Transcripts For FBC Cavuto Coast To Coast 20240714

Oil prices end disproportionate weighting with the dow, components like exxon, chevron mobile dominating the scene. Lets go to Edward Lawrence with the latest from the white house on the trade front. Edward what are we hearing . It is fish. U. S. Trade Representatives Office filed to increase tariffs on last 300 billion of chinese imports from 10 to 15 . It will go into effect in two faces. First phase of 15 happens this sunday. You see items on the screen will be affected. The second batch goes on september 15th. Chinese reinstituted 25 tariffs on u. S. Cars sold in china. Increasing tariffs on 75 billion worth of u. S. Imports. Were expecting a phone call between the two trade teams. It has not happened yet. Vice president chief of staff says the pressure will put the u. S. In a position where china will make a deal. There is a lot of pressure on china for them to reach a deal, and to actually hold, the commitments of that deal. Which is something we havent seen in the past. No, i wouldnt say a deal is not possible before the election of 2020. The pressure this administration, this president applied to china put them in a position where theyre more anxious to make a deal. Reporter can tell you American Companies are selling to huawei under temporary general license. The process is continuing for a new special license that will extend beyond the november date, when temporary licenses end. Sources with knowledge of the process. There are more than 130 applications received for the special license. So far no American Company has gotten approval for the special license. The president says reason we can take on china now because our economy is strong. The president going after the Federal Reserve over that economy. The g7 leaders were quote, giddy how low the interest costs has gone. President trump saying the fed has no clue. He wants a 100 basis point cut in the federal funds rate over a period of time. Neil . Neil good having you here yesterday. Continued success watching it, my friend. New estimates on the chinese auto tariffs how much they would cost, 1. 1 billion for 2020. President trump blaming the fed just now as he pointed out for a slowdown going on. We have to make up ground by cutting Interest Rates a lot and soon. Greg mcbride, keith fitzgerald, what do you think of that . One full percentage point, what do you think . Thats a lot of money, neil. You know, in a big move in a short period of time is one thing markets cannot handle. They may want to, but cannot handle it. It would force automated programs currently haywire to go off the mark. Im leery about that. Neil what do you think about that, greg . He will rethink the payroll tax. The economy is strong, doesnt really need it. I dont know how much truth there was to the notion he was considering it. If the economy is strong it doesnt need a tax cut, then it certainly doesnt need an Interest Rate cut, doesnt it . That is exactly right, neil. Especially of that magnitude. The fed even had a difficult time justifying a quarter point rate cut in july. That will not be the last one we see. I, would not wish for anything drastic, simply because i think unintended consequences are far more significant than any possible good that could come from it. Neil you follow this stuff far better than i. When they come in batches, it is something to Pay Attention to. Two year yield yielding more than the 10year. It has been the case mostly recent trading days than not. Three month more than the 10year. Fed funds overnight Bank Lending Rate is more than the 10year. 30 year in and out of record lows. So from your vantage point, keith, what are the markets telling us . Ive got to tell you, neil, i thought long and hard about this. I have a very controversial opinion on this one. We have 15 trillion of negative yielding assets around the world. I think we simply have a supply and demand problem. Money is coming here, the only place they can get paid to store it. That artificially depresses yield curve, rating on recession, probability of recession would be higher than otherwise would appeople. Im leery the indicator not what it used to be. Certainly something we want to watch. I dont think it is an accurate harbinger of doom everybody used to think it was. Neil greg, when you want to imitate europe, it is sort of like people trying to i to imite my diet plan. Probably not a wise strategy. Why would we want to imitate economies and nations sucking wind . If we imitate something from europe, start with the train system. Lets not imitate them economically. Neil italy with food. Follow italy with food. They got that right. I could get on board with that for sure. Look their economies are, by and large, anemic. Germany, which is the biggest economy is effectively in recession right now. Their Monetary Policy a byproduct of desperation. They have been really kind of throwing things against the wall. So far nothing has stuck. That is not a pathway we want to go down. All this talk about negative Interest Rates, that is not a scenario to be wishing for here in the united states. Neil to the point that the tariffs, impact is going to affect us, maybe not to the degree that europe is feeling you know, economic slowdown, different issue, i grant you, do you look at this, keith, say, the cost of Auto Industry is going to be substantial . Automakers are feeling it, even foreign automakers are feeling it . This is a legitimate issue . Excuse me. Yes it is, very much, neil. Like throwing a rock in a pond. You will have a ripple effect. Right now what doing, evaluating those industries that have the potential to grow. Potw margins regardless what happens to tariff or regardless what silliness we get out of washington or regardless of brexit. They will recover faster, will recover father, will hold their value better. That is where my head is in light of all these headlines. Greg, i would be remiss shutting down parliament september 9th for about a month ago. The queen writing off on Boris Johnsons request to suspend parliament. It is rather unprecedented move. What do you think that means . Seems a given that Boris Johnson will get his way a no deal brexit, he is almost in the position of forcing the issue now. What are your thoughts . I think here in the u. S. , i think implications of what we see in the uk are, weakness in the pound is going to hurt tourism from the uk to the u. S. It is going to make exports from the u. S. To the uk more expensive. And making that trip to london just a little less expensive is not going to be enough to offset that. On this side of the pond i think a drop in the pound weve seens not a positive development for us here at home. Neil i have noticed, keith, looking at those issues, stocks, sectors that would be vulnerable if there was great dislocation in britain, outside of british banks, british financial industry, some european spread british manufacturers it is localized there, thats it. Our own exposure, ample as it is for financial giants, theyre barely feeling a whiff of this. So is this not the big deal were told it could be . Has it been overplayed or what . What do you see . You know, im tempted to believe that, neil, but the law of unin10ed consequences is significant. When it comes to Something Like brexit were literally going into uncharted territory. Never mind following your diet or mind, for example are or italys food, were going into an area where Capital Markets simply havent been before. Is this a reason to throw the baby out with the bath water . No way. Would you be concerned about it . I would be and i am. Neil greg, back to Interest Rates, you guys have been very prescient on a lot of these developmentss the u. S. Is a winner by default. In other words money will find its way here because it is not being attracted to places like britain, europe, asia. They have been in a market free fall for the most part. But we benefit by default that means our dollar will benefit. All the jawboning in the word about lowering Interest Rates to weaken the dollar wont work because their currencies suck more. Exactly. Were the best house in a bad neighborhood from a Economic Perspective. Keith was saying earlier, capital is making its way here. Yes that distorted the yield curve. Not just distorted it the past couple months. It distorted it for years because of growing amount of negative yielding debt. I do think inverted yield curve is a signal we have to heed. It might signal something that could be 18 months or 24 months away still. Neil gentlemen, thank you very, very much. Always good having you on here. A quick peek at the dow before we take a break here were up 188 points. A lot is driven by oil. Not a trade back and forth thing. The fact that oil prices jumped up. You know the drill, they jump up, commodity related issues jumps up. That affects 11 s p sectors, two of which have a a Indirect Energy component to them. Within the dow, what is going on with exxonmobil, what is going on with chevron, those two issues are contributing a third if im doing my math backwards. If not, i will blame it on someone. My body is truly powerful. I have the power to lower my blood sugar and a1c. Because i can still make my own insulin. And trulicity activates my body to release it like its supposed to. Trulicity is for people with type 2 diabetes. Its not insulin. I take it once a week. It starts acting in my body from the first dose. Trulicity isnt for people with type 1 diabetes or diabetic ketoacidosis. 