Transcripts For CNBC Power Lunch 20160526

Lets get pumped up. Were being joined about it Founding Partner of agin and we have a kmg manager of tortoise capital. Youve been negative on oil. Were back to 50. Why . Are you changing the tune in the price forecast . Im not that constructive on it. I see the dollar rallying as the fed goes into Interest Rate hike mode here. Balance of the year. I think some of the outages that have driven the latest leg are transitory. You have already seen the canadian outcut come back. Youre seeing libya barrels starting to load. And the situation in nigeria isnt great. Iran, iraq, saudi arain yashgs all set to ramp up production even further in the coming weeks. So youre negative . You think this is a short term pop. You expect prices to fall again . And were at a critical level here matched up right with the october high. It would be a prominent double top if there is a failure here. Okay. What we do know is that prices have rallied. As oil prices rallied, so, too, have manufacture the stocks. What have you been investing in . Do you agree with johns per inspect theyve oil is not going to fall again and what are you investing in . Yeah. Thats what makes a market. Well take the other side of that trade. You know, oil is really, i think, just starting to Gain Momentum here in spite of the u. S. Dollar strengthening. What were seeing is big production declines, u. S. Is down 800,000 year over year. Rig counts are down 80 in the u. S. , 35 internationally. Were not making enough crude to meet growing demand. Were starting to see that now. We drew four Million Barrels of inventory on wednesday. We think by midyear theyre back within the five year range on the inventories. Were pretty constructive. You want to get to your responds to that . Yeah, i just dont see the demand side of the equation being too strong either. We need asia to come tlouchlt a lot of folks are saying kline sim porting oil which they are. But the processing it into refine proukdz. You see the support that market seen from gasoline prices now fade away in my view. Thats what takes to make a market. Obviously, youre a buyer. You got a couple of stocks that youve been buying as wm. We talk oil. Were like exxon, chevron. Why is liondel basil an interesting stock and investment for you . Its a commodity player. A commodity chem. They take derivatives from natural gas and the derivative products they use is input. Creates huge margins for them. The output is tied to crude oil prices. So the margins are continuing to expand. Theyve been, you know, basically printing Free Cash Flow over last several years. Buying back significant amounts of stock. 10 of the outstanding stock the last several years. Reupped that program. Keep bumping the dividend there. Its a question of where do they deploy all this Free Cash Flow . There is a lot of new chemical facilities coming online over the next several years. Theyre an intergrated producer. Basically, theyre not particularly tied to the ethylnie. Matt, a real pleasure to get you on. Thank you very much. John, im sure well see you soon. Lets switch gears and go from oil to the bond market. Seven year notes up for auction. Lets find out if that is lucky seven. Rick . It wasnt a bad auction. After the twos and fives, it wasnt that graechlt it was pretty good. If i look at the yield for these 28 billion seven year notes, 1. 652. Now if you dont have a real sharp pencil, 1. 65 1 2 was trading. Yeah, it was good in that regard. It wasnt stellar like yesterday. 2. 57 bid to kofrment a little over 2 1 2 times over subscribe. Too close to the ten auction average. 64. 6 on indirect. Better than the ten auction average. There with was a xuchskew. We had some in the 40s that brought down the data. That is the best since august of 2014. So will 88 billion in supply done. I gave that a b. So now lets watch. The street now has 88 billion in supply. Lets see how the market acts. Many times you see a bit of a rally. I see yields dropping. Ill pick it up, rick. Thank you very much. Host of billion dollar buyer is joining us and ceo of landrys and other businesses he runs. We have a lot of real estate to cover today. Well cover all of it in one way or another. Lets start with oil. Back at 50 a barrel after dipping down there into the mid upper 20s a few months ago. Do you sense a change in the mood, the propensity to spend, go out, dine out, do the kinds of things that patronize your businesses . There is always a lag. Just because oil is at 50 right now, that doesnt mean where its going to be in 90 dayors 30 days or tomorrow. And i think what youre going to see happening is if it continues to go up, things are going to get better in houston. But the consumer has not stopped spending money in houston. Lenders arent lending there anymore. Your real estate prices are starting to drop. But the consumer hasnt really been hit that hard yet. Because youve laid off a lot of people. But houston area is a huge area. Did you find as oil prices began to recede that Business Customer was less likely to come out and spend or that the big ticket dinners that you might serve were not as frequent . 100 . Youre not getting that. Peoples expense accounts have come down. Youre having cancellations of all your little small Energy Conference thats would come to town. The private dining high ticket in the steakhouses is down. Of course. People are going out of business. There is more bankruptcies happening with the Service Companies in houston than people even realize. I mean, every day right now youre having a Small Company in texas file bankruptcy. But preople are still going o bubba gump. Or some other place. Yeah. But what theyre not doing is having christmas parties, that kind of stuff. Big ticket items are dovenlt even the big companies, just to set an example have pulled back. How does it affect exxon . How does it affect your big schlumbergers, halliburtons . But they realize that they layoffs, no bonuses, pay cuts . Definitely. And business entertaining down. 100 . And is that you have national, International Businesses s that true across the country or not . The country, just like we saw in retail the last few weeks, the consumer is choppy right now. And i dont its not oil necessarily. But restaurants, retail, it is definitely choppy. What do you think it is . If its not Energy Prices and whats going on in houston and the local economy with the bankruptcy thats youre seeing and no one else is paying attention, to why is the consumer so hesitant . What are you hearing . You know whats funny . There is a Hotel Company out there that was looking at raise something money and they pulled back and said for the First Time Ever our adr is dropping everywhere. Average daily rate. And we dont know why. And it is across all of our different concepts, whether its a High End Hotel or a low end. So there is definitely something happening out there right now. Ill take the other side. We postulated this with apparel. In that people arent buying jeans because theyre buying houses. And theyre buying cars. You look at the home Sales Numbers and the car Sales Numbers are very strong. It is possible that the week i say that with air quotes, weak consumer is actually not going out to dine as much for the same reasons because theyre doing big things and they say honey, we cant afford to go on a weekend trip or out to eat. That always happens. When people move into suburban america and housing is booming, you know, the first thing they stop doing is spending money at clothes and restaurants. But sometimes theres a lag. Remember there was a huge lag problem in the Financial Markets in january and february and march if you remember. Lets hope it comes back as quick as the Financial Markets did because you dont want to go into a sum wert momentum we have now. We do not have momentum nlt restaurant and Retail Industry right now. Interesting. Interesting. Tim, well talk more about this and other topics throughout next few hours. Sounds great. With oil on the rise, how do you play it . Lets bring in the managing director of seacorp. Do you think the worst of for your sector is behind it . First of all, i have to say nice surprise that share some air time here with tillman. Im down in houston. Tilman goes above and beyond as far as charity work he does in houston as far as md anderson and police force. He is a great guy in houston. Great to have him on the show here. Is oil and gas we reached the point here where things are getting better. Were at the point now were 5 away from hitting the long term price target here. What were afraid of you is get to that 55 price, guys start minting money down here in houston. You have the supply problem potentially all over again. Between 2010 and 2014, 80 of the growth worldwide in oil supply came from the u. S. So youre going to start seeing growth, you know, the volumes are going to turn up here as you cross 50. For a long time people have been saying that production needs to come off line permanently. Lets say oil stays right around here at 50. Does the consolidation, the bankruptcies, do they end as you say theres a self fulfilling prophecy where oil is high and they pump more. Theres no production coming off line permanently. And so its just a vicious cycle. Yeah. At 50, its a have and have notes world at 50. There is a group of guys that crush it. Theyre talking about 100 irrs in the basin and new places like the stack. And then there are guys that are overlevered that need to go away at 50. So youll have a little bit of both. So who are the guys with the high irrs . You go to the basin, isb, die monld back, parsley energy, pioneer Natural Resources, simerex. Stack play, newfiled, continental, gas star, cimerex. And more upside from here . Yep. We believe. So. You know, mike, pioneer and Scott Sheffield, weve had him on the show, it is partially run by his son. But people consider Scott Sheffield the smartest guy as a operational guy for oil. Hes going to be retiring z that concern you and affect your investment recommend sngs. No, they have a great staff. There the coo is taking over f youre on the conference call. He hits everything operationally. The guy is a stud. So theyre g. In good hands. No concerns there. Mike, were going to wrap it up. Thank you, mike kelly. Fuel a biggish knew france today. Protesters are blocking oil depots ands Nuclear Power plants over labor law reforms. This comes two weeks before france hosts a Major International soccer tournament. You see the fires and water cannon there at play. Long lines for gasoline throughout france because of fuel shortages. Frances Prime Minister says the labor reform will not go away but the government is open to negotiation. News alert now on microsoft and facebook. Dom chu has it. Very interesting story here. Two tech titans getting together in a partnership in this case here what theyre looking to do is put down a cable connecting Northern Virginia and spain. To a 6600 kilometer data and Internet Connection cable in essence that will connect the u. S. With spain and then move on to other Global Network hubs all over the