>> xls breaking out. >> yeah. jpmorgan downgraded yet. >> jpmorgan is going to 100. cramer is right. >> it is rotation time >> all right good stuff >> thanks to all of you watching watching the markets now, 22,303 is where the dow sitting the president speaking about the tax plan in a little bit "power lunch" starts right now i'm melissa lee. fixing america's broken tax code republican leadership unveiling details of their big plan. we'll break it down and what it means for you and your business. >> reports say the cardinals head coach, rick patino and athletic direct rer out in the wa wake of the basketball scandal. and why amc ceo is going all in on vr "power lunch" starts right now

>> i'm brian sullivan. your money steady this hour. you can see the major indexes, fractionally higher. because they're not moving a lot doesn't mean there's not money being made the banks, bank of america up nearly 2.5%. sink k synchrony, all all kellogg hitting two-year lows. no one eating cereal anymore, but they are using microchips. moik kr micron is rallying >> i'm in santa monica, if i had to move one place in america, as you know, it may well be here to santa monica we're here for the tour that brings together some of the nation's most dynamic ent from

n entrepreneurs and innovators how they're turning things upside down. joining me over the next couple hours, from the black swan group, chris voss. a lead international kidnapping negotiator he'll teach us how to negotiate like your life depends on it and we'll hear from the co-founders of cavu venture. they are the folks behind such drinks as the popular water drink, vidacoco, chefs cut, they'll talk about that. and the founder of california baby will join us. she'll tell us about her 20-year journey to create a global brand. she's one of the richest self-made women in america she started with a $2,000 stake and running an $80 million a

year business. melissa? >> we wish we were there, too. >> it's so beautiful >> we have a special guest with us for the first hour. fedex ceo fred smith we have a lot to talk about including taxes, sfrux ainfraste and trade. republican leadership unveiling details of their tax plan. ylan mui and eamon javers join us ylan >> the corporate rate would go down to 20%. flaus b pass through businesses a 25% rate the cost of borrowing money would be partially limited under this framework they don't specify how they would do that businesses would lose the deduction for domestic production on the flip side, businesses would get the ability to fully expense capital investments for at least five years. they would get a lower rate on repatriated earnings

on the individual side, the tax rates would go down to flthree, 12, 25, and 35, though there is a potential for lawmakers to add a fourth top rate. this is orchestrated to show there's unity between the white house and republican leadership. that's the so-called big six they've been hashing out this deal over the past several months senate majority leader mitch mcconnell has had a somewhat rocky relationship with president trump in the past. today he put out a statement thanking the president and saying they would work together to get tax reform done the business community ises a out in full bore for this the american bankers association, the chamber of commerce,s a retailers are coming out in support of this plan the opposition is mounting as well democratic senator ron white, a ranking member of the senate finance committee -- >> we want to go to president trump speaking moments ago >> i'm happy with that i spoke to him last night. i never met him.

i never spoke to him i'm happy with him i have to say luther came a long way from the time i endorsed him. he ran a good race but roy ran a great race i know what they did with mitch, they used him in the campaign. he worked hard i'm sure thing also work out i wanted to say, on healthcare we have the votes for healthcare we have one senator that is in the hospital he can't vote because he's in the hospital >> you're talking about -- >> he can't vote because he's in the hospital we have two other votes coming, we'll have them. but we can't have them by friday because the reconciliation ends on frichltd we' on friday. i'm almost certain we have the votes, but with one man in the hospital, we cannot display we have them. plus some people want to go through a process to make themselves feel better, that's

okay what do you mean by that is mitch mcconnell in trouble? [inaudible question] >> we're talking about healthcare [inaudible question] >> i was looking into it i will look into it. i'm nop knt happy about it >> you are going fire him. >> i'm not happy about it. i let him know about it. >> is mitch mcconnell in trouble? >> you'll have to ask the senators about that. we're going now to indiana, we're going to introduce a tax plan that's the largest tax cut essentially in the history of our country. it's going to be something special. you already know some of the numbers. we'll give you some additional numbers. on healthcare, we have the votes. we can't do it now because we have somebody in the hospital. and we have great respect for that gentleman

he's a fantastic man >> he was yes. >> that's right. >> why does it matter? >> he has to come here and vote. >> he can't come here and vote because he's in the hospital >> here's the story. we will do it in january or february as you know, we have the votes but we can't go longer than friday what we'll do is we will do the block grants, we will do the healthcare we'll get a longer process going for the couple of people that did want to see more process even though they're a yes vote more importantly, i'm also during this period of a couple months, i will meet with democrats and i will see if i can get a healthcare plan that is even better so i will negotiate with democrats, but from the republican standpoint, we have the votes, we'll vote in january, february or march >> are you considering an

executive order? >> i am considering an executive order or associations and that will take care of a tremendous number of people with regard to healthcare i'll probably be signing a very major executive order where people can go out, cross state lines, do lots of things, buy they're own healthcare that will be probably signed next week. it's being finished now. it's going to cover a lot of territory and a lot of people. millions of people [inaudible question] >> john? [inaudible question] >> i think we're there now, john i'll be honest you look at the statement put out by alaska, right you say that by lisa. you look at the other couple of statements we're only one off maybe two. but we can't vote now, john. you probably didn't hear me. one of our yes votes is in the hospital >> who is that. >> i can't take him out of the

hospital [inaudible question] >> i do have confidence in him yeah but it's really not up to me it's up to the senate. i do have confidence in him. i will say they used him in the race, i was honored by the way i was treated in the race, but they used him in the race. john, they used him in the race. you know -- >> on tax reform, does your plan help the wealthy too much? >> my plan is for the working people and for jobs. >> you wouldn't benefit under your tax plan. >> i don't benefit in fact, very, very strongly, as you've seen, i think there's very little benefit for people of wealth. [inaudible question] >> the state tax, if you look at it, for farmers and people of small businesses

[inaudible question] i don't see it we'll talk to you at a different time here's the point -- [inaudible question] -- the point is this healthcare, we have it we have the votes. because of reckon sill yaoncilre have to wait until january, february, march. in the meantime i will negotiate with democrats to see if we can make a bipartisan bill [inaudible question] >> very much a red line. i wanted to start at 15 so that we got 20. the numbers were -- 15 was so low, we didn't take in the revenue. i wanted 15 so we got 20 20 is my number. i'm not negotiating that number. i am not going to negotiate --

that's the number i wanted to get to i wanted to start at 15 to get there. we really had to start there because of the complexity of the number >> on puerto rico, mr. president, why not lift the jones act. >> we're thinking about that but we have a lot of shippers, people and people that work in the industry that don't want the jones act lifted we have a lot of ships out there right now. i will tell you the governor was very generous yesterday with his statement, and so was the mayor of san juan. very, very generous with their statements we have a lot of people. i'm going there on tuesday, as you probably heard puerto rico is a difficult situation. that place was just destroyed. that's not a question of let's dry up the water and this and that that place was flattened that is a tough situation. i feel so badly for those people [inaudible question]

