Transcripts For CNBC The Kudlow Report 20130813

Pocket costs for consumers. All those stories and more coming up on the the kudlow report, right now. Good evening. This is the kudlow report. Larry is off tonight. Airline stocks plunging today. The u. S. Government in several states suing to block the merger between u. S. Airways and American Airlines. Phil lebeau joins us now with the details. Reporter this is all about whether or not you believe the merger between u. S. Airways and American Airlines hurts competition around the country. The Justice Department says that is clearly whats going on if these two airlines merge. A number of routes where there is not enough competition. Well talk about one specific airport in particular. The lawsuit will also slow down amrs bankruptcy exit. There was supposed to be a vote on thursday that would allow that exit to happen contingent upon the merger between u. S. Airways and amr. That is likely going to be delayed. U. S. Airways Ceo Doug Parker says this merger will not be happening in the third quarter. We talked about where we may see some competition concerns from the Justice Department. Reagan airport, d. C. , that is the primary area that the Justice Department pointed out. They say that this merger will hurt competition for people flying in and out of that airport and they point out that 63 of the nonstop flights at reagan would be controlled by u. S. Airways and amr if they merge. In a Conference Call today with reporters and assistant attorney general said we believe there will be hundred and hundreds of millions of dollars in consumer harm if this merger goes through. U. S. Airways and amr both issuing statements today saying they plan to fight the doj. They are defending the benefits of the merger, saying it gives people more choices and ultimately more competition around the world. What also bothers a number of people who have supported this merger, is the fact that this is the first time in the last six years when you look at the history of Large Airline mergers, the first time that were seeing the doj step up and say uhuh, cant get together. When united and continental got together, it was approved. When delta and northwest got together, it was approved. Now as american and u. S. Airways are close to making their merger happen, it is being blocked by the doj. Finally want to take a look at shares of lcc. They were down more than 10 today. The biggest oneday drop since august of 2012. Michelle . Whats the difference between now and then . All those other mergers were approved. Is it the change in administration, phil . Is it the fact that back then, people assumed that airlines were just big money pits that always lost money, and theyve been profitable for the last several years. A couple of things, michelle. Youve got to look at the continental united one happened under the obama administration. So a number of people are saying when you look at these mergers, you cant allow those two to go through, the one that created the new delta and the new united, and then stop american and u. S. Airways from getting together. But the doj is now saying listen, these four Major Airlines, american, united, delta, and then southwest, the new southwest, when it combines with airtran ata, will have 80 of the flights. We all knew they were going towards this eventually. So why were the previous two major mergers approved and this one being blocked . Thats what bothers a lot of people. You cant start the rules one way and then change them midcourse. Unless you thought youd have a point where there was just not enough competition and these guys were way too late. Thats true. That is the argument as well. Thank you, phil. Okay. So what impact would this merger really have on the consumer . Lets find out straight from the source of a lawsuit that rocked the Airline Industry today. Here with us on the phone is joseph alioto, filed the suit to block the merger. Vaughn kordell, a pilot for Major Airline joins us as well. Mr. Alioto, im going to start with you. You must be victorious today. Im certainly glad that the department of justice has finally checked in on what has been going on in the Airline Industry for the last just very few years, as was pointed out by phil just recently, the fact of the matter is that the that u. S. Air first had their first combine with air west in 2005. It was followed in 2008, which was a very large merger, which by the way, my clients challenged. And that was the merger between northwest i dont want to interrupt you, sir. We just got a History Lesson from phil. What would it mean for consumers . Okay, what it means for consumers is that this is the final real merger, the prices are and have been substantially raised since those past mergers. I think mistaken about that, although not by the department of justice. There are over 1,660 different routes in which these two Major Companies are about to compete against. Are we talking about 10 a ticket . 