>> and give me ten seconds on this wells news? can you buy wells or own it? >> in any other world this would be the ultimate short but i don't know it. >> what about nike >> i thought trevor was great but marcus is amazing -- that guy was a powerhouse the jordan brand was his personal creation. >> they have to -- >> and that is does it for us. thanks for being here. "power lunch" starts now. >> thank you very much and welcome to "power lunch. i'm tyler mathisen here is what is on the menu. wall street brushing off rumors of another white house shake rup. record amounts of money pouring back into stocks and is that the right move and netflix and thrill soaring 70% this year and getting a new upgrade today. what is behind the bold call on that one and then ten years ago a major

shoe dropped us into the financial crisis sh the collapse of bear stearns. what have we learned and it could happen again "power lunch" explores that and more right now ♪ ♪ and welcome to "power lunch. i'm melissa lee. the drama in d.c., the dow up triple-digits and ho-- holding and [ inaudible ] to the last june and bonds on the move, of note the yield on two-year hitting the high note since september of 2008 and three stock movers aig at the lowest level since august of 2016 -- tiffany beating earning but the forecast was disappointing and qualcomm is up and there are reports that the chairman is looking for buyout funding to

take the company private. >> it is a big hour. i'm courtney reagan, here is what else we'll tackle dow jones reporting the justice department is widening the investigation into wells fargo growth management and shares dropping 1% on that headline the number of new homes beginning construction plunging and dropping 7% and multi-family construction dragging it down. oil a spike right now. more on what is fuelling that in just a moment. but for now, tyler, back over to you. >> thank you very much let's get straight to the trading action stocks seeing a tiny bump as the dow is up 141 points bertha coombs from the new york stock exchange. >> can it hold this is the one day where we'll see big volume this week we have quadruple with the expiration of options and futures and that is a big event going into the close but the data so far has really left a lot of folks on either

side, consumer confidence much stronger than expected the reading of 102 and the record fund inflows so investors are pouring back into stocks and perhaps that is why they are not shopping and the retail sales were weak and then now housing numbers that are weak as we are seeing job openings hit record highs. so a lot of different cross currents the fed is looking at next week as it looks to most likely raise rates and the rallies this week have all faded going into the end of the day. we'll be watching that this afternoon. if the s&p can break the four-day losing streak and hasn't had a five hi day losing streak since 2016. and oil is one of the things we're watching rising on concerns about the continuing turmoil in venezuela as a major oil producer in this hemisphere and the u.s. and energy as a result is the best performing sector this afternoon. some of those names that are rising, tech this week, talk

about fading the rally nasdaq hitting an all-time high with the big names chick -- chip stocks have faded as have the megacapsar hitting the record highs the only one moving higher at this hour is netflix which continues to be a big momentum stock. speaking of tech stocks, the biggest tech ipo at the nasdaq, a cloud security firm z scaler going public at my usual home there priced at $16 a share. that is well above the range and look at pop it got opened at $27.50 and making for a valuation of about $2 billion. not a bad debut. >> not bad >> back to you. >> thank you the markets continue to shrug off the turmoil in d.c. but it is a different story in the west wing eamon javers reporting from the white house. >> reporter: it feels like there is an effort to stop some of the

media barrage over the p-- past 24 hours, whether somebody in this administration would be fired but a white house official told me a short time ago it seems like everything is chill here this morning. that is the line that we're getting from some of the white house officials here that there may not be any developments despite all of the speculation over the past 24 hours. take a look at the list of all of the administration officials who appear to be on thin ice starting with the chief of staff john kelly, somebody who has been at odds with the president in the past appears to have the upper hand on the job right now. but there is speculation that he might not be long for this white house. h.r. mcmaster, the national security adviser, who by a lot of speculation seems to be on his way out, at some point or another. and then a number of cabinet officials who are embroiled in various ethical disputes, whether it is flying first class to personal destinations or buying expensive furniture for

their offices and then the attorney general jeff sessions who has been under fire for the president of the united states for nearly a year now. for his decision to recuse himself from the russia matter a decision the president disagreed with dramatically. the president has been accused him of being disgraceful on twitter in recent weeks. but no indication as of right now and we sit here at 1:00 eastern time that anybody is leaving this white house today so we'll continue to watch for that but like i say, it seems to be an effort to tamp down the speculation here at white house today. thank you. maybe they're just trying to give you a break it is friday after all >> you never know. >> friday is the day they usually fire people around here. so we'll wait and see what happens late in the day. >> that is very, very true thank you so much. appreciate it. well despite the d.c. drauxa happening or not happening today, we'll wait and see. investors don't see concerned. record amounts of money still flowing into the market. according to lippor data, stock attracted more than $20 billion

and that is the largest in flow in two months and will all of the white house kay act the action and barry i will start with you. because you're from my home town, dayton, ohio, and eamon ran through it with us, and it doesn't mean that there won't be headlines but the market did take a hit when the new york times reported that mueller was looking into documents from the trump administration regarding russia or the trump organization regarding russia so are we at a point where the white house turmoil is making the markets a little nervous >> i think the market is a game of chicken right now and stuck in a trading range so it is sensitive to these sort of things but in the long term i don't think the changes over in the white house will have that

much affecting in there is a cover-up going on. when that happens and impeachment happens, that is very bad for stocks. but overall, i would say it is not a concern until you start to get down on the financial side, the treasury and the budget and the commerce secretaries if those wind up going, then i would start to be more concerned. >> and without the headlines, the dow higher by half a percent at this point. and mike, we talked about the inflows so far showing fairly bullish signals to the market. so what do you think do you think this rally just continues here higher or a little worried about the risks that we could see out of d.c. >> yes to both i don't think there is a lot of risk as long as the deck chairs keep getting shuffled around in washington, d.c. if something does get rotten at the core, that is trump himself, then we have an all bets off and a very different game. but until that begins to happen, i don't think wall street will pay too much attention obviously larry kudlow will be a

better economic adviser than carl marks but wall will look past that kind of stuff. in terms of inflow -- >> i think marx wasn't available for the job. >> it was tough to get him to washington. >> let me interrupt you and if i have fresh capital to put to work, do i want to put it to work in what has been working or what hasn't been working >> it is a $65 question, tyler we were doing some analysis this morning about large cap growth and large cap values so think about the two halves of the s&p 500 and the faang stocks in growth and the bank and energy stocks being in value. clearly there is more value available and at lower prices. so it would be a good place to begin to put capital to work however, the growth stocks have performed exceptionally well in fact some people are starting to talk about them in terms of