place. They go on to say here that its because of growing customer demand for high speed reliable connections for cloud and Online Services for both microsoft and facebook and their customers. The construction of the cable will commence in august of this year with completion expected in 2017. They also again say that microsoft and facebook are collaborating on the system to accelerate the development of the next generation of internecessary infrastructure and support the explosion of data consumption of the respective cloud and Online Services. The next evolution in internet infrastructure is being put down and in this case a partnership between microsoft and facebook for a new transatlantic cable. Of course, tyler, Many Companies in ocean depths. Its interesting that its microsoft and facebook collaborating. Not a telecom provider, obviously. Obviously users there must be a lot of traffic between annandale. There are a lot of company that invested in laying down global like global crossing, enron oh, wait. I was waiting for you to say that. I mean, obviously these companies are a lot more well capitalized. We talk about tech valuations. Some of the companies valued on eyeballs and all the metrics now. Were talking about new undersea cables. Break out the 1999 fashion. Putting down 3 . When you buy a home, it is now possible that one of the nations largest Mortgage Lenders. It is a good idea or are we entering the danger zone once again . Power lunch is back in two minutes. Man 1 i came as fast as i could. Whats up . Man 2 this isnt public yet. Man 1 what isnt . Man 2 weve been attacked. Man 1 the network . Man 2 shhhh. Man 1 when did this happen . Man 2 over the last six months. Man 1 how did we miss it . Man 2 we caught it, just not in time. Man 1 who . How . Man 2 not sure, probably offshore, foreign, pros. Man 1 what did they get . Man 2 what didnt they get. Man 1 i need to call mike. Man 2 dont use your phone. Its not just security, its defense. Bae systems. Theres a place for vacationers than just a little time off. The ones who choose to go big or stay home. Come with me now. Where every amazing, despicable, wizarding adventure reveals moments that are truly epic. This place is made for those who do more than just vacation. Whoa go with me now its made for those who vacation like they mean it. Universal orlando resort. Another sign of big time streng njt spring Housing Market. Pending home sales up 5. 1 hi hitting the highest level in a decade. They boost sales overall. On that note . The largest Mortgage Lender announcing a program it says will encourage first time home buyers to make that big purchase. The terms of the loans have worry that weve seen the story before. Diana olick joins us with that story. Melissa, this one is really hitting a nerve. Hundreds of comments on our piece on cnbc. Com. Wells fargo is calling it your First Mortgage. 3 down payment and wells says less complicated than other 3 products which have been unpopular until now. Its a conventional fixed rate loan. So 417,000 or less, backed by fannie mae. Gifts are fine. Mom and dad can make the down payment for you or use a community down payment assistance program. You dont have to complete a buyer Education Course but if you do, you can earn a. 8 Interest Rate deduction. Now minimum fico is 620. You do need mortgage insurance. Roll that into the race which is likely going to be a little higher on the average 30 year fix. Theyre estimating about 4. A . Still though, not a the love skin in the game on this loan. Wells claims its low risk to the bank. With this product, its very clear they have to have the ability to repay the mortgage. We have to make sure that they have a history of repaying debt. Or at the very least responsible management of the finances. Thats the issue. A 620 fico score means you dont have a good history of repaying debt or managing finances. I spoke to the executive in charge of this at fannie mae. He admitted it would be rare for a borrower to get approved for that loan. Lets bring in the chief economistist with red fin and michael calhoun, president for the center for responsible lending. We should note that your First Mortgage program was developed in partnership with wells fargo and self help which is in itself a affiliate of the center for responsible lending. Michael, i assume you think this is an example of responsible lending. Even on the surface, it does hashgen back to times when some of the loans to people with low Credit Scores at low down payments were anything but responsible. Why is this different . So this is a safe Proven Program and these mortgages are the exact opposite of the kind that caused the housing crisis. Why . These are fully documented loans that the borrower has to show theyre qualified and that they can afford the payment. Theyre also skin in the game from entities such as ours. Were putting our money at risk on the loans as are private mortgage insurers who have to think this say reasonable loan. And in the housing crisis, we will no doc loans with exploding payments. We did 4 billion of these loans leading up to the crosses. We had losses of less than 4 . If the rest of the Mortgage Market had done that well, there would have been no housing crisis and no great recession. And lastly, this is a Critical Program not just for these home buyers, but for the whole Housing Market and the u. S. Economy. Right now were missing about a million loans a year that in 2000 and before were there for first time home buyers. But tightened underwriting requirements which understandably got tightened after the crisis and there was overcorrection. The borrowers are being excluded. Its creating a disruption of the whole Housing Market and a drag on the whole Economic Growth. Do you think this will bring new buyers into the market. Buyers that would otherwise not be able to secure that loan and buy their first home . Not at first. I mean, there is a huge missing market in the Housing Market. Those people who cant put 20 down who have less than stellar credit but enough income to make a monthly payment. These borrowers are not being well served by the current market. I think this product is a little bit more about the banks than the borrowers. You know, banks have stepped away, especially lit big banks from originating fha products. They were badly burned. There was legal risk taken. They were accused and often admitted of wrongdoing. So there is an opportunity, in my opinion, for a big bank like wells fargo countries largest Mortgage Lender to create a product, circumvent fha and produce a low down Payment Market product which has the hopes of reaching this underserved population. Michael, i need a very quick answer. Is someone with a 620 credit score really likely to get one of the low down payment loans . Very quickly . There will be some borrowers. Many of those were innocent victims of the housing crisis where they acted responsibly but lost the job due to the recession, not to any action on their part. So the answer is yes, some will. There are and will be responsible borrowers at that level. Michael, thank you. Appreciate it. Brian. All right. Lets bring back in our friend. What do you think . Good idea . Or does it seem like weve been here before and it did not end well. It didnt end well. But remember, you used to be able to finance your down payment. And all will you to do is breathe to get a market. Wells fargo is one of best secured lenders in the United States. As a matter of fact, they probably are the best secured lender. They know what theyre doing. The 3 is given to people an opportunity but youre not getting that loan just because you have the 3 . Okay . You have to have a great fico score. Stle to make sure youve been at your job a long time, theyre going to know exactly what you make and know everything about your dna. But can you still do the 3 as a gift. In other words, you could lend me the money, i could i have zero real skin of mine in the game. No, your skin is going to be you want to live in that house though. Just because youre a startup and have a good job that you havent been able to accumulate the cash, okay, the bank is still getting it for security and people, theyre looking at who theyre lending to. They have a class. Well go in a second. They have a class can you tachlt i put a twitter poll out. You know, one of the informal polls, should they be required to take a home buyer course. 62 st respondents said yes. I was shocked by. That do you think that a class should be required for first time home buyers . Half a day . Teach them something in college. Not lets make you take classes to live in the real world. Maybe we need to get rid of anthropology in college and teach things in high school and college that you live with every single day. Be careful. Our Education System is what we need. Our anthropologist viewers may have a bone to pick with you. I was just kidding. You just made three people really angry. 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For a free quote, call Liberty Mutual at switch to Liberty Mutual and you could save up to 509 call today at see Car Insurance in a whole new light. Liberty mutual insurance. What aremaking a cake ht now . Ayla reminds me of like a master chef and emiana reminds me of like a monster chef. Uh oh. I dont see cake, i just see mess. Its like awful. It feels like i am not actually cleaning it up whats that make mommy do . doorbell whats that . Swiffer wetjet. So much stuff coming up. This is amazing woah. Wow. Now i feel more like making a mess is part of growing up. Stop cleaning. Start swiffering. Interesting day in gold. 1230 an houns is where its trading. Were not seeing the bid for safety for gold. But were seeing bid for safety in the bond market. Take a look at the etf that tracks the bond market. Its doing well. Take a look at the rest of the metals complex. Gains across the board with the most notable gain in palladium. All right. Is this a time to bet on consumer stocks . Do we also have mr. Ramos of pmi . Ben, you like consumer stocks . We just heard tihlman saying that consumers are choppy right now. We think that the Economic Growth is going to be largely driven by the consumers. Frustrated that the consumer didnt pick up as much as we thought they were going to in the first quarter. But were seeing a greater sense, greater retail sales. I think everybody is getting used to the way the consumer spends now post recession, buying more online. But theyre buying. I think within the consumer sectors, its going to be very much a stock pickers paradise for lack of a better term in that you have to be in the right names. We any general the sector should do well. Consumer discretionaries froefrt of 2016. If you dont name names, i understand. But you said being the right names like what . Just, for example, the general generalal tis. The shoppers are not going much to the mall. That is hurting the macys and nordstroms of the world. Were seeing the pickups in the amazons and even walmart starting to see a pickup right now. So i think thats going to be the big difference and who the winners and losers