Which is a good thing for all parties concerned, and a very good thing for the world. As we continue to evaluate options and in response to iranian aggression, the United States will immediately impose additional punishing economic sanctions on the Iranian Regime. Neil we have not heard a response as yet from the Iranian Regime in response to the president s remarks. Earlier this morning the response to the attacks that were leveled at this american facility in iraq was that there would be more to come. We go to the cow guy, scott shellady, on the impact of all of that. How do you think this is sorting out thus far . Always risky to come to any conclusions before we know what happened, but what do you think . There still could be, well probably still have some scares. Who is kidding who. I was up every two hours last night checking markets to try to build a picture for myself coming in today. This is dramatic turn around from last night at 10 00 a. M. Central. Its a pressure cooker. We took a lot of pressure off. I dont think the pressure is totally off, yes. We havent heard anything from the iranians. We havent heard anything from democrats either. There is a lot to flesh out here. Seems as though from the time being we have taken pressure off the pressure cooker. We might have taken exit ramp here so we havent really heightened things. I think that is good. Markets tell us they like that. Look at the vix. Vix under 13 before i got in the chair. Everything is telling us theyre pleased with the outcome. We might have averted something that doesnt mean it is over. Neil referring to the volatility index which measures a sense of fear or lack thereof. Are markets ahead of themselves. What do you think . Sometimes they get too buoyant and over their skis. What will be truth serum, earnings, see how they come out. Walgreens down hard today. That was a little bit of a surprise. Well need to see real economic numbers. Nonfarm payroll on friday. We need to see real economic numbers on friday. Bolster stock prices where they are. I will say all this as i sat in the chair, we talked about the headwinds. Headwinds were china trade, brexit and usmca. You know what . Those things have turned around. They have been a tailwind so far in the first few days this year. They look to be going that way the rest of the year. If that is the case, it will be hard to beat. These markets look pretty good. Neil you talked about the employment report due out on friday a good telegraph indicator for that, not all the time but a lot of time, private sector job growth, adp survey, surprisingly strong 202,000 jobs added. Estimate was close to 145, 150,000. What do you think of that . Im glad. I think the conundrum, neil, were not seeing a ton of Wage Inflation. Were not seeing employers fight for employees i would have thought with 3 1 2 unemployment rate. Something is going on, were not getting same out of the exhaust. There is something up. I want to see more this year how, maybe Wage Inflation is so elastic it will fling back into play here. Were going to see a lot of inflation all of a sudden. To date, numbers were seeing as far as jobs created, unemployment rate, were not seeing it come through. Im waiting for that. When it comes an issue. That something inflationary that the fed will look at. That could change the picture rather quickly. Neil thank you my friend. Always good catching up with you. All right. Neil president wasnt without upping ante a little bit here, threatening still more sanctions to bring the Iranian Regime back to the bargaining table so to speak. Former uss cole commander on that. Commander what did you think about that . We didnt expect the speech to include a mention of more sanctions. What do you think . I think it was a very measured response that gave the president flexibility to up the antisaying hey, this will not go unanswered. You dont fire missiles at us and do nothing. While at the same token, deescalatory move that gave us offramp hoping the president would take. Clearly he took it. When you look at it, oil markets calmed down. Prices are going down and by the same taken this is what Energy Independence gives you. It gives you National Security flexibility how to deal with complex issues in the middle east because we, the United States are dependent on that oil anymore. Neil commander, we are hearing reports for this raid on this American Military base in iraq, iranians did not use any of their proxies. They didnt want to risk anything using their proxies. What do you make of that . I dont think it was a risk. Iranian government and mullahs themselves felt they needed to send a signal from inside of iran. It was very, very concerning to them that they would farm this out. They wanted to make sure their people understood that iran itself was going to respond to killing of soleimani. So therefore it was absolutely appropriate that they did it for messaging internal to iran but same token they did it in a manner that did not result in u. S. Casualties which would have caused us to the clear the decks. We would have had wider conflict on our hands. Neil you reminded me in the region, just like negotiating with the chinese, about saving face or each side got something from the other but it doesnt remove reality that iran is not a very nice player in that region. It is already threatened repeatedly to do something, anything in the strait of hormuz to disrupt Energy Traffic so what do you think . Well, neil, to say that there are not nice player is the understatement of the year. I think you have to look at it. They are a brutal, ruthless regime that has done anything they need to in order to remain in power for the last 40 years since 1979. They will execute and kill anyone not only in iran, throughout the region and the world. Lets not forget. Hezbollah is very active in the triborder area in latin america. They bombed the Jewish Center in argentina. They continue to go after