1998 and 1999 again. the difference is the earns are there for the big companies. their valuations aren't out of line given the enormous price increases we've seen so i think the market is safe and think the growth stock leadership is safe until otherwise proven different i just -- i just think there is so many -- so you just talk about the flows a minute ago so much of the flows are piling into tech funds. now -- that probably means we're in the seventh or eighth inning but there is -- we're not sure what will knock that off the rail. >> right you know, barry, similar question to you in that -- in the past condition -- investors have been conditioned to buy the dip kind of thing. once the market fell 1 percent or even less, people would rush in is that the case any more? >> as we're looking at conditions -- as we look at conditions today, we see that there are some longer term strategic risks, the fed

tightening and the tariffs back in '02 and the market didn't like that and that fell 30% after that was put into place and the volume is still high we did take some pressure out of that inner tube with this decline and i think it is one of the reasons money is coming in four to one our clients are say, let's go ahead and buy more and i had one person say, i'll take out my credit line and put -- put it into stocks which makes me more nervous. so if we hit the upside, we're clear and if we hit the down side we are in a correction mode going sideways we believe it is a time to move into smaller stocks because they don't have the tariff problem necessarily and the bargain stocks, they've just been ignored for so long that they -- really are due and time to start nibbling in both of those areas. >> thanks. appreciate it. have a good weekend. mike and barry. let's get to jackie de angelis. >> rigs added up to 800.

up only 169 versus a year ago. and prices over 60 it is attractive to add oil but they are taking a cautious approach as we head into summer driving system expect to see the rig counts numbers to go up here in the united states. shale producers have been pumping more since opec implemented its cut and with delays on the ram coipo there might be more pressure to keep that back to you. >> thank you. and we have breaking news out of nike. according to dow jones, this is just crossing the wires, another nike executive is out. this one vice president jamie martin, they are saying these headlines from dow jones, he was forced out just moments ago i reached out quickly to nike to see if we could get clarification, but late last night we found out that trevor edwards, who is nike's president, the heir apparent to mark parker, that parker was resigning and leaving

in august and there was no direct allegations connected to trevor edwards with the other h.r. issues of inappropriate workplace behavior that has come up but if this report is true from dow jones, this is a second executive vice president, jamie martin, leaving nike in a very short period of time. >> edwards was an heir apparent candidate and he is alleged to have done what >> so they are not saying. in this memo that nike sent out that we have reviewed in the beginning of it they talk about inappropriate workplace behavior reports that have come into nike not implicating any one person or department. and the memo went on to talk about how some restructuring would be in affect in part because of that. mark parker wanted a correlation or to his executives and then below that trevor edwards was resigning in the nike memo said

it was his decision and would retire in august we reached out to nike and said we need more and help us understand this better and they said there are no direct allegations against mr. edwards that tie back to the inappropriate workplace behavior but there is no direction allegations. >> i don't know how well you know the personalities there at all. but how -- if mr. edwards was an heir apparent it sounds like he was a critical player. >> very critical. >> martin is a name i don't know. >> and i'm not as familiar with martin's role there or exactly what role he would have played or in this succession planning at all but edwards is a big one and the market is not sure how to figure that out mark parker has been there for a long time, 2006. he said he's staying beyond 2020 we saw reaction for the stock price higher and then lower and now with this headline you could see a further drop because this is uncertainty in the ranks of

nike. >> edwards was responsible or -- for much of the restructuring that had gone on with nike including stream lining the shoe line to make it more profitable there. so the reaction to stock was z puz -- puzzling to me and they expected the stock to trade off this morning but here we have a slight reaction on the heels of the executive leaving and leaving investors with feeling how much worse can this get and we don't know the answers. >> i agree there should be more to clarified for us to get a handle on the situation, with the personnel and how much they are cleaning up and how much is more to come. >> down a fifth of a percent. it is ten years -- ten years since the collapse of bear stearns and hard to believe but the question is could it happen again? we'll debate that. but next shares of netflix flying high up to 70%. one bull said the stock will keep climbing and the reasons behind his bullish bet when "power lunch" returns. strategy the same way

to create a financial plan built to last from generation to generation. we'll listen. we'll talk. we'll plan. baird.

want to know who will win the streaming wars of course you do rbs is out with netflix showing more americans are using the service and the company is gaining traction in forward markets like japan let's bring in mark haines good to see you. >> hello, and it shows there is a preference for netflix but it seems like netflix's lead is pretty solid lead over the likes of an amazon. >> amazon and youtube and hula as well. one of the big surprises from

the survey was on the pricing side so we did ask people and this is our 26th quarterly survey, how would you react to a $1 or $2 price increase and over the last few months that is what subscribers have had to put up with, a dollar price increase or $2 price increase and we saw in the survey price sensitivity come down. you into -- fewer people willing to cancel because of rising fees that is pricing power and one of the biggest fundamental surprises and why you have an accelerated revenue growth it is about 35% streaming growth for a solid five years an we think it is closer to 40% this year and margins will expand and you put that combination together and that explains why it is up as much as it is this year. >> walk us through the math. if netflix were to raise prices again say by a dollar, what does that mean for the revenue and the margins? >> i'm not sure i could do it

quickly enough off the top of my head but keep in mind you have 110 million subscribers and so a dollar many and how much do they flow down to the bottom line a price increase is all margin that all falls down to the bottom line but that is not how netflix is running the business and they are taking the price increase and put it into content. and we did a study with steven k. howl and look at media versus netflix and where they get the most content for their buck and we found that for every doll aur spend -- dollar you spend on netflix, you get access to $1.5 billion worth of content and that is 2-x and that is part of the appeal and why -- the reason why either netflix prices can continue to rise or traditional media or entertainment premium media prices have to come down something will give. >> you kind of answered this a moment ago, but when i see i

stock up almost 70 percent in a little more than two months, i figure i've missed the bus badly. tell me why i haven't -- you sort of answered it numerically but tell me why i haven't narratively. >> yeah. and i want to be careful here. at the beginning of the year we had netflix as one of top three picks given the rise in the stock and we took it off the top three. we'll stick with the buy we'll look out three to five years and see earning power and the market would pay 20 to 30 times so i could see upside in the stock so it would be unlikely for us to change our rating on the stock even with the rise given where we think the earnings could go long-term but the real narrative what people are missing is how popular netflix is in international markets. this is more than a majority are overseas a overseas and seeing traction in asia and secondly how much pricing

power the company has and how profitable the international markets could be they insisted it was just a u.s. phenomenon and didn't have pricing power and if they wan internationally they couldn't make a go and it wasn't proven. >> and snap -- it is not the last time it got snapped and not because it is rihanna and kylie jenner, but they underscore potential investors think that the redesign is not working well and they have an ad problem and they'll have to be like facebook monitoring what they put on their feeds in terms of content and in terms of advertising. how big of a problem are these >> i think those are all major problems, mem issa i don't want to duck any of those. we have yet to see any asset -- internet advertise gain real traction like four or $5 billion a year in annual revenue if the company namewasn't google or facebook

all of the ad dollars are going to those platforms and we'll see if snapchat can scape the facebook and google stars. but they are fixing the android app or the app on android devices. that hit the user growth a year ago. and fixing the advertising market place and the user interface change is debate but i think at the end we're going to see rising engagement. we don't have the proof of that yet. i think this company does a lot of a.b. tests and won expand the user interface for the entire population if they hadn't seen results. i'm guessing on that but a speculative stock and not one of the top three picks but i think there is an interesting play on the long side if you have a stomach for volatility. >> mark, thank you. well, coming up next, puerto rico governor pitching the island as an ideal place for crypto entrepreneurs simo mody is there to tell us why he think it could bring the island back from the brink.