are. Consumers are spending. That started in april. It should continue froefrt of the year. Ernesto ram yoos. You like costco. Yes. We do. Its doing really well. Piggybacking on what you talked about, we like a play on internet sales. Syncrony international have amazon and walmart and all the partners in the space that is growing the fastest like internet sales. So we like that stock for that reason. And it only trades at 11 times earnings which is a bargain compared to most of the consumer stocks out there. Thank you very much. Jay powell became the first governor to talk about the possibility of rate hikes coming. He said rate hikes are appropriate fairly soon. He supports gradual rate hikes if the Data Confirms the forecast. Now this is important. He expects 2 Economic Growth but he wants to see significant strengthening in the Second Quarter growth. Later during question and answering, he suggested hes not really in that big of a hurry to hike. Waiting are frankly not so great. You know, this doesnt feel like an economy thats, you know, thats bubbling over or threatening to break into high inflation. At the same time, i think you have to balance, really, the right splan a gradual set of rate increases over time. Same time he said that brexit does not represent a Systemic Risk and he does see a gap between the fed and the market view on the longer term outlook for Interest Rates. Hes inclined, me list yashgs he said, to listen to the markets. All right. Steve, im going to pick it up from there and go back to our two guests and get reactions here. Ben pace of hpm, do you have any thought about how the seeming growing consensus that rates are going to move up this summer by at least a little bit is going to affect the investing climate . Its interesting, tyler. It hasnt affected it as negatively over the last week as it did when the fed was socializing four rate increases in january. The markets basically said, no, youre not going to do. That ive said that just as unprecedent the as this ease was in 200 will 8 and 2009, thats how unprecedented the ease is going to be. I think everybody is learning as we go including the fed. So i think thats going to continue. I think the economy is much more ready for a much more gradual tightening than was envisioned in that area. Earnesto, final thought. I dont think that a quarter point Interest Rate hike is going to affect peoples propensity to go to another of your choices, mcdonalds. No, i dont think thats going to change that either. We think that Interest Rate environment thou is beginning to shift, obviously lyobviously, low environment to a higher environment. That is fueling some of the changes were seeing in todays marketplace where more cyclical and Interest Rate sensitive the stocks are starting to outperform such as banks and others. And that plays well with our pick because they will be beneficiaries of Interest Rate hikes. A lot of people are positioned to continue with low Interest Rates and especially the more defensive sectors. Some of the stocks that pay high deaf dendz. Theyre very, very overpriced. We see that as a big risk. We leave it there. Ben pace with hpm partners. Tilman, do higher Interest Rates affect your business in a really significant way or not . Not at all. But i think what the fed is doing right here is being safe. We just came with bad retail numbers from everybody. I think the fed wants to tell everybody things are good in this country. Were going to raise rates a quarter. I look for them to raise them and then dont look for them to raise them in september. At the endst year they will. I think they want to say things are good. Were going to raise rates f they dont raise, that means the economy is weaker. What about borrowing. Yeah. You financed a lot of your businesses with debt. Yes. Do higher rates affect your ability to borrow or your desire to borrow . Not yet. Because im a libel borrower. So its got to move up a lot to get to that number. It really wont start affecting me until it probably moves up a point and a half or two points which will be sometime at the end of 17. So a quarter point isnt going to kill you. No. But you have people that borrow billions of dollars, i mean, i owe a lot of money out there. I have a lot of assets and a lot of debt. When you Start Talking about one point on a billion dollars or two points on a billion dollars, its meaningful dollars. So you better make sure the business is good so it will happen. Remember, as rates go up, m a will slow down and multiples in business go down. The reason were paying crazy multiples is because people can afford to borrow. The world is going to change with higher rates. Dont ever forget that. Any moment we expect to hear from donald trump live in bismarck, north dakota. Power is back in two. Will your business be ready when growth presents itself . Our new cocktail bitters were doing well, but after one tradeshow, we took off. All i could think about was our deadlines racing towards us. A loan would take too long. We needed money, now. My amex card helped me buy the ingredients to fill the orders. Opportunities dont wait around, so you have to be ready for them. Find out how American Express cards and services can help prepare you for growth at open. Com. Theres a place for vacationers than just a little time off. The ones who choose to go big or stay home. Come with me now. Where every amazing, despicable, wizarding adventure reveals moments that are truly epic. This place is made for those who do more than just vacation. Whoa go with me now its made for those who vacation like they mean it. Universal orlando resort. Here is the familiar empty podium shot we take every now and then whether its trump or hillary or the president. Any moment now we expect to hear from the gop president ial candidate. Donald trump live in bismarck, north dakota. Its a press event prior to unveiling his Energy Policy which youll do later today. This is the day where donald trump got over the fence. He is now by delegate count the republican nominee. He has sowed it up to day. Hell talk about that from bismarck in the next few moments. Now a news update. The faa says flights arriving and departing lax slu expect delays up to 30 minutes due to equipment issues. An initial ground stop was lifted but it will take a while to clear out the residual delays. Paris police scuffled with protesters as several thousand people marched throughout french capital to demand the government strap a new labor bill. Protesters are angry at the bill. Greek Authorities Say they have completed the evacuation of the make shift migrant camp on the bored we are mass doan yachlt its now empty. At the peak, some 14,000 people were held in that camp. All state will offer home sharing insurance conference to hosts in six states in mid august. Those states include arizona, colorado, illinois, michigan, tennessee, and utah. Thats the cnbc news update for this hour. For now, back to melissa. Thank you. To the bond market now. Rick santelli tracking action. How are things sets willing after that auction . The end of 88 billion in supply. A lot of markets outside of equities closing early. Three day weekend. I dont think its a surprise that pretty much were looking at the high prices in the low yields of the week and pretty much all maturities. Speakingst aucti of the auctiond the note behave . It dropped. It was bate of a catalyst along with the other issues. Its like the last hurdle. People are talking about not coming in tomorrow. Train day 30 years, you see its effect there as well. Even the dollar index pulled back a bit. Heres an interesting one. A year to date chart in the hyg, etf for high yield, junk if you will. It is fresh to making fresh highs on the years. Close but not quite. There back to you, tyler. Ill take the, rick. Thank you. Were expecting to hear from donald trump within just moments. This, of course, on a day when we hit the magic number of delegates needed to clinch the gop nomination. So well check in with the presumptive nominee in two minutes. Donald trump will be speaking from bismarck, north dakota. As soon as he takes the podium, well go straight to him. Lets check in on the markets. Fairly flat day. Hitting new 52week highs in todays session. Take a look at. This people want to buy lipstick and dollar goods. Take a check on a Water Company thats been on this all time high list for a number of days in a row. Only one stock today on the s p 500 sinking to a 52week low. And that is the ticker abc. All right. So we want get to your take on this story and hear from viewers as well. Mcdonalds, shutting down the hekdz because of protesters. That is at the annual meeting today. Third year in a row that mcdonalds had to ask heck workers to stay home for the day. This is employees at restaurants pushing for the 15 minimum a wage and form a union. It comes on the news that foxcon is going to replace 60,000 factory workers in china with robots. So the reason we brought that story up seems incongruous. At the same time, we talk about ought ma automation and robots number industry is at risk as much as the restaurant business. Where do you see it going five years . People look to automate everything they can, especially in the kitchen where you can build equipment to do certain things for you. If the government and the states continue to push this 15 wage and not give tip credit for the waiters, its youre going to see a huge layoff in people. People are going to streamline their menus and not have the same prep items. Were told by listen. You own a business. But when we had the debate, people say thats not true. It will put more money in peoples pockets. That will lift all boats. Thats watt pro the ceo of mcdonalds today specifically said if minimum wage is raised 20 to 15, twhoe have to look to automated functions. You have to do it. When you calculate how many hours and how many employees they have, they could do and do the research and technology and spend a billionon dollars on equipment just so you can start automating it. When you look at the payout over a number of years, you cannot pay somebody 15 an hour when somebody is buying a hamburger for 4. It does not work. The numbers dont work. Theyre going to automate anyway. Dominos has done it. I go to my quick check and instead of place my order on a screen or i go to wawa, i do. That explain the tip credit and why it is so critical you to. I think a the love people dont, including me, understand exactly how it works and why it is so fundamental. When youre in full service like i am and so many of my thousands of employees are waiters, okay, theyre used to be a government tip credit. And there still is but states are getting away from it. So you might make 3 an hour where the minimum wage is will 8 an hour f a waiter makes the other 5 in tips, then we dont have to pay them because theyre maching that up. You dont have to pay them the 8 an hour. But remember, theyre making 100, 200, 300 i have stake houses where they walk with 500 every night. So dont make me pay the waiter 15 an hour the same amount that im paying the guy in the kitchen 15 an hour. Because the government is saying now you cant take some of their tips and use it to tip other people in the kitchen or whatever. Were so regulated. They dont seem to get the tip credit. If you want to make me pay somebody in the kitchen 15 an hour, thats fine. If theyre not a kid and its not a training wage, if i am okay with. That but you have to give business a tip credit for these waiters that make a lot of money. Lets be clear. This is not even this comment and statement is not about your industry. I mean, the majority of policymakers, men and women, hard workers, smart, but most of them have never run a business. Many people in office have been in office their whole career. So you get these regulations, not just you but any Business Owner handed down from government. Do you have any recourse. If they did something completely ruinous to your business, how you would fix that . Somethings happening right now and im thinking about suing a Government Agency for that reason. Ly no idea about that literally before i asked that question. That is how fed up i am right now with the regulations by the United States government. And the socalled spinoff thats are really appointees of this administration. What is the issue . The tip credit . No. Its an issue about legal issues with my employees and their rights to sue me or not sue me where something could be worked out very easily through arbitration, okay . They instead want to tell me, no, you cant do. That you cant solve it the simple way. We want to put it in court system and solve it that way. Theres a ln. Because, what, 90 of congress is or have been attorneys. 