100 a ticket . Is there any way for you to the last increase by them and jointly was between 4 and 10 for any ticket over 600. Plus change fares that went up to 200. They did it all together at the same time. The idea that both of these airlines that just reported the best profits theyve ever had in the last quarter could stand alone, neither one of them is in bad shape. Neither one of them needs to be bought out. And the idea that they could stand alone, and nonetheless they would rather consolidate. Let me get Vaughn Kordell in here. Youve heard what mr. Alioto had to say. You wanted this merger to happen. What do you say to that . Well, we looked at it from the Capital Market perspective and the benefits of consumer. We have to start with the understanding that these airlines lost about 11 of revenue, 77 billion in todays dollars. So in hindsight, we can say with great certainty that there was 8 , 10 too much in the system. So the airlines were unable to invest in competitive resources. In other words, old airplanes and the lack of new modern Technology Means higher costs, which requires higher revenue per passenger. Fares have not gone up very much, a few Percentage Points over the last year or two. Fares have gone up, but this is an industry that is not viable, cannot invest properly in the competitive resources, and the benefits of a more efficient and lower cost Airline Industry and merger between u. S. Air and american will accomplish over a billion dollars of synergies, one of thi1 3 of that could be h consumers. We would argument that the Justice Department lawsuit is deeply flawed, it does not make the economic case. By looking at a small slice of the total merger, theyre actually misleading on the relevancy of the fare increases. What do you say to the notion that for the last four years theyve actually been quite profitable . I mean, you exclude 2008 and 2009, which were horrendous years for every industry in the entire world. But beyond that, airlines now have become profitable. Additionally, both of these airlines have said they can make it on their own. They could stand alone. These airlines are not earning the cost of capital. We look at a full business cycle, break even on the cost of capital, and thats an openended question. Yes, the airlines are more profitable because theyve cut pension and Health Care Costs and major labor costs. And remember, the Network Airlines, the big players, american, delta, united, u. S. Air have a large percentage of their passengers and departures with low labor cost regional partners contracted out services. This is a major restructured Airline Industry, and they have great incentive to keep fares down. On that point, though but i want to make sure i understand clearly. Youre saying that yes, fares could go up some, but they need to because right now the airlines can not cover their costs with capital. And that means what. They can invest in new fuel efficient aircraft that burn 25 less fuel, have less Maintenance Cost and more reliable and better for the customer and those efficiencies equal lower cost. Mr. Alioto, what do you say to all of that . I think that mr. Cordle is mistaken in a lot of major ways. There have been substantial reduction in capacity, of course. That, of course, is because of the consolidation. There have been substantial cuts in departures and availability. Hes wrong about the prices. Theyve been increased seven times. He didnt say they didnt go up, he just said they havent gone up that much. Theres been a reduction in capacity, because when you have too much supply, then prices fall dramatically. And sometimes you dont have a profitable business anymore. Joseph needs to check his facts on the fares. The only testimony that was given about anybody not being able to make their cost of capital were for any new airlines. In other words, the variants were enormous. They have over 90 , if you took the top three, they have 96 , if you took the top four. In terms of their available seat miles, total revenues. If you took those, these people control over 85 . If you took their total assets, its the same thing. Theres no competition anymore. Let me interject. Let mr. Cordle get in here. Joseph may be great at making the argument, lawyers typically are, but hes no subject matter expert, and thats very clear in what hes saying. Hes completely misrepresenting the airline economics. These Network Airlines have lowcoast regionals, so when we look at this control and this methodology, we look at a very wide portfolio of units of capacity that bring cost down. So the whole premise that this Airline Industry should not merge is flawed. Deeply flawed. And joseph needs to go back and check some facts. Mr. Cordle, thank you so much. Mr. Alioto, thanks for calling in as well. We really appreciate it. Okay. Carl icahn tweets, the markets listen. Icahn announcing this afternoon hes taking a big position in apple. And then things really started moving. Look at this intraday chart. Thats the oneday chart. Can you guess at what time today carl icahn tweeted that he had taken a position in apple . You only get one guess. Later, just take a look at this place. No, its not a spaceship. This is the new Training Facility for the university of oregons football team. I thought that was amateur sports. Uhuh. And dont forget. Free market capitalism is the best path to prosperity. The kudlow report is coming right back. Weve been bringing people together. Today, wed like people to come together on something that concerns all of us. Obesity. And as the nations leading beverage company, we can play an important role. That includes continually providing more options. Giving people easy ways to help make informed choices. And offering portion controlled versions of our most popular drinks. It also means working with our industry to voluntarily change whats offered in schools. But beating obesity will take continued action by all of us, based on one simple common sense fact. All calories count. And if you eat and drink more calories than you burn off, youll gain weight. That goes for cocacola, and Everything Else with calories. Finding a solution will take all of us. But at cocacola, we know when people