>> reporter: puerto rico is trying to become the hub for cryptocurrency investors but will it succeed as they still recovering from one of the worst hurricanes on record that is coming up when "power lunch" returns

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explore a takeover bid for the chip maker and consumer confidence rising to the highest level since 2004. even after those disappointing retail sales tyler. >> thank you very much courtney, ten years ago today j.p. morgan rescued bear stearns, the original file sale price was $2 a share and a ripple in the ocean leading to the financial tsunami in the fall of 2008 so what we -- what have we learned since then and could it happen again we'll take a look at this fascinating tale when "power lunch" returns after this. >> the once mighty bear stearns is no more nationalized ki i morgan chase and the fed tangt over taxpayers on the hook for $30 billion.

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i'm sue herrera. here is your update for this

hour former south africa president will be prosecuted on 16 charges of corruption. the 75-year-old zuma resigned last month after he was ordered to do so by his party, the african national congress. the florida state constitution revision commission hearing from parents from park la -- park lapd high school who want stricter regulations and they propose to put the constitutional amendments on the ballot. >> and handy craft is recalling pacifier and teeth holders due to a choking hazard from august 2015 to march 2018 at stores nationwide the company received 67 reports of a snap detaching but no injuries have been reported so far. and congressman louis slaughter died after falling at her home the 88-year-old north caroliew elected in the house in 1986 and

chaired the house rules committee, for 31 years in the chamber made her the third longest serving woman. you're up to date. that is the news update at this hour back to you. >> thank you very much. a check on the markets which is losing a little bit of stream now up about a half of a percent at 24,983 and the s&p 500 is up for the first time in five days but now just a quarter percentage point higher. session lows, the nasdaq dipping into the red no in the green by a vast amount that would be one-one hundredth of one%. and the best performing sector at this our. >> ten years ago jp morgan saved bear sterns from going on and a bargain payment price at $2 a share and raised to $10 a share. it made sense at the time but was it worth the risk that bear

stearns took on. the best and worse deals of the banking crisis. >> let's start with this deal. it boosted theirinvestment banking ability. particularly in trading. and then washington mutual of 1.9 billion helped for areas like florida and california. now for just $3.1 billion in total they appeared good deals but led to about 70% of j.p. morgan $40 billion in the thus years. and jamie dimon said we wouldn't do that again. and in fact, i don't think the board would let me take the phone call and bank of america, they did boost their wealth management but taken a decade to fully integrate. countrywide, for $4 billion was meant to boost the more gaj

share and bank of america has just 3% and cost them tens of billions in credit and costs the ceo said it was not a good deal wells fargo had huge east coast geographic expansion and was a good deal but the best deal was morgan stanley $2.7 billion for the 51% in smith barney adding scale and retail exposure in the wealth management business which is helped differentiate them from goldman sachs in recent years. there is a key them, the later the deal, the better because prices have fallen but more importantly deals were executed left hastily and thus lower litigation costs bank of america and j.p. morgan paying the most because of the big deals in the crisis. that is the litigation kriess and not the credit which is a factor. >> so the question is could something like what happened in

2008 happen again? and as our economy prepared for another major shock to the system let's bring in john riding who was bear stearns chief economist at the time of the lapse and is the founding partner from rdq economics. we are also joined by contributor william cohen, a vanity fair special correspondent and has an op ed on cnbc explaining why bear stearns could happen again let's go there first, bill if we might, you described in some writing that basically what happened with bear stearns was a run on the bank by corporate lenders that stopped wanting to lend to bear stearns i presume that could happen again. maybe out of a different sort of origin, but why couldn't it happen again >> well, tyler, you are right. it could happen again because wall street and big banks generally are in the business still of borrowing short and

lending long and i know your viewers will know what that means basically their liabilities are short-term and the assets are long-term and when people want their money back, more quickly than the assets can be turned back into cash, that creates a run on the bank and what happened in 2008 was that the institutions that were funding bear stearns overnight or in the overnight repo market wanted their money back or didn't want to lend to bear stearns any more because of the credit quality of the assets that were securing those loans and bear stearns couldn't get the money it needed once that word got out and it was -- it was literally all over in a week. >> john, let me turn to you. you were there firsthand and witnessing it and something that you wrote back in march of 2008 truck me as very interesting and directly referable to where the fed is today and what it is doing. and you at that time had been

critical of mr. bernanke for pursuing a policy of gradualism with respect to raising interest rates. you thought thats would n -- tht a good idea and i wonder if there is a gradualist policy toward raising interest rates yet again? do you feel any differently about it and could similar seeds of crisis be resident in that policy >> well, i would note the only person to feel that way and we felt that way a long time about the fed, as they were raising rates in the 2004 to 2006 period john taylor for example of the taylor rule made various similar points in the book that he wrote on the crisis. and yes, by those metrics, interest rates are still far too low and are being raised even more gradually than they were raised in the 2004 to 2006 period so the money is there, including

the additional liquidity from an element that was missing in 2004 to 2006 which is the feds balance sheet and the $3.5 trillion increase in the fed balance sheet during the crisis which is beginning to slowly wound down. now that having been said, there is no doubt in my mind that the financial system is in a different position why? well firstly, we have probably much better levels of bank capital and a better bank supervisory structure in the stress test and those are important. and secondly, there are really no large independent investment banks left why there was a run on the bank was because the banks, like bear stearns and like lehman brothers and others were not banks, they were investment banks and they were separated until 1999 legally from commercial banks because glass steel. but when that disappeared, we were banks that didn't have

access to the lender of last resort facility. and so all of the things that happened in ten years ago today and with aig and so on were to extend and eliminate the independent investment and now they are all basically banks and have access to lender of last resort but the problem is congress has restricted the fed in dodd/frank and i think that is a mistake. >> bill, in terms of what jim was talking about, the increased capital, people say things are different these days in terms of how banks are fortdfying against the next potential crisis. but you put the finger on polls in terms of -- this is the bank's -- these are all banks business models. these are things that you can't necessarily legislative so in terms of if can happen again, the reason why you say it could happen again, the only way to get around that is to put -- to change the business model of the banks. it can't change, right >> melissa, i don't think it

can. we have a fractional banking model. that means that j.p. morgan chase if there is #$.5 trillion of deposits, people can get that going to the atm and meanwhile the money is never really at the bank or never been at the bank and nobody thinks it is at the bank unless they want it and that money is lent out to corporates and governments and endowments all over the country for long-term loans and long-term bases. so as long as everybody doesn't want the money at the same time, the system works just fine but occasionally people freak out. they did in 1929 and 1930. in 20008 and when people freak out they all want their money at the same time and they go to the bachk -- bank to get it and this is not there in 1920 or 1930 that meant long lines around the corner and pictures of that in 2008 the institutions were freaking out because the retail depositor wasn't upset because their deposits have been ensured

up to $250,000 that covers them but for institutions there was no coverage for them and so when that happens then you get a run on the bank that could still happen. >> gentlemen, thank you very much for taking us through a piece of very exciting interesting history. john ryding and jim cohen. >> up next from the financial crisis in 2008 so the retirement crisis many say is right in front of us. how unprepared we are for our golden years we took legendary...