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I know there are some reports forecasters saying that it could ultimately become a category 3 hurricane before reaching the u. S. Mainland. That might be a leap. Lets get skinny with fox news meteorologist rick reichmuth. What are we looking at here . The official forecast brings it to cat3 off the coast of florida. The one spot we dont have a skill is in strength of hurricanes. In last numbers of years we learned about rapid intensification of storms. Not out of the question we could see Something Like that with the storm. This area of the caribbean is not generally favorable for strengthening but it has done that the winds arep to 70 miles an hour, which is below hurricane force. We have a strong Tropical Storm. Over last 36 hours, the center realigned itself to the northeast of where it had been. That means were starting off initiation point all of our forecasting farther off towards the northeast. One of the things that has done spared puerto rico, the mainland puerto rico the bulk of that storm that we thought. It is great news. Puerto rico recovering from hurricane maria, almost two years ago. A lot of infrastructure really hasnt recovered for that. This likely sparing it. The not the case for st. Croix. And you see st. Croix, go back to poured rico. We dont see the winds get that strong before pulls off to the north. That is the good news around puerto rico. Well see rain and flooding, cause problems there, not like a direct hit from a hurricane would do. We start to watch the hurricane forecast models. You notice in the last little image a couple of these models, theyre reliable models we watch, curve this thing off towards the right, potentially bringing along the georgia coastline and other North Carolina. Other reliable models pull this in towards florida. Then potentially out towards the gulf which would eventually mean a second landfall. Well have this storm with us for a number of days to talk about. If youre anywhere say from florida, maybe not very, very south florida, just around the miami area all the way towards the carolinas you need to watch this one, the truth is we dont know where it is going five days from now. This is one of those storms we dont have a great handle on exactly the direction it will go. We do believe impacts across the southeast part of the u. S. We need to watch it. Neil . Neil rick, thank you very, very much. Puerto rico is obviously bracing for dorian right now. For more, lets go to rick leventhal, the latest to for the rico and san juan. What is the latest there . Its a beautiful, hot, sunny day here in san juan, neil. We keep hearing things will get a lot dicier in the next couple hours. One reason why we set up the fox storm cam on a tree. That will stream live hd video. Also provide weather data throughout the course of dorian which is expected to come at or near us right here on the beach in san juan. We give you a quick look around. People are sunbathing. Red flags are out with dangerous water conditions. We see along the hotel front, they put up tarps to protect observe front windows. Some homes have hurricane shutters. Many businesses closed in anticipation of the bad weather, put up hurricane shutters, boarded up their storefronts. The airport is virtually shut down. Major airlines canceling all flights in and out today. Likely reopen tomorrow. That is not confirmed. Only two years since puerto rico was slammed by maria which is cat4, devastated the island. Governor says lessons were learned. Urging calm. Hospitals are prepared. Schools were closed. Shelters are open. Firstresponders are prepositioned including teams that flu in yesterday to help out with local firstresponders. We have seen images as the storm made its way across crosswind ward and Leeward Islands in martinique. It washedout roads and bridges. That is a concern on the island. We could get four to six inches of rain, 10 in some pots. If it hits the mountains that could cause flash flooding. Keeping a watchful oy on this here and u. S. Is keeping watchful eye on it as the storm makes it through here up through the atlantic. Neil the people had the protest, government collapse and this. Rick, thank you very much. All right, there is a new poll out shows the president trailing the top five democratic rivals who want his job, in some cases by double digits but what is more worrisome for the president , what americans are saying about the state of the economy. More say it is getting worse than think it is getting better. Neil all right. There is a new qunnipiac poll out that shows for the First Time Since President Trumps election more voters say the economy is getting worse. So what does that mean . The fact that the trails all top Democratic Candidates want his job, by most cases double digits. Polls are one thing. They dont really matter much at this stage of the race. What do make of the early stage of the race with republican strategist holly turner, democratic strategist, brad gersman. Holly has a republican strategist, are you worried . Im not neil. 2016 during the primary, all sorts of matchups, republican candidates hillary clinton, trump was not faring well then, even up to november he was not faring well against clinton in the polls. We learned that they are not a accurate reflection what the electorate will do. The economy is important to voters. The president could dot easy thing. He could not be negotiating these trade agreements. He could lay off on the tariffs. We would all feel really good right now. I think he is putting the longterm health of the country out in front of his own political interests. We still have 14 months to get the issues resolved. Get some agreements set in place. American people will have more confidence in november of next year. Neil brad, i noticed right now, the strongest of his potential opponents, president s potential opponent remain joe biden. The others are grouped in there with substantial leads themselves. What do you make of that . Look, joe biden is the guy who will be out in front. He is the guy who will be the democratic nominee for president. It makes all the sense in the world because the narrative for joe biden he is the guy who can beat trump and that is the most, that is the most important thing to democrats at this moment but when you look at the Bigger Picture here and the trump polling and how far he is down at this point to some of these democratic candidate, i mean it really sends one clear message, is that the democratic narrative what this country turned into is making sense to democratic voters and to the independent voters. But that being said, we have to all understand, this is not a popularity contest. This is, this is the electoral college, that is in play. This is state by state game. And, that the polls are really meaningless as it relates to that. Neil youre right about that, but holly, i am curious though given the strength of the economy, i know it lost a little bit of sparkle but still doing fairly well. Yes. Neil im wondering whether the president is stomping on that getting distracted on back and forth with china, changing some of his positions when in fact his overall underpinning, that is the fundamentals of the economy itself remain pretty strong, not as strong as it was but still pretty strong . Right. I mean look when the president makes any statement on his negotiations with china he is not talking to the voters, he is not talking to the american people, he is talking directly to china. He is trying to get neil he is talking to voters. He is not he wants to get a deal done. He wants to get a deal done. The economy is doing well. If biden is the nominee, then voters will be given a choice of hey were you better off under obama and under trump. Then well know how they feel about the economy. The Global Economy is weak right now. It is not doing well. Were suffering from that. I can only imagine how much worse it would be if we didnt have some of the deregulation and tax policies in place the president fought so hard for. Neil you mentioned joe biden at the beginning, brad. Im kind of crunched for time, if it isnt biden, Elizabeth Warren emerges or bernie sanders, that is the type of candidate, or those are the type of candidates the president is eager to poison folks as unrealistically high when it comes to taxation and spending. Almost salivating at the prospect of anyone but joe, what do you think . Of course he likes that because joe is more of a middle of the road democrat. They probably agree on some things actually. As far as warren, sanders are concerned he wants to promote, the president wants to promote democratic socialist angle that a lot of the democrats have started to take and that would be a great comparison for him versus him and great economy and all these terrific things he will say he did versus socialist who will take our country in a completely different direction. That makes sense for him. That is something he would relish, obviously in my opinion win hands down in that case. Neil still early though as you pointed out. Guys, thank you both, very, very much. Meantime we telegraphed this to you. Not saying were prescient but we were prescient. Johnson johnson willing to fork over happily, not happily but 580 million plus to stealth an opioid dispute, this could be the opening salvo. A lot of people were looking at that, hey, a lot less than we thought. Along Purdue Pharma willing to go into bankruptcy to settle its own opioid cases, tune of 3 billion, netnet, a cost that could exceed 10 billion. Told you so. After this. Lets take a look at some numbers 4 out of 5 people who have a stroke, their first symptom. Is a stroke. 