Stuart this guy is not falling. Almost 11 00 on friday morning. The spending in this country is completely at of control which is why we are where we are and the pain that people think they feel now, of the play button or 20 times. Stuart that is what people need to think about. The dow industrials, turnaround, and we are now 13 points on his right. The record, the alltime high, i think, is 14,164. Rihanna what 14,060 and going up just a little bit. How about that on doomsday. And nice reversal. Stuart all right. Friday morning. It is yours. Is a way to look at the sequester in Government Spending. Is everybody else mad at the washington d. C. Housing market has been doing so well and the rest of it, the rest of the country has not . Well, is because of the government. Connell good morning. Im dagen mcdowell. Dagen im connell mcshane. A new news poll saying the majority of americans say automatic spending cuts to the only way to control the budget. Connell the cuts will not stop uncle sam from dipping into your wallet. The irs says of furloughs until after the april tax deadline. Dagen morris myers ordered via employees to report to work falling flat. People are always on the clock. What is being called the connected revolution. Connell an expert in that world coming in, plus several Security Fears realized. Giving a fox business exclusive access to its control center, as engineers track the latest threats coming in. Dagen the top of the war. Stocks now and every 50 minutes. Nicole petallides at the New York Stock Exchange with less than 100 points from an alltime closing high. Reporter can you believe were saying is again . Insider repeated yesterday were get within 15 points of our alltime closing high back in 2007 only to see us move into negative territory late yesterday. Here we are. We go again. But about 87 points away from the names that are leading the way including bank of america, walmart, disney, intel, seeing a very strong dollar which actually does not actually help the case of mallees not for the moment as far as income, that was not great. Consumer spending remained quite resilient. The fear next, which is interesting, is taking a little bit of a breather which could help this market along. Volume was a little better than expected. Back to you. Connell here we are. Less than 13 hours away for 85 billion in federal spending cuts beginning to take effect. Eightyone poll revealing 57 percent of voters say the only way to control the deficit through automatic spending cuts. Very little trust in congress. Getting it done on its own. The ceo of Euro Pacific Capital joining us from stanford, connecticut for. What do you make of that, people get this and say, well, i dont know. Maybe its not perfect, but is the only move will cut spending. Well, i think so far, the problem is these cuts are not large enough. Cutting Government Spending is good for the economy, its bid for the dollar, but these cuts are trivial. Maybe it is symbolic, but it is not enough to really make a difference. Unfortunately i think these trivial cuts are going to do more than offset other increases in Government Spending that going to take place throughout the year that are going to deport these minuscule cuts that are part of the sequestered. Connell you mentioned the dollar, but distillate of the stock market for just a second before we do that. You mentioned a second ago how close we are not to this alltime high in the stock market. About 14,081. Less of 100 points. The alltime high. What to make of this kind of collective stock market yawned and all the budget talks in d. C. . First of all, you adjust the stock market for inflation. Were nowhere near record night. Especially if hes a real barometer. I think the market is missing the boat, missing a point rather, just like they did in 2007. The last time we were the site. And we were right around the corner. The financial crisis. I think the stock Market Investors are oblivious to the problems. They think they have been solved. They think that the fed as an exit strategy that is credible. Doesnt. Think we are still headed for a worse economic crisis than the one that we had in 2007. But i think the real damage is not a point to be a stock market. Its going to be the bond market. Connell okay. That is obviously and for Strong Language. That is pretty Strong Language saying were headed for worst crisis that is worse than what we went through in a 0708. What you mean by that . We will apply . You will have a dollar crisis, even though it is strengthening right now and get some of the other fiat currencies, you have a collapse in the dollar. A huge spike in Interest Rates. I think our whole economy, which is built on the foundation of cheap money is going to topple when he pull the rug up from under. Dagen connell ill be by the day, but is this something we could be talking about, you could be coming in for years and eventually come up, yes. Youre right or is it something that is embedded in this one . It could be years. Of the its going to be decades. A big obama is going to finish his second term without the bottom dropping out. At the crisis is imminent. At the summit will happen to mark. I think it is building. And that began more confident of this call that i was about the call i made regarding the housing bubble of the financial crisis. I think this should be even more obvious. What is amazing to me is the same people that missed the last crisis are oblivious to this one. They have learned nothing from their past mistakes. They just keep on repeating them. Connell before the