare, its trust fund for hospital bills will run out in 2029 and Social Security in 2034 . Well, lets focus on Social Security first everybodys using the same numbers, its just trickery and you know weve progressed so much since dean baker and i wrote that book in 1999, back then everybody believed that Social Security was going to run out of money, most people thought they werent even going to see their Retirement Benefits which is, of course, impossible as long as theres still a country and so actually, no, the whole shortfall for the next 75 years is relatively modest, 2. 8 of payroll so even if you had to increase the payroll tax to cover that whole thing, which you wouldnt necessarily at all 40, of that gap comes from just too many people making incomes over 127,000 and dont pay Social Security taxes on that so you could correct that even if you do the whole increase, the average wage 40 years from now will be over 40 more than it is today so nobodys going to care, nobody cared in the 50s, 60s, 70s and 80s when we raised the payroll tax by more than were going to have to deal with, fill the shortfall more than what we have to deal with Going Forward and so the problem is really how to increase benefits thats why you see bills in congress, 160 cosponsors, thats what people need to talk about. People over 55 dont have much at all saved for their retirement theyre looking at maybe getting 3,000 a year from their Retirement Savings and the average Social Security benefit is 15,000 a year. Thats not enough. And its going to go up next year for the first time by a larger margin than has been the case in recent years michael tanner, react to what youve just heard. Is it a phony crisis is it a numbers game we need to payless attention to not only is it not a phony crisis, its a much worse crisis than we believe. The simple fact is that Social Security cannot pay the promised level of benefits with the current level of taxation, that right now we are tapping into the Social Security trust fund about every bond redeemed from the Social Security trust fund had to come out of general revenue so were increasing the federal deficit in order to pay off Social Security and finally the overall unfunded liabilities of Social Security is some 32 trillion according to Social Securitys trustees so wering a n a situation where we have enormous debt Going Forward, this is going to put an intolerable burden on young people and it will slow Economic Growth and we wont see the wage growth and job creation we need to see. Mark said its easy, raise taxes. Right now after you make a certain amount of money you dont pay a Michelle Caruso<\/a> cabrera. The dow and s p 500 setting record intraday highs. Dow would be higher if not for j. P. Morgan and Goldman Sachs<\/a> which are lower. J. P. Morgan reporting numbers this morning, the nasdaq is on pace for its best week in two and a half months the. Dow and the s p 500 on track to post their biggest weekly gains in seven weeks check out the movers walmart and boeing are higher on upgrades gap is higher, retail stock being added to j. P. Morgans focus list and a number of wellknown names hitting new alltime highs facebook, mastercard and ebay among them and we begin with j. P. Morgan. That story that tyler told you about. Ceo jamie dimon going off on washington during an earnings conversation call with analysts blasting the d. C. Dysfunction and the impact its having on the economy. Wilfred frost is here with more. Thats right, michelle. And here is the main part of that rant dimon referring to the excessive gridlock he sees in washington. Since the Great Recession<\/a> which is now eight years old weve been going at 1. 5 to 2 inn spite of stupidity and political gridlock because the American Business<\/a> seconder is powerful and strong and is going to grow regardless im saying it would be much stronger growth had we made intelligent decisions. Now, instead, well play the right bite which we have now here is the main part of that rant we have become one of the most bureaucratic confusing litigious societies on the planet its almost an embarrassment being an american citizen traveling around the world and listening to the stupid [ bleep ] we have to deal with in this country. Its important to note that he was referring to the last decade broadly, not specifically washington today and his main point as we heard is that growth is resilient overall and has over the last decade grown despite gridlock but certainly its fair to say hes envious of other nations like israel, ireland and china he called out but in particular the one he says was most pro active in changing laws and regulations to benefit growth was france and he praised the impact president macron has had in making the nation more businessfriendly. Guys even though moacron just got there. I know but he met him three days ago and as agift he gave him a bond that j. P. Morgan financed to fund the war in 1918. He did a call with journalist ins the morning where he got angry, right you were on that call. I was on that call indeed and theres been perhaps a little exaggeration what he specifically said was after a question after going on a similar rant as we heard from the analyst call in terms of the fact that we need to see more economic reform to deliver growth, the fallout question from someone was about the last two weeks of trading revenue which his response was to say thats not what is important, you shouldnt be writing about two weeks worth of trading revenue, you should be writing ant what washington needs to do to drive Economic Growth<\/a> so he had a kickback but it was more light hearted than the seriousness we heard on the soundbites from the analyst call. Have you ever heard a ceo go off that way on one of these calls . Ive heard people get elevated on certain questions. Thats a nice way to put it, elevated. We had an outright swear word so i havent heard that before this is an issue we heard him talk about before so thats why im not super surprised this topic got him going. I think it just came together once and for all today but i put the context on it. He was positive about u. S. Growth saying we have grown regardless saying if we release the gridlock we will grow faster, if we dont, we will grow slower so 1. 5 to 2 is the base case but we can improve from here is his point. Our next guest also heard those words firsthand. He was on the call, lets bring in jeffrey hart analyst at sandler oneil, what did you think, jeff . I kind of liked hearing it. I enjoyed it i think what jamie was voicing was frustration that many have, including myself theyre watching our elected officials find the time and money to fund expanded probes into russia through our president ial election but they cant seem to get around to reforming the tax code and the tax code is extraordinarily complicated and driving companies and jobs out of the country. They cant find the time or money to get around to that but they can get around to side political issues, its frustrating for Business Owners<\/a> that they have to deal with that tax code. Do you agree with wilfreds point that when you look at what he said, since the Great Recession<\/a> which is eight years old weve been growing 1. 5 to 2 in spite of stupidity and political gridlock it didnt sound like he was just talking about right now and russia at all. It sounds like hes been talking about whats been happening under the Obama Administration<\/a> as well. Our tax code has been a problem for a keck cade. Its not like its a new concept and weve never gotten around to addressing it. Dodd frank, theres good things in dodd frank that had to get done but they managed to publish over 22,000 pages of increased regulatory but couldnt get around to taxes. I think probably before the crisis if you look back there is a lot of frustration out there that the government isnt really helping the average person or u. S. Companies be competitive globally in an increasingly globalized world theyre almost kind of hurting as opposed to helping. So you basically think he had it mostly right and i think a lot of people agree that he has it mostly right though they might not choose to use the words he used. Lets turn back to j. P. Morgan and its business hows it doing it was a pretty good quarter. The thing people didnt like was Net Interest Income<\/a> came in lighter than we thought and they took their full year Net Interest Income<\/a> guidance down a little bit but that tends to epiand flow with the forward yield curve. Granted the guidance was more conservative but i didnt find it that disappointing and trading revenues were weak but they were literally as weak as promised so netnet to put up a number with those head winds working against you i think are decent results. As we move forward, what were seeing is Interest Rates<\/a> concerns and lowgrowth concerns rearing their head again its not something new its kind of todays fluctuation. We can get past. It jeff, good to have you on, jeffrey hart, thank you for being with us. Thanks. Despite jamie dimons rant and Everything Else<\/a> going on, the rally rolls on, the dow and s p 500 hitting another intraday record high in just the past hour Michael Vogelsang<\/a> is president and ceo of boston advisers and we have a new face to power lunch, welcome, mike but vogelsang, its amazin amazing, if we were waiting on d. C. , we would be waiting forever. We had government shutdowns a couple years ago, we havent had tax reform in more than a decade are we overreliant or overweighting on some miracle to happen inside the beltway while people are getting rich around us by ignoring washington . I dont think this market is going up because this stuff isnt getting done i think the market is going up because theres almost no