80 percent of all strokes and Heart Disease . Preventable. And 149 dollars is all it takes to get screened and help take control of your health. Were life line screening. And if youre over 50. Call this number, to schedule an appointment. For five painless screenings that go beyond regular checkups. We use Ultrasound Technology to literally look inside your arteries. For plaque which builds up as you age and increases your risk for stroke and cardiovascular disease. And by getting them through this package, youre saving over 50 . So call today and consider these numbers for just 149 youll receive five screenings that could reveal what your body isnt telling you. Im gonna tell you that was the best 150 i ever spent in my life. Life line screening. The power of prevention. Call now to learn more. Neil all right, now the fbi is confirming that search is underway, detroit area linked to the president of the United Auto Workers, gary jones. Jackie deangelis has been piecing things together and has the latest. What are you hearing . Reporter they searched the home of United Auto Workers home gary jones, and search ad Conference Center used by union leaders. That is happening as we speak according to a fbi spokeswoman. The fbi says there are multiple locations, other multiple locations being searched as well. Of course the backdrop to this, this is widening of multiyear investigation into alleged corruption in the uaw top ranks. There have been charges in these cases against nine people, but of course, prosecutors have alleged here, that there have been bribes, kickbacks, financial first appropriation among the union firms as they dealt with Car Companies through the bargaining process over the years. The uaw could not be reached for comment. Plant workers are responding and reacting to the news. Theyre surprised by it. One plant member, uaw member, Sean Crawford is worried that it could potentially negatively impact the bargaining going forward. He wishes they would clean house of those suspected this and move forward. Neil this whole issue with Purdue Pharma, offering billions to settle opioid claims, even go into bankruptcy to close the deal. Deirdre bolton with all the details. What is going on . Neil, this oxy contain baker Purdue Pharma and the family, are have thousands of lawsuits that claim that the company and the family are responsible for starting, sustaining the opioid crisis. Not a small basis. Discussions are going on for months between states attorney general, plaintiffs, lawyers, purdue, trying to prevent any new lawsuits being filed against the family or against the company. Sources say a settlement is near. Here is what it looks like so far according to our sources. Offering to settle more than 2,000 opioid cases for between 10 and 12 billion. Now the bulk of the funds would come after a chapter 11 bankruptcy filing that would transform the company from a private company to a public beneficiary trust. That then profits from all drug sales, including the painkiller, oxycontin would go to the plaintiffs which by the way are largely states, cities, townses, tribes that have been affected by the crisis. Other terms purdue giving, not selling Addiction Treatment to the drug. You cant make money on upside and downside. The treatment are drugs currently under development. They are fasttracked by fda. They include tablets to blunt opioid cravings. There is overthecounter nasal spray which some people say can reverse overdoses. Senator bernie sanders, one politician weighing in earlier via twitter, he says corporate greed killed thousands of americans. Executives at Purdue Pharma who perpetrated crimes should be behind bars. I want to remember in context allly, the company in 2007 and three top execs pleaded guilty in federal court that they misled doctors, patients about the drugs risk. The company paid fine of 600 million. Despite that, continued to push promotion of the drug, playing down the risks, over selling its benefits. Neil as part of the settlement, the Sackler Family itself would have to pay 3 billion for its own pockets. Obviously give up ownership if it goes through chapter 11. About they would have to sell another drug company they own, contribute from proceeds of that sale, another 1. 5 billion. The idea is to enforce consequences, show some other drugmakers been involved in making these kinds of points that they will face the music, neil. Neil amazing. Thank you very, very much, deirdre. Why would a family controlling a company essentially give up the company . Why not roll the dice, go into bankruptcy, see what happens, rather than pay out first, then go into bankruptcy . It is confusing for a nonlawyer like me. Fortunately i have a very Good Health Care attorney with us right now. What is the legal benefit here, david . Can you steer me through this, whatever the emotions rightly attached to this, its a very unusual deal, isnt it . It is sort of like the asbestos cases. When the claims are so large, so many, that there is not enough money to go around for all the potential plaintiffs and states, the state has are filing in these cases as well. So, bankruptcy is inevitable. Either purdue is going into bankruptcy, or going into bankruptcy with an agreement with everybody, which will give the plaintiffs and states more money, it will set up the public trust to allow plaintiffs to submit claims and be paid. This trust will be managed by a federal bankruptcy judge and a trustees. The reason why this is good for the Sackler Family, they have been sued individually in this case. So they want to prop up a good deal. Otherwise if they dont prop up a good deal, the suits against them individually go on, if they were proven they knew about it, they could have personal liability in this case. Neil help me with all the pharmaceutical makers who might shake in their boots, there by the grace of god could possibly go us . What are we looking at here . This could be bigger than tobacco. We have mckesson involved, Johnson Johnson. These companies are largest in the world, International Companies and they have the money to make payments. I believe you will start to see more and more verdicts of these cases, bellwether cases come forward in front of the judge in the Northern District of ohio where these cases are. Neil right. I think you severeds in the billions. You will see big money verdicts come out. Neil a lot of people interpreting the Johnson Johnson settlement in ohio for a little over 550 million, and that would be sort of a low, sort of a low level figure and it was interpreted as much maybe the burden wasnt going to be as onerous for those guys. That is wrong, right . Totally wrong. I think by these drug manufacturers telling doctors and patients these drugs can be used like advil, everyday painkillers, they addicted wrongfully so many americans, innocent people are now addicted to heroin and other drugs to compensate for their opioid addiction for the last go decades, really decomposed so many families in this country, honestly, there needs to be corporate responsibility. I think these are righteous cases that the plaintiffs and states are filing. Neil david, thank you very, very much. David piertro. There are expects that other companies will be caught up in this. The storm has just begun, kind of intimated this. Also want to let you know were learning more about the uaw raid on the United Auto Workers, homes of some of the chiefs of auto workers including the head of it, the uaw is saying it is fully cooperating with investigators in this ongoing corruption probe and see absolutely no need for the search warrant that were issued today. Now a lot of this we are told might be indirectly or right directly tied to negotiations that are going to be continuing right now with the automakers. As you know they pick one and launch negotiating or potential strike against one that will serve as a model for the industry. This suddenly got in the way of all of that, to put it mildly. More after this. Re of her car rental, and getting her car towed. All i had to take care of was making sure that my daughter was ok. If i met another veteran, and they were with another insurance company, i would tell them, you need to join usaa because they have better rates, and better service. Were the gomez family. Were the rivera family. Were the kirby family, and we are usaa members for life. Get your Auto Insurance quote today. What about him . Lets do it. Come on. This summer, add a new member to the family. Hurry in and lease the glc 300 suv for just 419 a month with credit toward your first months payment at the mercedesbenz summer event. Going on now. Neil forget any deal with china. To hear a lot of farmers tell it, could you just pass this new nafta deal now so we can have something we can hang our hats on. Fox businesss Grady Trimble has all of this. What are we looking at . Reporter hey, neil, were seeing latest technology in agriculture in action. This is combine is able to drive down the road for corn and picking it. You mentioned usmca. I want to bring in rob sharkky. He is an expert on this. A lot of farmers are forgoing major purchases this year on Technology Like this, because they dont know what the future holds with china. So what theyre saying is, just pass usmca, give us something of certainty . It has been a depressed farm economy for several years. Farmers have conversations with bankers it needs to be a year that is profitable. All the trade is making farmers very nervous. We want to get as much trade passed as we can. Reporter neil, were walking as the next combine comes up. This is brand is spent. This has been described as the batmobile of combines. Rob, i want to go back to china. Trade obviously, especially soybeans in the midwest, way down compared to this time last year. How are, how long are farmers willing to go on like this . For decades farmers know china has not been playing right. They have been screwing around with us. We know we need to do something, right . Having the knowledge to know to do that, to go through it are two different things. You see a lot of farmers very concerned, very worried they will not be able to withstand the storm. There are a lot of nerves. We know it has to be done. Hopefully we can be patient with it. Reporter neil, to some it up, these folks are saying we dont know what will happen with china, at least get usmca in front