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it is a crisis decades in the making as one of the largest generations in american history prepared to retire, many americans are learning they haven't saved near enough for the years ahead. sharon epperson is here with a report you can't afford to miss. >> well financial experts say you need between 10 and 12 times your current salary to retire comfortably. yet the average worker has saved just $2,500. some plame their job one quarter of private sector workers aren't offered 401(k) and now they are hoping a new innovative program will change that. >> and when josh decided to go

from biology to beer, his goal was to craft a perfect pint, giving employees a way to save for retirement may have been a goal but not able to brew up on his own. >> you spend a lot of time and energy working with these people and developing relationships and they become family and you rally want thebest for them, you wan them to be able to provide for themselves later in life. >> now thanks to a program that is the first of its kind in the country, employees at reach break brewer are given the chance to save for their future. through a state-run retirement plan called oregon saves. >> we're giving small businesses the same kind of opportunities that some of the larger businesses have, low cost savings for employees at no cost to the employers. >> about 55 million american workers in the private sector are not offered a 401(k) plan through their employer most of them 32 million work at small businesses which have fewer than 100 employees >> some may say, why is that a

problem? study after study shows that people are 15 times more likely to be saving for retirement if they are offered access through their employer. >> they require employees who do not offer 401(k) to automatically deduct 5% of an employee wages after taxes and send it to their individual retirement account or ira. workers can contribute $5,500 a year josh allison hopes offering a retirement plan will attract the best employees who will help ensure customers keep coming back >> one thing that the savings plan will allow us is people will be able to view this as a long-term career rather than just a stepping-stone. cheers >> now programs like oerg saves will not solve the crisis on their own. with a current contribution of $5,500 a year, works still node to find other ways to save but it is a step in the right

direction. >> sharon, thank you. stay with us because we'll talk about millennials. my favorite age cohort. >> watch it. >> what? >> watch it. >> they're facing headwinds -- i'm going to crush -- they try to plan for the future our next guest research indicates that two-thirds of the millennials don't have anything saved. not a penny for retirement diane oakley is executive director of the national institute on -- retirement security is this because of the nature of millennials or is it because of the changing nature of work that so few have put money aside? >> first of all, millennials and baby boomers and gen x all work for employers who offer a retirement plan and two-thirds work for employers who offer a plan but millennials are coming up against they may not have enough years of service, they may not be working enough hours,

aquarter of millennials work part-time and part-time employees will less like t-- to be illithible and -- eligible and some it theable to find an employer who offer a pension plan. >> and i cover retail and we talk about how the finance crisis changed the way we spend which could mean the change that we save. i'm a millennial, an older millennial and it made be realize that things could disappear quickly. it might have made some of me and my colleagues more nervous about even a 401(k) because it is invested in the market. do you think that has anything do to do with what you are seeing with the idea of millennials saving less than the investment profiles than the other generational cohorts. >> actually, millennials are saving about the same amount even as a percent -- the ones who were saving, are saving

about 10% of pay now that was probably okay five or six or for boomers because they're not -- millennials will live longer than boomers millennials will get less as a replacement from social security than boomers will get based on the current structure and they also face a risk that social security may run out of money if congress doesn't fix social security so they are concerned and actually what we found is when offered a plan and being eligible, millennials are going into the retirement plans as the same rate as baby boomers and gen x. >> how important are other things that businesses are doing like auto enrollment, and ways to kind of entice millennials not only to invest in -- and to enter the plan, but also to stay with the company >> i think auto enrollment is key. a lot of millennials don't feel that connection. again, some of them have only

been there about half -- about half of them at the current job two years or less. and so that is one of the things that keeps them out of the plan. but if they are eligible and they do participate, they're participating in pretty much that same rate as all the other generations in the workforce today. >> you say alarmingly that 83% of latino millennials have nothing saved for retirement that is even higher than just the average. why is that? is that because latinos are less likely to work for companies that offer 401(k)s are or more prone to be those part-time employees who don't qualify even if the company offers one? >> the answer to that question is both of those apply to latinos. latinos really are the class or the ethnic group of american workers today that have the lowest level of working for an employer that offers a plan. only about 50% of them with for an employer who offers a plan.

then it's compounded by the fact their work patterns also usually indicate they're less likely to be eligible for a plan as well they get a double whammy >> thank you very much appreciate your time diane oakley >> you're welcome. >> thank you, sharon, for joining us as well >> puerto rico pitching itself as a paradise for crypt crypto entrepreneurs we'll head to san juan coming up on "power lunch. you know what's awesome? gig-speed internet.

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sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. puerto rico believes blockchain entrepreneurs could bring the bruised and battered island back from the brink is this really the right path for puerto rico? there's risks here seema mody is in san juan with the details. hi, seema. >> courtney, it's been six months since puerto rico was hit by one of the worst hurricanes in history now the island is desperate to bring business back. the government is positioning itself as a destination for blockchain start-ups this week, launching an advisory council that is dedicated to helping blockchain companies grow here on the island. >> at this point in time, we are welcoming with open arms blockchain technology for puerto rico because we know that

there's a huge potential for the island >> it's a tax incentive that makes puerto rico very appealing. specifically act 22, which basically says if you become a resident of puerto rico, you effectively pay no long-term capital gains. of course, that's appealing to specifically the cryptocurrency and blockchain investors that's one of the main reasons a lot say they are making the move to puerto rico >> this is one of the best places to put a start-up company. the tax incentives are incredible, the talent down here is incredible. >> but challenges do exist they're still recovering from hurricane maria. about 90% of the island does have access to power, but many citizens telling us they're still dealing with weekly power outages. plus, while the government is being welcoming to the blockchain community, many people here say that banks, local banks, are making it tough to access credit that's hard as they try to build out their businesses here in puerto rico. lastly, the talent pool.

