The Halftime Report started right now. Welcome. Good to have you this thursday jim lav leventhal, the brothers najarian, we have a big show first we want to get to Steve Liesman who has just sat down at the table with what the fed may do in the weeks ahead. Yeah, scott i think the story has to do with that a pause is coming and the question becomes when its coming i think theres an oddson bet that the fed is likely to cut in october. But its a massive cut and if they cut in october, is the market thinking about that the fact that there would be some kind of pause and powell has signaled this several times publicly hes talked about the 1998 cutting regime three times this will be the third time. I will tell you, the comment yesterday from charlie evans, a guy who has been massively in favor of rate cuts, he said i dont push any cuts the rest of the year match that from tweets of others, too. And kaplan said said im agnostic about additional rate cuts and there was a speech by powell, everybody took it he didnt mean back against the market so that was dovish. But he said were taking it meeting by meeting i think hes more neutral than the market has considered it to be from the feds point of view, theyve delivered three different measures of stimulus and ill count those for you one, they stopped hiking by removing hikes that were baked into the market. Thats stimulus. Two, they stopped reducing the balance sheet. And three, they cut rates twice. There may yet be a third rate cut. But i think we need to go back to that controversial phrase that powell made at the press conference, midcycle adjustment. But im thinking theres probably going to be some kind of pause between midcycle adjustment and an actual e cycle. And the reason, because of the three types of stimulus i just told you about the fed thinks about stimulus with a language and variable lag. It doesnt know how long it works or how much it works it may want to see how that stimulus in the pipeline settles in before you get done with this whole thing, i need to say two very important things. Trade is a major factor in the outcome. If things go well with china, it could take off it could take rate cuts off the table. If they go badly, it could put more of them back on its a decisive factor for the Federal Reserve. And i think, second, this brex the thing is working the right way fortheu. S. Economy at this moment and i congo beyond that. So what youre telling me, it sounds like, that a pace based on your reporting is coming. Yeah. Its just a matter of of when whether its coming before the october hike or after an october cut . Right i think the market has this mostly right because what ive seen, ive seen 83 probability of a rate cut in october i think thats a little bit big because theres two weeks of data left to go either way but then it drops down to an 18 probability of rate. And i think theres a possibility it could happen but i think the bet against it makes sense. I dont know the way the market is thinking. I think the market tends to think like a roulette table, i hit 21, roll it over lets hit twunl again. I dont think you hit a lot of points in a row with roulette. You look at the data lately retail was disappointing right theres some other data out there thats been somewhat squirrelly and disappointing right you would think that pushes the fed over the goal line to do the october cut and the parts were talking about . It may. Thats an important point, scott. The fed keep saying were in a good place, policy is in the right place. And what does that meany the question becomes does that mean were in the right place for the data thats here i think the fed believes to some extent it has addressed weakness were seeing now i done think they believe its behind the curve you may in the audience there believe that the fed is behind the curve. I think when it says were in the right place, i think they believe theyre in the right place relative to the weaker data thats coming in now. Do you want to give a comment or opine on what kudlow had to say today about the fed being way too tight . He even used the word deep state were talking about in relating it to the fed im not going to talk about what larry said. I will tell you what every economist that i talk to says, which is that it is substantially the trade regime that has caused what were going through right now. There is potentially some of that type of Monetary Policy from the Federal Reserve thats had an impact. But when we look at things like business spending, when we look at things like business confidence, it looks tied to whats happening, look how the market reacts thats tied to trade more than anything else. I grant larry there was tightening going on. Whats he call severe yeah, it was the slowest tightening in the history of the Federal Reserve, i believe every quarter they get a hike or they have in the past. Its had an impact im not sure so sure of the economy. Pete, if there is a pause, are you cool with that is the market going to be cool with that . Well, thats a great question look at where the volatility is right now. When we look at volume difficatn the market place its to the close end. If theyre getting intimidated, i would think were seeing the volatilitydramatically youre the one that has made the arguments, cut rates, cut rates. And i wanted them back in june i mean, when we saw the first inversion, steve, thats when i was pounding the table saying the fed is not listening to this the fed is not seeing what were seeing here. That this is a pretty dramatic move when you get that inverted curve. And i think they could have moved faster, judge. They waited 60 days basically from the beginning of june to the end of july until they finally addressed it i thought they should have done 50 and been done instead, they did 50 over two moves. But where we are now, i think were fine if its because of the deals that you mentioned because a china deal gets done, steve, if they take it off the market, well be fine with that. A major asterisk, with everybody that i talked to, if the data get uglier, theyre going to do more, right . Right let me come from the other side i think the fed appropriately saw that the inverted yield curve was due to factors not respective of the economy. Would this have spiked the fact the economic numbers as youve referenced have weakened a little bit, the curve has steepened and in fact jacked back up to a 1. 