future in looking at this stuff getting done washingtons proven themselves to be completely dysfunctional and unable to establish any management of our economy, our infrastructure, our tax code, anything that is sort of reasonable, responsible and fair, its very clear. Thats what dimon is saying. Before we get into your stock picks. When was washington functional we had government shutdowns three or four times in the 80s, a couple times in the 90s, a couple times in the 2000s, were longing for this time of government function and im thinking when was that meantime, Corporate America<\/a> chugs along. Are disneys earnings going to be hurt because were not getting Corporate Tax<\/a> reform not yet. I dont think so. What were looking for as citizens first and investors as well is progress, right . Just being able to get stuff done thats reasonable and, frankly, for what the kind of taxes we all pay we should expect and every poll, every social view of the country shows that its more polarized than its ever been and thats basically whats driving washington and i dont see anything that sort of quickly will be repaired here. I mean, you know, look i was listening to the previous show and all these guys were talking about the individual stocks i got a couple to chat about but oh, my goodness, theres nothing else except equities to be interesting from an investment perspective. We just keep grinding higher and higher and higher. I think were in uncharted territory. Mike labella, you say dimons comments about the Trump Administration<\/a> are a big red flag for the markets and investor confidence. Explain that thought but i go back to what michelle said what i heard him talking about was not necessarily pointed particularly and certainly not exclusively at the Trump Administration<\/a> but more broadly at a kind of systemic dysfunction that he thinks has infected washington for the better part of a decade if not longer. It highlights a really, really important disconnect that weve seen in the market and thats been the disconnect between consumer and business optimism, which really took off after the election, and the hard Economic Data<\/a> which has been pointing to more of the same slow growth. Dimons comments that the fact is that this stuff is not getting done, every time theres a new distracting tweet, every time theres another scandal it makes it less and less likely that this congress is going to get anything done whether its infrastructure, whether its tax reform, health care, anything else we need to focus on so its not a matter of this is something new, its about are we actually going to move away from this lowgrowth rut that weve been in the in the last decade. How do the tweets connect to discussion about health care or a discussion about tax reform . Its just another distraction. You look at the congress and every time they have to sit there instead of talking about Health Care Policy<\/a> theyre replying on how they feel toll a particular tweet or the newest thing dwump might have said. The idea that s that doing things in congress is difficult enough, with all this distraction it makes it more unlikely anything will get done. And the media is complicit because were asking how they feel about the tweet so what do you do with your money . Labella im calling you labella because youre both mike labella, what do you do with your money do we just keep grinding higher here. This is the question that everyone is asking, what do i do valuations are starting to really creep up, were just in this 1. 5 2 gdp growth. We think thats likely to continue so investors need to focus on two things. Do they need to be in equities many people are underfunded. Legg mason came out with their Global Investment<\/a> survey one of the startling things was 50 of baby boomers dont have half the amount of money they expected to when they were going to retire so that means investors have to relook at income and also relook at defensive equities so in other words things where they can get inflation protection but be more of a stable exposure if there is that market correction. Michael vogelzang, leave us with some great stock. I just worry, right i mean, stable stocks, utility stocks trading at 23, 24 times earnings, i understand why but oh, my goodness when those go back to ten times earnings, they wont be stable and safe thats the biggest worry we have we think equities are expensive, theyre going to continue to grind higher but were probably looking at 15 or 20 chance of a decent correction some time the second half of the year and im not sure people are ready for it. Thats not a stock pick he was trying to give you a warning. I asked for good news give me one name to help us make money with a macro market decline. You wanted a stock pick people dont use stocks anymore, they just use etfs and passive investing. Why do you want to talk about stocks thats your job. No, i understand. I mean best buy is a wonderful idea theyre fighting the good fight against amazon and the internet. Weve owned it for a couple years and are very happy with it they theres more ahead there. We like disney for the antiest opini antiespn crowd, once disney figures out what to do, there will be value there. There was a stock pick. Well, you beat him up. Mike and mike, also the name of an espn show, but thank you very much. Pair of mikes. Its friday so that also means the weekly rig count numbers are out, jackie de angelis, how are they coming in . We added two oil rigs according to baker hughes for the week so thats two weeks in a row that were moving back higher remember, we had the opec output cut and here in the United States<\/a> they added, added, added for like 23 weeks. All of a sudden we had one down week it was a head fake for the market and now were going back up again one analyst i spoke to said, sure, why not . At 46, u. S. Producers are still profitable so that could continue to happen until prices become more depressed. We are up about 1 on the day, this didnt move the needle much, a little hortcovering a we go into the weekend and there will be up days throughout the summer but overall the feeling is if nothing really changes, these oil prices are headed lower. Back to you. Jackie, thank you. Coming up, the latest projections show Social Security<\/a> will tab out in 17 years unless we fix whatever its problems are. But our next guest says theres not really a problem calls it a phony crisis and that we should leave it alone is he right . Well debate that one next ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. The future isnt silver suits anits right now. S, think about it. We can push buttons and make cars appear out of thin air. Find love anywhere. Hes cute. And buy things from, well, everywhere. How . Because our phones have evolved. So isnt it time our networks did too . Introducing americas largest, most reliable 4g lte combined with the most wifi hotspots. Its a new kind of network. Xfinity mobile. Social security will tap out in 17 years unless we do something to fix the program, medicare, quicker. How dire is the situation . With us are michael tanner, senior fellow with the Cato Institute<\/a> and mike wisebrot, codirector for the center for economic policy. Mark is the coauthor of Social Security<\/a>, the phony crisis. So lets start there, mark why do you think its a phony crisis do you not believe the numbers that treasury secretary mnuchin and others presented yesterday saying that medicare, its trust fund for hospital bills will run out in 2029 and Social Security<\/a> in 2034 . Well, lets focus on Social Security<\/a> first everybodys using the same numbers, its just trickery and you know weve progressed so much since dean baker and i wrote that book in 1999, back then everybody believed that Social Security<\/a> was going to run out of money, most people thought they werent even going to see their Retirement Benefits<\/a> which is, of course, impossible as long as theres still a country and so actually, no, the whole shortfall for the next 75 years is relatively modest, 2. 8 of payroll so even if you had to increase the payroll tax to cover that whole thing, which you wouldnt necessarily at all 40, of that gap comes from just too many people making incomes over 127,000 and dont pay Social Security<\/a> taxes on that so you could correct that even if you do the whole increase, the average wage 40 years from now will be over 40 more than it is today so nobodys going to care, nobody cared in the 50s, 60s, 70s and 80s when we raised the payroll tax by more than were going to have to deal with, fill the shortfall more than what we have to deal with Going Forward<\/a> and so the problem is really how to increase benefits thats why you see bills in congress, 160 cosponsors, thats what people need to talk about. People over 55 dont have much at all saved for their retirement theyre looking at maybe getting 3,000 a year from their Retirement Savings<\/a> and the average Social Security<\/a> benefit is 15,000 a year. Thats not enough. And its going to go up next year for the first time by a larger margin than has been the case in recent years michael tanner, react to what youve just heard. Is it a phony crisis is it a numbers game we need to payless attention to not only is it not a phony crisis, its a much worse crisis than we believe. The simple fact is that Social Security<\/a> cannot pay the promised level of benefits with the current level of taxation, that right now we are tapping into the Social Security<\/a> trust fund about every bond redeemed from the Social Security<\/a> trust fund had to come out of general revenue so were increasing the federal deficit in order to pay off Social Security<\/a> and finally the overall unfunded liabilities of Social Security<\/a> is some 