>> the people allow certain countries. we can add countries and take countries away as far as the travel ban is concerned. whatever it is, i want the toughest travel ban we can have. i will see you in indiana we will go over some more talking points is everyone going? [inaudible question] >> i think the nfl is in a box they're in a really bad box. if you look at what's happening with their ratings, frankly the only thing doing well in the nfl is the pregame because everybody wants to see what's going on. the nfl is in a bad box. you cannot have people disrespecting our national

anthem, our flag, our country, and that's what they're doing. in my opinion, the nfl has to change or you know what will happen their business will go to hell >> the first amendment -- [inaudible question] >> that was president trump making impromptu comments on the white house lawn outside of marine one commenting on a number of things melissa lee and fred smith with us for the hour. some things the president discussed. he believes they have the votes to get healthcare done he noted a senator that was in the hospital he was likely referring to thad cochran no longer in the hospital, but in mississippi recuperating he said he would negotiate potential block grants with the democrats. though it would early be in to 1 2010 he talked about wanting to start at 15% corporate tax rate to get

to 20. he made the comment about the nfl, you heard at the end that basically you cannot allow people to disrespect the flag or their business will go to hell >> with us on "power lunch" is fedex chairman fred smith. he says simplifying the tax code will help create growth. great to have you with us. are you optimistic that that tax reform will go through given some of the difficulties republicans have had getting their agenda through >> i am. i'm optimistic because it's different from healthcare. there's broad consensus on the democratic and the republican side of the house that our tax code is not an effective one our two biggest competitors are u.p.s., and dhl.

our effective tax rate is 34%. >> your effective. >> that's our rate >> after deductions. 34%. >> correct >> you need a better accountant. >> that's down a bit dhl, that was 12% last year. 15% the year before that it's like us playing basketball. on the end of the court, we're playing with a 12-foot basket, everyone else is shooting on a 10-foot basket it's got to be changed for u.s. competitiveness and to incent investment in the united states. >> you will get many people out there who will say corporations are complaining about these tax rates but paying very low percentages, maybe historically low percentages to the overall tax pie. effectively it is complaining. how would you answer those critics? the problem is if they're on the

left, they want to take a technology company which is able to use various tax jurisdictions to have a low tax rate, but an industrial and transportation and logistics company like fedex has a 34% rate one thing this tax reform package does is to eliminate many, many deductions in order to have a more uniform, albeit lower statutory rate of 20% >> do you think the president or republicans are handling getting a tax plan across the line well? they chose to go for healthcare fact i would imagine for a company like fedex, tax would have the biggest impact for you >> i think better strategy and monday morning quarterback is always perfect i think a better strategy would be to go for infrastructure

first, then tax reform and healthcare the mantra was you needed healthcare to do tax reform. that's not correct we've seen that in the last few days, when healthcare reform is stymied and they introduced an initiative to reform taxes >> do you think it will get done >> i think it has to get done. the country is not investing enough, either business or government to produce the type of blue collar middle class wages that people want to see. we're not even back at the pre-financial crisis levels, and federal investment and infrastructure is down to 1948 levels >> let's follow up on melissa's healthcare question with what cement about incomes many americans have not had a raise in 10 years, 20 years. a salary raise

i'm sure they've gotten more from their company in terms of healthcare benefits. how much has the rise of healthcare costs at the corporate level impacted fedex eaves ability ability to say i want to give you 5% more in pay, but i can't because i have to pay 10% more on the healthcare side >> we've been able to give our employees annual wage increases at a substantial level year after year to go to your question about healthcare, we adopted, like most large companies did, a consumer driven healthcare plan when the aca was passed, theed a cac tax was put in place we matched it up with health reimbursement accounts we give folks on the front end and help them be better health consumers. we have held our healthcare increases to a left whe level w

can get good healthcare increases. new developments in the college basketball bribery scandal. lde university of louisville hoing a press conference saying coach pitino is on administrative leave live-stream your favorite sport

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welcome back the university of louisville holding a live news conference on their involvement in the ncaa basketball scandal let's get to eric chime for some of the headlines on a sports story rocking the business and sports world >> that's right. rocking both sports and business we heard from the interim president at louisville university he said head coach rick pitino is on unpaid administrative leave. he has not been technically fired yet. similarly the athletic director is on administrative leave, but his will be paid they will be reviewing his employment status as it relates to his contract. the player involved, he will not be allowed to participate in ncaa activities. the louisville president said the fbi has been on campus, there will be more reports here to come. rick pitino, one of the highest paid college coaches in the

country. the adidas louisville deal one of the highest contracts in college athletics. >> administrative leave, that may not please everybody we'll see. >> you got it. let's check back in with tyler mathisen withwhat's coming up from the iconic conference >> melissa, thank you very much. we have the art of the deal from someone who spent most of his career negotiating hostage releases for the fbi he's now advising fortune 500 companies on how to get what they want. he sars h s they want. he sars hhares his strategies ad tips for you next. ♪ and let me play

(bell ring)

thank you so much. thank you! so we're a go? yes! we got a yes! what does that mean for purchasing? purchase. let's do this. got it. book the flights! hai! si! si! ya! ya! ya! what does that mean for us? we can get stuff. what's it mean for shipping? ship the goods. you're a go! you got the green light. that means go! oh, yeah. start saying yes to your company's best ideas. we're gonna hit our launch date! (scream) thank you! goodbye! let us help with money and know-how,

so you can get business done. american express open. hey everybody. welcome back my first guest here at iconic conference in los angeles is chris voss, former lead international kidnapping negotiator and an expert at high-stakes deal making. his applying his experiences to the world of complex corporate negotiation. his book is titled "never split the difference: negotiating like your life depended on it." chris, welcome >> thank you very much pleasure to be here. >> in the past couple of minutes president trump said he's ready to negotiate with the democrats about healthcare reform. i wonder what you think of

president trump the negotiator his style, the way he plays it what do you think? the man who wrote "art of the deal." >> his tile is assertive he is the type of negotiator as a hostage negotiator i had to learn to get the upper hand on without making him mad or worse. the reason why he's going to the democrats is the republicans are tired of him an assertive, openly aggressive negotiator, people get tired of dealing with them. so then they start talking to other people nobody will talk to them >> you make a point there's a kind of negotiating judo, a yin and yang in negotiating. sometimes you're demanding i think mr. trump is generally more on that side. but there are moments where you might get better results by being deferential. >> there's great power in deference. i can say you have to give me this in a demanding way, or i could say, look, if we don't put this on the table, we can't make a deal >> let's talk about another

negotiator, another style of negotiator you have been in tight spots where you've had to negotiate with people who took hostages, who are kidnappers, they see those victims as their only way to stay alive or stay out of jail their only bargaining chip substitute nuclear weapons for kidnapping victims and tell me how you would negotiate with kim jong-un who sees those weapons as his only way to stay alive and in power what does he see in the future he wants the kidnapper or hostagetaker, my first thick is i want to see you live through this. i want to know whether or not he sees himself alive in the future we pick a spot in the future that we both like. how to move back from there is where the art of the negotiation comes in i will pick a place in the future that you like that i will take you to now you're more cooperative.