of congress, pass it, so we have some certainty going into the future. Neil my thanks to rob sharkky, the grain farmer you were chatting with. Georgia farmers are worried about the new nafta, get the deal we have done, signed, and delivered. Georgia agriculture commissioner is with us now. Commissioner if this is delayed, then what . Neil, i think everyones glad that we have an agreement. Theyre searching for certainty. There are many aspects of the agreement where there had been terrific progress. So i listen to our growers. Were still have some concerns when it comes to fresh fruits and vegetables playing on a level playing field. There is no difference in this agreement and nafta, the goal was do know harm. Much different mexico were dealing with when nafta was originally passed. We still have some looming concerns. Im hopeful that we can get a deal, get, also get the china tariff situation arranged where we can get back for farmers, for their revenue from the marketplace. That is what every farmer i know wants to happen. They dont like being used as a tool of state. Neil what im confused, commissioner, youre wellversed on this whole issue, this was supposed to be, that is, the usmca deal, much better than the old nafta. You just seemed to imply it is not that different from the old nafta. What are the distinctions . No, with respect to fruits and vegetables and i think the administration is doing a great job explaining there are many gains in this agreement that would be wonderful for the country. Still fresh fruits and vegetables, all the objectives are not met. Were a heavy fruit and vegetable economy in agriculture in the state of georgia. Our produce remembers concerned about the same issues with labor, environmental practices, food safety, that what well have to do, with this agreement, and access to our markets were going to have to sell our products. Well be far more aggressive with our georgia grown brand. Work with school nutrition, local products. That is one way we can answer as solution. But overall i think it will be positive. Folks are looking for certainly certainty. Neil commissioner, i had a guest on a little earlier in the show, saying im not optimistic well get a deal with china separate from this issue, even by the election. For farmers, and for those in your state what do you think of that . Well, theyre still supportive of the fact we needed to address this issue, and it needed to be done a long time ago. Where it has hurt georgia the most, in one of the commodities you may not hear so much about, but we lead the nation in pecan production. We opened this market with china and 40 of our pecans go to china every year. The Current Situation has cost us over a dollar a pound now. That is down a third. Were still dealing aftermath of Hurricane Michael where we lost 28,000 acres of pecan trees. That segment of agriculture is certainly hoping that the deal comes sooner rather than later. Thankfully we have got good trade people. We have good secretary of agriculture. Theyre doing all they can to help us. Certainly our farmers are on a him right now. And it is pretty shaky. Were very concerned but hopefully the lord give us good rain, good weather. We can get this crop in. Live to fight again in 2020. Neil gary black, we appreciate you taking the time. Thanks, neil. Neil you probably get sick of hearing about this inverted yield curve. There things we follow here, they come in twos, threes, in this case fours, that is getting market attention. You have a three month yielding more than a 10year and fed funds overnight Bank Lending Rate yielding more than a 30 year, when all four are in sync like that it almost always, it always does, presage a recession. But there can be a delay. So you would think the record low Interest Rates, housing would be booming. It is not. Why is that . After this. Is labor day, everyos excited about chevrolet. Theyre all really cool cars. Woo, i love it i cant stop staring at it. Ride out the summer in a new chevrolet this labor day. Wooh its time to upgrade. Get zero percent financing for seventytwo months plus two thousand dollars on all 2019 silverado double cab pickups. And, during the labor day sales event, make no Monthly Payments for 90 days. The labor day sales event ends september 3rd. The labor day sales event ends september 3rd. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Neil weve got record low Interest Rates. Look at 30 year, 1. 93 . You know the deal. All of sudden the yield is going down. That mean prices are going up, flight to quality here. One of those weird development where the bond market continues to do well. In this case the stock market continues to do well. The benefit for homeowners, those refinancing, we had a little bit after boomlet going. Not much, very shortlived. Now it is done. So were looking at in the most recent stats. Former fannie mae executive tim ruud on all of this and what is going on. Tim, youre hearing all this anecdotal stuff on the highend about the rich who cant sell their mansions. About those who are concerned, in hightaxed states they cant, they cant unload their properties. So everything kind of sometime sometime stymies in the meantime. What is going on . Hey, neil. To your point Interest Rates have been the savior of the Housing Market. It allowed the Housing Market basically to recover to prerecession levels but that is kind of played out because one of the problems is while certainly lower Interest Rates make it more affordable to buy a house right now because values have gone up so much theyre actually way outside where their historical norms are in terms of the Median Income required to buy the median house. So either Property Values will have to come down 30 or well have to find ways to get people to make more money or even god help us, create some exotic financial mortgage product to make these things more affordable. What could go wrong . Neil right. A lot of people harken back to some statistics go back to at or around the time of the meltdown. People jump on that, saying oh, my god, it will happen again. What could do you think of that . Look, im focusing more and more lately, a topic, Different Reasons between economic cycles and credit cycles. The last housing crisis based on a credit cycle that went wrong. You had cheap money, loose money, speculation, fraud. As soon as properties values stop, fell apart. People were illiquid. Couldnt get out of assets, became insolvent. My fear in this market, if were not really focusing on fiscal policy, dealing with the main issue that we have which is affordability and supply of housing, you could be setting ourselves up for a big fall. So im hoping obviously people are thinking beyond Monetary Policy and looking at the really important fiscal things that need to be done for Sustainable Growth to insure people have access to reasonable and affordable shelter. Neil do you ever think there is something fundamental were missing . Particularly a lot of people, younger buyers theyre not interested in buying, more interested in renting . Maybe a product what they learned watching their parents bought a home that melted down, forced out, whatever, theyre just not into it anymore and maybe its that . That is a great question. I have four teenagers. I dont think one could change a light bulb. They are better off renting. Institutionnal money coming up with creative ways to alternatives with homeownership. Working with builders to build Single Family properties for the specific purpose to rent. Im fearful of if they are successful getting essentially new households to rent in creative ways they will probably find ways to subsidize the rents like uber lyft, amazon, all found ways to subsidize people to change their behaviors. If these companies are successful getting these new house holds to change their behavior, serfdom doesnt end well for an economy. Im concerned about that. Neil wellsaid. Tim ruud, thank you very, very much. Ken fisher, one of the can aniest, saviest investors i know is urging people to calm down. He is next. Patients that i see that complain about dry mouth, they feel like they have to drink a lot of water. Medications seem to be the number one cause for dry mouth. Dry mouth can cause increased cavities, bad breath, oral irritation. I like to recommend biotene. Biotene has a full array of products that replenishes the moisture in your mouth. Biotene definitely works. It makes patients so much happier. Neil all right. We are up 215 points on the dow, Energy Leading the way. There are no trade worries for the time being or at least any tweets or musings of the president or anyone else, even at china. So thats one thing. But with oil prices up about 2 , chevron, exxonmobil, big components in the dow can disproportionately weight the dow. 27 of the dow 30 stocks are up. Sometimes you got to get out of the tick by tick movement. For that i rely on the expertise of billionaire investor ken fisher. You just saw his commercial there. Ken, maybe you can help me with this. Im going to raise with you a lot of the worries that are out there. You can either shoot them down or elaborate on them. Worry number one, we are entering a recession. The inversion in the yield curve, you know the whole drill, presages a slowdown and its coming, its definitely coming and recession is coming. That worry and the pronouncement of that development. What do you think . Well, i think its wrong because first overall when you look around the world, leading economic indexes have not been falling. They do that before we get into recession. Secondarily, the world is growing and the fear is preprice. Markets always preprice fear. Neil okay. Worry number two, real estate. Its not benefiting from this downturn in rates. We just had a guest saying probably wont. What do you think . I think it is true that its not benefiting but