32 trillion according to Social Security<\/a>s trustees so wering a n a situation where we have enormous debt Going Forward<\/a>, this is going to put an intolerable burden on young people and it will slow Economic Growth<\/a> and we wont see the wage growth and job creation we need to see. Mark said its easy, raise taxes. Right now after you make a certain amount of money you dont pay a Social Security<\/a> tax anymore. This hole isnt that big if you just raise taxes first of all, this would be another tax on the people who create Economic Growth<\/a> and innovation in this country that would have an effect on whether or not we grow as a society, whether or not we create new products, whether or not we create new jobs but second it would do very little in terms of the cash flow because this additional revenue that comes in would be used to buy government bonds, the money becomes general revenue of the federal government, is spent on other programs by the federal government and we have to repay that out of general revenues which means a second tax increase or additional borrowing in order to pay back the bonds in the first place. How much is skewed, michael, by the demographics . Generation x, of which i am a member, is the smallest generation so now we have to support the boomers. Heres the good news millennials are coming theres 85 to 88 million of them who will be basically supporting us, a small generation wont this flip because of demographics it really doesnt look that way and essentially what youre looking at is in 1950 or so you had 16 people paying taxes for every person receiving benefits. Today youve got about three by midcentury you should be down to about two and then it levels out from there but the fact is that as a society were not actually even at replacement rates in terms of birth rates in this country. It has to look better if you have 45 million genxors supporting 75 million baby boomers, youll have 85 million millennials supporting 45 million genxors, that has to be a positive of some time. It helps but were living longer so the retireers are going to be growing larger. Im a baby boomer. You think millennials will work that that hard . They dont want to work that hard. Mark, the last word to you, i read the report yesterday that indicates for Social Security<\/a> in the year 2034 the deficit will the definite, in other words, whats taken in in tax versus what is paid out, will be a basically half a trillion dollars. That sounds like a problem and then it grows from there. No, no. These are all just misleading numbers. You have to stick to what really matters. Whats the shortfall Going Forward<\/a> and what would it take to fix that . And how much would that make a difference to anybody going living in 2030, 40, 50, 60 or 75 years out and no matter how you slice it, as i said, its going to be less than we had to cover in the 50s, 60s, 70s and 80s and theres no significant problem and nobody will notice as long as its introduced gradually these numbers michael was saying are misleading numbers you can say unfunded liabilities for the pentagon are tens of trillions of dollars Going Forward<\/a> but it just doesnt mean anything, there will be taxes that pay for it and thats all were talking about here theres no significant shortfall, its none of this stuff is going to come to pass. Tweakable and addressable let me just get a final question tweakable and addressable by a minor tax increase or making the amounts of income that are subject to Social Security<\/a> tax go higher over time. Am i understanding that would take care of 40 and the rest we could do with a payroll tax that nobody would notice everybody notices it, what do you mean nobody notices . Everybody notices when their taxes go up on their payrolls. Well, actually nobody will be bothered by that. As i said, we had payroll taxes of a bigger magnitude in the 50s, 60s, 70s, and 80s the income rises, when you talk about more baby boomers retiring and less people paying in, thats just giving one half of the baseball score its like saying the cubs had a terrible game, they only scored two runs and you dont see the other team didnt score any. The any economy is growing, productivity is growing, wages are growing, the problem is distribution the problem is that most of the income in the last 30 years has been going to the richest people in the country thats the problem. You cant keep raising taxes and expect the economy to grow you cant thats the last word. Economic growth wont occur if you raise taxes thats the last word. Gentlemen, thanks very much for your time. We appreciate it michael and mark you can email us at power lunch cnbc. Com. Still ahead theres a movie now theres an opera based on steve jobs life the composer and lib rhettist join us. Who comes out on top ogeinthlostrade well tell you next. Its turning into a good friday for your money today. The dow and s p hitting another intraday high. Get this the dow would be higher if it wasnt for j. P. Morgan chase and Goldman Sachs<\/a> holding it back. What is helping the dow . Walmart. Walmart getting an upgrade today. Heres the biggest winner the group of 30 stocks, microsoft, visa and dupont also leading the way. By the way, net app nrg energy Seagate Technology<\/a> leading the s p 500. Nrg energy up about 40 just this week. The latest Airline Report<\/a> card is out. Are customers still complaining . Of course they are its airlines and this is america. But lets find out by how much philip bow is live in chicago with the answers, Courtney Reagan<\/a> who got stuck in an airport last night is sitting here. Complaining. She gives them an f. Not fake news, shes complaining about the airports. Courtney, get in line the latest numbers for the month of may show that there was a surge in the number of complaints, not surprising given what we saw in april well talk about that in a bit the on time arrival ratings, overall they were on time 9ment these were the best of the airlines no surprising hawaiian and delta near the top as they traditionally are month in and month out. Who did the poorest in may and, remember, the average for the industry is 79 , express jet, frontier, spirit, jetblue, Virgin America<\/a> 58 of the flights arriving on time really poor month of may for Virgin America<\/a> now lets talk about those complaints they were up dramatically in april when there were a number of highprofile incidents that spilled over into may. We had a few at the beginning of may. There was a dealta customer fro hawaii, that got attention these complaints climbing after those high profile events so not a huge surprise there and yet when you look at the Airline Index<\/a>, at the end of the day what investors are asking is whats going on with profits whats happening with passenger revenue . Both are up and we had deltas numbers yesterday and some people might be worried about the cost going higher but q 2 will be a strong one for the airlines and thats why the Airline Index<\/a> is moving higher so as i send it back to you, guys, i know courtney isnt happ happy but as someone who flies all the time, join the club. How many hours have we spent sitting in airports . Productivity killer. Before we let phil go, be clear, every Airline Executive<\/a> knows who phil lebeau is dont you get any make sure this plane leaves on time. No, but ive had a Business Traveller<\/a> who recognizes me sitting next to me and were delayed and he goes hey, how you liking the airlines right now . Join us, whiskey. Thank you, Phil Courtney<\/a> is sitting here because we want to talk about retail sales that i fell unexpectedly in june for the second straight month. She joins us with more this is not a good sign. Its not. This week has been an interesting one for retail a lot of cross currents. We started the week sharply negative for retail when youre talking about those stocks amazon prime day stole the attention midweek, target gave us a good pri announcement, thursday the xrt and fact gained 2 , the best day of the year today the etf is relatively flat why . Because the Commerce Department<\/a> says june retail sales fell slightly, 0. 2 , when expectations for for a slight gain so lets break down the categories, sales drop more than 3 in miscellaneous store retailers. This includes retailers who dont fit into other define categories, merchants like florists, used Merchandise Stores<\/a> and pet supply Stores Department<\/a> stores slipped 0. 7 sales at Sporting Goods<\/a> stores fell by more than half a per sect the Consumer Price<\/a> index data today showed food prices were flat in june after rising each of the last five months so its hard to point to sudden price deflation but sales at restaurants fell 0. 6 for may, Grocery Store<\/a> sales down a half percent. The strong retail categories continue to be strong, building and gardening equipment up half a percent. Nonstore retailer amazon is in here and nonstore retailers walmart up 0. 