end of the second obama term. That is the prediction. In terms of another crisis. That is to restore things off. Good to see. Thanks allot. Dagen president obama currently holding a lastminute meeting with congressional leaders at the white house. Connell that is the story of the day, i guess. Peter barnes is there with the latest which is what computer . Well, they are meeting right now. Should be breaking up in the next few minutes, and it will get a briefing from white house secretary jay carney, mostly to get rid of what happened. We are expecting that nothing will happen today to avoid the sequestered. Senate majority minority leader, mcconnell, kind of decided he wanted to set the tone for this this morning, putting out a statement before the meeting saying, im happy to discuss ideas to keep our commitment to reducing once been spending at todays meeting, but there will be no lastminute backroom deal, and absolutely no agreement to increase taxes and, hey, guys, even if there were, congress is gone. Skedaddled last night, left town , not back until monday. Of course. Dagen i wish i had that job. Not really. Not all, in fact. Thank you so much for that report. Peter barnes in washington. You heard him just say the following. The next minutes a crisis will happen before president obama leaves office. It will be precipitated by the bond market. A message jump in Interest Rates. What they think about the protection . Chief investment officer. Joining us now from mountain view, california. Do you think that will happen . Spike in Interest Rates, spike in yield, financial calamity . Before the end of this term to. Peter is an optimist. Lets put it this way. Yes, i do think that their risk that was being pointed out is very real. Let me point out why. Look at the difference with what is happening here and in italy. We think italy as a crisis. We are in the same boat. We have just as dysfunctional government. One thing we have learned from the crisis in the eurozone is that the only time policymakers act is when the bond Market Forces intact. All the progress of the reform in europe took place when the bond market forced it to take place. The difference, though, is the eurozone does not need to finance its deficits from abroad. They dont have an ad account deficit in the eurozone. In the u. S. We have a current account deficit which is why peter pointed out that threat to the dollar, and i fully agree. Everyone has been chasing yield, jumping into bond. The biggest threats were facing is actually that we get some economic growth. At that time the bond market has to unravel. Only at that point, probably, will we get any reform done. We have gridlock. Nothing will happen. Its all just politics. The politicians will move and the bond Market Forces them to. Dagen staying on italy. Want to ask you about the Federal Reserve, but in italy you have a lack of work ethic, a socialist state, a deeply ingrained into the culture, like other not. A lovely place to visit. Very lax in his own network that much. That is not the case in the United States, and this is kind of an esoteric were looking at it. Would people be more willing to lend us money thinking that we can grow our way at of it is because of the american way and our desire to work and start businesses. Well, the italians probably think theyre good people. We have an entire mitt. Connell telamon attitude. Think about the cuts we have taken everyone is screaming. That is nothing compared to the cuts that we have to do. Trillion dollar deficit, not 8 billion. And there is much more work to be done. And true, the bond market is giving us the benefit of the doubt. One of the reasons why people love to invest in the u. S. Is because you can take your money out. No capital controls. But what it means is that the u. S. Dollar is attractive because of liquidity, not because of quality. And we cannot just rest of those laurels. We have to do something to improve the fundamentals. Otherwise a some point it will of know what will happen before the end of obamas term, but theres a risk. And as such investors have to take the caution, be aware that there is a risk in the bond market and the dollar. Dagen i have been hearing now for several years now. You dont see that in the way the people are acting with theyre money, and hes looking at the 10year. That kind of brings us to the point with the Federal Reserve. You say the trigger for higher Interest Rates would be economic growth. Why wont it be the Federal Reserve . Baby because the better reserve will act and tell his see some growth or maybe not . The Federal Reserve has not been in control. As the market. Good Economic News, the bond market might plunge. Everything that the reserve has been doing has been trying to prevent that. Keeping Interest Rates low, buying bonds, operation twist, telling folks to forget about inflation and focus on employment. Its all about tryto prevent the bond market from falling off a cliff if and when we get economic growth. Maybe it will work. Nothing has. And, again, maybe they succeed. Maybe everything will be dandy. The point is, there is a risk that things might not work out perfectly, and if youre an investor you better plan for it. If you look at the housing bubble, it is difficult to protect prick when these things first. Timing is difficult. The time to take precautions now, now when it is too late. Dagen the tax bubble bursting as a walk in the park compared to a lot like the one that we saw during the housing boom. Looks like we arent setting ourselves up for another one potentially. Thank