7 yield and to me, the market is saying, we may not get that rate cut because of where the tenyear has gone in terms of Larry Kudlows comments, he goes on how great the economy is, lowest in years and when hes pushed by andrew who thankfully took a balanced approach and said why should we cut them le he said because the dollars too strong guess what, larry, you know thats not the mandate from the dollar there is no good reason to cut and the fed actually did a good job in front of these weakening numbers. Id like to see them not cut i think what theyre doing now is jawboning that 83 down a little bit and with the yield curve steepening, thats helping them remarkably, i agree with steve. Thats strange. It is everybody sees the light at the end of the tunnel. What i agree on, i think what i want from the fed is that they act appropriate, right yep i dont care if theyre going to cut or not cut. I care that theyre going to look at the data at that point in time and behave rationally and act appropriately. When you said people are in the right place, im not reading into that. I dont think its a game or a high school dating relationship where you need to read into it when they say theyre in the right place, i believe they say theyre in the right place thank you for bringing us your reporting thats Steve Liesman lets go on to the story from the top of the show, thats the numbers from netflix, jon. Fabulous. Fabulous stocks stocks up nicely well, the stocks up 44 bucks from when we saw the data change, judge, thats what we saw with the battle fin stuff. When we saw that, the stock was 266 or 263 in that range we popped all the way to 269. Why did we give some . Well, we had a bunch of folks, dan nyles out there talking up the case when the competition comes. I think the key word there, judge is legitimate concerns, man. Were all here at this table about timeings right if youre a trader, youre all about timing if i say november 1st, is it going to be 40 million subs added add disney no or any of these places it will take years to get to those levels the fact that netflix is putting this on now. And the fact that theyve got the irishman on the box instead of theaters. This is the most acclaimed movie in years 100 with rotten tomatoes. I disagree with dan nyles, until he can tell me when, the key word of his phrase, when i think the stock is a little disappointing. Really . I think its deservedly. 44 bucks i mean, we knew it was going to go by large numbers either way. Yeah. It was priced in by the options, if you just looked at the options, you knew you were going to get a big move. Sorry, jimmy, ill let you in one second the focus is what should you be looking at in earning . We all said international for the right reasons. Because domestically, i dont know how much they can get, scott. They got 66 plus million right now. Give or take are they going to add to that or deplete some of that probably deplete some of that domestically but where are they focused on growth in india, and Reed Hastings talked about the subs comes from india. He didnt say the rest of the global world he said india. So thats the part, i think people are getting it right because there was a little bit of gloom in terms of the guidance obviously, thats where we hit off above that 309 and pulled back from there. Thats why we pulled back, i think, was the guidance. I felt encouraged that i didnt own the stock initially because they did use u. S. Subs and the stock pulled back because the whole market pulled back a little bit. Thats not why. It pulled back before that domestic 101, you got to meet expectations if you have a 50plus multiple and any expecticses are missed, i. E. , u. S. Subs, its not okay to say everything is great thats investing 101 stock should be down . I wouldnt be surprised a week later were seeing this down a little bit. Im not saying its a raging short. But on the other hand, you still have the competition yeah, international is going fine that gives you a 50multiple theres no reason you expect a 50 multiple from where we are. If you have a drop in u. S. Subs going into a more competitive environment, jon, thats not concerning to you id say it is concerning to me, scott. And it is concerning because we have dropped 120 points from the highs that we were at. In other words, thats pricing in thats the market being pressured and looking forward. Weve priced that in weve all pounds the table here about disney, comcast, all of the rest time warner, all of these folks that are coming after them that is being priced in day by day. As far as when does that actually really impact them . They talked the call last night which i was on, they talked in particular mobile, overseas, and the amount of mobiles that theyre drawing in now, right now, today, which none of these other guys are doing. Thats going to be huge for them going forward. To petes point about india as well, i agree. But at 50 times, for me at least, thats not priced in enough all i know the subscribers from netflix, its going to hit like a tidal wave youre right, the big issue is when but all i can tell you that when is going to be faster than any of us can anticipate what about the overall faang trade . Which, by the way, we were asking