to target israel. They are within the government in lebanon. So they will do whatever it takes to remain in power. The question i think for the United States now is going to be the longterm view. Iran today is where north korea was 15 years ago. If they continue to pursue the bomb, what is the path that we and our allies around the world are going to have to put in place to prevent them from getting it and are we willing to live up to the full consequences of that decision . Neil any messages for north korea in any of this . I think the message is very, very strong. I think north korea understands that the United States is going to do whats necessary to safeguard our National Security. Again north korea is the only nation that has ever threatened off with offensive use of Nuclear Weapons. Kim jongun understands even though the deadline passed at some point he needs to come to the negotiating table or well be in the position well not allow them to have Nuclear Missiles with minute miniaturizs at top of them and reaching United States and china has to start participating in that process. Neil house is getting set to start 1 00 p. M. Senate, 2 00 p. M. Mike gallagher will be at the one p. M. Briefing. He will take time to join us now. Thank you for joining us. What do you think of the say this seems to be sorting out . I think this is massive victory for President Trump and entire National Security team, if this is all there is. When the dust settles, and it is still settling all we have iranians lobbing some Ballistic Missiles in the desser, beating their chest at home. Meanwhile weve taken most important terrorist organizer, commander, arguably the deadliest, dangerous man in the world off the battlefield . Hard to interpret that anything other than massive victory for the president. Huge meaningful step to restoring posture in the middle east. That is a good thing. If youre interested in reducing our force posture over the long term. Neil congressman, do you have any update . I know nancy pelosi after word of the attack last night wanted to push back this vote on limiting the president s war powers. I believe until next week. Any update on that . No update, but i think it would be wise for them to take a step back. Consider they introduced this draft before they even reviewed any of the intelligence surrounding the attack t wayne until 4 00 p. M. Last night the gang of eight got briefed. I think that is profundly irresponsible as is the rhetoric youre hearing coming out of all democratic president ial candidates. Elizabeth warren suggested on meet the press this weekend this was all part of a wag the dog effort to distract from the ongoing impeachment trial. Bernie sanders suggested that killing a terrorist, Qassem Soleimani and Abu Mahdi Muhandis lets unite americans, republicans and democratses around the basic prince, if you kill our fellow americans well come after you and well not sit idly by while you threaten our people. Neil thank you very much, congressman. Appreciate it. Thank you. Neil the corner of wall and broad the dow at session highs, 70 or 80 points from alltime highs. S p 500 is at an alltime high. Nasdaq is at an alltime high. Gold is giving back earlier gains. Oil for a while. The latter was actually down, after running up and flirting when it came to brent, 70 a barrel. Very different environment, optimism we dodged a bullet quite literally. Did we . After this. Liberty mu. Line . Cut. Liberty mutual customizes your Car Insurance so you only pay for what you need. Cut. Liberty m. Am i allowed to riff . What if i come out of the water . Liberty biberty. Cut. Well dub it. Liberty mutual customizes your Car Insurance so you only pay for what you need. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. Im part of a community of problem solvers. We make ideas grow. From an everyday solution. To one that can take on a bigger challenge. From packaging tape. To tape that can bond materials to buildings. And planes. One idea can unlock a breadth of solutions. At 3m, we are solving problems that improve lives. Neil all right. President hopes to resolve the situation with the iranians. What isnt clear what nancy pelosi will do reining in the president s war power responsibilities. She kicked that off until next week. Forget about the impeachment process where that goes, will reining in of president s war powers go in lets get fallout from supposed end to this crisis from charlie gasparino. We have iona Political Science professor judy and wall street journal associate editor john bussey. John begin with you, end with you, will there be appetite to do the war powers thing next week . This did not have the semiending it appears to have today, it might, what do you think . This had been an issue before the congress for many administrations. Neil absolutely, absolutely. Not just this most recent round. Look the president s speech set the tenor for what his administrations view of iran is. It didnt seem to be much of a change. Were going to continue to try to contain them is what he said. Were going to ramp up economic sanctions as well. It didnt answer any of the questions that the democrats have been come playing about. Why did you strike when you struck . You said there were imminent threats. What were the imminent threats . There was no discussion of that. I think were at status quo. Im not sure with impeachment underway that the congress has appetite for another political argument with the president over this particular issue. I think it will probably focus on the impeachment proceedings. Neil what do you think . I think when donald trump acts the way he acted today was president ial, measured. If there was one thing people worried about, can he manage his way, if you think about the markets are ultimate determinant. If trump was crazy, everything that democrats say he is, markets would not be up whatever they are up 200 points. I know it is a snapshot neil but markets