you so much. Great to talk to you. Be well. Connell the 24 seven work force, the connected revolution. And this concept may be taking a little steam out of Melissa Meyers this past week for rihanna who employees about coming into work, to work in the office, not from home. Dagen sequester or not. The irs says it will still be collecting taxes come april. Connell live inside mcafee cyber threat facility, one of the top minds trying to think of on line attacks of your business and your money. So we will get to that of an but later on. First a look at the oil market. Just above 90 or just below 91 depending upon your point of view. Who will be right back here. [ indistinct shouting ] [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All onhinkorswim from td ameritrade. Executor of efficiency. You can spot an amateur from a mile away. While going shoeless and metalfree in seconds. And you. Rent from national. Because only national lets you choo any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. Now this. Will work. [ ale announcer ] just like you, business pro. Just like you. Go naonal. Go like a pro. Connell record earnings, record backlog. This company is called the chart. Chart industries. Reporting yesterday. Update. Actually, mentioned. I gave people this is of work assignment. Want to go look into january 209th investor presentation. But youre going to learn is that this is a liquid natural gas bank, a phenomenon. As i caught on to the degree that we have up here. Connell have to interrupt you. Breaking news. The speaker of the house outside the white house. The process we are about to engage in, the house should not have to pass a third bill before the senate does anything. The house has laid out a plan to avoid the sequestered. I would hope that the senate would act. But just make clear, the president got his texas accent it were first. In my view its over. Its about taking on the spending problem in washington. Theyre going to move. I am hopeful that we wont have to do it. The threat of a government shut down while we are dealing with the sequestered the same time. The house will act, and i hope that the senate will follow suit. Thanks. Connell speaker of the house outside the white house. After meeting with president obama today. The data sequester. Spending cuts set to take effect. Inside the white house, the breeze into the Briefing Room. The press secretary, jay carney should be appearing for. Dagen we cannot wait for that. Charles is still sitting with us, standing by or sitting by to react to this. Again, the republicans are saying were not going to make this about revenue. The president is trying to basically change the discussion. By the way, the Senate Democrats to present this bill is a combination of spending cuts. Is there really cut spending. It does not cut like a net deficit of all. You have the tax increases. Connell i think the main thing that he said, two things that got me. First of all, the president got an amazing bill already. The 411 tax hikes and spending cuts. That was just an absolute amazing deal of the president has already gotten. Number two, it was interesting that he brought of the continuing resolution because a month ago everyone kind of thought that that would be the next major battle. Somehow sequestration, there would have been a deal done with that. That would not have been it. This is where the republicans make their stand. Is going to make a pretty interesting. In a fight on both bell feel that the same time. Connell we talked a lot about how the market shook this often does not seem to care. So, you know, the sequestered is not go into effect. Some point, will market care more as we leave that to the possibility of a government shut down which is the next deadline is looming . You know, the market is interesting. Think the market likes the sequestration. And the surly they like a smoother, more orderly, but the idea of curtailing spending and getting to the biggest problems that face this country, not near term, long term. So far the market is saying not that its not a big deal, but maybe, maybe the on the steps that we could take. Dagen at the white house does not want to sequester cuts to go into effect because there will be an impact. There will be any impact on the broad economy that the average person can feel. In the market, you wont get that dramatic move in the market. So they fear what could happen because theyre like, okay, if we cut this, even in this kind of hand and wait, we can cut. Dagen another quick theory. Maybe the white house is seeing a real serious bumps in the road and is trying to cover there you know what. Personal spending today. Emmy, personal income was pretty much a disaster. 20year low. Connell we will hear the white house side of it from inside the white house and a few minutes. Dagen marisa meyer in order to employees and younger to get an officer go out, just quit falling flat in this day and age where people are already working 247 on there mobile devices. Connell we will talk brought that to me up next. Later, an exclusive look at the cyber terror team doing its work. Adam will take us live inside the command center. It should be pretty cool. All next week. An indepth look at the impact on your money. We will be sitting down with some of the bigger names as ever security. Dagen those two things dont scare the bridges out of you, dont know what will. Connell brace my elbow. This coming up next. A serious cyber threat that you will see anywhere else. Thats next week. 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