>> you also talk about two important tactics in a negotiation. one is called mirroring, where you repeat back the negotiator position of the other person and the other one is where you get to a moment in a negotiation where you concede to the adversary, that's right. talk to me about that. >> i get the adversary to say that's right to me >> all right that triggers a break through. it's weaponized empathy. military grade empathy seek first, enemy understood if you say that to me, you feel understood now you're willing to listen, which is where i've been trying to get you all along >> when you're preparing for a negotiation, what is the most important thing? is it knowing what you want? is it knowing what you're willing to give up is it knowing what you are absolutely not willing to give up >> actually, those are all

secondary what i'm after is what can i get on the table >> what can you put on the table? >> what can i get to you put on the table. what i want what i'm willing to give up, what you want is still open to negotiation. i want everything on the table you got stuff i don't know about. i need you to get you to put that on the table. now i'll make my decisions >> is there any role for feelings in a negotiation. >> you can't exist as a human being without them if i get you feeling good you'll make a deal with me. if i eliminate how you're mad at me, you'll make a deal with me i know that stuff is going on in your brain i will reach in, dial some of it up and some of it down >> i wish we had more time, i wish i could pick your brain on how you learned all this it's cool stuff. chris voss, thanks for being with us today. "power lunch" will continue in a couple minutes we have more of our exclusive power lunch interview with fred smit th,he ceo of fedex.

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breaking news from the fed

let's get to steve liesman the federal reserve out with its triannual survey of consumer finances, and it finds medium family incomes drew %. th grew 10%. the biggest income gains went to families without high school diplomas african-americans and hispanics also saw larger income gains than whites. that did not reverse the trend of wealth at the top of the spectrum the taupeop 1% of income share rising from 28.3 not only income, when it comes to wealth, the top 1% wealth climbing to 38.6 this is a survey with a direct

braring in bearing on the discussion and debate over taxes. good news on the income side let's bring in casey matthews and andrew slimmens fred smith joining us for the rest of the hour casey and andrew thank you very much andrew, starting with you. tax proposal/plan, whatever you want to call it. not a bill that the coming out. corporate tax rate, expected to be cut to 20%. if we get that, how much do you think that could add to corporate earnings, and thus add to the stock market? >> i mean, look, i don't think as we roll into next year's numbers, which will happen in the fourth quarter, the market looks not that expensive based on 146 as the consensus now. can you get another $10, $15 on to that? that's the upside for the market i don't think 146, which is -- there's no tax reform baked into that number. >> i would imagine, fred smith, i want to bring you in you do

taxes. you pay a couple billion in taxes a year >> 34% yes. >> that's a lot. if that gets knocked down, that will free up a few billion would that go to earnings per share? how would that money -- would it go to jobs what would you do with be the money? >> fedex is a capital intensive business our capex budget we have insufficient money to create wage increases. you heard wanlwages are going u there's inflationary pressures on wages but for the average person you have to have capital investment. think of a person with a shove verses a bulldoze end. so we would probably increase our dividends, we would increase our capital investment and i'm confident that the employees at

fedex would be a great beneficiary of a tax decrease. if we get tax reform, is that built into your guidance for the street >> no. >> bingo >> to your point >> exactly >> would you ever build it into guidance or wait until a bill was signed into law? >> based on my experience, i would wait until the bill was signed into law and maybe a day after that to make sure it wasn't a trick >> can i ask another question. in 2005 there was a cash repatriation bill passed what did fedex do at that junk chor junctur juncture >> we have had a balanced approach to our balance sheet led by our outstanding cfo, allen graff. we put a lot of money into the business to invest for the future we bought a lot of shares back we steadily increased our dividends. as i said earlier, we have been able to increase wages every

year a tax decrease would allow us to do all of those things at greater scale. >> does it matter in your view what companies do, if there's repatriation tax break, whether they actually spend it on new facilities or something like that or if they do share buybacks >> look back to 2004,2005, most companies bought back stocks there was a narrow window to do it there was an aggressive repatriation i'm not so sure the window would be so narrow, so it may not happen all at once the way it did. >> that's the major criticism, mr. smith. people who are opposed to corporate tax cut also say, you'll cut taxes, then the executives will pay themselves more, raise the dividend, and the worker won't benefit >> i think you're talking about apples to oranges. the repatriation of funds

overseas is one thing. capital investment is not made on the basis of money coming from overseas or from santa claus, it's made on the basis of the return on invested capital the higher the tax rate, the less capital investments you'll get. the less capital investment that you get, the slower wage increases because that's how you make blue collar people more productive that criticism is fundamentally wrong and doesn't understand basically how things work in the boardroom. >> i would agree with fred, back to 2005 you had a small number of pharmaceutical companies who had a great deal of profits overseas they brought them back even though congress had rules. you must do this and that, you must not do this or that with it they broke the rules they bought back stock, increased dividend, did not increase jobs, in 2006 and 2007 all those companies laid off people >> they set a bad precedent. >> i'm just a data guy

looking at what history tells us we have different behavior maybe. that doesn't driver capex, business warrants capex. >> right >> you have don't back of the envelope calculation, if we had a 20% corporate tax rate, what per share that would mean for your guidance? >> i haven't personally, but i bet alan has done it obviously, as was say the a moment ago, it's not reflected in the s&p guidance or anything. it would increase corporate income, but we've lost -- the brt brought this out the other day -- the business roundtable -- we lost in this country in 291the 21st century, almost 5,000 companies bought by foreign entities or gone overseas because of the tax rate differential that we were talking about earlier. we're playing on 12-foot goals,

competitors overseas are playing on 10-foot goals >> this is why there's a rally, the perception some of these pharmaceuticals could bring money back and have none do deals. if you're out there you have an index fund, you're not an active investor, you are hearing about personal and corporate tax rates coming down, you're wondering what will that mean for the s&p 500. what does it mean? >> right now, not much it's noise just because the proposal has a long legislative process to go down >> to mr. smith's point, i get that the proposal means nothing, but if we get it into law -- >> a 5% increase in stock earnings the consumer will feel better, because of consumer confidence and they'll feel good about

spending there is a derivative of economic impact due to taxes fwufrnlg . >> but it will also accelerate the economy and the fed will take 5:shuchblt all bull maction it willwill shorten the duratio until the next -- >> you mean the fed, not fedex >> yes >> how much do interest rates influence your business and decisionmaking >> we have an enormous cash flow not as much as you might think having said that, you have to go back to the fundamentals it's the return on capital, whether it's a bulldozer, 777 or truck that determines whether boards or companies are in debt. interest or the tax rate is just part of that if you have a lower tax rate, increased interest rates t will take some of the benefit of the

tax rate back away, but on the other side of the koint you will be so much better off with a 20% tax rate applied to every u.s. company. as opposed to today where some pay 5%, others pay 34% >> we have to leave it there thank you very much. fred will hang with us for the rest of the hour still ahead, forgot just going to the movies, how would you like to be in one? kind of. two movie industry power houses virtual reality. that story straight ahead. t. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade.