real estate is one little part of the world. The fundamental problem that i dont think people see correctly is that what i consider to be very wrongheaded imposition of quantitative easing in all the major Central Banks of the world over a very long time has caused banks to be significantly overreserved relatively to any time in history and there really isnt much reason for them to be incented to make these loans. The price is less important than supply. Thats a really simple point most people get that almost always in all things, particularly in things monetary, supply is more important than demand. Central bankers always think the reverse of that. They always think demand is more important than supply. Low Interest Rate type money is not stimulative even though the rates are low. What we should want is a steeper yield curve that provides more incentives for banks to lend which we would only get by the Central Banks purging the purchases they have made of long bonds over the last decade. Neil or cutting shortterm rates. Whoa, whoa, you can cut shortterm rates but if you look overseas, short term rates are already negative everywhere you go. You cant cut shortterm rates as much as you can reverse the idiacy of the past and purge the long bond purchases of the past. President trump wouldnt like it but the fact is banks live off the spread as much as possible and the more you get them to purge those bonds, marginally push up long rates, you get rid of this concern about the inverted yield curve, et cetera, et cetera, et cetera, which is not something i worry about for a different reason but as it is, right now the banks are way overreserved compared to any time in history. Neil let me give you worry number three. That is the rich, that they are sort of closing up their wallets. We have seen indications of that with sothebys and christies, Auction Sales are down, apartments you can afford in new york by putting cash down are not selling and it will have a trickledown effect. What do you think . I dont know. I think trying to predict from the small percentage of the world that are rich goes back to neil talking the united states. The united states. Even in the united states, those people that they want to focus on are a tiny percentage of the united states. If you think of the 1 , i think the other 99 is actually much more important, and the fact of the matter is, people miss this, i say this all the time, mostly rich people dont really want money. Rich people want things that could be traded for money if they wanted to. They want the stuff thats better than money. Maybe right now, those things arent the things they prefer but its not like something disappeared. Neil so im extending this to the top 10 that account for almost half, little bit more than half, i think, of all the retail buying going on. If they slow down, does that worry you . Because that appears to be slowing down. I dont much worry about demand side things as much as most people, because if you think through history, total consumption as a percent of gdp stays within about a 4 rigid bandwidth, no matter what happens. You can have big boom, big bust, that percentage doesnt shift much. People think but wrongly that everythings about demand and heavily about consumption. Its really almost always more about supply than it is about demand, and i just think thats a backwards way to think. Neil latest worry lot of people think the way i think is backwards. Neil but you have a pretty damn good track record so i will defer to you. Let me get your sense of the china worry. Thats the most pronounced in the market. Were not seeing it too much today thus far. That we might not get a deal before the election, and that this could have global implications. What do you think . We might not. And of course, tariffs are negative and as i said before on this show, the totality of tariffs globally since 2017, if fully implemented, fully taxed, constitute less than. 3 of global gdp. Therefore, its about 10 of one years gdp growth. Its a negative but its being made a mountain of a molehill. Then the other part is positive trade agreements arent really paid attention to or factored in at all in our current sentiment. We have had a lot of positive trade agreements in the last two years and people pay almost no attention to those. They, in fact, in total money aggregate, are bigger than the china discussions. People dont get that. They only focus on the negative. Neil i think you even mentioned the recent u. S. Japan accord. Let me get your sense of politics, if you dont mind. I know the vagaries of that are hard to calculate. This quinnipiac poll thats out today shows the president trailing all the top five democrats by double digits. Furthermore, 37 of those polled say the economy is worsening versus 31 who say its getting better. Its very very early, you reminded me of that many times when we bring up such issues, but if that still holds and the president is not reelected, you would start seeing signs of that, i believe you said the markets would be starting to factor that in. Theyre not at this point, i guess, but how do you play that . So first, i dont think markets factor that in this early. I think the time that markets factor that in is sort of next spring as you move to the point where you reduce the uncertainty of who actually is the democratic nominee, and you begin to truly get a twoperson contest. Right now, you dont really have anything thats close to that. Normally you get this winnowing, it differs cycle to cycle, but we will get that winnowing and the effective twoperson contest. This time it will be a little different than times in the past because the Democratic Party goes about picking its nominee very differently now than it did the last time or recent times. In that process, i think it gets delayed out a little longer but you will get to that point and in fact, it does matter who wins the presidency. Those things are important. But i dont think the market is ready to preprice any of that stuff now. Thats next year. Neil you know, ken, you have written over a dozen books and there does seem to be a common theme in them. Not across the board, but that following the crowd or imitating the crowd or following the consensus, i think its fair to say, is something you dont do, so you zig when others zag. Right now, trade or recession seems to be a dominant concern. For now you seem to have dismissed them. What does concern you . Well, i do worry about Central Banks doing stupid stuff, because i think thats mostly what they do, and i fear that they may do more stupid stuff like more quantitative easing which would be quantitative diseasing and a negative. Neil not just cutting rates, but going the other way, buying notes and bonds and Everything Else to force rates down . They keep thinking straight levels are what matter rather than the Interest Rate spread which is really more important. I would hate to see them do more of that stupid quantitative easing which is really quantitative diseasing. Neil President Trump wants more of that. President trump wants more of that. I cant control what President Trump wants. And the fact of the matter is Central Banks around the world are doing these things. Im more actually afraid of foreign Central Banks right now than i am the american central bank. If you look, for example, at a country like sweden which is a little country, nominal gdp growth is 3 . About half of thats inflation. And they are growing a quantity of money at a fraction of 1 . Thats deflationary. I dont like that. Its just one little country. Theres a number of other little countries but overall, i would like to see us think of the average duration of money as one thats stable and or lower with a higher tilt toward long rates which you would get by, as i said earlier, purging the long bonds they have acquired over the last decade. The politics, i dont fear as much as most people do, because in america, we always get what we think of at the time as a winner. And the fact is, uncertainty falls with that as we get to the election. People tend to have a view which i think is wrong which is that whatever their political views are, if they dont get enacted, we are going to have disaster. The fact of the matter is, we had an awful lot of winners and losers over a very long period of time, and the market doesnt quite work that way. Now, this is not our fathers Democratic Party but if you go through the history of the first year, the first the inaugural year of democratic president s with the exception of jimmy carter, they have all been double digit positive, because the fear of them has been in the back half of the election year, then because we have a government thats set up not to let the president do too much, in the inaugural year they cant get as much done as people feared they might and therefore, the surprise is positive. Its always the difference between surprise and prior expectations that moves markets. Neil unless they win by a landslide and have a verdict. Go ahead. Edict, i should say. I think thats hard to do when you look at the Senate Makeup of the election in 2020. Its hard to get that landslide. Neil i have thrown a lot at you and i appreciate your patience. The queen now approving the suspension of parliament that Boris Johnson wants to formally break away from europe, even if it means no deal. The implications for us would be . Well, i want to make the point that almost every bit of news about brexit lately has had very Little Market impact. Neil youre right. The fact of the matter is the market has been prepricing brexit for a really really long time, including every conceivable outcome, and anything shy of outer space aliens landing in britain and taking it over and using it as a base to consume all humans globally will end up having been positive. Brexit has got to be the most prepriced