4 . General merchandise up. 4 , remember ulta around sephora. You could have driven home from virginia. I know but i was so tired i would have been a danger to everyone on the road its better for everyone else i just sat at the airport. Courtney, good to have you back are Companies Like<\/a> amazon killing wages and jobs one noted wall street analyst says yes but one of our next guests says no stop blaming tech, borots and out mission. Whos right . Whos wrong . Well debate it. Hi, everybody, im sue herera, heres your update this hour House Democratic<\/a> leader nancy pelosi alleging the Trump Campaign<\/a> eagerly intended to collude with russia and may have broken Campaign Laws<\/a> she added that white house adviser Jared Kushner<\/a> must lose his security clearance. I also for the revoking of the security clearance for Jared Kushner<\/a>. Its absolutely ridiculous that he should have that clearance. The lawyer for betty shelby, a White Oklahoma Police<\/a> officer recently acquitted of fatally shooting an unarmed black man has submitted her resignation from the police force. Shelby had been working in an administrative role since returning to work. Beyonce has shared the first photo of her two twins, rumi and sir carter the two were born in los angeles. Thats the news update this hour i will send it back to you, thai. Brian and i thought the same thing. That looks like a very casual picture. Yes, absolutely. Spontaneous. Spur of the moment. Kind of a selfie. Not at all choreographed. No stylizing there at all. None whatsoever. Were happy for them. Its very similar to what she did when she announced she was pregnant. Very madonna and child. I looked exactly like that after giving birth. Madonna not the singer. We have to get to Rick Santelli<\/a> theyre screaming in my ear. Whats going on . Oh, never mind. Hes not there. But beyonce is still there my birthday and beyonce have the same birthday. The recent ecommerce boom, the need for Fulfillment Centers<\/a> is rising i dont like to disclose that kind of personal information its giving midsize cities an economic boost were live in tracy california with more. Reporter we are in tracy, california, about 70 miles from San Francisco<\/a> and this place has become a magnet for fulfillment businesses, case in point is that big building behind me. Thats a crate barrel Fulfillment Center<\/a> and right behind it, what you cant see, is one of two Amazon Distribution Centers<\/a> here in the city its not just here lets look at the map of the u. S. And other top hot spots for Fulfillment Center<\/a> businesses and those areas include Central Jersey<\/a> as well as lehigh valley, pennsylvania, and louisville, kentucky all big hot spots. They are midsize cities around the periphery of major pet moll tan areas that have low operating costs as well as cheaper land and labor as well but we wanted to see for ourselves so we took a driving tour of some of the industrial parts of tracy and we found brands like fedex, safeway, medline just to name a few theyve all set up shops, bringing jobs. Keep in mind, this seems to be known as a railroad hub back in the day and then known for agriculture as well as Food Manufacturing<\/a> companies. One expert tells me that there are an estimated 10,000 new jobs which have been in the area, new jobs created in the area the last five years in the county alone and all of this is prompting the city to create drone footage to try to attract more companies to come here and set up shop. Now, some critics argue that these types of jobs are minimum wage jobs, not enough to support families but the mayor tells us they still create a lot of economic value. The people that come to our jobs here in tracy are not just all from tracy but throughout the region and what that also does is it brings the people in tracy, it increases our daytime population which in turn helps us attract more businesses like restaurants and retail and commercial. He says that in the last quarter alone the citys sales tax revenues went up 35 which is helping build more parks and improve infrastructure being to you guys. All right, nation of Fulfillment Centers<\/a>. Thank you aditi. Still ahead, just 60 seconds to convince a panel of experts your company is the next big thing. This startup promising laundry free linens win the panel over you can find out next. First, were at the cme for todays bond report. Rick its been a really strange week if youre a bond person if you look at one week of tens, were closing down about seven basis points on the week but if you look at boon yields, theyre hovering at the highest levels since early 2016. One of the reasons and how its showing up is a strong euro against the variety of currency. Not very good since october. Hey, wages are important to everybody. Well look at amazon, wages with in about two minutes dont change that dial are not rising more than they are. Some say technological corruptions are contributes to the amazonfication of wall street keeping inflation levels and wages low. Is this right . Joining us Jared Bernstein<\/a> from the center on budget and policy priorities and catherine ward, editorinchief of reason. I did find this, with all due respect to bank of america, i found it weird because walmart has seven times more employees that amazon, does about three times the also of sales, has been around three or four times as long but youre focusing more on technology. Is amazon the reason anything is being held back . I think theres a price effect the combination of globalization and technological change have certainly contributed lower more stable prices. Its one of the reasons the fed has been having such problems hitting their 2 target. However, wages still respond to unemployment not as strong as they should and one of the things that goes on in places like walmart and amazon and lots of other big box firms is that workers simply dont have the Bargaining Power<\/a> that they used to have i dont think that has all that much to do with technology, i think it has more to do with trade. Im not going to defend ames but ill say this, amazon didnt create low prices. Amazon, in fact, is often not the lowest price if you shop around theyre just competing with walmart. I wonder why were focused is technology the issue i think one of the aspects of technology that you have to kind of acknowledge these days is that people can be much more price sensitive based on the kinds of platforms that both walmart and amazon offer along with the vast increase in the Global Supply<\/a> chain so theres a price connection but if you want to understand wage dynamics you have to look at worker Bargaining Power<\/a> and those firms do suppress the ability of workers to bargain for higher pay. Catherine i think the idea of amazon as the new boogieman is just a sort of retread of walmart as the old boogieman. The idea that theyre somehow harm being done to consumers by keeping prices low and by making distribution faster or easier or more reliable strikes me as a weird way to approach the question and to raise the specter and say oh, maybe our wage dynamic looks more like japan and that would be an unambiguously bad thing. Long ago we were desperate to be just like japan. So i think this is a weird deja vu of a bunch of old things mashed together. Its not consumers were worried about. Its wage earners. Wage earners are consumers. So i think you have to distinguish between consumers and workers or wage earners. Often times theyre the same person and whats interesting about this debate is that theres no question that consumers benefit from the kinds of price dynamics weve been discussing but theres also wage effects and if you combine them then you have real wages around real wages have been stagnant. Catherine, i read the report as if youre not worried about prices going up because things like amazon and the iphone keep getting cheaper you dont press for higher wages usually the reason workers are pressing for higher wages is because things are costing more. But now things get cheaper all the time so they dont. Its a little more complicated than that because, again, real wages have been stagnant for middle and lowwage workers for a long time so that combines obviously nominal wage growth and inflation even at low inflation lots of workers have been falling behind. Let me throw a red meat one out there for you, catherine, where does the decline of Union Workers<\/a> fit in all of this so obviously the decline of unions is a huge piece and it does for sure rebalance the relationship between employer and employee, between amazon and the people they pay. I think its for the good. I think theres once again a circumstance where the decline of union has opened up the market, allowed more innovation and, yes, of course in this case the result might be stagnation of wages but there are other benefits which shouldnt be overlooked. Were going to leave it there . I disagree 100 with what kat r catherine said but we dont have time. The wage stagnation piece is much of a bigger problem. Well have you both back. Time for the power pitch, ladies and gentlemen today is it all about bedding. Yes, bedding so does this startup have what it takes to be the next big thing . Im joan. Im kirsten. And were the founders of beantown bedding we sent our kids to college and gotten a education ourselves we learned that most students are too busy to wash their sheets and the average dorm pillow contains 300,000 live bacteria colonies. So we came up with an easy and healthy solution ecofriendly disposable sheets. Theyre made from plants, can last for weeks and discarded guilt free because theyre compostable. Its a 5 billion opportunity to change an industry and people love our sheets. We now sell on our web site, target, and Bed Bath Beyond<\/a> for more than 100 businesses and hospitality. Were selffunded, have margins over 50 and leverage our backgrounds in Management Consulting<\/a> and Consumer Products<\/a> research now were starting subscriptions at 15 theyre for busy people who are sick and tired of washing sheets. Welcome to todays power pitch. Im dominick zhu, you saw bean town beddings pitch lets meet our panel joining us on set, Angel Investor<\/a> and startup adviser kelly hoy. Okay, kirsten and joan, youre in the hot seat. First question. Talk about the pricing of the products were looking to introduce a Subscription Service<\/a> which would be 14. 99. Is it 14. 