thousands of people migrated out of puerto rico after hurricane maria to the mainland, finding talent that can specialize in blockchain, that will be a challenge, as more people make the move to puerto rico. lastly, i would say it's becoming very competitive, specifically with nations like switzerland, japan, and south korea, that are also trying to become the headquarters for this fast growing industry that is blockchain >> is this a matter of businesses domiciling in puerto rico or people moving their companies and employees there? >> no, it's a very much a growing trend, melissa, but these are people who are picking up their bags and actually moving to puerto rico, trying to take advantage of the tax incentives and also saying, listen, this is a warm climate by building our companies on the ground in puerto rico, we're helping with the island's economic revival, building out jobs as well >> i don't know, seema, whether you had time to get out and around much. i know on these trips you often just work and rarely leave the

hotel, but what have you seen in terms of the state of the recovery or lack of it >> yeah, absolutely, tyler san juan in itself is back up and running. it's definitely recovered from hurricane maria, which took place six months ago once you go inland, it's a very different story. there are a lot of pockets that still don't have access to power. the recovery still very much in progress in puerto rico. >> thanks very much. seema mody in san juan >> lots of retail news out today, and lot of big stock movers in the group this hour. we're going to break it down, and could we see more shakeups in the west wing we'll head live to the white house for the very latest. plus, the press briefing set to get under way we'll carry it live as soon as it begins. the seco hndour of "power" begins right after this break.

i'm melissa lee. here's what's on the menu. chaos, what chaos? despite rumors the president may be ready to clean house, stocks are higher is that the right move or should investors be more concerned? >> a lot has changed since the collapse of bear stearns ten years ago today. could it happen again or did wall street learn its lesson >> and nothing but net

a basketball player robot making its debut in japan we'll show you its incredible skills straight ahead. slam dunk edition of "power lunch" starts right now. university of miami could have used that robot in the game yesterday. welcome, everybody, to "power lunch. i'm tyler mathisen stocks right now kind of mixed with the nasdaq, as you see there, in the red by the slimmest of margins. the dow losing steam as we head into this afternoon. it had been up about 160 points. now up a little more than half that, or about 90 points thes&p 500 is higher for the first time in five days, but again, by the slimmest of margins. financials, energy, telecom, those are your s&p 500 sector leaders. as you see right there walmart, american express, and the big cat are the top stocks powering the dow at this hour, with walmart bouncing back, up by 2.3%. some other movers at this hour i guess it is adobe, although it

says abode adobe up 3.25. the company beating on the top and bottom line. on the flipside, not a good day for broadcom, it is in the red despite an earnings beat overstock sinking after posting a much larger than expected loss and kraft heinz trading at its lowest level since 2015. hold the ketchup, courtney >> i was just going to make a ketchup joke you're fast. i'm courtney reagan. here's what else is happening. the number of job opens in the u.s. surged to a record 6.3 million in january wynn resorts former ceo steve wynn may sell all or a portion of the stake in the company. he's the largest shareholder owning nearly 12% of the company. >> and apple says it will hold an event focused on education on march 27th that event will be held at a chicago high school. the company wants to hear creative new ideas for teachers and students tyler, over to you

>> thank you we begin this hour in washington where we're minutes away from the friday press briefing with press secretary sarah huckabee sanders. chatter still running wild about another west wing shakeup to come, and eamon javers has been filtering the rumors and the scuttlebutt for us on the north lawn hi, eamon. >> hi, a really unsettled feeling here at the white house today. aides reported for work this morning, a number texting me saying they're not sure if one or a number of senior administration officials would be fired today so far, no news in that department and i talked to one aide a short while ago who said that everything feels chill so far today. so there is a sense here that there might be an effort to tamp down on some of the speculation that somebody might be about to depart the white house but we'll watch it throughout the afternoon. we're going to see a briefing now from press secretary sarah huckabee sanders in a few moments. you can imagine she will get a barrage of questions about exactly that any number of officials on thin ice with the president

starting with john kelly, the chief of staff himself, is somebody who has been speculated to be on the president's bad side also h.r. mcmaster is someone who never really gelled with this president of the united states never been able to find that personal relationship of trust and in the wake of the firing of secretary of state rex tillerson, earlier this week, there's lot of speculation that h.r. mcmaster could be the next to go. there's any number of other cabinet secretaries who also appear to be on thin ice with the president for a variety of ethics reasons, buying furniture for their offices, traveling lavishly, first class air fare, that sort of thing we'll see whether any developments come through the afternoon, but so far, no news from the white house that may be how the white house likes it >> andrew mccabe was on the graphic we just showed there he's leaving, retiring >> right >> i believe it is on sunday the question there, if i'm correct, is whether he is fired

based on some internal disciplinary reasons at the justice department and the fbi, and if he's fired, what happens? he loses his pension, right? >> the problem for mccabe, he announced he was leaving but gave a date in the future which is coming up this week in which he would be departing because that's the date on which his pension would vest now, the question is, whether or not the administration will fire him before his pension vests he's somebody who has also been on the wrong side of the president of the united states, but has run into some internal trouble in terms of the fbi's ig, and an internal investigation at the fbi so if we see the results of that report at some point in the next 24 hours, there's a possibility that the administration could take steps against him but all of that is still to be determined at this point as well and of course, there's the other factor here at the white house, there are so many officials who have already resigned but who are still working here gary cohn has resigned, still working here hope hicks has resigned, still working here josh rufell has resigned, still

in the building as far as we can tell i saw sean spicer here yesterday, although he was visiting for st. patrick's day festivities. a lot of people who have parted ways with this administration in acrimonious terms in some cases are still here, still advising the president. there's a group that might be going. a group that has already gone but has not left the building, and a lot of question marks. >> gone but not gone thanks very much appreciate it. >> you bet >> it's been ten years since the firesale of bear stearns to jpmorgan how have the markets feared since this key event mike santoli joins us with that. hi, mike >> yeah, extraordinary as those events were, and as bad as the markets did in the year afterward, getting cut in half on the s&p 500 in the year after the failure of bear stearns and the acquisition by jpmorgan, since then, it shows you time is an investor's friend the s&p 500 since then is up 7.5% annualized which is basically its long term average. almost 10% including dividends

what i find interesting is the broker dealer index. an index of securities firms both then and now. bear stearns would have been in there at that time, layman brothers was in there, merrill lynch was in there all of them needed rescue or they failed. at a horrible time, right away, and only late last year did this index of securities firms stocks make a new high. the prior high would have been from 2007, so you can see the market had an inkling that stress was building. there was going to be problems in the financial services area it fell into the bear stearns failure and beyond that. i do think pointing out one other thing, that shows you that there were these senses in here that there was a big risk building up before bear stearns buckled. are there also unseen or unnoticed risks now that have been building up it's hard to know for sure, obviously, but some of the stuff in the background, record corporate debt levels. that's a background factor obviously, some kind of china financial stress is a perennial issue. and it seems as if something