thing that ever happened. Neil we just learned aliens have arrived in london and taken over london bridge. Finally, ken, you talk to investors who are nervous, they have had big market gains, a lot of them, you know, just dollar cost average, you have the same amount every month, you buy more when its lower, fewer shares when its higher, but thats a good strategy that works without getting, you know, fancypants about it. What do you think of that strategy . I think people need to think about what makes sense in the longer term. Markets collectively can wiggle in their chairs far longer than people can sit still, and the fact is most people get driven crazy by things and want to change to a strategy thats to take advantage of the times. I think the most important thing to do is figure out whats appropriate for you, whoever you are, in the longer term, do that and stick to it. Neil you still love annuities. You think theyre a good idea, right . Oh, you dont want to get me started on how much neil ken, always a pleasure. Thank you very much. Ken fisher. Fisher investments founder. Became a multibillionaire with zigzagging advice, going against the grain and consensus. Meantime, one tech giant is moving production out of china. Theyre not even waiting to see how this trade thing is resolved. They settled it for themselves. We are getting the hell out. After this. How do you gauge the greatness of an suv . Is it to carry cargo or to carry on a legacy . Its show of strength or its sign of intelligence . In crossing harsh terrain or breaking new ground . This is the time to get an exceptional offer on the mercedes of your midsummer dreams at the mercedesbenz summer event, going on now. Lease the gla 250 suv for just 329 a month with credit toward your first months payment at the mercedesbenz summer event. Mercedesbenz. The best or nothing. But how do i know if im im getting a good deal . I tell truecar my zip and which car i want and truecar shows the range of prices people in my area actually paid for the same car so i know if im getting a great price. 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Neil ken fisher is really focused on this china thing but we have graphics packages so we are. Just have to deal, america. Here to make sense of all those worries, maybe they shouldnt be worries, or to put this in perspective, john hiltenraff. Jeanne, let me begin with you. Hes saying its right to be concerned about whats going on with china and its going to be a worry, but in the scheme of things, it really wont justifiably move the needle. What do you think . I think there is truth if you look at the data to what he is arguing. Certainly companies, individually, have to be concerned and they have to manage any risk and of course, they are doing that now. But if you look at it overall, at least at this point, the impact, if it is ultimately fulfilled, is not nearly as dramatic i would say as some people in the media are forecasting. So theres probably a lot more focus on it in the media than there is in terms of the impact. You told us to jump in. Im going to jump in, if thats okay. Im going to take the other side of that argument for a couple reasons. One is, its true that like the tariffs are a small percent, for instance, of our gdp. But i think you have to look at theres the national economy, then the corporate economy, so to speak. Americas Biggest Companies spent the last two decades building Global Supply chains, buying into the whole globalization strategy, and i think for them, theyve got a lot at stake. Their whole cost structure is on the line when you start increasing tariffs. I think it does matter for them. Then the other thing that really matters so much is just the uncertainty. So maybe the tariffs arent so much today, but the fact that we are in this tit for tat situation that seems to keep escalating, has to leave a ceo wondering well, whats it going to be in a year, whats it going to be in two years. I think if trump just said today all right, were not raising the tariffs anymore, we are in a stalemate and we are just not, you know, doing were not negotiating anymore, i think the market would rally because they would say all right, now we know what the answer is. Without knowing the answer, i think that creates uncertainty. I think you hit the nail right there on the head. Its not the tariffs in and of themselves. Ken fisher makes the great point, the tariffs are. 4 ,. 3 of gdp. Neil when it came to the meltdown a little over a decade ago, the argument was that mortgagebacked securities, the housing thing was such a small percentage of the finances of the world, whatever they were using at the time, but again, we know it was the catalyst that begat more selling, more selling. Im not trying to scare people, nor am i trying to say dont worry about all of this. But i think that percentage game can come back to bite you. I agree. I dont want to throw in my lot with you. Neil please. I do think whats really important is uncertainty. You have Companies Like Texas Instruments who said they would build a billion dollar plant in texas saying you know what, we will hold off on that for a couple years now. You have companies nl neil that feeds on itself. Because then they dont hire employees to staff that plant. They dont rent the land and build the products that will increase the supply chain, they have to higher more employees, spend more money. Thats what slows down the economy. But we are talking about two different things. You are talking about the overall impact on the economy where the numbers quite frankly do matter. And the impact is not as great versus [ speaking simultaneously ] if these individual companies do have to take responsibility, if when donald trump in 2015 was talking about a tariff war which to his credit he has been talking about a long time, these companies have an obligation to engage in Risk Management which most of them have done, and neil to be fair, they didnt think he would go a little crazy. Right . I dont think they expected him to put tariffs on every single product. He said thats what he was going to do. He absolutely said he was going to take this to the end. Donald trump did. I think they had their head in the sand about a lot of things. Neil so glad you phrased it that way. The alternative would have been [ laughter ] thank you for picking that up. But you know, they didnt see the backlash brewing in this country about all the jobs that were being outsourced from places like North Carolina, places like ohio. They also didnt see the fact that when donald trump said im going to do something about this, he meant it. So i think they are kind of being caught on their heels. Neil the other thing hes flying by the seat of his pants on this, im going to stick you with tariffs, increase tariffs, delay tariffs, make them 10 , no, 15 . Its like a bad abbott and costello. It is hard from the outside to make sense of it. Neil you think theres a method to this madness, its not just madness . If you read some of his old books, one of the things he likes to do in a negotiation is keep his opponent on his heels, and keep them guessing. The problem is neil hes got the whole world on its heels. Hes doing that with china now but hes also its affecting the whole country. So it might have worked for the trump organization, but again neil but even the i mentioned earlier some companies are seeing double digit declines. Tiffanys, the rich stop buying penthouses in manhattan so things are slowing and that trickle down is going to be felt. What do you think . I think it is going to be felt and i would just go back and say these Companies Need to engage in Risk Management. They have to do that. If you want to say oh, i didnt believe donald trump in 2015 neil wait a minute, donald trump lecturing companies on Risk Management. [ speaking simultaneously ] i am not donald trump. Are you saying they need to have some more in vietnam, more in mexico . Neil they are. Theyre doing it. They are absolutely doing that. By diversifying and finding new markets, yes. Neil hang on to that thought. A lot more after this. The political fallout and the impact, after this. Oh, wow. You two are going to have such a great trip. Yeah, have fun thanks to you, we will. Aw, stop. This is why voya helps reach todays goals. All while helping you to and through retirement. Um, you guys are just going for a week, right . Yeah thats right. Can you help with these . Oh. Um, were more of the plan, invest and protect kind of help. Sorry, little paws, so. But have fun send a postcard voya. Helping you to and through retirement. Neil we are following dorian, now a Tropical Storm, could be a hurricane by days end and it could hit florida as a category 2, maybe category 3 storm. The American Red Cross spokesperson Rosemarie Valdez joins us from san juan. Shes on the phone. How are things looking there . How are folks getting ready . Hi. Thank you for the opportunity. Right now, were just Holding Tight and seeing everything pass. They expect a lot of floods, a lot of rain in the next couple of hours so for now, the red cross has been preparing since three days ago, on the materials we need and confirming availability. For this moment right now, we are adjusting expectation of what will be the results of this storm when it passes so that we can start our help to the community. We are thinking tomorrow maybe it will be safest to go out and help people when the storm passes the island. Neil the territory has had to deal with a lot, not the least of which protests little more than a few weeks ago that forced the governor out of office. Theres been disarray, theres been a lot of backandforth between your new governor and our president. Leaving all that aside, its not been an easy time for the puerto rican people. How are they dealing with this latest hit . I think that every time we