100 . And having gone to law school, i can assure that you lawyers are very good at propagating themselves, right . Accountants are got at making rules that require you have accountants. Lawyers are good at writing things that only they can understand. You are 100 right. And with that i retire. Sullivan drops the mike. Out. All right. Any moment now, its like the fifth thats not donald trump. Were going to keep saying it until he shows up. Donald trump expected to hold a News Conference in bismarck, north dakota. [crowd cheering] i could get used to this. Now you can. When you lease the 2016 es 350 for 329 a month for 36 months. See your lexus dealer. Theres a place for vacationers than just a little time off. The ones who choose to go big or stay home. Come with me now. Where every amazing, despicable, wizarding adventure reveals moments that are truly epic. This place is made for those who do more than just vacation. Whoa go with me now its made for those who vacation like they mean it. Universal orlando resort. Same place, same podium, same wait for donald trump to meet the press News Conference on this day where he surmounted the delegate threshold to become the nominee of the grand old party. Your thoughts . I think its going to be a close election. I think its totally a tossup. I think all republicans are going to get on the trump bandwagon just like the Bernie Sanders people are going to get on the hillary bandwagon. Trump gave a great speech at the nra the other day. There are a lot of people in this country that have guns. Theres a lot of democrats that love to go hunting and have their guns. Trump is going to xart people that youre not going to be able to go hunting and target practicing and have that gun anymore to protect yourself. Remember, most of the violence is in certain Little Pockets in every city. Guns are not a threat to most of us. From a bis perspective, do you back trump . You know, i dont know who im going to support in this election. Im truly undecided. Between the democratic side and the republican side . I am more a republican, okay, but i dont know who is going to be the best president at this point. Im kind of shocked that we are where we are. I think hillary, of course, would make a very good president. I wish our Supreme Court was not bipartisan, okay . I mean, i think it all comes down to the Supreme Court. And thats where Everybody Needs to judge who they want tloekt president or not. All right. Were going to leave it there. And were going to keep watching that empty podium. I tell you, that podium is a great guest though. Were going to take a quick break and well be right back. With another hour of power. Will your business be ready when growth presents itself . Our new cocktail bitters were doing well, but after one tradeshow, we took off. All i could think about was our deadlines racing towards us. A loan would take too long. We needed money, now. My amex card helped me buy the ingredients to fill the orders. Opportunities dont wait around, so you have to be ready for them. Find out how American Express cards and services can help prepare you for growth at open. Com. Were not just waiting for donald trump to speak, he is going to be laying out his energy plan. Thats why he is in north dakota. Obviously, a huge Oil Production state. They suffered, as we showed you by being up there, so its not just trump talking. Its going to be about him and his energy plan. Anybody in the oil, gas, coal, whatever business. They want to listen to. That as soon as he begins speaking, that was a photograph, we will bring that to you. Okay. So speaking of oil, for the first time this year, oil went above 50 a barrel. Its not there now. It hit 50, 21 a barrel. Were below that now. The dow, not reacting. Were seeing the dow down 28 points. Not a lot going on with the dow overall. But home depot, apple and pfizer are the best three gainers. And apple, a lot of people aligned it, the best performing dow stock this month. Since the buffet bottom. You know what today . It is birthday of the Dow Jones Industrial average average. The dow turns 120 years old today. When it comes to the u. S. Stock market, this is the benchmark. That is most people think of. Is this 30 stock index still relevant to todays investors . David, youre in charge of the dow and the s p 500. Most investors would argue that thesomesome or even a broader index is a better representative of the u. S. Stock market. Why does the dow matter still . The dow matters, first of all, its 120 years of history. Nothing has more history and unless you were through the financial crisis in the last ten years, you know history matters. Second of all, it is the index that average individual investor understands and recognizes names of the stocks, he can calculate it in the back of an envelope. And it tells him where the market is and to a large extent where the u. S. Economy s the 500 is more of a professionals index. Both of them together tell us what is happening in the markets. And in the u. S. Economy and to a very large extent, what is happening all over the world. One of the criticisms, david, of the dow and i dont mean to wonk out here, is that highly priced stocks have an out sized influence on the, not necessary lit bigger stocks, just the ones that have higher prices, have an out sized influence on the index itself. Explain why that is not something i should worry about. We have a rule. Its in our methodology that says the ratio between the biggest and highest price in the smallest price should be no more than 101. And it is within that range at this point. We feel the price weighted version has a lot of other benefits f youve been following the indexing, all you hear about is smart beta. A fancy way of saying its not capitalization. The dow is not. And the dow is potentially a smart beta index. And given what was just mentioned about apple, i think anybody who is tracking the dow probably very happy about that stock right now. If you look at the stocks every decade, it is interesting to see where the stocks would be today. Because you change out, what, two or three every couple of years because the other ones arent doing that well. So do you really get a real good view at what is really happening out there with the dow . Yes, i think we do. Some companies merge with other companies and if they disappear, they have to come out and be replaced. Some Companies Start very small and get bigger and bigger and become major players. In fact, most of the Technology List in either index started so small. Nobody could see them at that time. So the change wez make are to make sure that we the market is as it is today. In fact, every measure change noes matter what it is. I want to bring you in. You have open folio. This sounds luke a crowd sourced index. So you create this other index base ond what investors at large have in their portfolios. Why is this a better measure . Because its more relevant and more relatable. Why do i as an individual investor, why do i care about the stock prices of 30 multinational corporations . Theyre irrelevant. The dow is dead to mechlt i care a lot more about what other investors like me are doing. So what we do is rather than average 30 stock prices, we take 70,000 investor portfolios and get all this data to create an index and benchmark whast real average invstor looks like. Dont you get a skewed view . If youre aggregating what many, many investors have, then youre sort of biassed toward the crowded trades. Is that sort of index that you want to use as your benchmark . Its to understand where you fit n i care about how i am relative to other people. So now i get to understand how im doing relative to other investors or even have a personalized to be investors like me. There are a series of papers for 15 years ago called trading is hazardous to your wealth. A nice cute title. But what it shows and what behavior financials shows is that individual investors, especially the active ones that tend to trade which im guessing are the same ones that are likely to file the portfolios with you and keep them up to date, they dont do very well. Thats why i jump and say what we actually are doing is not skewed towards active investors. We have a lot of passive investors on our platform. And what our data set shows, were here to engage the users and help them understand they shouldnt be active traders. Its a way to engage and help create a relevant benchmark and we have data that show that over trading actually causes underperformance. Well, we would agree on overtrading. I suggest if you want to you dont want to overtrade. The best demonstration, better than all the other indices we mentioned to day is a total market index, one chf we run. Im a believer in benefits of passive investing. What you and your team have done in terms of furthering the goals and aims of passive investing is incredible. But you step back and we have data that show that maybe people should listen more to what youre doing. I think the real power of this social benchmark and social bench marks in general is that ability to engage people, have them think about the finances and potentially improve their investing style in ways that you can agree with. How does excuse me, david. I want to ask, how does the performance part of your index and based, a crowd sourced index as i understand it, how does the performance of your index, that main one were talking about, compare with the performancest dow or the s p 500 over you