that may perhaps being building toward a head, and the short volatility trade that came to the surface just last month as a lot of these funds that had bet on calm markets had a rude awakening. none of them seem like they have that kind of feedback we had back then that really did undercut the markets and the economy. >> thank you very much mike santoli >> and despite the d.c. turmoil, money has been coming into stocks add a rapid pace, so the question is, is there a point at which investors should worry about the white house drama and act financially on it? brian is senior investment strategist with oppenheimer funds. rod smith is director of investments with riverfront investment group brian, let me begin with you so far, the market seems largely to have stepped over whatever white house upheaval there's been certainly did in 2017 into, i don't know that it will be easy to draw a direct line between

how the market has been behaving and what's going on in the white house over the past few weeks. is there a point at which white house upheaval becomes an important investment pivot point? >> i think investors focus too much on politics we look back historically, there's been very little correlation or causation between presidents' approval ratings or events taking place in domestic politics and moves in the financial markets. what investors should be looking at more is a couple of miles southwest from 1600 pennsylvania avenue, to the federal reserve because when we talk about when these cycles ultimately end, it's typically after a period of prolonged interest rate hikes. and the yield curve is getting flatter. now, that doesn't mean that the cycle needs to end today or even 100 days from now, but a flatter yield curve ultimately presages slower credit growth, weaker economic activity, and ultimately, some decline in the equity markets i don't think we're there, but the uncertainty around monetary policy to me is far more significant for investors than

what's going on in the executive branch of government >> rod, brian has his eye on interest rates do you >> yes, i do i also love the comment that mike santoli made about time because i think we're trying to manage portfolios for clients that have different risk tolerances, different time horizons, and our theme for 2018 is there's sort of a tug of war going on between good economic news but higher interest rates to exactly brian's point what we're doing is we're trying to keep people in the equity market as much as possible what that means more recently is we have been cutting back on our exposure to high yield bonds, to credit and moving that money into more investment grade, shorter timeframe stuff that will go up with interest rates, so floating rate corporate debt. and keeping it balanced for people with a three to five-year

time horizon, you have to build in the possibility of a cycle. we do not see it in 2018 don't see it in 2019, but a three to five-year timeframe, you have to build it in. if you can go out seven years, i think you can have a lot more equities in your portfolio >> i want to get it the point you made about investors paying too much attention to washington it seems like washington, though, has provided some of the greatest catalysts for this recent run in the market, whether it be trump's election, the talk about tax reform, which did give us a boost. the talk about deregulation. at some point, policy giveth and doesn't it taketh away >> yeah, remember, this was a long-term secular bull market that started in march 2009 we had a hiccup in early 2016, amid the first interest rate hike and strength of the dollar. the economy was recovering by the middle of 2016 and when you look at what happened after trump was elected -- >> so is it coincidence? >> we had a sharp move in small

cap value. since then, it's been very much large cap. it's been very much growth and it's been very much emerging markets. that wasn't really the trump trade. the trump trade was going to be strong dollar, small cap, u.s. val value. it's been the opposite of that that's not a political statement, just to say the composition of returns, this has not been all about policy from the executive branch what i would say, though, is as you get longer in the cycle, the likelihood of a policy mistake somewhere rises. so if we see tighter monetary policy or we see further steps towards some type of trade i don't want to say war, but some type of trade conflict around the world, then investors may need to change their perception of things. as of now, the global economy looks quite good >> if you have time, i think trade is the one where you have to focus on what's going on with policymakers because when we

build our scenarios, that's the scenario that changes, is a game changer. it's very encouraging that what's been coming out has been mostly peter navarro and now larry kudlow saying this is all about a negotiating stance and trying to get fairer trade fairer trade is good but an escalating trade war type situation, tit for tat situation, it's not going to like that. >> absolutely not. rod smyth and brian levitt, thank you. >> thank you >> speaking of trade, united tech shares under pressure this week as investors try to assess the impact of recent tariffs they're a large buyer of steel and aluminum jim cramer got a chance to sit down with the company's ceo and asked if he's worried about the impact of tariffs. >> we buy 600,000 tons of steel a year we buy 3 million pounds of aluminum but most of that is actually bought outside of the u.s. only a third of the metals are bault here in the u.s.

and so as we think about the impact to the business in the short term, it's not going to be significant, but it's one of those worries, again, if you start with tariffs on steel and aluminum, where do you go next >> you can catch the rest of the interview tonight on "mad money" right here on cnbc >> here's what else is coming up in "power lunch. u.s. shopping malls was another big tenant as toys "r" us announces its liquidation. are we headed for another retail wreck? >> housing starts coming in weaker than expected are the home builders to blame >> plus, it was a wild week in washington and reports are swirling the president may be getting ready for another big personnel change it's friday, after all we'll break it all down on "power lunch." ...with its high-tech cameras and radar... ...contemporary cockpit... ...three hundred and sixty degree network of driver-assist technologies... ...and sporty performance... ...what's most impressive about the glc?

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welcome back to "power lunch. big headlines in retail today. tiffany shares in the red after disappointing guidance forecast. a shakeup in nike's management following reports of workplace misconduct ulta beauty up today the company reported a 60% increase in e-commerce sales shares of overstock getting crushed. that company going through an awful lot of changes and let's not forget the story of the week, toys "r" us liquidating its business we have the profounder of simien siegel >> first, i want to get both of your takes on nike i want to tell our viewers that

we learned a little bit more dow jones in this report says both mr. martin and mr. edwards protected male subordants who engaged in behavior demeaning to female colleagues. nike has not yet given us a statement. if this is true, that speaks to a culture that potentially is a little hostile what does that mean for the company going forward and its growth everything it's going through right now. both of your takes i would like. liz if you want to start first >> i think the market will shake this off i don't know that it should. i think culture and people are enormously important we don't know the details so it's important not to rush to judgment but i think at a company like nike, culture has to be very, very important and it's troubling >> we have now lost who we thought was the heir apparent in mr. edwards. >> right they do have a very deep bench, but it says something if they're elevating people who kind of look the other way if there was misconduct going on. >> simien? >> i think recognizing that you have more information that we do right now, so you have more

updated news there is something as well on the other side obviously, what needs to be taken care of needs to be taken care of. it looks like the company is making an effort to do this. we have seen companies making decisions before we hear about them and others that are not, that are more reactive without opining on the specifics and the nuance here because we simply don't know, i will say i think it is something. something to be said for the fact we're seeing this headline come out of nike, not from an external source. >> but if edwards and martin leave, that's a hole in terms of their talent is there enough talent behind them to fill that void >> to liz's answer, the easy answer is yes. nike does have a funomnm bench you think about which company we're talking about, the size and scope to get there every individual person is critical, and every individual person can be replaced because there's so many people below them so i wouldn't be concerned on a company level on the personnel leaving issue. i think the other issue that we were talking about is understanding what wint on, understanding what the rest of the work force is like