come together, good things happen. To learn more, visit coke. Com comingtogether billionaire investor carl icahn make headlines once again today. This time reportedly investing more than one billion dollars n apple. Icahn wrote the news in a tweet that read we currently have a large position in apple. We believe the company to be extremely undervalued. Spoke to tim cook today. More to come. Apples Trading Volume surged after that tweet, spiked 300 when it comes to volume. Take a look at the stock. Closed up almost 5 on the day, adding more than 17 billion to its market cap just this afternoon alone. So is this carl icahns magic touch at work . Joining us now from new york is the former Reagan Deputy assistant secretary treasury and abigail doolittle. Abigail, im going to start with you. Carl icahn strikes again. Was this tim cooks best day ever or worst day ever . I think it had to be probably pretty close to his best day in the near term. This is probably a game changer for apple. A real inflection point, a bullish inflection point. I have to imagine that mr. Icahn is seeing something in that Business Model thats going to drive revenues higher and stop the slide of messy quarters. I think youre going to see Gross Margins restored. I think in the near to medium term, were probably looking at a 570 stock. This. Cos from someone whos been pretty bearish on apple for a while. But david, icahns already making demands. Thats what he does. He wants a big stock buyback. When tim cook got this call today, was he happy or not . I think he was probably happy. Remember the previous demands on apple were that they do something financial engineering. And apple responded by borrowing a bunch of money and paying a bigger dividend. So i think icahns request will probably be in the nature of making the company grow faster, so thats probably a plus. Does he know anything about how to do that . Well, hes shown a lot of companies that there is a way to increase earnings and increase revenue. So i think that part of it is pretty much a given. And you saw the results in the market today. What do you think hes going to do first thing . Thats hard for me to say. Im really not an expert on apple. But i think hell probably go in there and really try to improve the Gross Margins and i think hell probably try to boost revenue growth. Its slid over the last couple of years from 60 down to less than 10 . I think he wants to probably get that back into the teens. This isnt anything new, right . But you bring somebody to the table whos got a lot of power and a lot of money and a lot of power of persuasion, and loves, loves to use the media and his mouth to make change. I think thats a great point. Because this has really been a psychology stock for so many years. People have loved it. Now you have this big billionaire behind it. I think you could really see that tide turn in terms of people are going to get onboard and become apple lovers again. I think thats a great point on your part. When you have that positive momentum, it can help not just the stock, but i think that can sometimes especially around an iconic type of iphone, maybe help boost sales again. Meanwhile, apple helped stocks raise rebounds. The tenyear treasury yield was also up for the second day in a row. Are Interest Rates still too low . The markets moved higher. The tenyear yield is 7. 22. It wasnt that long ago we were talking about 1. 5 . What does it mean for companies abilities to fund themselves . I think it ends up being good for the economy because its reflecting growth. I think what happened in may and june is what we should call a reset in the bond yields. They had just gotten too low in the spring. Now bond yields will go up gradually and i think stair step fashion if the economy accelerates. The signal today from retail sales was theres some acceleration going on in the bond market price. Thats all well and good. Yields are still low. Thats okay. I have to take the other side here, michelle. When i look at rates at this point, i dont think theyre too low at all in the context of this weak global environment. When we think about the normal cycle, as many people know, you start off with the stock market cycle. It leads to the economic cycle, the business cycle. And then it leads into the Interest Rate of the rising rate. The business cycle, i dont know. 2 gdp, you tell me. Its almost like trying to put out a fire that never even sparked. If we look at the housing related stocks, weve seen real weakness. 15 declines since mid may. Investors dont think the bright spot of this economy can handle that. Look over into the eurozone. Youre the economist, david, what do you say to that . I think there are other bright spots. I agree with what abigail was saying, but if you look into what was happening in the household survey, Small Businesses seem to be beginning to hire workers. Weve gotless risk of a tax increase now than weve had in many years. And so thats a plus. This prospect that the fed will taper remember what the feds been doing. They borrow money from the private sector. And they put it into really deadend government bonds. One of the highpriced assets in the world. So if they will stop doing that, that gives a bit of a green light. Light at the end of the tunnel for the rest of the economy. So im hoping theyll actually get to a taper maybe in september and that will be a positive sign for the rest of the economy. David does not fear the taper like so many do. Lets move on to a positive sign in the economy. The budget deficit narrowing. The federal government has a 607 billion