get to the peak of the hurricane season, theres a lot of anxiety and a lot of stress, because so many people have really present memories of hurricane maria. Thats why we were very specific from the beginning, because the best way to deal with all the anxiety is to prepare. From day one, we were talking about remember to have water, remember to talk to your family, get your preparedness kit on board, your plan, where you will be at. Do you have to go to a shelter. Find out those key things to avoid having to pass over all the suffering and all the trauma that they went through when we had maria. So for now, we just are focusing to reaffirm to everybody that the red cross is taking all the necessary steps to be prepared, to be ready with everything that we need so that once the storm passes, we will be there to start helping the people from especially the east side of the island. We have been monitoring this storm. We first thought it was going to go through the southwest so we geared up to prepare with our volunteers and capacity for those municipalities and now since everything has changed, we adapt to the circumstances that we are seeing now. So we are focusing now on those municipalities in the east, especially two municipalities from puerto rico that are outside of the main island, and we have volunteers there and resources. So that hopefully tomorrow when its safe for us to go out and start helping, we are there to provide the help that people need. Neil all right. Be strong, be well. Thank you for all youre doing. Rosemarie valdez with the American Red Cross. By the way, we are focusing on some interesting political news in this country. The fourth republican u. S. Senator has decided not to seek another term. In fact, in the case of the georgia senator johnny isakkson he wants to leave at the end of the year. Hes been battling parkinsons disease. 12 republican representatives including the latest sean duffy of wisconsin have indicated they are leaving as well. Whats going on here . After this. Neil all right. Republican senator Johnny Isackson is the latest republican who says hes going to retire. In his case hes been battling parkinsons disease. He wants to leave by the end of the year. Hes the fourth senator on the republican side to do so. 13 republicans in the house have already indicated that they want to step down. Sean duffy of wisconsin, the very latest there. Now, the reason why this is getting the attention it does is because we had a similar phenomenon going on certainly in the house, where up to 40 republicans were opting out of running again, and that somehow presaged what would be the toppling of republicans as the dominant party in the house of representatives. Is this happening all over . Realclear Politics White House reporter on that signal. What do you think . Reporter well, members retire for a number of Different Reasons, but it is alarming that if you go look at the house side, more than a dozen members are retiring. Thats three times as Many Democrats and i think that if you ask them, you know, they will tell you that being in the minority really limits what they can do but then if you also speak with them privately, i think what they will tell you is that theyre not ready for the slugfest that is going to be 2020 with President Trump atop the ticket. Neil so are they just getting out while the gettings good or what . Reporter i think it might be a little bit of that. You know, this is going to be another historic election. Theres a lot thats going to be happening and they are looking at the indicators right there. Again, there are a myriad of reasons why these guys get out. Its not as big as it was in 2018 but with this number of republicans retiring right now, and the Republican Party losing some rising stars like sean duffy in wisconsin, who is going to be on the front lines of keeping that state, its something thats got gop analysts a little bit concerned. Neil you know, im going to enter into the mix John Hilsenrath and jeanne zaino. Jeanne, one of the things that caught my attention, this notion that even with a Strong Economy, we have this quinnipiac poll that shows more americans are worried about it getting worse, not better, and that doesnt jive with the numbers that still look pretty good. Whats happening . Yeah. You know, this has been a problem right along. Where the numbers are actually good, employment is historically low, the economy has been on an upswing. But there are all these worrying signs and we were just talking about one of the big ones which is the tariff war with china, the failure for nafta 2 to even get in for passage, you know. People feeling insecure in a lot of ways. So i think people are right to be concerned, although at this point the numbers look good, but pollsters are asking are you concerned and for many people, the answer is yes. Can i just say one thing about the numbers . Growth was pretty good in 2018 and certainly the Unemployment Rate is exceptionally low and its great news for millions of americans. But job growth and Overall Economic growth has been slowing. The numbers have been good overall, but theyre not moving in a great direction, and you know, this is an economy that the president was hoping would be sustaining 3 , even 4 growth. It doesnt look like were doing that right now. Now, this is one reason why the president is so angry at the fed and is talking about how the fed should be cutting Interest Rates, because were not living up to the 3 numbers that everyone was talking about a year ago. It looks like we have come back down to around the 2 range. Which by the way, is exactly what economists predicted would happen when passing the tax cut and doing all this stuff. Neil this is the first time i heard you credit economists. I love economists. Neil by the way, on the whole issue of the economy and everything, senator Lindsey Graham yesterday defended tariffs, but admitted that the impact to consumers will be severe. Take a look. I think you were saying the greater good is keeping up the fight, but i dont know if a lot of americans know that theyre going to soon be feeling that. Do they . Well, i think the president knows that if he surrendered to chinas cheating it would devastate our economy and the World Economy over time, so the price to standing up to china i think is a lot less than just giving in to china. The tariffs are a tool. Nobody likes it as policy, but i dont see how you make china change their behavior until theres a consequence to what theyre doing. Neil i want to raise that with you, because heres the first republican of some prominence to say we ought to be pounding that message that americans, even though the greater goal is the good here, that to get there, americans are going to feel some pain when they go to the store, to walmart, target, whathave you, and that the president might be misplaying that by saying tariffs are a wonderful thing, they are revealing wonderful results. What did you think of that . Sonny perdue got a taste of it the other day when he was talking to a Town Hall Group of farmers, when he said what do you call two farmers complaining about the economy, where are they, they are in a whine basement. That cheesy joke aside, what we have already seen is that a core group of President Trumps supporters, those guys with trump bumper stickers on their pickups, farmers, they have been the casualties of this trade war. We have seen that from the beginning of the year to june, bankruptcy filings on farms are up 18 . Now, polling showed that a lot of those guys still think that yes, at the end of this trade war, they still believe that, you know, as their sort of patriotic duty that things will get better than worse, but you know, after the harvest, after they see a diminished market, farmers in key states like michigan, pennsylvania and wisconsin, that support, that could be thinning. That could be a problem for the president s reelection. One thing about consumers, theyre not getting hit right now. If you look at inflation, Consumer Price inflation, its below 2 and its been below 2 for a long time. So they arent feeling it right now. A lot of farmers are feeling it, manufacturers are feeling it, you know. Neil a lot of American Distributors who deal with china, they are feeling it. They are absorbing a lot of it. A lot of people, the consumers themselves havent been hit that hard. The other thing i just wanted to mention is people the market wants this thing to end, already. We are trying to completely reorder the trading relationship between the two the worlds two largest economies. That takes time. I just dont think this thing goes away overnight. Everyone wants neil before the election . It took us 30 years to get here. You know . If the election is the standard by which youre not going to fix the problem if thats your benchmark. Neil if it is that, final question to you, philip, is that a worry and should the president be worried . I think what we have seen so far is that a very Strong Economy has sort of acted as a bandaid for some of the increased costs that we have seen from the trade war right now. I think that this president has been very consistent that hes going to put tariffs on, people are prepared for him to do this. They heard him say that he was going to engage in this trade war in 2016 and they are ready for that. Whether or not they are ready for the costs that come along with it when they eventually do hit, as this continues, thats an entirely different question. Neil all right. I want to thank you very much for joining us. I owe an apology to you. I have gotten some email on this. Im not saying john oh, my god. Neil i was referring to the propensity of the wealthy to stop buying penthouses. I want you to get your you owe two apologies. I dont own a penthouse. [ speaking simultaneously ] i drive a kia, for crying out loud. Neil i apologize if some of you heard that. Its all his fault. More after this. Truecar is great for finding new cars. Youre smart, you already knew that. But its also great for finding the perfect used car. Youll see what a fair price is and you can connect with a truecar certified dealer. Now youre even smarter. This is truecar. Their medicare options. Ere people go to learn about before theyre on medicare. Come on in. Youre turning 65 soon . Yep. 