ever watch a move i ha movid wonder what it might be like to experience it in real life now amc is teaming up with a vr company. joining us is adam aaron of amc,

and kevin of dreamscape immersive. adam what do you hope this brings to amc? right now it will be centered so you can experience this. right now you are hoping that people who try vr will stick around and see a movie >> at amc we are selling 250 million movie tickets in the united states. 350 around the world the whole centerpiece of what amc stands for is creating theatrical experiences that make consumers want to come out to the movies dreamscape immersive vr is amazing. it puts the guest right in the middle of a movie. we think they'll love it. >> do you think they'll buy a ticket also? >> we do we're happy if they buy a movie ticket or a ticket to dreamscape

experiences. we wantsd consumers to feel happy and welcomed in an amc theater. we have 1,000 worldwide and this is a big step in having more people come to our theaters. >> kevin, briefly, give us an idea of what kind of content consumers can experience now >> you might see a movie at amc, then walk into the frame of the movie. the content will represent original content and content that is leveraged off of major movie franchises it's a game changing technology that we will able to bring over from switzerland, that can identify where you are at any point in time and what you're looking at with friends. and you combine that with great stories, great narrative, some of the best hollywood directors, and we're bringing you dream sz

sc dreamscape which we think will change movies for people >> to add a quick thing, vr has been sort of elevated video gaming heretofore. what makes dreamscape immersive so unique, it's core comes from sin tattcinematic story tellers. this is a chance for you to be in the middle of a movie. >> adam, talk to us about the box office in general. we were talking about this new initiative as a way to get more people into the amc theaters a lot of analysts are forecasts a challenging box office even in the current quarter, third quarter. mkm had an estimate that it would decline 15% what have you seen this quarter? is it getting better >> well, let's see when you drive a car, you look through the front windshield, not through the rearview mirror. august was the worst august in movie history. september is the best september in movie history we're already looking past the

third quarter. the fourth quarter, october, november, december, with all these great titles coming out, culminating with "star wars" in december, we think the fourth quarter, you'll all be ready to see the miraculous recovery of the movie theater -- >> will it be a miraculous recovery compared to the third quarter or year-on-year? >> both. and hugely so. >> thank you adam and kevin. >> thank you up next, more with fred smith what does a man who probably knows more about american roads than anybody else thinks needs to be done first if we get a infrastructure bill and the momentous task of rebuilding puerto rico fedex just sent several planes down to the island to help we'll get fred smith's take on the challenges going forward my dell small business advisor

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i'm pleased to have steve smith, founder and ceo of fedex

on the program let's wrap up by talking about a number of things first off, puerto rico you guys have been helping you've been sending planes and sending supplies you have first-hand knowledge of what's happening there what is the current condition, how bad is it really and what's job one right now? >> job one right now is getting water and food and medical supplies down there. we've flown nine flights in there. we have one on the ray right this moment into barranquin which is the airport on the island which was just opened today. we have relationships with a number of charities like red cross, heart to heart, direct relief, salvation army, team rube con we take their gear in and we're moving it in at a very rapid rate as is the military. they've got to get the power on. that's the biggest problem. >> i want to ask you about cyber. it's been the big breach and it

did impact your earnings you have said that ex-cyber attack, you're on track for your annual guidance. how has that changeded when you look at cyber and what you're investing in cyber right now >> i think we have some of the best cyber folks in the world. rob carter, our cio is ranked every year as one of the grittest industrial cios in the world and our security team is world class. the cyber attack that we experienced was quite different than somebody sitting in your basement it was a nation state or a nation-sanctioned attack on the ukrainian government and it hit their payments system which immediately went out to the people doing business with them which tnt was doing. so was fedex and the mother company, so to speak none of our systems were hit at all, and it was a massive attack and our people did a fabulous job and it's something that you've got to pay attention to in business today because it's

not going to stop. >> you saw the impact there on eps. >> yes when it comes to competing, you've got dhl and you've got ups and you've also got the likes of an amazon or an alibaba. how do you view that given e-commerce is 15% of the business and still an important part of your business. are they frenemies how do you view that >> well, business is sort of complicateded in that regard for instance, we carry all of the postal services and priority mail that's moved by air and so it's competition i think you have to remember that amazon and alibaba are retailers. that means that in the traditional sense you go to a store and you pick something up. e-commerce simply means that they deliver something from the store to you so the vast majority of e-commerce packages are deliveries from some place close to new jersey to be able to have low-cost deliveries. we pick up, transport and deliver things from 220

countries in the world from billions of peoples in hundreds of -- millions of businesses, one to the other so they're -- they seem like they're the same when you get your package, but what's going on upstream is remarkably different. >> let's talk about the nfl. you are part owner of the washington redskins. your name is on the redskins field. you are a former marine, correct? >> correct >> what is your take on the anthem protests? >> well, as a veteran, i certainly dislike the method that the players are taking to express their grievances i wish they wouldn't do it, but i firmly believe and i think it was thomas payne's famous statement. i disagree with the state of defending your right to death and your right to say it i think quite frankly, it would be a good thing is for the president to give an invitation for four or five players to come

to the united states and president obama had the beer summit president obama had the gridiron summit and see what they're trying to accomplish and get football back to the enjoyable past time that it is on the weekends without bringing politics into it >> think we can all use some common sense these days. >> i hope they'll get it resolved because it's a great game and it didn't need this type of distraction. >> i never got my sweat shert anecdote in. fred smith from fedex, a real pleasure. >> thank you >> gop leaders set to speak in just a few minutes on the tax framework and we'll bring that to you live and the latest in the college basketball scandal is this the event that the ncaa finally change its ways. second hour of "power lunch" starts in two minutes. ound the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income.

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welcome to the second hour of "power lunch. here is on your menu gop leaders set to speak in just a few minutes on their new tax framework and you will hear is live when it happens and if trump's tax plan can get to congress, what are the odds it becomes law? we'll ask former ambassador max baucus, and as the ncaa

basketball scandal continues to unfold, is there any way to get dirty money out of college sports jay billis is here and he'll offer up his opinion as "power lunchette kwo "begins right now. >> a close in the green will be the first in five days and the dow transports hitting all-time intraday highs treasurys also on the move what's notable the yield on the two-year hitting the highest levels since 2008 and the yield hitting the highest levels since august 1st and that is helping to lift financials and the highest level in a decade, nike, the biggest drag on the dow following disappointing sales growth and its outlook was disappointing. meantime we want to head over to tyler matheson who is live at the iconic conference. >> thank you very much what a beautiful event this is bringing together a ton of entrepreneurs and wanna be

entrepreneurs for the continuation of our iconic tour and partnership between cnbc and "inc." magazine. the best entrepreneurs gather to share their ideas and network and maybe inspire a new generation of disruptors and leaders. we will talk this hour to rohan oza and some have dubbed rohan as hollywood's god father and he's the guy behind vitamin water and we'll talk to iclisoy and she borrowed from her mom for a billion dollar company and we'll join you in a few minutes. >> republicans out with a framework of their tax plan and we're expecting to hear from speaker paul ryan and mitch mcconnell shortly, but first, let's get to elan moi. >> republicans are working hard

to show that they are unified around this tax framework, but the opposition is already coming fast and furious this plan would lower the corporate rate to 20%. we give pastors, and it would condemn the tax rates to 12, 25 and 35% with the option for a fourth rate that's a little bit higher, but on the senate floor, democrat chuck schumer called this framework earlier today a handout for the wealthy and big businesses >> when donald trump was talking about this plan over the last few days he talked about focusing on the middle class and not helping the wealthy. the plan is a major disappointment because it so deviates from everything the president said. >> the house republicans are getting back from an off-site tax reform meeting and they'll be joined by their colleagues for a joint press conference in just a little bit.