deficit so far this fiscal year. This is positive news, folks. Thats because its down from 947 billion at this time last year. Isnt this a sign that the spending cuts and the sequester are helping the economy, david . I think it is. When the government borrows money, the private sector looks at it and says wait, were going to have to pay it back. When the government spends money, thats going to come out of our pocket in the future. So they hold back on hiring investment. And so one part of the good case over the next year is the governments taking less future money from the economy and thats just plain good. Abigail . Maybe so. I think, though, in the broader context of what were dealing with right now, potentially Interest Rates rising and i dont think theyre going to stair step. I think they could spike higher. Crude above 100. I also think something investors arent really paying a lot of attention to, the unwind of the yen trade. Those are big risks. It could be a perfect storm. Be that as it may, positive news to some degree. I think that there are broader issues to be dealing with that investors are weighing right now. I agree with those points. So oil is too high for equities to really keep motoring along. And the japan situation is not coming together. And so weve got negatives there. So im thinking the glass is half full. Its not three quarters full. But we do have a smaller deficit. For that, we can all be pleased. Thats pleasing. David, good to see you tonight. Thank you so much. Abigail, you, too. Youre staying right here. Because now were going to talk about that other activist investor. What is he thinking . We cant get a hold of ackmans psychiatrist, so were going to try to analyze him right here after the break. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. 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So what kind of guy does business like this . Here now is a real estate reporter. And the author of a 2011 profile on bill ackman. Still with me is abigail doolittle. I didnt. I like it, i like it. This is toned down, actually. You did a profile of bill ackman. One thing that struck me success when he was playing tennis with his daughter. I thought it was very insightful into how competitive he is. Please retell the audience that story. Right. So when i was reporting on the profile, bill took me out to Randalls Island here in the city where he was had a twohour tennis match with two of his traders. Meanwhile, his daughter, she was taking lessons. And at the very end, well first off, bill was complaining about being a little rusty. He had been on vacation, so dont hold any of the plays against him even though he certainly seemed to dominate the match. Against his traders. Hes often talked about helping warm up andre agassi. So his daughter comes over. Shes across the court from him. Every ball goes whizzing right at her. Probably because she was the easiest mark on the court. But also id like to think because he was trying to toughen her up. How old is she . I think she was 13 at the time. 13 at the time and hes just whipping the balls right at her. Right. Uhhuh. Deeply competitive. But for her own good. Just like jcpenney. Just like herbalife. They need to listen to bill and all will work out. Hes resigning from the jcpenney board after this very acrimonious fight. I cant imagine any of this surprises you. Maybe that it didnt drag out longer. Hes certainly been pretty obstinate in the past with some of these bets. I think target dragged on for quite a few years longer. Mbia was a sevenyear fight. Right, exactly. A lot of these things pay off. Canadian pacific is doing well after he shook things up there. I think one of the things you can look at it two ways. Hes either very patient or very stubborn. But from a lot of the people i talk to, he always thinks hes right and its his job to convince the rest of the world that thats the kascase. When we went out for breakfast after the tennis match, he paid with the target credit card he kept in his pocket two years after. Abigail, as an investor, when you see what ackman does sometimes quite successfully and sometimes really, really poorly. Speaking to jcpenney here, i think this boardroom drama is attentiongrbi i attentiongrabbing and distracting. I think investors want to focus less on ackman and whether or not they can bring a turnaround about. Relative to the upcoming quarter, theyll be looking at the cash burn. 1. 1 billion. So long as its not comprised of operating losses and comprised more evenly of Capital Spending to suggest that they are building out properly. I think its going to be a positive. But i think this whole boardroom drama is very little to do here. What struck me about this boardroom drama is that he started this who process. It was ackman who said got to bring in ron johnson from apple. It was time, it was inspired. The board went along. It was a disaster. And here he is again saying well now we need a different ceo. Its like hes a glutton for punishment or he cant admit that hes the reason its such a disaster the last go around and hes stepping in it again. Yeah, i certainly think that bills probably the last person who would ever tell you that it was his mistake. He famously throws mixers at his apartment on Central Park West where he tries to set people up, so maybe thats what he figured jcpenney needed. And hes never invited me . All right. Not after tonight. No, definitely not. But you in that suit, you should go. Definitely. Looks super cute. Matt, thanks so much. Abigail doolittle, good to have you on the set as well. Now