give me several time periods. Over the last year, the average investor according to the portfolios has underperformed by eight points. Eight Percentage Points . Is that because because they have diversified portfolio that includes bonds and stocks . Cash . The most interesting thing is really relating back to what david is saying. Its over trading. We actually see that when the market turns down, we see investors sell some of the portfolio. They lighten up on the positions. They panic sell. And they dont reinvest before the market rallies back. So my so if i were to compare my performance to your index and say okay, i want to benchmark against your index, i would presumably be walking in performance that was below that in at least the past year of the s p 500 or the dow . Were not an etf that you invest in and track. Were not managing your money. Were purely just providing you context for hour your own envestment strategy fits n i hope that your portfolio outperforms the average. I hope youre doing better than average. Maybe i should sign up my portfolio. Mine saul indices given what i do and our compliance rules. Right. I guess, you know, what i would say is that it is a good sign that minimal trading, minimal fees and index investing is a very successful way to go and so on. As an educational effort, there is no question i would be in favor of it. I think its very different from either the dow or the s p 500. And thats really the item. If anything, those will 8 you mentioned, ill tell our marketing guys to put it in a quote and run it in an ad and get permission first. Great discussion. Thank you very much. Thanks very much. Thank you. You know, we never ask you about the stock market. You vaul the restaurants and everything. Do you invest in the stock market . Definitely. Last time i think you were in europe we talked about it. And definitely invest. And dont forget. I was public for 18 years. Yeah. So you watched your own. Yeah. But i own a lot of stocks. Do you care about the dow . What do you look at . I look at the s p 500. Because the dow changes out, you know. As soon as a company doesnt do well and only looking at 30 stocks, you pull it out. You put another good one in. So the dow is going to always do well. Lets throwin some and then you make it look good. Youre right. But what we would you know what they need to do . They need to publish, take the dow any of kous do fit we want to take time to do the rsh. Take the dow stocks from 2010 and 1980 and if you ran them as if they were the same dow 30, where would the dow be . Take out the ones, if its an m a deal, thats what happened. But dont pull something out because its not doing well. Thats what they do. If you are not one of the top performers in the United States, you get pulled out and somebody else put in. Or if it gets bought by somebody. Yeah. But thats what im saying. In that case, yes. Thats why i said you have to give them. That but other than that, the dow is the dow. I like the challenges. Im trying to see who is in the dow. Melissa, you and tyler and i have been in the dow. Im trying to look. Ge has been in it for the longest. So the dow in 1982 was allied chemical,al he could yashgs american kan, at t, bethlehem steel, kodak. Yikes. Good argument for taking them out is they no longer represent the economy. And thats why they had to add apple. Sears. Yeah. But what is funny though, right. But if you looked at it, you know where the dow would be . Probably had 400. Woolworth. Take a look at the dow additions like apple whether it was added, it did horrible. After that, it went down. And they never took that away. Are you sure they didnt take it out . Theyll take you out and put you back in. And verizon they took out has done well since being taken out of the dow. There is another aspect of this as well. When you look at that, brian, you see how the world changed. Isnt that amazing. From 1980. We live in a different world today. In 1925, they dropped mack trucks and they also dropped the recommendington Typewriter Company in 1927. This is really interesting. Ill going to ignore the rest of the show. North american company. Were going to have a pacific name. Well let brian do more research and come back at 10 past 2 00 eastern time. The call just came in. Shes about to arrive. And with her, a flood of potential patients. A deluge of digital records. Xrays, mris. All on account. Of penelope. But with the help of at t, and a network that scales up and down ondemand, this hospital can be ready. Giving them the agility to be flexible reliable. Because no one knows like at t. Enis really built into theat foundation of the company. Whole foods market is engaged with pg e on many levels, to really reduce energy and reduce our environmental footprint. For a customer like whole foods, saving energy means helping our environment, and we can be a part of that. Helping Customers Save Energy is a very important part of what pg e does. We can pass those savings on to the environment, the business, and the community. Pg e really is an expert in saving energy, and that partnership is extremely exciting. Together, were building a better california. Welcome back to power lunch. Were still awaiting for donald trump. Once donald trump, the presumptive nominee goes to the podium, well go there. Were expecting this to be followed by a speech on Energy Policy. So in the meantime, lets talk more half the population of north dakota is on that stage. All of business smashg on that stage now as we wait for donald trump. In the meantime, what should americas Energy Policy look like . Back us with, tilman. Great to have you us with. Ill start off with you. I dont get the sense that donald trump wants to end americas oil addiction. Just the opposite being that he is going to be in bismarck, north dakota, delivering an Energy Policy speech. You know, who knows . Hes been on both sides of so many issues. Hes been on both sides of gun rights. Hes been on both sides of choice. Hes been on both sides of Renewable Energy when in iowa, he was strongly for wind power subsidies and ethanol. But then hes been against clean energy subsidies. Im guessing you parsed through his past tweets, past statements, et cetera, to try and formulate what you might think could be a trump Energy Policy . Look, im just going to wait. Im going to wait and see. He is in favor of federal regulations to mandate ethanol. He is in favor of fracking. Hes against the paris climate agreement and he believes that he says Global Warming is a host perm traited by the chinese to undercut american manufacturing. That is from a tweet in 2012. So we have something out. There but were going to see we may see and just a little bit the most comprehensive statement he ever made. Is there anything he can say or do that would change your outlook for oil . If he said something about iran, for example, a decision to roll back the Iranian Nuclear deal, i mean, that could be something that could be potentially negative for iranian oil getting on to the market. But beyond that, i dont really see anything beyond a lot of rhetorical and bluster coming out of this speech. One would think you go to coal s that bad for natural gas and the fraccers . There is bad. He wants to get miners back to work. How are you going to make natural gas more expensive . This is a Market Driven development. It will be interesting to hart facts or the plans. I want to come back to the title of your book. How do end americas addition to oil . Is it there he is. By the way, the people would are gathered there in bismarck and there is mr. Trump. Maybe we better get ready for that. The people around the podium are the north dakota delegates to the gop convention. And there is mr. Trump shaking hands. Another reason he may be in north dakota is the north dakota delegates are unbound. Right. These are the guys that actually can they appear to be all men. These are the guys that can there you go. They can say screw the rules. Were going to do what we want. They said basically as much. So trump unbound. Well see here. Just in a moment. So how do you end the addiction to oil . You know, this issue of the addiction to oil this is not a particularly partisan issue. Lets listen to mr. Trump. We need to listen. Well come back. From north dakota. So north dakota had a big statement. I really appreciate it. We will not forget it. Thank you very much. I want to thank a very good friend of mine, harold ham. I guess we can consider harold the king of energy. Nobody like him. Ill tell you. He knows more about it than anybody that i know. Ive been on the cover of every magazine. I think hes been on more covers of magazines than me. Congratulations and thank you very much for your support. Okay, folks. Yes . Yes, john . [ inaudible question ] thats good. Is that right . I love that word. He used a bad word. He knows nothing about business. When you rattle someone, thats good. Because many of the world, as you know, manufacture our countries in our world, our beautiful world have been absolutely abusing us. So if theyre rattled in a friendly way, thats a good thing, not a bad thing. Arent you showing a cavalier attitude and thinking about what is required to keep america safe. I wonder if you tlik respond to that. The president has done a horrible job. Everybody understand thats. loud manufacture the countries to totally take advantage of him and us, unfortunately. And hes got to say something. Its unusual that every time he has a press conference hes talking about me. So, you know, its just one of those things. I will say this. He is a man who shouldnt be really, you know, airing his difficulties and he shouldnt be airing what hes airing where he is right now. I think youll see it stop pretty soon. He has ooez not done a good job. Today were giving a big speech on energy. Were going to see Amazing Things happen. But president obama, you see where were going. We have tremendous difficulty and problems. Were going to solve those problems. Well solve them fast. Okay . Your Campaign Chairman told the Huffington Post as youre building your vp list, its probably unlikely there is a woman or a minority in that mix. Because that would be pandering. We dont do it for any specific reason. Were looking for absolute competence. I expect well have many women involved with not only i mean ive had it with the campaign, you about wheat have many women involved. I look forward it to. Hes been misquoted. But well have women involved at the highest levels. Mr. Trump, are you going to consider mr. Trump, during the republican primary, you repeatedly tacked your opponents for, you know, being funded by big donors, big money donors. How do you convince your support thaerdz youre not going to become the puppet that you accuse your opponents of snk. Im no puppet. Im raising the money for the party largely for the party. And we intend to raise a lot of money for the party. Were raising it for senators, congressmen, congresswomen. Were raising it for a lot of the people that are running. We want to have majorities. Its very important. We have a tremendous staff of people. We