99 per set of sheets per week per set of sheets, the sheet sets have a fitted sheet, a flat sheet and pillow case and queen and king sets would have two pillow cases. Kelly my question is is your brand anything more a laundry solution for Rich College Kids<\/a> . Its that and more. This is just for the Retail Market<\/a> and hospitality beyond that theres disaster relief, Health Care Applications<\/a> but for us our focus is on the college and the ondemand economy now. One of my first questions is you mentioned a subscription model. Does that apply both to a consumer around the b to b model . The subscription is specifically for consumers we have contracts with businesses and they usually order on a yearly contract. What stops other companies from copying this concept . First were building a brand and thats the most important advice we got from our patent attorneys. As well we have exclusivity with the finer in the sheets and there are Technology Barriers<\/a> in well within the nonwoven industry. I noticed in the video the kids can leave it on for several weeks but how durable is it when people think about how to put it on the bed. Its made from a eucalyptus fine we had kids use them for 40 plus nights we got some of those back because we wondered themselves as they wear they pill and eventually they will tear but they will hold up for considerably long period of time. So we just heard what kirsten and joan have to say is the panel in or out inir . This is a smart innovation will expand the bedding category i like the Business Model<\/a> and the product so for those reasons im in. Kelly hoey . Im impressed with what this founding of what this team has done and being boot strapped and funded i feel this is a product that can grow organically, i am out i like what these founders are doing, it is innovative product and i love that it is environmental freiendly i am out one in and two outs we are honored to have this opportunity to be included in power pitch. Thank you so much our panelists and thats today power pitch. For more on power pitch, visit cnbc. Com f ts. Readyorhi an opera about steve jobs. Well talk about the two people bringing his life to stage next i put everything into my business. And i had all these points from my chase ink card. So i bought ingredients, utensils, even made custom donut cutters. Wow all with points. Thats how i created the ripple the doughnut in a doughnut in a doughnut. Suddenly its everywhere. I mean, it really took off. What will you create with your points . Learn more about the ink business preferred card. What will you create with your points . What . Pony neighing] hey gary. Oh. Whats with the dogsized horse . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a live person right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on thinkorswim. Only at td ameritrade. First there is a steve jobs movie and now there is an opera. It is called the revolution of steve jobs. Joining me now is mason bates of the kpo and also steve campbell, he came up with the words. Gentlemen, it is good to have you here great to be here. Mason, this is your concept why is steve jobs life deserving an operatic treatment . Yeah, how can technology be the subject in opera steve jobs has everything in it that a great opera has, hes got passion, creativity and love and anger and redemption obsession the thing that makes interesting for opera is we change the way we communicate with our devices and opera can tell the story of how people communicate of different kinds of music weeping in and out. Mark, how about you how are you telling the story with the words it is not just of the te technological resolutivolutionse words. They did consult with you of the family, have they seen the work we reached out as a courtesy to let them know this is happening. This is a very honest, sympathetic portrait of steve jobs who had a positive and negative charge and his wife really grounded him. We did let him know that this was happening. I am sure being in the family like steve jobs, quite sensitive to all different treatments. I do think that the people in his life that helped make him who he is are critical pieces of this opera their key pieces is a puzzle did you have to dig Old Computers<\/a> for props and find old apples of the old, original iphones. We did not use props on stage and we dont even use the nail this is a fictionalized account of a real man that influenced our life and will continue to influence our lives. You dont use the names, i tune, iphones and mackintosh is it because you did not have permissi permission we did not feel it is necessary, everyone knows what those devices are. I cannot imagine the audience not knowing because of the influence he had on our lives. Did you have to pay any kind of licensing fees if you were to use those . We had early sounds of early electronic piece, you will hear hard drive of mac and plus of booting up and keys of booting i think probably from the staging and from a better perspective, it is in order to make it universal of certain degree, you want to stay away of mentioning of certain of things. I have an idea for a sequel and a follow up. It would be to do a musical. You and other people. Musical on the first treasury of the second secretary of the United States<\/a>. You should rap it whos next . Jeff basils . I was wondering that. We got to get through this one because i got to figure out how this all comes together. Whats interesting of a person started and creating the world of a most powerful company is, how does that impact his life. With steve jobs, there were a lot of teaching in that life that makes it interesting. Epic story. Thank you, guys, good luck. Mason bates and campbell more of the ceo backlas coming the second hour of power lunch begins with that and more in twominutes. Shes nationally recognized for her compassion and care. He spent decades fighting to give families a second chance. But to help others, they first had to protect themselves. I have afib. Even for a nurse, its complicated. And it puts me at higher risk of stroke. That would be devastating. I had to learn all i could to help protect myself. Once i got the facts, my doctor and i chose xarelto\u00ae. Xarelto\u00ae. To help keep me protected. Oncedaily xarelto\u00ae, a latestgeneration blood thinner. Significantly lowers the risk of stroke in people with afib not caused by a heart valve problem. It has similar effectiveness to warfarin. Xarelto\u00ae works differently. Warfarin interferes with at least 6 bloodclotting factors. Xarelto\u00ae is selective, targeting just one critical factor interacting with less of your bodys natural bloodclotting function. For afib patients wellmanaged on warfarin, there is limited information on how xarelto\u00ae compares in reducing the risk of stroke. Dont stop taking xarelto\u00ae without talking to your doctor, as this may increase risk of stroke. While taking, you may bruise more easily, or take longer for bleeding to stop. It may increase your risk of bleeding if you take certain medicines. Xarelto\u00ae can cause serious, and in rare cases, fatal bleeding. Get help right away for unexpected bleeding, unusual bruising, or tingling. If youve had spinal anesthesia, watch for back pain or any nerve or musclerelated signs or symptoms. Do not take xarelto\u00ae if you have an artificial heart valve or abnormal bleeding. Tell your doctor before all planned medical or dental procedures. And before starting xarelto\u00aeabout any conditions, such as kidney, liver, or bleeding problems. Its important to learn all you can. To help protect yourself from a stroke. Talk to your doctor about xarelto\u00ae. Theres more to know\u2122. A bomb shell from americas ceo, of jp morgan slamming what does that say theyre great for making cars but how about making pizzas . Check this out, a Company Using<\/a> robots in making pizzas in less than five minutes. Second hour of power lunch begins right now i i ism. The major market is high right now. Utilities are among the best casino stocks are lower today and prosecutors in macao are guilty of corruptions. Jp morgan reported earnings this morning and they beat the streets. Jp morgans kate snow dimon went uncensored and lashed out of washington, using words that we dont say onair he began explaining how those dysfunctions contributed to slower growth. Since the Great Recession<\/a> which is eight years old, growing at 1. 5 to 2. 5 in spite the stupidity and political gridlock what i understand is much stronger growth having made intelligence decisions and not gridlock thank you for pointing out because i am going to be a broken record until we get this done we are unable to build bridges or airports. He then compares to the u. S. To other countries around the world that are manage to get things done. I wouwas just in france and argentina and israel and ireland and we met with the prim ministers of india and china it is amazing that every one of those countries understand that practical policies that promote business and growth is good for average citizens of those countries. He left his last criticism using the s word i dont buy the argument that well relegate this forever. We are not if this administration makes great, we have become one o f the most bureaucratic confusing litigious. Susan welch and our contributor and james is here with us from the American Enterprise<\/a> institute and also a cnbc contributor susie, this seems to me like a breath of fresh air. I wish more ceos would speak more plainly like jaime dimon did i heard from ceos and businesses from the last couple of weeks of incredible frustration with the lack of activities and gridlock. There is some hopefulness among the Business Community<\/a> when trump was elected, this is going to be a probusiness environment and some great things can happen and we can unleash and now theyre frustrated of the unforced air thats created distractions and the bureaucracy on both side