you can expect them to talk about fairness, simplicity and competitiveness. you can also expect them to say that they purposely left out some of the details of the plan because they want to make sure that individual lawmakers feel ownership over the framework because it's really going to be up to the tax rate and committees in the house and in the senate to turn this framework into a bill. back over to you >> ylan, thank you ylan mui president trump speaking in the past hour and he talked about the republican tax plan about taking on the nfl. the president making some comments from the white house lawn in front of marine one, the helicopter so we heard the answers. it was hard to hear the questions, but he said a number of things. >> caller: the president was surprisingly chatty and he doesn't often stop and talk to the reporters under the rotating helicopter, but he did today and one of the questions he was asked about this reporting that we've seen over the reporting in the past week or so about a 15% corporate tax rate

the president has been said to be pushing for that corporate tax rate of 15%, and when the plan was introduced today they rolled out a 20% corporate tax rate so the president was asked about the discrepancy there. he said essentially his pushing for a 15% rate was just a negotiating tactic here's what the president said a few moments ago. >> i wanted to start at 15 so that we got 20 it just -- the numbers were -- 15 were so low we didn't take in the revenue, but i wanted 15 so we got 20. 20 is my number so i'm not negotiating that number. i really -- i am not going to negotiate. that's the number i wanted to get to i wanted to start at 15 to get there. we've really had to start there because of the complexity of the numbers, but 20 is a perfect number >> 20 is a perfect number and that's where he always wanted to land the president saying today. he also said he's not going to negotiate with that, brian and that's one of the difficulties he will face as the process

moves from capitol hill as you just heard from ylan and they may end up at 20 or they may end up somewhere else and the president saying he doesn't want to negotiate, but ultimately, would he sign a bill that has a higher tax break that's the open question here. >> eamon javers, thank you very much let's bring in lawmakers from both sides of the aisle we are joined by max baucus, former democratic senator and ambassador, by the way, as well as jim mcrary, republican of louisiana. i like having the formers on, gentlemen, because you guys are actually going to save something. they'll just say we're not going to get it done or we will and whatever it is ambassador/senator baucus, let's begin with you you are obviously a democrat is there any part of what you've heard that you would support if you were still there or do you think that could sway the chuck schumers of the world to come over and cross the aisle

>> well, hold on to your hats, this will be a bumpy ride. many groups as well as the well-fielded interest groups my concern thus far is this is just a framework we have no idea what the legislation might be and that's found in the tax writing committee and the second concern is this seems to be partisan, and in my experience i was very involved in the last major forum and tax reform under president reagan the president worked with both parties. same thing with the 2001 bill, and second, i wanted to see how much revenue was lost and the main purpose of tax reform is do this right and do this fair and make sure we're competitive with other countries worldwide, but also make sure that we're in a situation where people feel pretty good about what's

happened any we're not losing revenue by increasing the deficit. >> if you were to handicap the odds of this, a, making this into bill form to congress or b, being signed, would you be able to handicap that >> i think it's a high percentage that congress will pass a bill and the president will sign it what form it ultimately takes and whether it could be truly called overarching tax reform bill remains to be seen, but i believe there will be a large tax bill passed and signed into law in this congress, if not this calendar year, next calendar year. >> what makes you so confident, sir? >> there were a couple of reasons and number one, a substantive policy reason and everyone knows that our tax system which has not been reformed is anachronistic and out of step with the rest of the world and particularly our business tax system and it needs

to be done for tax reasons and the political imperative for republicans. that speaks for itself >> you know, max, we've heard so much back and forth. you heard chuck schumer's comments, i'm sure, right before we came into this and of course, the senator from new york has been cose we the president along with nancy pelosi. there's a lot that the public hears and a lot of commentary from the president, from both sides, how much of that is just posturing? >> is there real work and friendship being done? it's hard to find evidence of real work. the affordable care act, some people call obamacare, it does need some reform, but it got so partisan and the rhetoric on each side was so loud nothing happened there's no change to the

affordable care act and rather than replace and repeal. i hope, frankly, that both parties have learned a lesson from the failure of healthcare reform that has worked together and i have to say very strongly and the major tax reform unless both parties sit down and work together and forget the rhetoric you've got to work together, and it will only happen, in my judgment, if people do work together >> i will go back to what jim said that is true. i think there will be a tax bill passed he kind of hinted and i tend to agree with him it will be very modest and it will be a tax cut and probably not be major reform. >> to that point, the congressman and the president has said that negotiating away from 20% corporate tax rate is not on the table in his view, and if you were in congress right now, would you be afraid that he's sort of putting you into a corner when it comeses to

making a bigger bargain into the whole plan >> i think so. i think the president realizes that there's a long process ahead of the congress and developing this bill and getting it passed. he's a good negotiator i suspect he's willing to listen and to work with members of congress to get a final bill so i don't think that's a huge hurdle i do think he's right in term of the policy i think 20% is probably what congress should shoot for to make our business tax system, particularly our corporate tax system competitive the average rate in industrialized nations is around 22.5% and that will come down a little bit because you have great britain, for example, that will be reduce their rate to 15% in the next year or so so i think 20% is the right goal >> all right congressman cleary -- senator baucus -- >> one point -- >> last point here >> one interesting point here is

whether this will be revenue neutral. back in '86 president reagan did change his mind on what the top rate should be because there was a requirement that the legislation should be neutral and that is the cuts would equal which revenue it comes in. that's a big question here is this going to be revenue neutral or not, and i hope we focus very much on that, and i hope that it is. >> all right thank you both, gentlemen. appreciate it. >> sure. the university of louisville placing rick pit inon and the athletic director on administrative lead and is that a big enough punishment for the school we are awaiting gop leaders to speak about their new tax reform plan we'll keouhe t men that that happens. whoooo.

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welcome back to "power lunch. i have news alert on amazon. the company is holding an, vent at seattle headquarters and announcing an entire new suite of devices from new echos to auto phone and gaming integration. a new echowill cost just $99 it's available for preorder today and there's also an accessory to allow it to make phone calls. amazon announcing integration with bmw and gaming. we'll bring you more the event is still under way >> deidre, thank you. one of college basketball's best-known coaches taken down by a scandal. louisville putting rick pitino on administrative leave.