dont like escalating wars. They like measured and management. Prom donald trump came out and said they could manage the good case. He gave the good case why soleimani could be killed and situation with iran how well manage this thing. When somebody can articulate management skills from the bully pulpit, its hard for nancy pelosi to compete against that or any democrat. By the way, johns right weve been talking about it for years. If you look at for years nothing ever happened. The president has wide powers. They couldnt rein it in under obama. Couldnt rein it in under bush and that, donald trump, you will not win against. Neil even during the carter administration, they tried to rescue the hostages, congress was all over him for the failure. Yeah. Neil they did surprise with threats of new sanctions against the iranians. He didnt spell them out but it was sending a message to iran, that makes me wonder what irans response is going to be . Two things surprised me. When he first came out to the podium, he said iran will never have Nuclear Weapons. And during, as long as im president. He mentioned he would indeed increase the economic sanctions. To me, that suggests that we are in the same place we were before this latest round of incident. Which is, how do you then insure against Iranian Nuclear weapons which are 10 months, a year out at this point and, increase those sanctions. But what is their offramp. How do you bring them to the negotiating table . I dont think i heard from the president how that is going to happen, that is what i would like to see but how do you get them there . Okay. It will be very hard to get them there through sanctions. What i think is impressive about him is that we are back to square one. I mean you know did not ramp up the war. Neil in other words, back to where we were . Well manage this thing. Well screen you with sanctions. If you screw how did we manage it, if in 10 months they indeed have a Nuclear Program . He has drawn a red line neil theyre not going to honor i think it is a very important point. The unfortunate thing were back to the status quo which is untenable one, if you think about it. The markets if i have affirmation to the latest nanosecond to the moves. Market is not relieved there is not all out chaos. Markets are up. Wait for irans real response. Neil what do you think it will be . It will be what weve seen all along. Neil great satan . Not the rhetoric so much, neil as the efforts in yemen. Neil none of that changes though. I dont think it does. I dont see either offramp articulated by i agree. The risk remains. If these proxies that they cant control or do control if one of them acts there is a lot of risk out there. Neil they use those proxies, they can use those proxies for this attack. This attack, neil, was epsodic. We got month ahead of us. Neil exactly. What is the alternative . What is really the alternative . Is the iraq, iran deal that obama crafted the alternative . They were flouting it. They were going to build a Nuclear Weapon under those circumstances. I dont understand what the alternative is, if you take out one of us, were going to come back. Were manage you and your economy . Neil to be expected satisfactory out come we could hope for . I dont know. If you think iran neil john basing what theyre seeing in the markets. He is right it is epsodic i think there is lot more in this. People thinking about it over the weekend. Is there a case to be made that the obama iran deal was working . And i have not, listen i read a lot on it. I have not seen it. But i would just say you know the best outcome shortterm but does nothing to address the long term. Im not sure were any better off than we were prior. The risk remains. Neil do you think a deal can be had where we enter into negotiations with iran and we try to solve this once and for all or is this impossible . I dont want to say its impossible. I sure hope it can happen. I dont see the president , administration saying publicly how you get there. If you think about the markets. If anybody watching markets think the short term risk, that may have diminished a little bit. Ask Sheldon Adelson of a long term risk out of cyberattack comes out of iran 40 million later. This is real risk. Again neil that wont have that wont have fingerprint. Will we play ball with despotic regime 30 of the population controlling 70 . That is essentially you have. You have religious zealots. Neil that wont change. Will we, were going to enter into deal with people like that. If we dont deal with them, talking about regime change. The president hasnt said that. He actually has. He actual has, with sanctions. He has inside he wants to overturn the regime. He doesnt have to. He said he wants to work with them. Im asking how do you get to the next step . This is good short term outcome but how do you get the long term neil john, end with you, looking at markets, more oil markets, they were running up in participation, american Energy Independence notwithstanding we have to worry there will be another conflagration in the middle east. Yeah. Neil decidedly less of that fear today, which is accurate, last week or this week . Probably this week, right . The iranians dont want to escalate. Americans dont want to escalate. That is good for particular view, needs for the market and of pricing. What happens, down the road . Maybe the tensions are such, charlie has a point. How does this, what are the alternatives . And the continued tension, the continued containment effort will have a price as well. There will be conflicts between the two nations which is probably going to Pressure Oil Prices on upside. Their economy is in shambles. Neil oh, it is. It is only going to get worse. Neil the benefit of this, like Ayatollah Khamenei 40 years ago, a great distraction for a horrific economy. If they want to go do titfortat neil the new term is quid pro quo. Play that out for a second. We dont know, his econ