the question were these going to spur a spark . All of these stocks up early on theyre not up now im going to beat the drum and others have well, i think its wrong to lump these stocks together i understand why they were you go back to 2015 and these were the horsemen of that rise if you look at apple or alphabet right now, those stocks are clearly outperforming. Amazon really hasnt been performing that well netflix and facebook are kind of in the middle there. Theyre entering growth in a reasonable price territory but apple and alphabet to me, alphabet definitely say value stock. I dont care what anybody says i know its in the growth indices. Some people spell faang with two as im not out in left field. But my larger point, i understand why the acronym exists, but i dont th we not t does this have any relation to the faang trade at all no. I think its far more individual and netflix has been the standout for a long time when we talk names this is the name thats been failing long before the rest have failed. This is one of those names thats pulled back for a while especially if you go with what jon was talking about, its well off its highs. Alphabet and facebook, this is a content model and to extend to apple, apple is a product model. Lets do this before we move on to the banks because mayo just pulled up to the table and i dont want to leave him hanging out too long uhoh it will be okay ibm, jennie owns ibm, pete owns ibm. Jim got out of of ibm, look at him. Happiest guy at the table did you even hear the sigh of relief a little exhale and wayne doesnt care because he has nothing in the game oh, he cares. Ill give you the first crack, jennie. Down 6 . Okay. So the initial investment on ibm was based on consistency of cash flows and over the long run, buying it at decent valuation, and hoping at that Point Management would actually start to execute and to jims point earlier, investing 101 meeting expectations for what its worth, for the past five quarters since ive owned it, netflix has delivered on earnings expectations the stocks been lackluster. Steve and i were fighting over it earlier saying with the 6 that alone eats into my dividend. I think the consistency of the cash flows could become valuable and they put out a gross margin that i think is of value in the long term. Pete . Its the legacy thats killing them i think its about what investors are focusing on. Theyre focusing on that and up 25 . You got to like where the direction is going and i know yesterday i brought it up, and we were jobbing about ginny having some issues a lot of misses when theyve been gains, scott, they havent been major gains so the question is what is the focus right now. People focusing on apple, people saying its the phone. It was 55 at one point, and now its 48 its hardware. The rest is the services and wearables. I think the problem for ibm is people are still looking at the legacy model and thats not where they should be looking microsoft, it took a while but Satya Nadella got that thing going. Right now, the cloud, and red hat was a great acquisition, paid a lot of money. Let me ask you, you love microsoft . Yeah. 36th to where it is now just think about that since the change in the ceo. I got you, but you got to try so hard and be willing to sit and make a compelling case in the face of headwind after headwind yeah. Why bother . Well, i think the patience fact is definitely something and i know youve probably been extremely patient as well. Its been tough, scott, quite honestly, to remain patient. What i can see whats going on, weve seen that out of intel and systems the only man on planet earth i remember sitting on this desk at microsoft, everybody said theying out to put mulally in there as ceo, i said, are you kidding me, the guy from ford . No, they got the guy from cloud. This acquisition, they did the right thing, give or take called a year ago and now the transition is great. You know why investi ining 1s important because the company who has the best Vantage Point on what their company is going to do is telling you what theyre going to do and either get it right or get it wrong and theres another side of that and thats refuse nvenues, and v missed revenues, five quarters in a row three quarters out of five. Let me finish the case you gave for the transition is the same case you can give for 250 before the ceo skwau squandered their capital to take on debt, a large storm of stock at 250 they missed the cloud. Maybe theyre in the hybrid cloud but they ceded that, a very important area, theyre a main frame manufacturer, right, they ceded it to google, to microsoft to amazon. Thats a lack of vision. So ive got a company thats got incredibly poor, poor execution by their own scorecard but, steve, its not the same argument at 250 versus 140 where i entered the stock. It is. When youre buying something at ten times earnings, with a nearly 5 dividend yield and you have strong visibility into the cash and you know theyre paying you, thats worth something and thats valuable. And that can keep you in there until brighter skies come around, right . Until red hat. And its not entirely similar to holding qualcomm, based on the fact that i knew there were cash flows and it was really cheap. And it took me two years to have the catalyst kick in let me just do a different take on this because i do follow the stock. Ive been in it twice in the last five years. Certain things that should be done and theyre not easy. Margins. Red hat should solve that. Margins are operational excellence, and theyre not good at ibm, number one number two, you want to get a higher multiple, its easy, spin out, the debt doesnt need to be there. Its customer financing. And i look at the board of directors on this, and i say why arent you doing these two things get an operational executioner in there