>> just an hour ago, he put the athletic director on administrative leave as a result of the investigation that broke yesterday. it will review the job status soon as it will try to honor employee contracts and hr rules. it was one of the six schools that paid off middlemen and players to get top high school starts to play at certain schools. also arrested yesterday was a top basketball marketing official at adidas jamed jim gato, a 47-year-old who has spent his entire 24-year career at the shoemaker the ties between louisville and adidas run deep. just last month the two signed a new ten-year, $160 million sponsorship extension and adidas' biggest deal by far. it's been widely reported that adidas hired the daughter of louisville's athletic director to work for them earlier this year the policy is not to disclose who does and does not work

there. sonny vicaro told cnbc that shoe companies have been doing this, making payments to shift the choices of high school players note in the fbi documents one family said, adidas might have to pay more than $100,000, because a rival company was offering more to picket their schools. louisville's players decommitted a high school senior who said i'm not going anymore. you will see this happening at a lot more schools >> definitely. let's find out from someone who would know >> thank you for more on the impact of the college scandal, and college analyst with espn, and former player, and a big pleasure to have you on the program and a fan for years. thank you very much for coming on >> thank you for having me a pleasure >> a lot of people wonder why pitino is on administrative leave. his contract stipulates he needs ten days' notice do you anticipate that rick pitino will be fired when that contract all period buffer zone

is up? >> yes this is just, as you mentioned, a contractual issue and he'll be fired, and they are effectively fired right now, and it's just a contract issue as you mentioned. >> and do you believe that is the right move >> i do. given that this is the second scandal in a year the first one, and i don't know how to refer to it, the escort scandal at louisville, that was so off the grid and so unimaginable as to be hard to fathom and i can understand and the school was never charged with anything by the ncaa and clearly, they can understand, too, and you wouldn't be able to imagine having to monitor something like this and this issue before us is the recruiting issue and the ncaa coach accountability rules that just came in a couple of years ago, and even if rick

pitino didn't know about it, he's charged with knowing about it whether it's reasonable or not, so on top of the last escort scandal and i don't think the school had any choice and it's sort of the corporate way of getting everything off the table and cleaning house, and i think it was not only sort of the method of dealing in college sports right now, and it would probably be the right thing to do >> we want to take a quick breakaway and we want to show speaker house ryan and he's talking about the tax plan along with gop leaders and you see mitch mcconnell and we are monitoring this and we'll go there live as soon as the q and a begins. >> you've been very vocal and critical about the ncaa over the past couple of years to me the most interesting thing about this is that the fbi did not let the ncaa know about this investigation which seems almost insane why do you think the fbi would keep the ncaa in the dark?

do you believe it's because at the bottom of it they simply did not trust the ncaa to keep it quiet? >> no. they just don't need it. the ncaa is always the last to know anything, and their enforcement division does not frankly do a very good job and so they don't uncover anything they're usually uncovered by journalists and this is different because it was uncovered by law enforcement, and it all came from, you know, from an sec person who got into trouble with the securities and exchange commission and he ruled on some of the folks in college athletics and, look, there's no excuse for the breaking of rules or federal law and the ncaa cause this and we have amateurism rules and these players are worth a ton of money as anybody who watches the

programs would know and understand the way economics works and a good friend of mine who likened amateurism to prohibition. we're not stopping people from drinking we're just driving everything underground and this is a multibillion-dollar business and even though this is going to shape college athletics in the short run, this is want the first scandal we've had and as long as amateur rules remain in place it will not be the last and it will change the way money flows in college sports a little bit, but it is not going to stop the flow of money. it certainly will not do that because no scandal's done that >> and that's the point, and remember where we are right now, jay. this is cnbc we're the money network here in many ways and we've talked about this louisville has $160 million contract with adidas the pressure to get those kids to go to louisville, make it to the pros, wear adidas so they can sell shoes is a ton, but to your point, the money is already out there just in different

ways is there anything that we can do to really get that dirty money, if you will, that underground economy as you talk about it out of college sports or is it so entrenched we're just going to have to deal with every five or ten years a scandal like this, complain about it and then move on >> well, i mean, i don't want to answer a question with a question, but you don't complain about the dirty money and athletic directors and presidents pay dirty money or when natalie was doing movies. that wasn't dirty mono pep it's only drirty money to the player because they're the only players denied the opportunity to get fair market value for their worth. there's no other student that's told what they can earn and still be a student in good standing so these amateurism rules especially while you have a multi-billion industry and they mentioned a $160 million

contract in louisville that's just a drop in the bucket relative to the multibillions involved in college sports and the only people that are cut out of realizing the pro value are the athletes and that's a lot of what's driving this, frankly. >> you played basketball at duke i went to virginia tech which is a very large football university what do you think would be a fair way to determine a wage for a player either in basketball or football or a different sport? how would we do that >> you know, i'm a big believer that the free market tacks care of all of this these schools know exactly whom to recruit and who to play what would be a fair way to dole out playing time and a fair way to recruit they know exactly how to play and they're making up all of these excuses, would we play the last player on the team the same as the first player on the team? everybody in college makes the same amount of money and in what endeavor does everyone make the same amount of money

people seem to understand who the best players are when we're doling out playing time and picking all-americans and recruiting people and putting on recruiting lists and we know exactly who can play and who can't, but when money is involved all of a sudden it's too complicated? it's not too complicated it's simple. we just don't want to do it because the schools want to keep all of the money and they want to control everything. this amateurism notion -- the ncaa was founded in scandal in 1905 or so and it has existed in scandal ever since this is just the latest in scandal and as long as we continue with this current system we will see scandal after scandal going forward. >> we're already over time, jay. quickly, six schools basically implicated do you think there will be more? >> yes there will be more it will go to agents and some other coaches, but as soon as this one bottoms out we'll move on to the next thing and the money will continue to flow. >> jay bilas going way back. a real pleasure to have you on cnbc thank you.

>> thank you take a look, republican leaders speaking right now about the tax plan you see house speaker paul ryan there. we're monitoring this and we'll get there live as soon as q and a begins. let's get back to tyler matheson at iconic in los angeles. tyler? >> thanks very much. coming up, the big business of branding we'll talk to the co-founder of the taboo about what it takes to create a long-lasting and impactful brand especially when it comes to millennials. i want to crush the millennials. much more "power lunch" ahead said the baby boomer