they obviously had phenomenal impacts and positive impacts not being there is a positive from that aspect, but the idea that nike won't have people who can elevate from within, and the market is still there. >> a lot going on. let's move on to tiffany liz, so some mixed results there this morning the ceo on the call sort of laying out pretty simple six priorities going forward none of them super groundbreaking though. what do you think about tiffany's trajectory onto the ceo just there six months, still getting his feet well. >> i like it i actually am surprised they seem to be making real improvements in the right places we obviously have a little momentum going on with product some extensions in different categories some theater that they're adding to the stores and also talking about operational improvements and improvements to their tech stack. so i think there's a lot going on, and they have the right team in place to do it. i think they are talking about

accelerated sales. accelerated earnings operating margin opportunity i think this pullback might be an opportunity >> to be fair, we're talking about retail we have spoken about it a ton. boring is not a bad thing. there's a simple plan and it's not revolutionary is not bad this is a company that is very well known for its brand it's a box that sells very shiny objects. like, if we can oversimplify it to that, that's a good thing and a good place to recognize where we want to be. within that framework, hearing what they're doing is good >> forgive me, we're going to go to the white house you have been trumped. marc short is at the briefing podium >> only then, after cleared from an fbi background check and the office of government ethics is a nominee submitted to the united states senate. when they get to the senate, they go through several additional valuations including meetings with staff, meetings with members on both sides of the aisle. the nominee then undergoes a hearing and the committee then

votes on nominee to get out of that committee at that point, the nominee moves to the senate floor for full confirmation traditionally, the senate routinely confirms the administration's nominees once out of committee it is there to respect the will of the american people and the election for an administration to fill out its roles under a new president. instead, what senator schumer has done is to require cloture votes to essentially slow down the process and to obstruct. at this point in the past four administrations combined, the last four administrations, the senate had conducted 17 cloture votes combined cloture vote in essence being a filibuster on a nominee. 17 cloture votes in the last four administrations combined at this point today, the senate has had 79 cloture votes in the first 14 months of our administration

17 over the last four administrations versus 79 in the first 14 months of our administration that is roughly five times the number of the last four administrations combined senator schumer is essentially weaponizing a senate procedure and demanding cloture votes on our nominees that he even eventually supports. 11 of the president's nominees have been approved without a single dissenting vote yet still forced to go through a 30 hours of debate to essentially slow down the senate calendar simply for the purpose of obstruction even senate democrats have begun to call this out and to say it is getting to the point of ridiculous at this rate, the united states senate would take 11 1/2 years to confirm our nominees. 11 1/2 years to confirm our nominees so let me give you one more

example of the comparison historically in the first entire term of the george h.w. bush administration, his entire four years, he faced one cloture vote in the entire four years of the clinton administration, he faced ten cloture votes. under the george w. bush administration, the entire first term, he faced four cloture votes. barack obama faced 17 in his first entire four years. we have faced 79 in our first 14 months that adds up to 32combined in the entire first four years of those administrations. relative to 79 in our first less than a year and a half so let me give a couple more illustrations of specific individuals. pat puzella is our nominee to be the deputy secretary of the department of labor. we still do not have a deputy

secretary, a number two person at the department of labor pat was nominated 269 days ago he was reported out of committee in october he was confirm said in the george w. bush administration by a unanimous voice vote so he's already been confirmed by a previous congress without any dissension, and yet 269 days later, we still do not have a deputy secretary at the department of labor. at the epa, deputy administrator andrew wheeler, he was nominated 152 days ago scott pruitt still to this day does not have a deputy, a number two serving at the epa he was reported out of committee in november. yaline pobly would be deputy assistant arms secretary

obviously, arms control is an important issue for national security and heightened in light of upcoming negotiations with north korea. she was nominated 298 days ago and has been previously a staff director of the house foreign affairs committee. isabel patalunis, nominated 270 days ago, reported out of committee in july, has been nominated to be assistant secretary of treasury for intelligence and analysis. this helps work with many of the sanctions you have covered so many of these positions in fact are national security positions. and lastly, kevin mcaleenan to be commissioner of the customs and border patrol was nominated 298 days ago obviously, it's been a priority of this administration to highlight the security threats we face at our southern border kevin in taking that role would be safeguarding our borders and helping prevent terrorists and contraband from entering the united states, yet congress and the senate continues to dither

and not have a confirmation vote we're pleased he finally got through a cloture vote last week we expect him to be confirmed on monday night, but 298 days later, as the american people have been anxious to make sure that our border is being secured, we still do not have a head of customs and border patrol this level of obstruction is beyond historic. it's something that, as you, i know, are very focused on personnel inside the white house, we ask that you also shed light on the historic obstruction happening in senate to make sure we're able to fill out our administration, to do the job of the american people, and help make sure that our country is safe and secure >> thanks for coming out you mentioned the plight of your nominee at the state department for the arms control position. you mentioned the need for having that person for the upcoming negotiations with north korea. yet, you still do not have a nominee to be the u.s. ambassador to south korea. why is that? when will you have that nominee?

is that position also important for your efforts >> sure, i think there's been several conversations about that internally with putting forward nominees that as they go through the process, in many cases, it gets so delayed and so long that nominees have withdrawn from being submitted to senate. there's a couple examples where that happened recently that thecludes that post, but we have been having ongoing conversations about nominating someone soon >> on the ambassador to germany, which senator was holding up the nomination of his consent? and why doesn't the senate majority leader mitch mcconnell -- is there a reason, and why doesn't mitch mcconnell force a vote on the nominee? >> thanks. mary elizabeth is one of the stars on the team who has been with us from day one, and she helped to staff justice gorsic to the confirmation and is in charge of our nominations, so i'm going to phone a friend, so

he got out of committee, so basically he's waiting for a final vote on the senate floor >> yes >> so that, i believe, he got out of committee several months back he's another one that should be on our list of those waiting the challenge that leader mcconnell faces when you're not allowed to just bring up for a voice vote, you have to go through cloture, he has to prioritize these that's one more of our nominees that has been obstructed >> we're going to pull away from marc short speaking in the white house press briefing room about what he describes a level of obstruction of trump administration nominees that he calls beyond historic. very vividly outlining some of the nominees to various deputy secretary levels at the labor department, at the epa, and so forth. and vividly pointing out how many days it has taken to get those nominees out of the senate, in many cases they have not. he said at one point at the

current pace, it would take 11 1/2 years for the administration to confirm all of the nominees that it has submitted. he lays that obstruction clearly at the feet of charles schumer, the democratic minority leader in the senate. "power lunch" wim take a quick break. 'lcoin tmotowhwith more, and wel ntueo nir at's going on at the white house.