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But Boris Johnson, the english or uk prime minister, has every right to do this even though there are those right now saying they may try and take him to court, but hes essentially suspending parliamentary action until october 14th. Basically that works out to 23 working days. This coming at a time when we are only nine weeks away from another eu brexit deadline on october 31st. Opponents are calling this a coup, a constitutional outrage, a blow to democracy, but Boris Johnson had led the Core Campaign to get britain out of the eu. He says come hell or high water, we are going to be leaving on october 31st, deal or no deal. The thing is, the majority of members of parliament, even those in his own party, have talked out against a nodeal exit from the yoeuropean union t others say no, well be fine. Regardless, this really puts the squeeze on mps, the members of parliament who are going to do everything they can to stop Boris Johnson from getting the uk out of the eu with no deal in place. Very interesting, very dramatic. Neil outside of british banks that were sort of caught in the crosshairs, no effect here, no effect anywhere else. What does that mean . No effect on . Neil stocks. But the british pound is moving significantly, dropped about 1 . Actually over 1 last night when this news was announced. The pound has been really the Way Investors have played this brexit drama. It dropped from 135 a few months ago when the odds of brexit were getting lower and investors were really betting on no deal or no brexit happening at all. Neil what do we make of that . I think like youre saying, there are effects. The pound is getting weaker, the dollar is getting stronger. Neil just what the president doesnt want. Not at all. I think so much of our economic challenges right now go back to board rooms. The more uncertainty there is about globalization, about the Global Economy, i think the more uncertainty you get in boardrooms about how to proceed. Maybe the stock market the stock market tends to ignore things until it cant. Then it all happens in a day. Maybe in october, the stock markets going to wake up and say oh, the european economy i think by the middle, end of october, we could see an impact on the stock market. I think quite frankly, you find some investors saying Boris Johnson didnt have a choice here. He either was going to continue going down the path that they have been down and that wasnt working, or he was going to do something dramatic. I think this is his shot to do something dramatic. Whether it works or not. Because to ashleys point, there are going to be constitutional challenges to this. If it doesnt work for him, i think we may see a really dramatic impact. Neil as you pointed out, ashley, europeans are secretly more worried about this than the brits are, right . I think so. For a start, if we crash out or the uk crashes out with no deal, they may not get that 39 billion dollar payout, the divorce settlement, if you like. Theres a few things that can happen here. I think Boris Johnson is trying to run out the clock, frankly. But i think what will happen is the opposing parties will try and get in a vote of no confidence and i dont think that will be successful. If it is, then we could be going the a general election in october. So still a lot of unknowns out here. But i do believe Boris Johnson, he campaigned on this, he promised it and hes really going for it now. Its going to be very interesting to see how this plays out. Neil i see another trip to london in the near future. Thank you very, very much. Ashley webster. This is a little novel. The former new york fed president urging that the fed not enable President Trump. Who says its not tit for tat over there . After this. Theres a company thats talked to even more real people than me jd power. 448,134 to be exact. They answered 410 questions in 8 categories about vehicle quality. And when they were done, chevy earned more j. D. Power quality awards across cars, trucks and suvs than any other brand over the last four years. So on behalf of chevrolet, i want to say thank you, real people. Youre welcome. Were gonna need a bigger room. Oh, wow. You two are going to have such a great trip. Thanks to you, we will. This is why voya helps reach todays goals. All while helping you to and through retirement. Can you help with these . Were more of the plan, invest and protect kind of help. Voya. Helping you to and through retirement. To the wait did frowe just winners. Prouders everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy a new samsung note. Click, call or visit a store today. Neil all right. Usually you hear from the president , not so often members of the Federal Reserve, but the former new york fed William Dudley getting controversial, saying the fed should not cut rates because that would help the president get reelected. He was that blatant about it. Back with our panel. Thats pretty clear where hes coming from. Nothing to help the president. I find that incredibly problematic. Obviously, the president has invited this political fight with the fed, no question about that. Hes been after powell and of course, if the economy starts to slow, he will blame powell first and the democrats second or vice versa. That said, im incredibly uncomfortable with members of the fed making decisions about Interest Rate cuts and other things based on who they want to win the election. Wait a second. I got to jump in on behalf of my man, the dudmuffin. Neil dudmuffin . [ speaking simultaneously ] look, the dudmuffin did not say we shouldnt do this because its going to help President Trump get elected. He said the president neil dont reward his idiotic behavior. Which is hurting the economy. Hes saying if you continue to cut rates thats going to curb the blow from the trade war and allow President Trump to continue neil buttress mistakes others might make. If you are enabling the trade war which is damaging the economy, you are doing more damage to the economy. I cant call him the dudmuffin. First of all, bill dudley doesnt work at the fed anymore. Thats important. Neil former fed chiefs talked about the president jawboning the fed but this was another level. You cant defend what he hurt the fed. What bill dudley did yesterday hurt the institution hes trying to defend. Neil he has to know that. I didnt know him as the dudmuffin but hes a smart guy. Im surprised he did this. They were surprised and bothered at the fed about this. It threw the fed into a political argument that they dont want to be in. Neil but this news that some of them secretly agree . You think some of them secretly agree . I think that some of them are frustrated with this president. By all means. But when they say they dont want to get involved in politics i think its about the framing. The argument bill dudley is making from an Economic Perspective makes complete sense. If you are saying this thing is being taken by the president to extremes and the fed is enabling that, the fed should not be an enabler. Thats his entire argument. That actually makes sense. Now, its being twisted a bit to say we dont want to help President Trump because President Trumps a bad guy. But that wasnt the argument. Imagine if it was, if the shoe was on the other foot and this was being said about a democratic president. I do not think for the legitimacy of the fed and the institution itself, a current or former quite frankly does the institution any good when he makes the statement. He can as a private citizen. He has every right. He was a senior guy at the fed. You wonder who hes working for. Neil hes not the dudmuffin i know. Im going to tell you this is exactly the dudmuffin i know. He was all about economics and all about making Good National sense. If the trade wars hurting the u. S. Economy, the feds job is to protect the u. S. Economy, maintain price stability, reduce unemployment. The trade wars hurting both those things. You should make those decisions regardless of the politics of the time. The fed also wants to defend its own political independence. To put for a former fed official to put the institution now in the middle of a political debate that it wants to have nothing a part of, hurt them. I think fed chair Jerome Powell has done hes put a lot of effort into staying out of that fight. I think bill dudley was saying no you cant be running away. Put up your dukes and get after it. Neil final word, dionmuffin. Thank you all very, very much. Great job. You took it too far. Neil yeah, i did. I realize that now. After this. Neil from Tropical Storm to hurricane. Dorian has strengthed with watches from puerto rico a Virgin Islands t could eventually hit the florida, georgia, North Carolina region. To go to say. Here charles payne. Charles the inverted yield curve steepens. Guess what, investors are confused about the message. The stock market exhibiting great resolve. Where do we go from here . We have expert panel to work it out. One of the best former heavy hitters taking a shot at President Trump suggesting that the central bank that makes policy decisions that wont help the president s fight with the trade war in china. I will go in depth. First Johnson Johnson. Now purdue could be on the hook for a blockbuster opioid settlement. Why the owners are considering a possible 12 billiondollar deal and would that be fair . That and so much more on