its just the latest snag for obama care and another crucial part of the new Health Care Law is being delayed. This time, its the part that was supposed to make the Affordable Care act actually affordable. We have that story next. Hey did you know that honey nut cheerios has oats that can help lower cholesterol . And it tastes good . Sure does wow. Its the honey, it makes it taste so. Well, would you look at the time. Whats the rush . Be happy. Be healthy. Are you flo . Yes. Is this the thing you gave my husband . Well, yeah, yes. The name your price tool. You tell us the price you want to pay, and we give you a range of options to choose from. Careful, though that kind of power can go to your head. That explains a lot. Yo, buddy i got this. Gimme one, gimme one, gimme one the power of the name your price tool. Only from progressive. Welcome back to the kudlow report. Im Michelle Caruso cabrera in for larry kudlow. In this halfhour, call it the government gone wild. Wherever you look these days, seems like uncle sam is getting very involved in the free markets. The headline today, the effort to break up the u. S. AirlinesAmerican Airlines merger. Also, look at this new facility for the university of oregon football team. Are we sure we still want to call College Football an amateur sport . Were going to take you inside the palace that bill knight built. Thats a little later this hour. President obama took questions about the failing implementation of the Affordable Care act last week in his press conference. Did he really answer any questions . Take a listen and decide. I want to ask you about two important dates that are coming up. October 1st, youve got to implement your Health Care Law. You recently decided on your own to delay a key part of that. If you pick and choose what parts of the law to implement, couldnt your successor down the road pick and choose whether theyll implement your law and keep it in place . Were not in a normal atmosphere when it comes to quote unquote obama care. We did have the executive authority to do so. And we did so. But this doesnt go to the core of implementation. Now the New York Times reports the administration has delayed yet another part of obama care. The limit on out of pocket cost for patients. Is this just more evidence that the entire health law should be delayed or even repealed . Here now is former Obama Deputy White House Press Secretary bill burton, now Vice President and managing director of global strategy group. And also hatley heath. This is the third part of obama care thats getting delayed or not implemented at all, hadleigh. It grows increasingly important that its just incredibly difficult if not impossible to implement. The news with obama care is this. A new day, a new delay. This is an admission, or should be to the American People, that this law is unworkable. This is on the heels of the white house providing a special kind of waiver for congress and their staff. If its not good enough for them, its certainly not good enough for us and this means we need to delay the entire law or repeal it. Bill, what do you think . A lot of this has to do with basically software. When you have to bring together all of these companies nationally, trying to figure out who has met their out of pocket costs. Its become incredibly difficult. Small companies have trouble with their i. T. And their software. Imagine the National Government trying to do this. Well, michelle, as you point out, this is a big deal. When youre implementing a big law, sometimes there are things that are going to be particularly complicated. When i was at the white house and the health care was being put together, folks knew that this was going to be a very complicated thing. What the president was addressing in that press conference where he talked about the one delay, you would think that the Business Community would be happy that he is listening to the Business Community and heard that some of the complications they were having. So to make what is a big law more manageable, did delay one piece of it. The report in the New York Times today was a little misleading in the sense that theyre talking about something that had been posted since february, that people knew was coming. And secondly, a lot of these Consumer Protections that are going to bring costs down for folks are already in place or will be implemented next year, like not being able to be denied for preexisting condition. Things like capping out of pocket costs. Banning a lifetime caps on Health Insurance. So consumers are already experiencing a lot of the benefits. I thought the cap on out of pocket costs is whats being delayed at this point. Thats not going into effect. No, thats one piece of it. And yes, the piece of it will take time to implement. And there are complications with the software, as you say, and listening to business you down play there are complications with the software, as you say. You say that almost in a banal way. This is a massive program that is going to be nearly impossible. Did you install microsoft, the most recent version of windows . I mean, it is just an enormous issue dealing with youre right, michelle. Hold on, one second, hadley, let me respond to that. This isnt just about the software in the federal government. These are the individual businesses and providers who have to change up their systems as well. Its emblematic of just how difficult this is going to be, if not impossible. Hadley . I totally agree with you, michelle. This software is not something if we have some kind of virus we lose files on our