to get the margins understand control spin out the debt. I cant believe im even having to say it. You know, let me just get back to that, okay ibm is selling at 12 or 13 from 250. Here theyre selling at a 10month low with stocks cut in half i hope it turns around, one day it will turn around, one day maybe theyll have a new ceo but they continue to execute but they dont execute you got to talk to the company the company is broken. Let me finish. So, you can own the company for the yield. Its a 4 yield, now its a 5 yield. The best thing to say about the yield is it goes up as stock goes down. But you lost that safety net in one hour of trading. You can get the last word go ahead as you were talking about before, we could blink in this kind of market you could have 6 back but at 250, earnings were like 14, right . Earnings were like at 13 its not like having the multiple the multiple didnt go from 12 to 10, it went from extreme to cheap well leave it there. From tech to banks with Morgan Stanley posting a Strong Quarter stock. Lets bring in mike mayo, wells fargo Senior Analyst i know youre trying to pride yourself as a tech guy youre not cutting your tie off. I told him, i told him when we booked him dont even go with the tie maneuver on this desk. All right, pretty good, you feeling pretty good . All the big banks are out, whats the rap big banks get hurt from exits. You had flattening yield curve and soft capital markets, the big banks, jpmorgan, citibank, revenues grew. And that does not happen in a vacuum that happens because the larger banks are getting benefits of scale driven by technology so this Third Quarter event we think is, you know, a sight into whats likely to happen in the next decade. Who had the best quarter . Jpmorgan easily had the best quarter. Solid. Which is the best stock citigroup is the best stock ten weeks from now, value acts to support is it expires eith s get citi gets it done on their own. Whats the would stock . Plain vanilla banks are not doing well citibank, wells fargo and jpmorgan in the meantime, the rest of the industrys expenses have gone up onefifth, over the last four year, the industry expenses up onefifth. The three big banks are flat the largest banks are getting the benefits of scale. The Smaller Banks are not. Address goldmans quarter wilfred frost is out in california, hes interviewed greg lemkow. How do you agress the quarter . Goldman sachs results this quarter, its not a close call they had several markdowns they underperformed in Investment Banking and trading. And others were up in Investment Banking right it wasnt a great quarter but, yeah, goldman underperformed by leaps and bounds. They were last, why well, this is a transition year for Goldman Sachs, all right . So this is getting towards the tail end theyre pivoting theyre changing how they do business theyre having less partners at the top. Theyre going more towards Consumer Banking more digitizization, more middle market Investment Banking. In other words, youre putting the ceos imprint on the firm and that takes the first year. You get a little bit of a free pass but going into next year, they will go more. They also have a new one, in talks with malaysia, not confirmed by goldman if theyre able to resolve the 1 mbb deal that could get a headwind. The top picks are citibank, Goldman Sachs. And theyre trading at book value at a company thats grown book value twice as fast as the s p 500 over 20 years. So the book value is not going down you know what, thats why a lot of these stocks are trading like recessiontype prices. Youre at book value for goldman, Morgan Stanley, citigroup. Thats where you used to go before the recession i was on cnbc before the financial crisis these stocks were trading at 3, 3 1 2. Now theyre trading at tangible book value the strongest in a generation. By the way, you had a quarter that i would call techtastic, even with the incredible macro headwinds that a lot of people, including on the show said would bring down the bank, but that is not the case mike, everything you say is factually correct. Im in citigroup and Goldman Sachs. Heres the thing, the stocks arent going anywhere. I look at citi in particular, i say theyve got execution problems they have not met expectations with return on common equity if you look at that, are you saying, okay, if they dont fix it right now that value act is going to come in and replace the ceo . Well, look, citigroup has made progress. Gone from 8 returns to 12 returns. Theyve gone from lousy to okay. All im saying okay is not good enough we still think returns move towards 13 next year. Thats below their target. Even knowing all of that, if you get a 12 or 13 return on equity, youre trading at tangible book value. My question is value act the fulcrum upon which that lever moves . I think the fall of value act is underappreciated when you look at other companies. Okay. Just to be clear, they havent not moved. A lot of these stocks are up 33 this year. This year, they have started to move just from the Fourth Quarter of last year okay, but thats true for the whole market all im saying, they might be out of the woods and absolutely believe theyre out of the woods and were on the cusp of the biggest connection between banking and technology in the history of u. S. Banks. And the result of that, people say weve put out a 200page report, saying nice, pete. No, the rubber meets the road which it did in the Third Quarter with the big three banks which well see in years one, three and five mike, real quick, Goldman Sachs, to your point, and i mentioned this months ago about the deal with the billion dollar whale and that particular deal that Goldman Sachs was tied up with the lawsuit over imbd and whether or not that were would get settled. If that gets settled, goldman is a different animal but it