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♪ all right. good afternoon, everybody. welcome back to iconic in beautiful santa monica consumers, of course, very often fickle and it be very hard to appeal to their changing taste so how does a brand make a lasting and memorable impression and impact joining us now are the brains behind brands like vitamin water, chef's cut beef jerky we had the guys on a couple of

weeks ago, you probably remember rohan oza and taboo manager partners. >> every time i see the ad for the water that you just sold for, what? a billion seven. >> something like that >> i laughed my you know what off, when i see that thing with chris walken and them. >> with justin timberlake. >> can you make any brand hot? >> absolutely not. >> why not >> because for me it always starts with the product. if you don't start with a product that people are looking for, so you know today everything is upside down and all of the foods on the shelves today are high-sugar, high fructose corn syrup, high carbes and we know we have to eat high-protein, good fats and fiber. everything is upside down. so people especially millennials are now searching for tomorrow's brands so you have to start with the product that they're looking for and then you can make it hot, and there's no magic bullet to something that they're not

looking for. >> one of the things that i noticed, brett, in my own life and around is that people are looking at labels of foods and drinks in a much different way today and that plays into your strength that's what your portfolio of brands is largely about. >> 100% and we're realists and believe that you can't go from one spectrum to the other very quickly, and it will be a systematic approach time over time and everyone's looking for an upgrade and if you give the consumer an opportunity to upgrade their diet and feel better about themselves, they'll take it and i also think with the emergence of social media, it's word of mouth for millennials is huge and trust for the new upstart brands are a lot better. >> is it as simple, rohan, as getting rihanna to carry around some vita cocoa? is it as simple as getting madonna? >> it's not that

take bai it is very low on sugar. 5 calories and tastes amazing and it's a product they're looking for. when justin became an owner in the company and he was very smart. he didn't want to be an endorser and he was an owner, and wait a second, i've heard about this. let me try it and then they're in celebrity helps turbo charge your brand celebrity can't carry your brand. >> you want a celebrity who believes in the product and doesn't just want the quick paycheck, right? you want equity, like 50 cent. >> there has to be a passion and authenticity millennial consumers are too smart to think that putting a picture of michael jordan with a big mac like the 1980s won't, and they need to see the authenticity >> you sold vitamin water to coca-cola -- >> he was a smart guy. >> that's all right. you did all right. >> i did okay. yeah >> are sugar drinks dead or dying?

>> yeah. sugary beverages are declining it's not off the cliff, but it's definitely doing this and especially the millennial audience come in the first thing they do is they grab a product and before you used to throw your frosted flakes into your grocery cart and you're off now you do this. you turn every package and to me, brands that are low sugar, that taste great are the future. kombucha that was a randomly odd word is now on the uptick. kombucha is the new soda >> a nice hedge fund guy like this goes into this business, why did you do it? >> hedge fund, you make money or lose money and working with brands is my passion and you're helping build a business that can be long lasting and you're also creating something. >> a little more exciting, i bet. >> a lot more fun. >> how many companies do you have in your portfolio now >> 16. >> how many do you expect to be big buy-like hits then middle and then losers? >> so we rate it

first, we have no losers we're in denial about that i'm sure that there will be some, but we don't believe any, but we have, we think a lot of great ones that are big hits and then a bunch that for us, a minimum will be a three times return on our money because we feel that they can do it, but what we love about the companies is every single one creates jobs that's the difference in what we do, and they create jobs >> fantastic guys, got to leave it there. >> sounds good. >> folks, back to you. >> thanks, ty. port ridiculouerto rico hito devastating hurricanes and it is trying to deal with massive debt what happens to that money that story is next on "power lunch. i count on my dell small business advisor

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hello, everyone. i'm sue herera here's your cnbc news update for this hour. one woman was killed and at least 11 others wounded when several rockets were fired towards kabul airport. the taliban claiming responsibility the attack came as secretary of defense james mattis and nato secretary-general ian stol tenberg. >> to attack a civilian airport

is a criminal act, it's a terrorist act and it shows the importance of fighting this kind of organizations in afghanistan. >> israel's military chief reducing the prison sentence of a soldier convicted of killing an incapacitated palestinian soldier. he began 1818-month prison term. his sentence is being reduced by four months and many israelis including prime minister netanyahu defended his actions toyota says it's spending $374 million to upgrade five american plants to support production of its first u.s.-made hybrid power train the plants are in alabama, kentucky, missouri, tennessee and west virginia. you're up-to-date. that's the news update this hour i will send it back to you guys, brian? >> sue, thank you very much. >> moments ago, president trump saying he is considering to take steps to help puerto rico get fuel and food and other relief

supplies ariana is joining us live from puerto rico. ariana >> caller: that's exactly what people are lining up for here in every block. it's food, it's fuel, it's supplies one week after this devastating hurricane and that is what you're seeing in the streets of san juan here, and one of the most important things is that this has become a cash economy. the big question now is how do you get cash when 95% of the island is out of power this is an atm here. it had about six people when people realized there was cash here, the line just flew by and the money ran out very quickly and people are making a success attempt to see if this machine will dispense any money and here we met margarita margarita, can i ask you were you able to get money out of the atm >> was there a limit as to how much you could take? >> $100 is the limit i was going to withdraw 500 so i

have to only -- i only did 100. >> we're speaking here on cnbc just about how much gas is needed and supplies, what is your everyday life like now here on part rico >> i was up at 4:30 a.m. this morning in line to get $20 of gas for my car it's been awful. >> caller: you are here driving around with your family? >> with my family. my grandkids, a 1-year-old and a 15-year-old. >> for a 15-year-old, what has it been like to live through this tragedy >> it's been catastrophic. this is horrible everything is awful. >> reporter: life is at a standstill and young kids like them, they tell me they're not even going to school that's the situation here. the situation that the mayor of san juan is calling a terrifying humanitarian crisis. back to you guys >> ariana, thank you so much puerto rico was in massive debt even before these devastating hurricanes and what happens with those bonds right now? steve liesman joins us with the

other part of the story. >> the value of puerto rican debt plunging to another all-time low as it dawns on bondholders and the ability to repay has been severely impacted by the devastation from hurricane maria. puerto rico, these are general obligation bonds in 2035 and they're in a benchmark there and 50 cents on the dollar the situation declined as you just heard that and uprooted lives. maria has done lasting damage to the island nation's economic output sorry, it's not a nation moody's private property that has not offset the federal relief efforts will signal reduced economic capacity. what does that mean? it means that port rick'suerto s ability to pay back its debt --

and it there's no call from that now, and not from the president and not congress and the federal board overseeing the bankruptcy is likely to revisit the island's financial plan this week the board on friday allowed the island governments to ship up to $1 billion of budget funds over to emergency measures. the question, this is my opinion here from an economics point of view, it's not puerto rico that doesn't get an easier debt load. the question is when the market realizes that the situation has dramatically changed and that debt needs to change, as well? >> let's dig into that more here joining us now, celine firth, the heritage foundation who once referred to pouerto rico a faile paradise and debt forgiveness for the world's poorest. salim, do you believe that puerto rico should be allowed to default on its debt and there should be some intermediary that the bondholders do not bear the

full loss and they work out the ability to not repay it, but not screw over for lack of a better term, the bondholders? >> no. i think the bondholders should have to hold the bag they bought into this. you can see where the island's finances were going. obviously, the game has changed now. we saw these images on the segment right before port ridiculous owe is devastated and no one is getting a cent unless it's rebuilt the chance is to wave the jones act to allow puerto rico to get back on its feet if i was a bondholder i would be writing this off right now >> the jones act that you're referring to is an obscure law that says if you will ship in the u.s. virgin islands and the caribbean it has to be under a u.s. flag vessel and that said, a pushback a little bit salim, because the bondholder should be holding the bag. in any contract, there's something called the force