raised a lot of money for the party. This is money that is going into the rnc. And we are going to have, i think, a tremendous were getting thanked all over by the republican senators by congressmen. And hopefully well raise a lot of money. This is money raised for the party. Im also continuing to fund big portions of my campaign. Mr. Trump, he was also quoted as saying did he release your taxes. He said it would lep the adversaries. He seemed to sound as if youre not going to release your taxes. , no im releasing when were finished. The irs is very professional. And they continue to be very professional. Ive been audited for 15 years. I dont know people that are audited for 15 years. Ive audited all the time. The irs is very professional. And as we move along, as soon as thats finished, whenever that may be, hopefully it is before the election. Im fine with that. Okay . Do you pay some federal taxes . I do. Yes. Mr. Trump, welcome to the mr. Trump, in the wake of yesterdays Inspector General report from the state department about Hillary Clintons emails, you said you have doubts about whether or not she can stay in the race against you. Are you prepared to call on her to get out of the race so that americans can have more confidence in the integrity of the front runners . I said i like her in the race. I want to run against her. Look, she has bad judgement. Probably illegal. Certainly it is bad judgement. Its devastating the report. Its dpef staevastating tlaen i reason for it. Skirting on the edge all the time. You look back at her history and this is her history. Its a really, really aharsh report. So it is shocking to see it. Its shocking to see what she did and more than anything else, its bad judgement. That will be up to her if she wants to continue running. You talk a lot about uniting but when you were in new mexico, you went after the governor there zshgs there clinching this number now, does this change your approach at all . Well, i think it will. I havent had the support of the governor of north carolina. She was on somebody elses side. That is fine. That serves right. I imagine shell come over to my side. If you look at whats happened tremendous support from all over the country. We have governors all over the place and vast majorities, i think the approval up is to over 90 . Thats tremendous from where we started. I won the lections in landslides. Very important to sachlt you look at the lections. We go to new york and win almost 62 of the vote with three people running. We then go to pennsylvania which is going to be i think a state that were going to do apladzingly well. I think im going to win pennsylvania easily. We have tremendous support there. Maryland, connecticut. We win delaware, rhode island, and then as we win, you know, we had a tremendous, tremendous success when we went to indiana that was incredible. Bobby knight helped in all fairness. Were going to have tremendous successes. The thing im most proud of, not the fact that im watching hillary instead of hillary watching me. We were supposed to be going into july and a lot of people said it wouldnt be solved during the convention. There is a new convention in august and here im watching hillary fight and she cant close the deal. That should be such an easy deal to close. Shes unable to close the deal. So im watching her. And well see what happens. I was inquiring, are you planning on recognizing tribal sovereignty on a nation to nas basis based on the u. N. Declaration of the rights of Indigenous People which the u. S. Had endorsed . I have to look at it individually and i will be doing that. Number of people have asked me. I will be doing that. Okay . What is your message to people that have not supported you. Do you have something to say to martinez directly . Weve this h. Tremendous support from almost everybody. And even if you look at congress, i mean, the support has been incredible. I spoke with paul ryan last night. Its moving along. Hes a good man. Well see how that works out. We had a very good talk. Also nin the Huffington Post i dont read the Huffington Post. Im sure it is misquoted. I didnt think they covered politics. Do they cover politics . Apparently they do. He said you were going to start softening your position on the muslim ban . We are looking at a lot of different things. We have a radical islamic terrorism problem. Its a worldwide problem. Not just this country. And we have to find a solution. And we have to be vigilant. We have to be tough and smart. Were you serious when you said you wanted to debate Bernie Sanders . Id love to debate bernie. Hes a dream. I said last night on jimmys show, it was i said i would debate him but i want a lot of money put up for charity, if we can raise 10 or 15 million for charity which will be a appropriate amount. I understand the Television Business very well. I think it would get very high ratings. It should be in a big arena somewhere. And we could have a lot of fun it with. Id love to debate bernie. The problem with debating bernie, hes going to lose. Because honestly, has system is rigged just like our system is rigged. Look, if i didnt win bypassi me majorities, i wouldnt be standing here. Bernie hasnt been able to knock out. But the super delegates for the democrats, so on, i mean, its so unfair. Id debate him anyway if they want to put up money for charity. So well see. We actually had a couple calls from the networks already. You have started talking to the promoters . They have to pay a lot of money for it. Im in first place. I won something over 10 million. Youll get on a debate stage with Bernie Sanders . I would love to. I love debating. I know you people never write this. But every single poll on every single debate the online polls, drudge and Time Magazine and all of them, i won every single debate. I didnt know i was going to do that. I never debated. You know, politicians are all talk, no action. I created jobs. And businesses and did great. But i never debated professionally. You know, i ran against all these people. They debated professionally. But according to every Single Online poll after the debates i won every single debate by every single poll. So i dont mind debating. I like to debate. You know, the one thingcy said to myself, i wonder how well ill debate. You know, guys like this great gentleman right over here is one of great oilmen of the world, were not debaters. Were people that put people to work and do things and a lot of good things. How many people do you have working for you . Tens of thousands. Tens of thousands. Thats what he z id rather debate harold. But i will tell you, he may surprise you. He may do very well. But we dont do that. But somehow it worked out well for me. It worked out well for me. So i actually lot of debating process. I had a lot of fun. I was soenter stage for every single debate. The only time i was upset with the networks is when we had even numbers. Like eight. That means you had two in the middle. I always insisted on having odd numbers. Go ahead. What hold do you think the federal government should have on energy now that youre at this Petroleum Conference . I think the federal government should get out of the way. The federal government is in the way. We have so much potential energy that people wouldnt even believe it. In fact, my speech today is on energy. The coal mines are shut. What theyve done to what Hillary Clinton, shes worse than obama. I mean she actually openly said i want to put the coal miners out of business. I want to put the coal mines out of business. Essentially, shes saying i want to put the steel mills out of business. Were not going to have any businesses left. I dobt know how she can do well in pennsylvania. She certainly didnt do well in west virginia. And, you know, i think she made a big mistake. She is catering to certain people. I think ultimately jobs and these incredible people, the miners. I asked a couple of them, why dont you go into a different profession . They said because we love going after coal. Ill never forget the answer. You know, you think its dangerous and you are going deep down into these incredible crevasses. I say, wow. But they love doing what they do. Thats what they do. Its like me, you know, i grew up. My father was in real estate. Im in real estate. And now im in politics. He wouldnt believe what happened. Hes looking down saying what happened . But with the coal miners, they love doing what theyre doing. Hillary clinton, and such an important product. Hillary clinton should not be putting them out of business. Would you be for bringing more refineries here to the u. S. So we can become more Energy Independent . I want to be Energy Independent, yes. Absolutely. I want to be Energy Independent. And i havent spoke ton harold about. That i would say Energy Independence is what we all want. And we also want to sell our energy to other place thats dont have the great Natural Resources that we have. Dont forget. Through modern day technology, we found out that were sitting on energy. Im going to be talking about it in a minute. But that were sitting on energy like nobody would believe. I want to be Energy Independent. And the answer is yes to your question. Paul ryan has still not endorsed you. What policy concessions are you willing to make to get the endorsement . Well see what happens. Weve had great conversations. Well see what happens. Do you still believe you would still want to ban all foreign muslims on a temporary base snis. As of this moment, im very unhappy when i look at the world of radical islam. Im very unhappy it with. Were going to find a problem. And were going to come up with a solution. Obama could never come up with a solution. Number one, hes incompetent. And number two, the solution just is never going to be out there for him. He wont even mention the word. They say to me, thank you. Thank you. This is a problem. Its a problem that has to get solved. And when you see people that are looking to do tremendous destruction like in california with the 14 people killed, they lived in a house where they had bombs all over the floor. People knew they were up to bad stuff. Nobody reported them. People have to report when they see. Okay. Go ahead. Does your band still stand . You said you would bring coal mining jobs back. Im a reporter in wyoming, the largest coal producing state. I see. By far. I was very impressed. One of the main factors of the jobs going away and mines are closing is because of low natural gas prices. Poor Decision Making by coal companies. And by government. And also because of slowing international demand. So do you believe you have power as the president to actually bring the jobs back and how . I think ultimately goal is very inexpensive. You have to get rid of some of the regulations. I spoke to some mine owners and they were showing me some of the regulations where its on a daily basis going in checking, checking, checking. They have people that do nothing but deal with regulators. And its out of control. Market forces are going to be whatever they are. All i can do is free up the coal which im going to totally