was wealth management, scott, that did it for morgan standing here. Wealth management is something that goldman is struggling with mightily im not saying on Morgan Stanley but im saying goldman should have been moving in this space harder and faster because this is whats really hitting it for Morgan Stanley right now internationally in particular, goldman was touting this saying, boy, its Fertile Ground in asia, especially with barclays and Deutsche Bank and others finally David Solomon is catching up, better late than never. At the same time, Morgan Stanley had an improvement in the pretax business in the wealth business i think David Solomon is doing a great is job hes taking the necessary steps that you have to take and hes got a vision that goes out look, theyve been i was talking at one of their Senior Partners there you mentioned it, theyre saying, look, instead of waiting a year or two years, lets talk about you leaving now. So that frees up the rung the rungs on the ladder for others to move up, which is what you want, right . Theyve combined some businesses as well. So theyre taking costs out and theyre trying to increase their synergies. Those take a while to play out but you cant count goldman out. Mike, really quick because citi is one of the names you talk about all the time. Do they return the price to book like back in 2007, 1. 6 range, or are they stuck right now we think the citigroup stock will go up the math works and all were going back to where the stocks used to trade historically are you ever going to wear a tie again . You cant been a bank analyst without being part tech analyst. You cant be a bank analyst without being knowingable at tech im not wearing a tie. So great. Mayo, good to see you mike mayo, wells fargo security. Sue herera has the headlines. I sure do heres whats happening, everyone explosions in syria could be seen from the Turkish Border as the u. S. Seeks to persuade ankara to call off its offensive against kurdish fighters the fight continues as Vice President pence met with turkeys president erdogan Southwest Airlines has pushed back the boeing 737 max jets it will keep them out until november 8th, longer than planned. And flags over the capitol and the white house were lowered this morning in honor of the late congressman Elijah Cummings he died overnight at a Hospice Center in baltimore at the age of 68. He was praised by House Majority leader stenily lhoyer. Return of confrontation, disagreement, and anger, and yes, sometimes hate, he was a beacon of civility, of fairness, of justice you are up to date. Thats the news update, scott. Back to you. Appreciate that, sue. Heres whats coming up on the Halftime Report teva pharma shares sliding 50 this year. But one firm thinks its time to buy, our desk debates it in the call of the day. Plus, dont meet jon and meets unusual activity trades the options theyre tracking in the Options Market and how you can play it. And were three weeks away from a special halftime show in honor of veterans day. Live from the womens memorial in arlington, virginia, friday november 8th if you want to join us that day, email your name and phone number to veteran tickets cnbc. Com the tickets are free the Halftime Report with scott wapner and the traders is back in two minutes but in my mind im still 25. Thats why i take osteo biflex, to keep me moving the way i was made to. It nourishes and strengthens my joints for the long term. Osteo biflex now in triple strength plus magnesium. So servicenow put your workflows immhm. Cloud, huh . Your employees must love you. Thank you. Ah, you could say that. So how are things with you guys . Great. Thank you. Thank you, sir. Lunch next week . Terrific. Say hi to the team. Will do. Call my office, i will. Sounds good. Alrighty. Servicenow. Works for you. Here, hello starts with hi mple. How can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Welcome back we have a news alert we want to get to on General Motors our jane wells has that live from detroit, jane reporter hey, scott, were getting detailed from the united autoworkers of the proposed deal which they are currently trying to sell to the local president and then the rank and file among the new details is that theyve proposed an 11,000 ratification bonus we knew it was going to be over 8,000 but its 4500 for temporary workers. And also this is a very important deal for the union, fulltime temporary workers which have been a huge part of gm for the recession will now begin to transition to permanent status starting in january 2020, based on when they were hired. And all of the rest starting in january 2021 however, it is now clear that three plants will close, including lordstown, and that could be a dealbreaker as Union Negotiators were going in to meet with the rank and file president. There were those in the hallways shouting lordstown, lordstown. Some say if lordstown is going to stay open, theyre going to vote no on this. Shares of teva jumped. The stock with the news of opioid settlement. Weve made tell our call of the day. Theyre targeted at 18 look, with the report, back into the Election Year with both sides going against health care. Teva, you know, has just not done well. Its the stock of all of the darlings, if you go back five years. If im going to own health care, im going to own pharma or big ones that i know you own pfizer, merck, busineristolm. And theyre trading off of what might come out of this and that is dangerous territory. Because that could swing either way, scott it could be unfavorable for them which is unlikely or get a whole lot worse. I do agree with steve. Which is why im in the pharma name, big names. It looks so cheapful you take a look at future earnings then you take a dive. And even i with my value stock, im not getting into this. Just on the other side, going down