commuters. This has to deal with personal health care data, or when the government is using it in these statebased exchanges. We have to have a system in place to verify data on peoples incomes, Health Insurance status. Realtime data. And were simply not ready. The programs are not ready. If anything, i would hope that republicans and democrats could agree that this law needs to be delayed, that we need to take our time with implementation, because no one wants to be a part of that train wreck, republicans or democrats. The president is not asking congress to do that. Hes just doing it himself. What did you think of his response to the question about selective implementation . Well, i think that bill is right that the Obama White House is listening to business, but theyre not listening to individuals. Theyre not listening to the many numbers of americans who now say that they disapprove of obama care, that they dont want any part of it. So if the white house is willing to listen to business, they ought to listen but you approve of his picking and choosing parts of the law . Absolutely not. In this country, congress is supposed to write the law. If you want a law on the significant provision of the law, like the individual mandate as will house has passed legislation to do, then you need to do that through congress. We have a legislative process to do these thing things. The Republican House has made clear that they have no intention of doing any such thing any time soon. Let me just make one point about what hadley said about listening to individuals. Hold on, finish your thought about why is it okay for the president to selectively pick and choose what part of this bill, what part of this law will be enforced or wont be . Well, what the president is doing is implementing what is a very complex change to the way that our nation treats health care in order to curb the rising cost of Health Insurance. So that justifies circumventing law . I would hope we would expect of our leaders that they take prudent steps to balance the concerns of business and the need to aggressively move forward. The president just charged ahead and didnt listen to anyone in how he was implementing this law. Probably wouldnt make a lot of sense. Thats what hes doing. As the rubber hits the road, what we have to do is balance out those needs and make sure that health care can be as effective as humanly possible and we can get cost down as quick as we can. But the republican talking point on this, which is just lets stop obama care, lets defend obama care. That is not an answer. Thats a political talking point. What the American People need is an actual plan. There are many different strategies to push back against obama care, and thats what people who support a free market are doing because we care about the quality of health care in our country. Because we care about the choices available to americans and their families. This is not necessarily a political footfall. Lady and gentleman, thank you so much for joining us tonight. Theyre coming back. Theyre not moving. Theyre going to be back with us in just a minute. Now the government is getting involved in everything from big coin to airline mergers. Whats it going to take for washington to stand down just once, please . Thats next. [ marco ] im a student at Devry University. And this is my home team. This is my large lecture hall. This is my professor. And also my coach. This is my booster club. This is the guy whos graduating ready for a great career in technology. [ male announcer ] in 2012, 90 of Devry University grads actively seeking employment had careers in their field in 6 months. Join the 90 . Learn how at devry. Edu. Join the 90 . License and registration please. Whats this . Uhh, its my Geico Insurance id card, sir. Its digital, uh, pretty cool right . Maybe. You know why i pulled you over today . Because im a pig driving a convertible . Tail lights out. Fix it. Digital insurance id cards. Just a click away with the geico mobile app. We replaced people with a machine. R, what . Customers didnt like it. So why do banks do it . Hello . Hello . if your bank doesnt let you talk to a real person 24 7, you need an ally. Hello . Ally bank. Your money needs an ally. Tonight, we have several examples of the government involving itself in almost everything. First the proponents of bitcoin pride themselves on operating without any central authority, but the senate has something to say about that. They have reached out to several agencies about the Virtual Currency. They want a Virtual Currency policy. We continue now with former Obama Deputy White house secretary bill burton and independent womens senior Foreign Policy analyst hadley heath. We had bart charlton. He wants to regulate anything with a pulse. And even he said he wasnt that interested in regulating bitcoin, and yet the senate wants something done here. Whats going on here . A couple things. First, if you look at the folks in the senate looking to ask more questions, they include tom carper, a democrat, and tom coburn, not just a republican, someone who a lot of people think is into government overreach. Bitcoin is at the stage where it could be anything from the next huge new thing, to just the same old thing that its been. Small confined currency. When people get together and decide to put together a currency, it seems like something that the government ought to at least take a look at, especially if its a platform or a vehicle by which people can launder money and move around funds in ways that the government probably ought to keep an eye