do. Get the Companies Back to work, market forces. That something i dont want to get involved. Thats beautiful to me. A market force is beautiful. Sir, i think im the only Canadian Press here. The he could stone excel problem created problems pt you would aprofit keystone xl and would you contract to build it . Yes, i would. It should be approved. Im not saying it shouldnt be a better deal. Hillary is probably not going to approve it. Ill absolutely approve it 100 . But i want a better deal. Listen, heres the difference between harold ham and myself and you or obama who doesnt know what the hell hes doing. Heres the difference. Im going to say, folks, were going to let you build the pipeline but give us a piece. We have to use Eminent Domain. Eminent domain. The favorite project is the Keystone Pipeline. If you read the documents, the whole big section is devoted to Eminent Domain. Without it, pa pipeline wouldnt go ten feet. You understand. That i want the Keystone Pipeline but the people of United States should be given a significant peefs the profits. Right now obama would say yes or no and most politician was say yes, well approve it or we wont. Im saying well approve it. I want it built. But i want a piece of the profits because well make it impossible for it to happen through Eminent Domain and other things. I want a piece of the profits for the United States. Thats how were going to make our country rich again. One way out of thousands much thats how were going to make our country rich again and how were going to make America Great again. You understand what im saying . They would like to build a pipeline and mr. Ham could ship the oil through this is a different pipeline. Do you like the zbld. Its great. Do you like the idea as a reporter . Im the only person that rates energy. I love it. Im going to look at anything. Im going to look at anything. A lot of times pipelines are so much better because instead of going on trains and having all of the problems caused by that, its underground and environmentally theyre better in many cases. But were going to take a look at it. Pipeline would involve mr. Ham to export oil through canada into canada and also overseas through canadian ports. Well im not aware of that one. Well certainly take a look at it. My basic bias is to approve. I want to approve for jobs and the concept of pipelines is kafrme kafrment. Sir, a local Small Business magazine, so for Small Businesses and chambers of commerce across america, what are the keys to Economic Vitality . Two of them, lower taxes, were the highest taxed nation by far. And the other one is were overregulated. And i will tell you, i made a speech last night in front of a group. I said regulation and this surprised me, really surprised me. Ive seen it ever since i have been doing this for like ten months or so. And regulation is even more of a problem for people than the taxes which surprise me. But theyre both problems. So were going to lower under my plan, were lowering taxes very substantially as you know for businesses, for middle income, for everybody. So taxes are going to go way down and were going to get rid of the tremendous numbers of rules, regulations, probably 75 of which are absolutely takerible for our country. Okay. Is that offensive. You tell me. Im sorry about. That pocahantas. Is that what you said . Why are you having this conversation . No, she tweets about me. Every once in a while i tweet, when i tweet, not many people are watching their tweets. When i tweet, they watch. Ill say this look, she is a senator that is highly overrated. Shes passed very little legislation. She has been a real disaster for a lot of people including the democrats who frankly cant stand her manufacture the democrats. Just ask Hillary Clinton how she likes her. And i would say this. Ill debate anybody. I dont care. Id debate her. Shes done very little for massachusetts. The beautiful thing is i got up to almost 50 . And she was fighting me. So i really think if her record was exposed and the fact that she was a nativeamerican, she said she was nativeamerican but she wasnt able to document it, she said well i have high cheekbones. You see, i have high cheekbones. Im a nativeamerican. And then she i noent foe if it is a fraud, but she was able to get into various schools because she applied as a nativeamerican and probably able to get other things. I think shes as nativeamerican as i am. That i will tell you. But shes a woman that is very infective other than she as a big mouth. Go ahead in the back. You said you would do a debate with senator sanders and raised t ed the idea of raisingy for Womens Health issues. We raised a lot of money. Nakt, on tuesday, were going to be releasing a tremendous list of all the money weve given with the debate when i decided that i wanted to do this instead of go to a particular debate. I felt i wasnt treated right. I did a speech. During the speech, i said lets see if we can raise money for the vets. On tuesday, were going to have a press conference in trump tower, tuesday at probably 10 00 or 11 00 and were going to release a full list of all of the people, almost 6 million worth of money was raised. Now when i started that, i said maybe i started it. We werent going to raise anything. It was a idea that came to me. I said lets raise some money for the vets. And one of my friends who was there, very substantial person offered 1 million. Carl icahn gave half a million. Somebody else, another good friend of mine, i believe he gave 1 million. All of a sudden, we started getting a lot of money. I love seeing it. And on tuesday, were going to release a list of all of the different veterans groups that got the money. Close to pretty close to 6 million worth of money. And that was great. And what i do if we did this debate, id like to do something similar where theyll pay this. In this case, it will be just a payment about it networks. Why should the networks have a dean like this, mach a fortune, sell it to sponsors and put the money in their covffers . Vince fosters sister now that you hit the magic number of 1237 im so honored. That is really good. So honored to be in north dakota. Were glad to be here. So honored by these people. Exactly. But now you set the sights on being president , what do do you in the first 100 days . Well, number one, ill be unwinding various executive orders. And ill be unwinding executive orders in particular having to do with the bored wrer people are pouring into our country that arent supposed to be here. And well be unwinding that. Well have a lot of things to do. Were going to start rebuilding our military. We have no choice. We have no choice. Its not like gee do you want to do it . Were going to build our military stronger than before. I saw the other day, actually on cnn, but where the jet fighters were using parts from museums and graveyards, plane graveyards where theyre taking old parts for our fighters for f16s and interviewing the pilots. These are great people. And they were saying theyre so embarrassed and so ashamed of what is going on. This shouldnt be the United States. So were going to rebuild our military. Were going to have the finest equipment in the world again. And nobodys going to mess us with. Very simple. By the way, im the last person in terms of the draw. I wont have to worry about the draw. Im the last person. I didnt want to go into iraq unlike hillary and other people. And we shouldnt have gone into iraq. Iraq was a mistake. And thent way obama got us out was a tremendous mistake. So well have well have a lot of fun that first 100 days. Well start prot ses of making America Great again. How about a couple more . I was wondering, first, you have to get through the general lection. How close is the Campaign Staff for being ready for the general Election Campaign . One of the reasons i made a deal with the rnc is, which to me is i think they have done a really good job. They build staffs in every state. You cant do that or you cant do it very well if youre doing it all over the next few months. So now i just learned i got the nomination. This is going to happen according to some people in august and some people were saying because of the Second Convention which would have been ridiculous and many people said it was going to go into the july. And then we had that massive victory in indiana. I wont forget the people of indiana. That was a massive victory. Is so here im sitting. I love watching hillary and bernie go at it. Bernie has given me great lines which im using, believe me. But i will say that as far as building, the infrastructure, theyve been doing it for many years. He has really upped it. And all over the country they have very good people. And partst benefit is we get to use those people. While im raising money for them, theyre going to use it for other people running for office, its been an honor. I met some of the people in different states. I met a big group of people from different states that work for the rnc. And down the that over a period of just a short while. You know, we have november is coming up very rapidly. It will be very tosoon. And they are set up with really great fran struinfrastructure. Vince fosters sister called your comments to the Washington Post about cruel, irresponsible, and wrong. The question was asked about vince foster. And it was asked of me. What do you think of vince foster . I really know nothing about the vince foster situation. I havent known anything about it. Somebody asked me the question the other day. I said that. A lot of people are very skeptical as to what happened and how he died. I know nothing about it. I dont think its something that, frankly, unless some evidence of the contrary ive seen come up i dont think it sure be part of the campaign. But if you reveal something to america ill answer it in the appropriate way. Okay. One more. Mr. Trump yes . Here in north dakota, fracking is on the forefront of everyones mind. Bernie said he would ban it all together. How you would deal with it . Bern ji going to ban fracking. Hillary is going to ban fracking. Hillary is going to abolish the Second Amendment in case you have any questions. Shes going to abolish your right to own guns. Shes going to abolish the Second Amendment. Im the opposite. I got the endorsement the other day from the nra which is a great honor for me. Theyre great, amazing people. Im a member of the nra. My sons are members of the nra. But they want to absolutely knock out fracking. You do that, youll be back into the middle east and begging for oil again. Its not going to happen. Not with me. Were going to open it up and be Energy Independent. Well have all sorts of energy. Were going to have everything can you think of, including solar and i know a lot about solar. Solar is very expensive. I know a lot about solar and gone solar on eection. Its a very expensive thing. Wind is very expensive. Without subsidy, wind doesnt work. You need massive subsidies for wind. There are places maybe for wind. But if you go to various places in california, wind is killing all of the eagles. If you shoot an eagle, you