to maryland this week, in the baltimore conference, this was one of his top picks interesting what was the basis score . I think it was mostly on valuation. Thats interesting. I hate the space napharma and bio right now, teva should outperform because most of it is in generics which should find a benefit in price control still, i think its going to get tarred and feathered im not in it. Even from the opioid issue from the stock but the jern nashg generics yes, to that end, we used to own mylan, and it was down in march. We finally started to see some activity come in on november 8 calls, scott. But its not huge. Its like 8,000 contract which is is pretty good but it hasnt built from there ive got to go to Kayla Tausche in washington, d. C. With breaking news. The acting chief of staff Mick MulvaneyJust Announced that the u. S. Will be hosting the g7 summit in june at the trump doral in miami its going to produce questions and pushback from democrats from the extent that the president and his family may be profiting off of this event. White house officials have attempted to streamline thevane on Global Growth next year and of course, there are questions for what that means for the president s bottom line. Kayla, there were questions when it was first brought up, and where it was debated and now that debate is not going to end anytime soon now that you have an official announcement no and it could perhaps be a legal battle, scott. At the time, when dora White House Press secretary said theres actually a language list of properties whether its in north carolina, colorado, tennessee under consideration, suggesting that they werent going to have the doral choice be a fait accompli and the president touted the locations to airports and other major cities well see what led them to choose doral were going to listen in to the acting chief of staff. Kayla, thank ou. At the end of that process, doral was far and away, far and away, the best physical facility for the meeting i was talking to one of the advance teams, he said its almost like they built this facility to host this type of event. Many of you have been there. You know theres separate buildings, with their own rooms, separate and apart from each building so one country can have a building another country can have another building you folks can have your area for the press. And common areas are appropriate for needs down there anticipating your question, how is this not an emollients profit how is the president going to profit from this i think the president mass made it clear that he doesnt profit from being here. Hes not taken a salary since hes been here hes given that salary to charity. Will not be profiting here weve talked about the possibility about whether or not the president could actually do it at no cost. I understand there are difficulties in doing it that way. But there are also difficulties, obviously, if they charge market rates. So theyre doing this at cost. It would be actually be cheaper to do it at doral, compared to the other final sites that we had. So, were looking forward to that to that meeting. Again, june 10th through 12th of next year, for the 46th g7 now, my guess is with that official part of the briefing finished theres going to be question about a variety of things going on around the world. So if we can do something together, that would be great. Can we take the questions about the g7 first, go through those and take a chance to ask other stuff before the end of the day. Ayman how is this not profit for the president with his home resort and how is the president criticizing the biden family a couple Different Things first off, youre not making any profit i think youve established that. But its an opportunity ive heard that before. I guess ive been the chief now for nine or ten months i always hear whenever we go to maralago, and whenever we play golf i would ask you to consider the possibility that Donald Trumps brand is probably Strong Enough as it is and doesnt need any help on that its not like its the most recognized name in the english language around around the world right now. No, that has nothing to do with that listen, i was skeptical, i was i was aware of the political criticism wed come under for doing it at doral. Thats why i was surprised when the advance team came back and said this is the perfect location to do this. I get the criticisms, so does he hed get criticized regardless of what he chose to do theres no way of him profiting on this in any way, shape or form whats the difference between him and bidens clearly, theres no profit here. Clearly, theres profit for the bidens if you look into the trump family and bidens, trump family made their money before they went into politics thats a big difference. Yes, sir do you have any idea how much money youre looking at and also will it remain a g7 . I dont have the numbers in terms of the cost. I do know one of the ones i saw there was almost half as muffin her much here. I dont want to butcher the numbers. It was like half doing it here at doral a 50 savings. As for the g8, the president has been candid about that whether or not he wants russia to join the g7 again it used to be for members of that organization. I think hes been fairly straightforward, not only to you folks and others around the world which is we go to the g7, what dominates so much of the discussion Russia Russian EnergyRussian Military policy, russian economy. It dominates a lot of the discussion wouldnt it be better to have them inside, a part of those conversations, that discussion will continue. Yes, maam how can you say this is the best place to hold it . Surely there were other places that this can be held. And you cant make the argument that the president is not going to profit because we cant know how much he might profes futuret yeah, to