on. Hadley . I understand that our congressmen, just like other americans, probably want to understand a new market and a new innovation, and ive got no problem with them trying to understand whats happening here. But i also understand that the federal government impulse is to regulate everything with a pulse. And regulation should focus on preventing criminal activity, preventing fraud, protecting consumers. But going beyond that to micromanaging every aspect of a business is not helpful for us. Moving on. The ink is barely dry on North Carolinas new voter i. D. Law. Two lawsuits, though, have already been filed against the tar heel state. The Justice Department already fighting a similar law in texas. Will eric holder challenge North Carolina as well . What do you think of this law . I am a proud north carolinian. I understand the handups people have with these laws. I understand voter i. D. Laws are controversial. But whats happening in North Carolina is mainly bringing these election laws at the state level in line with where the majority you have to have a photo i. D. To vote. Thats right. Theyll become the 34th state to have that requirement. I understand the criticisms with that kind of policy at the state level, im also if you feel disenfranchised having to bring your drivers license to a polling place, think of how disenfranchised are when others cast a ballot five or six times. I recognize that voter fraud why are you laughing, bill . Because its hilarious. There are no cases of voter fraud that have been stopped as a result of these laws. How do you know . What are you talking about, how do you know . When people have drilled down and investigated. Look it up on the internet. So you shouldnt need photo i. D. . Let me just finish this point. These laws try to fix a problem that does not exist. The reason that they are trying to put them in place is not to stop people from voting five or six times, which there are no instances of people finding folks doing. Its instead a systematic effort to stop certain groups of people from voting. Like who . Like africanamericans. Like hispanics. They dont have a photo i. D. . Im saying when you look at who this affects but why would minorities be afraid to vote because they have to bring an i. D. . Its not about being afraid to vote. Then what is it . Tell me why. I encourage your viewers to go to the Brennan Center website because they have very clear statistics that show when you put these laws in place, it disproportionately affects people who have lower instances of having photo i. D. S or drivers license. Why . Because they have lower instances of having the actual identification to go and vote. This is why im so frustrated with the politics of voter i. D. Republicans on one hand who see volter i. D. As the only solution. I dont really like that solution. But i dont hear any suggestions from people on the left because they deny that voter fraud is a problem. We have 1. 8 million dead voters registered. 2. 8 million voters actively registered in more than one state. How can you deny that this is a problem . We have to safeguard our most sacred right to vote. If somebody dies and happens to be on the voter rolls, that doesnt mean that voter fraud is occurring. It just means they died so they dont show up and vote. Next topic, the Justice Department will not prosecute the london whale bruno ixel is cooperating. Thats hardly jp morgans only problem. The bank faces two other doj investigations. Is the government overreaching when it comes to jp morgan or just doing its job . Hadley . This is another case where like any kind of crisis, theres that temptation to overcorrect. We did have a huge financial crisis. The london whale, something nobody wants to see. Any kind of crisis, these regulators ability like teenage drivers and overcorrect into headon traffic. We shouldnt be looking at clamping down on our Financial Markets just because were fearful of another crisis. We do need regulation. But again, we need it to prevent criminal activity. I see something even more sinister here. Jamie dimon was very up front about his criticisms of new laws, about the government overreach. He was one of the few ceos to stand up and say enough is enough. And i see this as punishment by regulators. No. I think if that was the standard by which the government was deciding who ought to be investigated and who ought to be looked at then the irs wouldnt be doing what they were doing either, right . You would see a lot more people on wall street being investigated for different things. What happened in the financial crisis brought our economy to its knees. Yes, some of this stuff ought to be investigated. Yes, weve got to do a deep dive into making sure that consumers are protected and that people on main street are as protected as the folks on wall street. Jp morgan can just write it off and not think about it and jamie dimon still gets to head up the company and the board. But for the consumers still losing money, its a big deal to them. Consumers could not lets be clear, consumers did not lose any money in that transaction. The bank lost money. The shareholder had, as a result, fewer profits. But no consumers lost any money as a result of that transaction. Finally, bp is fighting the epa. The oil giant is suspended from getting new federal contracts because of the gulf oil spill. But its suing to get that suspension lifted, saying the epa is abusing its power. Hadley, what do you say to this . Have they already paid their dues with the money and the fines and Everything Else . This is exactly the same