kill an eagle, they want to put new jail for five years. Yet, the wind mills are killing hundreds and hundreds of eagles. Theyre killing them by the hundreds and nothing happens. Swind a problem and its very expensive and doesnt work without subsidy. But i despite that, i am into all types of energy. I love the farmers and the farmers are incredible. We have to remember this was largely a farm state. And they produced tremendous crops of tremendous different goods of which i eat a lot of them. I just want to pay my respect to the farmers of north dakota because they have done a great job. One more, go ahead. Mandate passed 2022 . Well look at that and meet with the governor of iowa who is tremendous, tremendous guy and a friend of mine. Well talk about it. A lot of people want that to happen. We will be making a decision fairly soon. Okay. Given the low cost of crude oil exported since the ban and regulations were lifted by the federal government recently, what you would do to increase and stimulate growth in those volumes . Thats going to be im going to open it up so they can sell. That wont be up to people like harold if he wants to sell to other places. Im not going to help him. Nobody can sell like him. But now i would open it up and keep it open, get rid of the regulations and people like harold ham and, you know, people that i know that are really competent, super competent, believe me. And well start well make so much money from that, from energy because were blessed with something. Youll hear some numbers in a little while. We will make so much money that we will start to pay down our 19 trillion in debt. And well start to lower taxes and well start to take care of our Social Security and our medicare. Were going to open it up. Go ahead, david. I have to let him do this. I have a couple of bad ones, too. Now that a couple of women have taken issue with the way they were portrayed in a recent major story. So honored by that. Do you think youre done answering questions now about whether youre a sexist . Are you done or do you expect more of that . I think. So i was so honored. The New York Times did this massive story on the front page. And they quoted three women and then another woman. Manufacture the women have come forward saying we have Great Respect for donald trump. We really like donald trump. Thats not what we said. Thats not how it was portrayed. And they actually said this was going to be a wonderful piece. And the New York Times has been totally discredited. And the construction person i just presented many, many emails and i think i sent them you to, david. I did send them to you. Many, many emails where she is asking for a job back. Because after she was gone i never took her back shechlt. She wanted her job back. She wrote a book and said the nicest things about me. She said youre the least sexist person. I didnt know why she mentioned it. Anyone that would mention that if a letter is strange. Nobody accused me of it. But she writes me a letter. But she wrote many emails asking for her job back. Shes been totally discredited. So the New York Times story has been totally discredited. The New York Times i can tell you from personal knowledge is very, very embarrassed. It was a total hit job on donald trump. And to put a story like that above the fold with a massive picture of myself standing with Miss Universe contestants or maybe usa contestants who, you know, which i own, which i sold recently to img, i sold the pageants to img, good deal, by the way, but for them to put pue that above the fold, the New York Times, i can tell you theyre very ashamed of that story, and for the women to come o out, to come ow and be brave and say, who dwould that, that would be so nice. Did not speak to her when she did this. I spoke to her more recently and thanked her because it took courage for her to do that. And for her and others to come out and go forward and say, you really, really mistreated us by writing the story the way you wrote it, and we have Great Respect for donald trump and like donald trump very much, the New York Times was totally discredited. And honestly they should be ashamed of themselves. So its been a great event for me. I hated reading the story, even though this was not, you know, major allegations of very much stuff, you understand what im saying. One said, dont eat that candy. In fact, a friend of mine called up and said, its not too sear yu. But they made it like it was a big violation. Dont eat that candy. I appreciate the story you wrote about it because the New York Times has been totally discredited, and i will tell you. Theyre very embarrassed by that story. So ladies and gentlemen, thank you very much. Who created that . A talented person. Hes been here a long time. Come on. Get over here. Hes been here right from the beginning, right . Youve changed my life. I guess if youre one of the first seven or eight members of congress to endorse somebody, your life gets changed. My lifes been changed. Im glad youre here. I appreciate your invitation, your comments on energy, and look forward to hearing the rest of it. [ inaudible ] i missed voting for the energy and rep pragss bill that failed miserably, so i didnt miss a thing. Thank you, everybody. Speaker ryan suggested that hes withholding his endorsement. Lets see what happens. Thank you, everybody. Thank you. Donald trump has a bit of a hard time saying goodbye, we have to agree. He likes taking questions and he likes punching back around counterpunching, we got everything from killer windmills to diet tips, dont eat the candy, and a little bit of Energy Policy thrown in on this day where mr. Trump will later today give whats being portrayed as major policy statement about fracking and Energy Policy. And here to talk about that is our round table. How the next american president can end the United States oil addiction. Helima, it sounds like mr. Trump is strongly in faber of more oil exploration, fossil fuels. He doesnt think much of sew lafrmt windmills kill eagles . And Energy Independence. I think one of the questions is are we ever going to be independent. You can have this u. S. Resource, you can explore it, but ultimately we will still need to be dependent on these middle eastern producers. Im going to be very interested to hear how he talks about that on his speech. David . Hes peddling some outdated material. Today 200,000 are working in the solar industry. Thats three times more than working in coal mining. Solar has dropped about 80 in cost. Well see what he says in speech. So far Energy Independence. He said hes going to put cole workers back to work, but he hasnt told us how. And at the same time hes going to increase fracturing which is the maybe reason prices have gone down and put cole minal mi out of work. Helima, when i first joined cnbc, i made a montage of all the president s saying were going to end our independence. Johnson, ford, reagan, carter, one after the other. We havent done it. Like what youre saying about renewables. That has come dramatically down. What i dont understand, david, is this. Why do politicians act like its an youts come. Were going to need everything, are we not . Were going to need wind, solar, giants hamsters, whatever. Youre absolutely right. The other thing is we need to improve the efficiency of our energy use. Were doing that in our vehicles. We waste so much energy in our buildings right now. Weve made some good progress, but thats part of the package too that all of the above, thats what were talking about. Cars still run on gas and it will. We cant be deep see independent with the deep seadrilling and if we want to do it, we can do it. We might not choose to do it. I live with all those oil guys in houston. They tell me what they can and cant do and we can totally be energy youve got to remember. The energy that a building uses today, a million square foot building compared to one that was built 30 years ago is like 22 . Were aegd all these people, but were using thats a National Security issue frankly. To me thats how i look at it. So that were not forced to be so involved in part os testify world where people dont like us. I think thats the argument obama made. We do keep getting dragged back. The reality is we need a heavier barrel down in the gulf. Thats what saudi arabia and venezuela produce. There is a bit of a mismatch in terms of what u. S. Shale uses. We will still need oil for the foreseeable future. The one thing he said about coal, you said and someone chimed in. The reporter from wyoming asked a very good question. Trump said hes going to bring back the coal system. Its not killed by regulation, by market forces. The natural gas price, yes. Machines have taken jobs away. By the way, and the reporter said this, decreasing demand around the world, in particular kai na. We havent heard from donald trump yet, what he plans to do wall those forces. If the Keystone Pipeline is approved, which he said he would do 100 , what does that do for the wti profits . Theyre going to take it. Were going to buildnd and take our pay for it. Weve heard this with walls. Somewhere up in calgary in his office, someone fell off their chair. You know, one other topic. We saw a record tesla put out a new product. It had 400,000 advanced orders there. Thats going to affect the energy mix as well. Somebodys got to provide hold on. Weve got a news update on twister. It looks like two more are leaving twitter. Theyre leaving the social media network. It looks as if one current employee whos the vp that currently runs twitter amplifies the twitter advertising business is going to take over most of those roles. It does say she left on her own accord and this has been confirmed by our own julia boorstin. Back to you. Thanks so much. This is, of course, twitter is about 60 cents away from its alltime low. You use twitter now. Whats going on here . I do. Whats amazing is the young people are not using twitter. They love snapchat and instagram. So if you dont have the younger ones embracing twitter, youre in trouble. They need to do something and obviously they are. Theyre going to sell. When youre a listen, as a guy that runs businesses, you know, youve got two major executives leaving a corporation under whatever. Its an effect. Its an effect. Its an effect. If i lose two of my top ten people, i feel it. Yeah, absolutely. All right, folks. That brings us pretty much to the end. I had to wipe a lot off the slate there. We had gott watch trump which we never get to do. No eagles were killed. Why dont we take a quick market check do. We have time . Why not. The s p up a little bit. The dow down a little bit after two days of big gains. The irrelevant index as we debated an hour ago and the nasdaq is hire. So for our entire family, i thank you for watching power lunch. Closing bell starts right now. I think i know what that music is and i think i should know. Welcome to the closing bell. Im kelly evans. Im bill griffeth. You are wise, kelly. Thats the walking dead theme song. You see there the man who plays daryl dixon will be here. Norman reedus will talk about his new show called