your first point, again, i think with the profit, again, hes not making any money off of this. Just like hes not making money from working here. If you think its going to help his brand, thats great. But i would suggest he probably doesnt need much help promoting his brand. Well put the profit one aside and who was here from the last time, camp david was that the Perfect Place i think the folks who participated hated it and thought it was a miserable place to have the g7 i understand the media didnt like it because you had to drive an hour in a bus i get the point there are numerous g7 summits well, look, we looked at how can the white house make the argument its the only place its not the only place its the best place. Those are two Different Things there are plenty of good places to hold a large event. Theres no question about it some limitations, we wanted it a specific time, we wanted it in early june so that limits it a little bit theres difficulties going various places some places dont have the transportation you need. There was one place, i wont say where it was, we actually had to figure out if we were going to have to have oxygen tanks for the participants because of the altitude yeah, theres limits youd recognize the names if we told you what they were but this is by far and away the best. Yes, maam this is a business optic, how is the president going to stand on a debate stage, if in fact joe biden wins the nomination. And try to make an argument that he profited off of his presidency hes going to do that extraordinarily well yes, maam you talk about how this is the best place to somewhere this yeah. So is this going to be seflt conta selfcontained just at doral are there other hotel rooms or anywhere else . Yeah, i understand one of the advantages the advance team came back with about doral was the fact that it could be sequestered off from the rest of the city and that nearly all or all of the operations could be on that one property i think theres almost 900 acres there. So its a huge facility and theres a lot of open space. I think theres three golf courses. Theres a lot of Space Available to us. And we do anticipate the entire thing being on that campus for hotels including Additional Hotels, are you getting Additional Hotels involved in that well, again, im not sure about the when we talk about the diagnosielegation, for exam when we went to biarritz, i think there were two or three hotels the delegation will stay on campus the german delegation will stay on campus, you folks will stay on campus. Whether or not youll be using hotel rooms, i cant speak to that what local authorities you have been in contact with . Yeah, i havent answered that question, but the advance team works with each of those groups. The video shown at that resort showing the president members of the news media. Why of the news media and political opponents. Why do you think he hasnt spoken about the sentiment of that video have you asked him . Oh, but we put out a statement you had a chance to ask him that question yesterday and you asked him Something Else, which is fine hold on a sec. Your question was why he asked we asked as a white house. We didnt like that. I think we condemned that. Hes the president we did not. Did you think we would doesnt sound like a strong come on, john it was awful i mean, ive never seen the movie. No, no that has no place here i think weve condemn ed that. I dont know if hes seen it or not. I have yes, sir stand before cameras and say youre trying to put in a place that you think is the best yeah. Save the taxpayers some money, which is important for all of us, but sometimes you because of the appearance of impro pryty, dont make that call just the appearance makes us wince into say iing and maybe ts is something that you want to reconsider how would that conversation go the president knows that. Listen, the president , we know the environment we live in you all know the environment we live in and he knows exactly that hes going to get these questions and reactions from a lot o people and he was saying thats fine, im willing take that the same way when he goes to trump maralago trump bed minister he got over that a long time ago. We believe this is the best place to have it were going to have it there and theres going to be folks who will never get over the fact that its a trump property we get that, but were still going there. Aside from what your advanced team did to look for the Perfect Place, what role did the president play including getting it on the initial list of ten or 12 places . Thats a fair question. We sat around one night in the dining room. We had to list and he goes what about dorr rall . Thats not the craziest idea makes perfect sense. Were all familiar with it so its not like he said this is what doral is and explain it you know what . Thats not the craziest idea weve heard. Yes, sir wanted to ask as it relates to this decision youve made as the host country, couldnt the simply as the host country invite putin to represent russia at the g7 as i understand how it works, there will be other leaders there any way, for example, i met with scott morrison, the Prime Minister of straaustraliat the g7. But in terms of i think the xwe i got originally was duraning it from the g7 into the g8. Could he invite putin the question is can he physically do that yeah, i think he can. Would he consider doing that . Its not come up. The con vversation about whethe or not we turn it to the ga, that could be an intermediate step what about the country itself is there any value to sending a message to the world, especially given that all thats happened with attempts at foreign interference in our country that this president and our country is not open for the kind of selfdealing that happens in other countries . Is that not an Important Message