as the jp morgan story. We had a crisis, we had a disaster, an oil spill, and now were overcorrecting. Bill . I dont think you can say youre overcorrecting for what was a generational type environmental disaster that came up because of what bp did. In the cleanup, they were not great partners in how we went about making sure that all of the damage was mitigated in the best possible way. So look, i think that the epa makes decisions based on science, based on facts. And i dont think that theyre letting the correction get in the way of what is the best possible policy for the American People in our interest. Bill, great to have you, thank you so much. Hadley, you, too. Bill burton and hadley heath joining us for a lightning round on government gone wild. Now, its nice when your College Football teams biggest fan is the founder of nike. How nice . Look at the palace that bill knight built for the university of oregon. Jane wells is about to take you inside this 68 million palace of College Football. Next. Shes still the one for you you know it even after all these years. But your erectile dysfunction you know,that could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. Do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess with cialis. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, seek immediate medical help for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a 30tablet free trial. The university of oregon not a traditional College Football powerhouse like ohio state or usc, but having a brandnew state of the art facility is helping oregon compete. Jane wells is in eugene, oregon, with a look inside this fancy new facility. Reporter some are calling this black behemoth behind me the deck star, but if money can buy championships, then the university of oregon has no excuse. There is a lot of pressure to deliver. No detail too small. No material too out of reach for the Football Performance Center paid for by alum and nike cofounder phil knight and his wife penny at an estimated cost of 68 million and gifted to the university. Whether its the players lounge with italian leather and handmade rugs from nepal, complete with custom foosball tables of oregon ducks facing pac12 rivals. Or the overthetop locker room with ventilation to remove odors, lockers where your helmet and shoulder pads pop down. The coachs hot tub, a war room with the 32footlong table and a 500pound rug, writable black walls, or the auditorium with 170 Leather Seats made of ferrari leather, and each seat able to hold 500 pounds. I love the way the design for the team has captured the past but also this innovative twist to put us ahead. Do you really want to put sweaty young man on Italian Furniture . I dont know. They treat it very well. Theyre very appreciative and they know thousand take care of it. Reporter is it enough to help the ducks to go all the way . The school is dealing with some ncaa penalties for recruiting violations, but if recruiting in the big money game of College Football is an arms race, this could be a nuclear weapon. Sweaty men on italian leather. Only jane wells. Before we go tonight, we want to show you a clip of the new episode of the prophet, airs in about two hours. This week, marcus tries to turn around a popcorn company, but he has issues with the owner. Dont make me cry. Youre making me look like a liar and im not. You lied to me. When did i lie to you . Did you say to me today, are you trying to buy pop one . How was i supposed to know . You did it behind my back. How am i supposed to trust you . I was going to put hundreds of thousands of dollars into this and youre asking me to trust you. Marcus thats where i dont know if you have the integrity. I absolutely do. You did not display it. Integrity is the only thing in business. So you can be very wealthy. You can be very smart. If you dont have your word, you dont have integrity, none of the other stuff is worth a damn thing. Right now, i do not want to do business with you because i dont think i can trust you. The profit, 10 00 p. M. Eastern and pacific tonight, cnbc prime. Thats it for tonights show. Thanks so much for watching. So we could be a better, safer energy company. I can tell you safety is at the heart of everything we do. Weve added cuttingedge technology, like a new deepwater well cap and a stateoftheart monitoring center, where experts watch over all drilling activity twentyfourseven. And were sharing what weve learned, so we can all produce energy more safely. Our commitment has never been stronger. J. D. Power and associates has ranked quicken loans highest in the nation in customer satisfaction. I say family, because weve been blessed with this honor for 3 years in a row. Rest assured well treat all of your mortgage needs with tender loving care. Amazing Client Satisfaction its a quicken loans family value. Call 800quicken or go to quickenloans. Com to experience it for yourself. The ones getting involved and staying engaged. Theyre not afraid to question the path theyre on. Because the one question they never want to ask is how did i end up here . I started schwab for those people. People who want to take ownership of their investments, like they do in every other aspect of their lives. Narrator in this episode of american greed. Two brothers have it all. Country clubs, fast cars. Both boys were goodlooking. Narrator but on opposite ends of the world, they each meet the same fate murder. A horrible end to what were charmed lives. Narrator is there a tragic flaw that brings this family down . What this is about is greed. Narrator in early 2001,