of the isle slowing things down. Whether mr. Trump or the republicans on capitol hill are able to get done any of their legislative priors, there is been some breakthroughs on deregulations, certainly at the epa and elsewhere, are we in a friendly climate and admitting and stipulating what susie says there is a lot of unforced and distracting errors we have to admit it it is a little cheeky for a banker to complaint about incompetent in washington for slow growth. Growth has been slow in recent years because of major financial crisis, wall street may had some role in. It is a little funny there we elected a president whos not interested in policy and generically. And you are not going to have legislation coming out there is a lot of blame to go around but it should not be surprising they were sitting here in the middle of july and we have not pass business past reforms and still not, and bringing in high skills immigrant as and have not done anything in infrastructure. Dimon is one of the most frank ceo out there. Is this a one off or do you think well see other ceos coming forward and say out loud what they told you behind closed doors because he said this i think jaime doing it does open the door for more ceos doing it it does not bold them. Well hear more of it. I think well hear more specifics. What frustrates a lot of Business Leaders<\/a> is the understanding that there is no and the democratic are holding up appointments. Nobody is working in washington and democrats have been successful in slowing down machinery by not approving any appointments listen. Guys, hold on jimmy, i got to bring up this point i brought up early, i need a respond. When was this great era of corporation that we are declining for. We got 17 government shut downs since the modern budget put in 1976 hamilton and jefferson hated each other exactly [ laughter ] look at you going back to the reagan era arreagan and oneal handing t out. Do you get my point, jimmy. It is 535 men and women of different points of use and different geography and goals. Which is why it is important to have president ial leadership here the u. S. Have benefited from strong win thats back from technological change and demographics and those are not blowing right now. We used to be where gridlocks is good, well, gridlock is not good anymore. We do need them to start working together or well be stuck of the 1. 5 or 2 growth range mumjimmy made a good point. Suzi. People in business getting up and keep on trying to make Sheer Company<\/a> better and it could be that and i am not sure if i buy the argument if it is the way that it is been or the way washington is, i do think it is worst and the gridlock is worse because of the partisan ship and distractions everyday suzy, hold on, we got breaking news. Thank you very much miche e michelle we are going to go to sue herera thank you sprint engages warren buffet about investment he met separately with mr. Malone at the sun valley gathering. The parties are discussing apparently unclear at this point. The talks at an early stage and may not result of an agreement according to sources one possibility they are talking about at this point is seeing berkshire putting more than 10 billion in a transaction we do see the shares of sprints up 3. 5 at 8. 47 guys, back to you. Sue, thank you very much. Suzy, do you have any thought o s on this . Well, they asked him. I dont know if hes doing it. We dont know what his answer was. Hes making a point that this is dpoing to going to be busine Different Things<\/a> and despite of whats going on in washington. Well hear more asbout this very soon oh, jimmy thank you, suzy telecom is still trying to find, sprint is trying to find its way on this. Tmobile talk remember, go way back in the doj wanted four competitors and they felt like if they allowed any consolidation in the industry, and instead of what they argued of what we ended up with are high competitors. Verizon and at t if you are able to report a monthly bill price are coming down oh, dramatically. Thats part of the phase it is in the data yes, data previous coming down but the phone price is going up the next iphone, it is rumored to i had a meeting last night and i met with some analysts the newest debt market is phone debt it is still small. Now you are paying the full amount and most people are financing their phones its gone to 10 or 15 billion in a year you got to be one absolutely. He was. I dont know if he is still is interesting that those two guys, pinnacles. Remember masayoshis son met with trump hes one of the first guys trying to get the deal go through. If you want a wireless network, you need capital. All right, lets go to meg terrell right now. Tyler, we are watching a rise astrazeneca ceo is planning to stay at the company. That report is coming out from an israeli publication you see teva is up there we reached out to both companies and we have not heard back yet from astrazeneca rumors that astrazeneca is planning to stay on the company. Well bring it back tow. Thank you very much another high for the s p 500 and the dow. Joining us of what is another good week for equity, mark take a look at the dow leadership microsoft is leading right now and we are seeing new hospitalized all over the place and facebook and pain pail and also up there and walmart is doing wet. Apple is not high but it is moving up. We are talking about the earnings overall, it is so good. There are two issues for r the banks right now verses the fundamentals we had rather crummy numbers here on the Inflation Numbers<\/a> and the cpi numbers and that means inflation is not really there. That means the bars have moved down today the banks would have been down today regardless if they had easte earnings or not. This information is provided to us by our partners one month before, banks tend to trade up the day that jp morgan tends to trail downwardly so again, you have a fundamental reason why banks are down and you have a seasonal reason why they are down do you all right, guys, back to you. Here is what coming up as power lunch goes on, the president is working hard to get the olympics to la. And what do we think of jay iss ns grant . Th iall you need to know, robots making pizzas experience uncompromising performance at the lexus golden opportunity sales event before it ends. Choose from the is turbo, es 350 or nx turbo for 299 a month for 36 months if you lease now. Experience amazing at your lexus dealer. Thats why at comcast were continuing to make4 7. Our services more reliable than ever. Like technology that can update itself. An advanced fibernetwork infrustructure. New, more Reliable Equipment<\/a> for your home. And a new culture built around customer service. It all adds up to our most Reliable Network<\/a> ever. One that keeps you connected to what matters most. The biggest names this week. We find our own sitting down with the man who led the charge to bring the olympics to los angeles. Reporter so you are just back and you still have a lot of time there with the Olympic Committee<\/a> and also french president macron, whats the update now we know that los angeles and paris is going to get the bid. When do we find out whats happening . We are in the process to negotiate and the french to create this agreement. Theyre creating the winwin that theyre trying to achieve i am proud to say that the olympics are coming back to los angeles. Only one American City<\/a> won the summer games in the last 100 years and thats in atlanta and la the christmas, the summer games are so expensive and so many security concerns, why is this a good thing for los angeles we have to build no permanent pressure it allows us to operate the g e gam games it is never done before. We have a sporting infrastructure of the second to none in the country. All those things together is a unique place to be which gives us the confidence that we can deliver this here in the studio, having been in greece and seeing what happens to the infrastructure there and whats happened in brazil, the conversations that you had with the ioc representatives behind closed doors. Have they figured out that giving it of the olympics to a city thats small or does not have the funding or the infrastructure is not worth it, thats not helping them to emerge to be a greater thing but a bigger burden. Are we going liolympics going to places like la or paris. And so i think what paris and los angeles and tokyo is going to allow is olympics to go to the city all over the world Going Forward<\/a> with this new paradigm of hosting based on olympic agenda 2020, i think we are the ultimate proof of the olympics agenda in los angeles mahow much of anything are yu able to use of the 84 facilities and how much do you have to build new . Buildings are the legacy of the olympics it is ironic that Venus Williams<\/a> is playing, and so thats the true legacy, the social legacy of an olympic is amazing and it shows you that la is an entire new city here in sun valley, there is a lot of talk about the future of sports and we have amazon and streaming 10 nfl games with Roger Goodell<\/a> telling us how theyre changing the format. What does that mean of the values of sports right is everything getting too fragmented no, i think the value of sports is that you dont have to guess what people like the beauty of digital distribution, you dont have to guess where those people are whats consistent is the values of live sports is unchanged. Engage ing in the audience is unique and how thats distributed is going to change do you think the next big round is going to apple or amazon or net flicflix instead h Traditional Networks<\/a> whether they get them or not certainly paying billions of dollars for content is a big paradigm shift for a company theyll