majure and godzilla comes up, and this is the worst storm in effectively 100 years for puerto rico do you think bondholders should have any recourse? nobody knew this was going to happen even the worst storm wasn't this bad. >> so, in any -- in any government default there will be some reason, some demographic collapse, some natural disaster that you can point to, but we all knew puerto rico didn't have the money to pay these debts even before the hurricane. the question is can they grow enough to repay some of it so, no i don't think we should be stepping up and using federal taxpayer dollars to bail out people who made a bad investment and it sets a bad precedent if we bail these people out >> there's not a precedent for a category 4 hurricane the eye of it going directly down the center of the island and almost completely wiping out the productive capacity at least

for a time let me bring eric in eric, you have called publicly your organization for a debt relief what would that look like in your opinion and taking into account what brian is saying, a fair mix here and is it one that takes it all away from the bondholders or does the government step in in part to bail the bondholders out >> that's a really important question >> i think the reality is that we are dealing with a very serious humanitarian crisis on the island and more than 90% of the island without power and without clean drinking water so we know that the stakes are different now than we were three weeks ago. in terms of what that means for bondholders and the debt restructuring, puerto rico was already in the bankruptcy process. >> right the largest bankruptcy process ever -- >> i'm sorry to cut you off, but we're tight on time. tell us what it would look like. they're $74 million in debt, give us a quick blueprint on that >> yes much of it should be written

down it should be restructured. what's been very popular in terms of various ideas among all actors is looking at new restructure bonds that are linked to gdp, but in the short term we're looking at a complete moratorium on debt payments and it's absolutely essential. in the long term we're looking at a restructuring where we have significant debt reduction and significant cancellation and we don't have profitability for bonds until economic growth returns to the islands which is going to be some time from now >> salim, eric, and steve, thank you all very much. no doubt a conversation that will continue in the next couple of days. >> good to be with you. >> let's get back to the iconic tour in los angeles. we'll talk to a woman who took a smallo a tk tl anndooito a multimillion dollar business that's next on "power lunch.

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only at td ameritrade. ♪ ♪ hi, everybody. welcome back to "power lunch," here from the iconic conference, it says los angeles, but i know we're in santa monica, the home state of our next guest who took a small loan of $2,000 from her

mom about 20 years ago, right? and since has built a multimillion dollar business without giving up any control of her company to investors she's resisted the temptation to sell out jessica eqlisoy, founder and ceo of california baby welcome, good to have you with us >> we just had rohan oza and brett thomas on and they talked about how people today are looking at labels and ingredients to see what's in the products. >> right. >> they eat and put on their body and that's how california baby started. >> that's exactly how california baby started >> tell me about it. >> i was a young mom, and i started reading labels, and i started looking them up and finding a lot of potential carcinogens, and toxins, and i was shocked and alarmed and i set out to create a better product. >> you weren't a chemist. >> i wasn't a chemist. i came from the fashion industry >> the story is that you then eventually went and mixed products in your own kitchen.

>> i taught myself. >> baby loegs, shampoos and things like that. >> it turns out i'm a pretty good researcher. i looked at the ingredients and i had a chemist mentor me, and i would mix in my kitchen on my stove and after three years of research i hadproduct. >> you turned to mom for a $2,000 loan, and now you are in 10,000 stores, including whole foods, a host of the other ones. >> walmart, target specialty shops. >> you've got how many products? >> we have over 90 skews >> over 90 different products. and roughly 90 million in annual sales, right >> yeah. >> you built your business slowly, painstakingly and you retained control, you never brought in an outside investor >> never >> i am sure have gotten overtures to sell. >> yes >> maybe to some of the big consumer product companies >> yes >> why not >> why not >> why not investors, why not outside cash >> because it's about control.

so if somebody comes in and gives me money, then they start calling the shots and our products are all about quality and ingredients. our formulas are finnicy, they take a little bit longer to make and i just don't think that those people would be interested in doing that. >> what gave a nice california mom -- >> yeah. >> the courage to do this and go up against proctor and gamble, johnson & johnson? they're not easy competitors they like to crush their competitors. >> so what gave me -- >> what gave you the courage >> it's called the momma bear instinct so once women have a child, they change and that instinct kicks in and mind went into high gear. so i wasn't really thinking about those companies, i was thinking about my child and other than children who were being exposed to these toxic chemicals and so that's what drove me.

>> does money drive you or mission? >> money doesn't drive me at all. mission drives me. it's great to have money because our ingredients are expensive, so i do need a profitable company and we're dealing with smaller companies -- growers and producers. so and our products are not cheap. but it comes from the mission. >> but people found that there was -- you found that there was a price people were willing to pay for that higher quality, non-toxic product. alas we have to leave it there >> thank you >> it's california baby. >> that's right. >> that's the name of the company. she is a great entrepreneur. president trump getting ready to speak about the gop tax plan we are going to bring it to you minutes away, but we've got more froman sta monica and more power lunch right after this t-mobile's unlimited now includes netflix on us.

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all right. some other big business headlines today, shares of nike after a better than expected fiscal first quarter that has the stock down. amazon unveiling new echo devices and it is pulling youtube from it's ecoshow video device amazon says google made the move

for technical reason and without explanation. it violates terms of services, but hopes to reach a deal soon and twitter is testing a 280 character limit. that is twice as much that is currently allowed. it is rolling out to a small group of users before deciding whether to make it permanent for everybody. i loved yesterday, jack dorsey, actually tweeted something that was 280 characters and the response to that was something along the lines of i read half of it and i lost interest >> that's america. >> that's america for you. all right. check please is next

the tax plan the big story of the day and president trump is set to speak on tax reform and the gop tax plan he is in indianapolis, indiana, we'll see if he gives us anymore details. that's happening in the next hour on the closing bell >> yeah, and let's do check please really quickly ahead of that here. check please and my check please is twitter is testing out the rollout of the, what is it 500 -- >> it's a tome you can post a tome. >> testing a doubling of the character limit right now to 280 right now. you could only write 140 letters, characters, spaces included, et cetera within they're rolling it out a small group. that small group must include president trump because he is the only user on twitter -- excuse me -- >> that really matters >> no, no, no, from a getting national visibility perspective,

i got all choked up prior to completing that sentence >> test curve. we have a great show coming up at 5:00 on fast money. peter good-byer, one of the owners will be on. tony robins, the psychology behind this record-breaking rally. it should be interesting thanks for watching power lunch. >> closing bell starts right now. welcome to the closing bell, everybody, i'm kelly evans at the new york stock exchange. >> i'msto scott walker. president trump about to give his long awaited speech in that room in indianapolis on tax reform just a few minutes, we're going to take you there live as soon as it begins and billionaire and outspoken democrat tom steyer thinks that anything that cuts taxes for the wealthy is stupid and selfish. and larry lindsey will explain how they thinks this pla