to send when youre inviting the world to come here United States no. Your question. [ inaudible any g7 questions a couple of things. The best property for this to take place, the first question is why has no other g7 been there before because they didnt go look at it. Why do they have it at camp david . Im a little familiar with it. Ive talked to the folks there because i was up there, i think it was a g8 back then 2004 Something Back then. They said it was a disaster. How did that decision get made question if i can you were talking about the video where the president was seen shooing members of the media play ed at the doral property there. We havent had the chance to ask him that question, which we have the president has tweeted 45,000 times. How come he hasnt used it to condemn it youre his chief of staff. The white house put out a statement. Its not like the man hides in you folks. I think hes done almost 100 facetoface interviews with you. Okay anybody else on g7 . Is there any precedent in your studying of g7 of a summit being held at a property owned by the president or a president and my second question is as youre looking at the content of what you want to do next year, probably going to be hot in florida in june. Will Climate Change be one of the issues you discuss no, i dont know if another president has done it. I dont know if another president has owned a property considered for the g7 Climate Change will not be on the agenda yes, sir thank you President Trump has called for the exmposure of the whistl whistleblower is that the collective will last one on g7. We begin to talk b about the passing of your xhebt just to show the American People are you going to share documents that show you how arrived at this decision with the congress . No, but i would imagine we would share dollar figures with you afterwards thats already a course of business that shows by the way, youre going to hear this answer a lot, okay i dont talk about how this place runs on the inside so if you see our paper on how we did that, the answer is absolutely not yes, sir yes, there will almost certainly be a house judiciary hearing about this selection you think so . Nadler has talked about that. Do you think so do they have time to do that will the administration participate . Cooperate . Thats a fascinating question i have not thought that. This would prompt a Judiciary Committee veinvestigation. Im thinking to myself, they dont have time to do it because theyre too busy doing impeachment, right in then i think to myself, no, this is entirely consistent with how they spent the first 18 or 12 months in office i guess its been a year, right . That yeah. Theyd rather do that than talk about tax policy and talk about drug policy and opioids, health care so a fascinating question. I dont know if there will be a Judiciary Committee inquiry into this my guess is there probably will be and i look r forward to participating. These are all g7 questions . Now were moving on to Something Else john carl has not asked a question yet clairification on your first statement on the g7 you said five finalists and you said maralago was one . Four. We started with 12 on sort of a list with team visited the sort of a first team visited ten of those and i think identified the states we then got our senior team down and they visited four of which maralago was one there was one in hawaii and two in utah. Youre telling me in the entire United States, it came down to four finalists and two were Trump Properties . One sorry. Doral. Sorry, yes maralago was not close to being sufficient for the g7 thank you for clarifying. If i said maralago about where visited, it was doral. Apologize. To the question of ukraine. Yep can you clarify, been trying to get an answer to this was the president serious when he said that he would also like to see china investigate the findings and you were directly involved in the decision to withhold funding from ukraine. Can you explain to us now definitively why why was funding withheld sure, second one first. It should come as yo surprise to anybody, the last time i was up here, i havent done this since i was chief of staff ill take it back from the white house. Thats Mick Mulvaney defending the administrations decision to hold the next g7 next summer at the trump doral resort outside miami. Mr. Mulvaney saying the president has no interest in profit asked to whether a conflict of interest, mulvaney saying theyre not making any profit. That he, too, was skeptical. Ill go to kayla e clearly from the questions, hes not the only one who seems to be skeptical about how this decision was made. He said he had questions when he heard doral was on the list and said that he understands the criticism and so does the president. That being said, he continually defended drk doral as the best choice he said the separate buildings that would house the variation delegations and staff from the Different Countries as well as the media and continually talk ed about the 2012 summit at camp david that he said people hated. We should note, scott, at the 2004 sea island summit, they cordened off an entire island and the various countries staye in beach front condos. There is pres tent cedent to mae types of infrastructure for these events as to whether there would be a judiciary investigation, he said he hasnt haugt thought of that and said with the impeachment inquiry, he doubted hed have time thats kayla in washington for us that does it for us. Thanks for watching. The exchange begins right now. Thank you, scott well pick it right up with Stephanie Miller who joins me right now. Cofounder of sand Hill Strategy and cnbc contributor and policy analyst, james both standing by listening for some further reaction to what we just heard from mulvaney at the white house today. Would love your thoughts