definitely be in the mix. All players are here in sun valley Casey Wasserman<\/a> is here, thank you very much. Fingerprisprint and warren t it is good to have you here. Our audience is just joining us, we want to know of the headline of buffet of a possible investment in sprint, what do you think of this headline i think if sprint is having a problem of getting the deal with tmobile now with exclusive talks of the last two months. First, how the story is read, theyre talking about getting a 10 billion from warren buffet they dont have other Wireless Networks<\/a> that they merge with. What is buffet bringing to the table . Where does jonhn malone fit into this . Hes coming in as an investor and interest kbloeglobally and interests there. What the conversation is allegedly occurring right now based on some prior news report. Why are they having trouble getting deals done with tmobile i think it is a difference on price. When it is reported excluded a lot of expenses or capitalizing their phone expenses so Georgia Telecom<\/a> is smart enough to realize that it is a lot lower than that. It is a price difference in view between the two companies. Theyll have to get telecom with the fact that regulators will not approve this there is Tremendous Energy<\/a> that exist and ideal thats going to have to be agreed. Thats probably means of a much higher price than tmobile that a lot of people are thinking right now. Like what sprint is at 80, then tmobile should be at 90. Thats the fair ratio on these two companies. 10 million from buffet alone, the company is talking about generating cash flows and operating Great Network<\/a> facing low capitol budget if they are out there looking for investment in other peoples money, what does it say about the Capitol Investments<\/a> that they have done is 50 bigger from a mark capitol. You se does tmobile need sprint . Tmobile does not need sprint there is Tremendous Energy<\/a> that could exist through that transaction as far as putting more customers on the Tmobile Network<\/a> and having repairs that may scare the tech company. Certainly, there is values to the worry less company to have the marker repair going in as the government allows it are we anywhere and made any progress when it comes to the government now that it is a Trump Administration<\/a> there is so much talk of consolidations but it was not going to happen under the Obama Administration<\/a> for sure. Are we convinced a deal is allowed under the trump at minuad administrati administration however, sprint tmobile is going to have an issue with the department of justice. The real question is why would comcast and charters lo look at this the issues with tom wheeler and comcast thought going after time warner at the time that doj would approve it yes, it it s better for tmobil. Walter, thank you no problem. President trump commenting on Steel Companies<\/a> well talk with with the kate snow the closing trade for oils right now. Tl got those numbers and the ouook commodities, next on power lunch. Hi everybody, i am sue herera, here is the news at this hour healthcare bill falls short for low income on medicaid the bill does not address the key concerns of physicians and patien patients jimmy carter was discharged from a canadian hospital this morning after being admitted for dehydration. The 92yearold was working on a Habitat Humanity<\/a> project in winnip winnipeg singapore bridge collapsed, killing one and injured ten. The brackets that helps support the beam given way it is free teas friday it is giving away the 12 ounce shaken teavana, while supplies last yum back to you thank you. Stocks are higher and hitting new todays high for the s p 500 and the dow. Remember we talked about if retail is under value on tuesday. The gap, by the way, one of those retailers jp morgan adding to its list. Well, the oil market set to close for the day. Jack jackie deangeles, how are we closing today . Not bad for crude oil let me remind you of some of the points that we went through that people think can push these deals in longer terms. We did get a draw down but not as steep as we have seen in summer passed. You saw recount number going up today. People expected to see these trends shift a little bit and supporting the price at the same time you got a weaker dollar and thats what we are seeing in the action as well dollar index at 95 is keeping this price lifted. A lot of thing to this to thinkt these numbers are going to shift around with inventories would be something to watch back over to you guys. The move is helping, both on pace for their best days since may. Lets dig in morte on come momods lets start with gold, what do you see there Dennis Gartman<\/a> we tried to take out the numbers since last summer and we did not with those lows. After a year and a half or so, you have to think that the bear market has sended i think whats going on here is something is happening in commodities generally. There is such talk in deflation and discussions, beginning of the last month and a half, we have gone up and corn has and hn up what is that thats happening . Whats changed . Well, todd, i think if we have to put our finger on anything, one, the dollar has stopped getting strong and a weak dollar is always going to get stronger commodity prices. More importantly on that, the globally economy is going quite well it is not just here in the United States<\/a> but abroad things are doing better, asia and europe is doing better you have to have demand rather than supply declines and you have to have demand increase and thats whats taking place dennis, where is the money coming from, everything and everywhere in the world . Is this the sideline money we are hearing about in five years. The monetary authorities have been expansion for seven or nine years already. If you take a look at the evaluations on interesting ratios between stock prices and commodities. I think at the margin, why is money at the margin is begs is beginning to say, perhaps, i should find some investment in the commodity markets. It is the monetary authorities over the last decades being expansionary dennis, thanks as always. Thank you for having me here. President trump had reporters on air force one the president said the following. There are two ways, quotas and terrorists, maybe i will do both they have been doing it for decades and i will stopping it it will stop joining us now is mark milan of steal dynamics good to have you here mr. Milan. Do you like these comments from mr. Trump, what do you hope he will do i believe the administration is fully supportive of positive trade movements and if you look at china in particular since 2004, chinese are going through absolute growth and theyre still making capacity. Theyre not the only ones, japan and korea, all the emerged new economies since world war 2. Theyre all exports. Japan, korea and turkey and vietnam. Theyre all generating products and going to consumer markets and the eu and america much of the steel is fairly traded and it is being dumped in america and dumped. You want him to put on terrorists and quotas . Absolutely. The other side of the economic argument, people will come back and say okay, china got way too many steel factories and they themselves admitted and they do it because they want to keep people employed yes, theyre pressuring price markets. However, thats great for the consumer of steels your customers are getting great prices because of it well, i guess it is fine if you are willing to work with the people of the mark place you have Steel Dynamics<\/a> and our assets are the state of the art. We have cultures and employees and men and women are working those assets by far the best and most efficient steel makers in the world. We recognize having the lowest cost of volume ending it in the planet we got a lot of structure. Our structure mill today is running around 60 capacity. Thats a market, it is pretty healthy, all modes are strong and construction continues to rebound. We are running structural at 50 . The biggest defender here is china because the government is subsidizing them and theyre selling their products at below market prices or below cost. Absolutely. You have a situation where you have total over capacity of the markets to grand it in 2015, there is some great work done by the administration done in all honesty on the antidumping and strengths. And we saw sort of a diminishing falling of imports for a few months today, the first half of this year, we imported as a country, more code of product and all of those duties applied on that note when it comes to getting anything out of washington i dont know if you heard of dimons comment today of how frustrated he is with the action of Congress Reform<\/a> and etcetera, do you feel the same way it is frustrating that prague is slow. I spent the day in washington yesterday, i had a one on one personal meetings with ambassadand the ambassador and also had discussions of wilbur ross those folks are bright, they understand the issue of a trade and theyre working to recommend the president s restrengaints a of the environment of steel staying healthy again. Theyre slowly dissolving for a healthy economy, you need manufacturing and Steel Production<\/a> is the basis and the foundation of the manufacturing basis. It has a big historic role in this country mr. Millet, thank you very much, well watch to see what the a administration does. Have a great day. Bye bye. It is the worst group of stocks today is the best bet for your money now a robot that can make buy piazzas better than you. No kidding, that story is ahead. So i bought ingredients, utensils, even made custom donut cutters. Wow all with points. Thats how i created the ripple the doughnut in a doughnut in a doughnut. Suddenly its everywhere. I mean, it really took off. What will you create with your points . Learn more about the ink business preferred card. What will you create with your points . I enjoy the fresher things in life. Fresh towels. Fresh soaps. And of course, tripadvisors freshest, lowest prices. So if youre anything like me. Youll want to check tripadvisor. We now instantly compare prices from over 200 booking sites. To find you the lowest price. On the hotel you want. Go on, try something fresh. Tripadvisor. The latest reviews. The lowest prices. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Well, the dow and s p 500 is hit agnting a new record high well, you may not like big banks. Time for trading nation. Gina sanchez and mark kemper, welcome. Are you a buyer of the banks yeah, we think it is a buying opportunity. Look at jp morgan, they are up 15 so pull backs are normal lets not forget that a lot of the recent run up was a project of the trump trade and none of that stuff is materialized rising rates are good for the banks. Yes, the yield curve is flat but it will steepen when inflation picks up we do leave that we are at an in fluctuations point of Wage Inflation<\/a> and thatll flow through the cpi growth we are buyers and we need the values there obviously, their Balance Sheets<\/a> are strong, given the fact that they crush the trust test. Gina . We agree of all the things that mark just said. In addition, we would add that you are starting to see steepening of the bell curve we finally start to see it next month oing up fnly growinge short end. At the end of the day, it is not just rising rate, it is the steepening of the yield curve. Jp morgan has as the yield curve continue to steepen, that should help us and increasing interest margins gina and mark, thank you very much reminder, check out tradii tradiing cnbc. Com coming up, it is so fresh out of the oven. One area that the food in industry is not automated. Thatll be on sister fishing contessa you know, these lobsters are delicate reaches they have to have humans catch them theme who want to work hard, where are they coming up with that after the state of main now you are turning nation stats of the day and a word from our sponsor. Short selling can help you proft from a stock decline, however, because involved unlimited risk, you plus have a plan second, look for the stocks with the poorest technicals in that group and incorporating management techniques into our order to limit potential lawsuits lobster business in man is booming. A lot of it is thanks to china. R them hey, contessa. Reporter oh, i found them. They are big and they are moving traditionally this was a family tradition. It was handed down from generation to generation this i go is not happy to be out of the water, let me tell you, amend its very hard for outsiders to break no the lobster business the state regulations make it different that require apprenticeships and a long wait for licenses and, in fact, they even say that you can have only one license per fishermen, per lobster man, and the owner is required to be on the boat hauling them in. Theres very Little Lobster<\/a> conglomerates, none and very little automation because lobsters require all of this delicate handling. Many of the processors at this point rely on significant immigrant populations for seasonal help, somalis and sudanese make up a big immigrant population in the state of maine. There is some concern here about future work visas and then on the water the labor force is aging. The lobstermen roughly 50 years old on average the industry is working to encourage young people with easier access to licenses if they havent yet turned 23 years old, but, come on, coaxing a kid into working on the ocean in a downeast winter . The Skilled Labor<\/a> thing is its really about wanting to work, right . These are hard jobs. They pay pretty well, but they are hard jocks and were competing with the rest economy for, you know, inside jobs, right . Reporter when it comes to attracting Skilled Labor<\/a>, of course the money helps some of the College Graduate<\/a> are coming back and by hauling the lobster out of the ocean here they can make easily six figures but working around the clock. What they are hoping is that they can manage the supply here and keep up with demand and keep prices steady and keep making money. Guys let that lobster claw go, contessa i want to see unstrap it. Let it free. Reporter it wouldnt survive. You know, if i put him back in the water now, hes been rather traumatized by my handling, and so, ive got to give him a little butter, fantastic. Time now for the story youve been waiting for the pizzas being made by robots and its where else in, Silicon Valley<\/a> in Julia Collins<\/a> cofounder of zoom pizzaria who made the trek east. We teased it that way but you add people you have more than 100 workers. Thats right. So this is not robots taking everybodys jobs how do you blend, you know, humanity with robot overlords . Absolutely. The mission of the company is to use technology to get better food on to americas tables and to provide better, safer job for the folks that are working at zume. Youve said that before. So the issue is not whether or not automation will replace our jobs and our contacts because what weve done is create 120 new jobs in snowfally. What does the robot do . The robots do the tasks that are unsafe, that are repetitive, that are boring, that arent really humancentered tasks like sticking your hand in and out of a 2,000degree oven hundreds of times a day and the humans are doing collaborative work and creative work. Coming up with the cheesy e with Pineapple Express<\/a> im looking at your pizzas. Is this cheaper for you the idea is they are not going to take sick days . Did you decide to go this way for a specific reason . The problem we were solving is how to get health he food on to your table supportbly so theres a margin play going on here were using automation and technology to decrease some of our labor costs and occupancy costs and were reinvesting the surplus from technology into better jobs. Pizza pretty cheap. Our pizzas are as affordable. A 14inch enrony pizza will cost you 10, just the same as it would at a competitor. Even though it has locally sourced sustainably farmed ingredients and its the best quality. Are the pizzas cooked in a central oven or retail location or can i walk in and get a beats yeah, all delivery, tell me, that and how much do these things cost, these robots in. Zoo ume is delivery only. There is no storefront which means i dont play 10 of my revenue in rent and thats another thing were doing to increase profitability all our pizzas are in a special assembly and we get the pizzas to you that cooks the pizza while its being i just thought we saw it coming out of oven. There are people. I see the people. They are not getting cooked. That is our power baking oven so on an early production shift were prepar baking and then were finishing them. You can buy par baked bread and then you do the finishing. The pizza is cooked finally in the truck as it comes to my house. Yes we have a specific inventory routing system that tells the ovens within the truck exactly when to turn of course, when to turn off, how hot to cook for so your pizza is cooked to perfection. I think other pizzerias are doomed all pizzerias youre out there in trouble you got it worked out. Piazza is a 125 billion industry globally. Theres plenty of pie to slips zumes technology greatest pie to slice up. That is good. Greatest chinese import, pizza. Yeah. They invented the pizza pizza is great. Wish you the best of look. Whats your most popular pizza . Pepperoni 25 of my sales, classic Pepperoni Pizza<\/a> and i certainly eat my fair share. Next time bring some pizza. Or come on out to california. We should do the show from snowfally. We didnt get a lobster either. They are telling us we have to go. Thanks, julia. Check, please is next. They never say stay baby crying fly me to the moon elegant music and let me play bell rings your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual<\/a> wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you\u2122 Liberty Mutual<\/a> insurance. Where else are you going to get automated pizza, an opera about steve jobs and a discussion about amazon and whether its killing wages in one place. Only right here. I think amazon is getting scapegoated. In terms of whether or not they are killing wages. Yeah. Walmart existed well before them. The trends are so much broader than one store, one retailers ability to affect them. Automation is coming from a woman who has this cool Pizza Delivery Company<\/a> where they cook the pizza in a cool electronic truck so its arriving perfectly done at your house because its so well programmed. Ebay had a record sales day on amazon prime day. Ebay is coming after amazon. Watch them by the way, ill hit them with the high and off all next week ill be injecting liquidity into the wisconsin economy. Closing bell starts right now. Hi, everybody welcome to closing bell to close out the week on this friday afternoon im kelly evans at the new york stock exchange. It is friday, isnt it . Im aware. Already im bill griffeth. The dow, s p hitting intraday record highs today the only sector that is low among 11 in the s ps that you see there the financials all those Bank Earnings<\/a> this morning didnt exactly please wall street and Jpmorgan Ceo Jamie Dimon<\/a> got fired up during the firms Conference Call<\/a> in","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia600803.us.archive.org\/21\/items\/CNBC_20170714_170000_Power_Lunch\/CNBC_20170714_170000_Power_Lunch.thumbs\/CNBC_20170714_170000_Power_Lunch_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240628T12:35:10+00:00"}