hello, everyone. i'm sue herera here's what's happening at this hour a teenage rocky asylum seeker who told police he had been trained by the islamic state was convicted of attempted murder for planting a homemade bomb on a london underground train in september. the man showed no emotion as he was found uilty. cooper union college in new york will again offer undergrads free tuition the cost will be offset by unspecified cuts and some fund-raising the school announced in 2013 that it would begin to charge tuition on a sliding scale up to 50% of the annual bill, which was at that time about $43,000 this year. >> a window washer in florida had to be rescued after his rope harness malfunctioned and he became suspended from the equipment. crews were able to attach a safety line and break out a window in a unit below and then

lower him onto the floor unit. >> and more than 1,000 people attending commemorative events marking the 50th anniversary of the massacre in vietnam. that's when american soldiers killed 504 unarmed civilians in my lai and a neighboring community. it's one of the darkest periods of the vietnam war you are up to date that's the news update back to you. >> thank you very much >> the oil market closing for the day. jackie deangelis is covering it at the commodity desk. >> crude oil prices spiking in today's session. a close over $62 $62.34 was the exact finish. it's a technical one with a correlation to the stock market being higher as well the dollar is a little stronger and oil still managed to move up markel correlation more impactful than the dollar correlation. things to watch for that may impact oil the fed meeting, inventories on wednesday, and spring starting next tuesday may not feel like it, but on the

refinery calendar, it's important and part of seasonal trade. >> thank you very much, jackie >> well, today marks the ten-year anniversary of the first real ripple of the worst financial crisis since the great depression bear stearns collapsing and bought by jpmorgan for ten bucks a share. >> a stunning day on the stock market stocks under severe pressure earlier this morning after bear stearns gets a bailout from the feds and from jpmorgan chase >> the story really is about bear stearns and it's pretty simple attempts to help bear stearns has damaged the stock, in fact, damaged confidence overall, particularly in financials this is part of the great frustration. you do nothing, the stock goes down you try to help it, the stock goes down. >> so can this happen again? and what are some of the lessons learned from the crisis. kate kelly is a reporter with the times, covering wall street, also author of street fighters and greg works with the wj both of you, welcome to power lunch. >> thank you >> kate, i will start it off

with you i was chatting with the former ceo of the nasdaq earlier on cnbc today what he said was i thought very interesting, that they thought at the time when bear stearns was bought out that things were contained, yet it would be months later than lehman brothers filed for bankruptcy. why was wall street, i dont want to say duped, but convinced that things were contained at that moment >> i think there was a sense of complacency, many key players from the financial crisis would say it set in at lehman brothers who had resisted calls for them to raise capital throughout the interim period from march when bear fell to september bear was also guilty of that complacency. they had opportunities to raise capital in the six months or a year before they actually collapsed and their ceo at the time, alan schwartz, told people it wasn't necessary and that they shouldn't make the concessions that were being demanded of them from some of those potential investors in order to raise the capital

so i think complacency was an issue for sure i think the fact that the federal reserve backs up the bear firesale to jpmorgan and they were willing to step in perhaps gave a sense of security that ended up being sort of true and sort of false. obviously, they didn't rescue lehman brothers later, but they certainly did help to broker the deals during the crisis. they set up the troubled asset relief program to inject capital into other wall street firms so you know, this is perhaps one of the great unanswered dilemmas of the crisis. why did they help some and not others so there was this mixed perception, i think, melissa >> greg, in your piece in the "wall street journal," you make the point at the end that on anniversaries like this, we tend to focus on whether or not this could happen again this particular crisis will not happen again a lot has changed. banks are very well capitalized at this point. and you also make the point that we're not focusing on the things that could happen. in your view, what are those things >> kate and i actually, this is

a walk down memory lane because we were working the story ten years ago. there were very long nights. even though we remember things like bear stearns well, if you go back, there were crises left, right, and center at the time. problem with auction rate securities, structured investment vehicles, only when you step back do you realize that bear was one facet of a massive crisis around the world built on years of accumulation of debt. what i want people to think about now, forget about the way crises manifest themselves and think about the underlying forces which is the growth of dent, the growth of credit, and these forces that push people to take more risks. we had ten years of interest rates at or near zero. somewhere, somehow, i don't know where, somebody is reaching for risk in some shadowy corner of the market maybe not in the united states maybe in china if you look at things like aggregate debt levels. in most big countries they're higher today than ten years ago. i think you have to worry that the seeds of another crisis are out there growing somewhere,

even though it will not look like the crisis that we had ten years ago. >> kate, i think greg makes a wonderful point there, that the unifying thread between any number of financial crises that we can remember or that go back to the great depression, it's always leverage. leverage kills, right? >> leverage is certainly an issue, tyler it was certainly an issue in the heyday of wall street right ahead of the crisis. you had banks using 30 turns of lev rng. that, of course, has been reduced to a fractional level. i agree that greg makes a great point. there are two things going on that bear watching number one, because of the raft of regulations imposed upon the banking system after the financial crisis, notably dodd/frank in 2010, the banking industry is largely safer today than it was then there are higher capital cushions, there are living wills. there are these stress tests intended to have banks show us how well they might fare under stressed conditions. there are all these measures

a lot of risk has moved offshore, either into the hedge fund world perhaps or the shadow banking world, if you will, and other parts of the economy both here and abroad. however, not only are there other areas of focus in terms of risk and higher leverage at the moment, other than the banks, but we're also seeing a rewind or an unwind, i should say, in some cases of the very banking regulations. now, just this week, there's debate on capitol hill about this reform effort of dodd/frank and now it looks as though the house is, house leaders anyway, are demanding a stronger package that would do more to benefit more financial companies so this very week, we're having this debate about how much deregulation to really engage in >> greg, you mentioned potentially the bubbles or the seeds being planted in shadowy corners like in china. do you think the banks here are insulated enough from those external shocks that we're maybe too focused on what internally in this country could happen to

derail the system and not focused enough on the connectivity of the global financial system to places like china? >> i think you're exactly right. the big banks are so like basically stuffed full of cap and liquidity is you would need something totally catastrophic and epic to bring them down. but the very regulations that have made those banks safer have had the effect of tending to cause risk to migrate elsewhere, as kate was saying about a month ago, we had a volatility shock, a lot of people who were only dimly aware there were these obscure products designed to product from volatility were out there and blowing up in retrospect, it was a pretty small incident, but the lesson is what else is out there. let me throw a few examples out there. it laaly is the third largest debtor nation. they haven't elected a government at all, but the leading party is a populist movement are they going to start talking about defaulting on italy's debt china now has levels of debt that are astonishingly high,

that have been consistent with crises in other countries. we're about to see the first shots fired in a trade war between the united states and china. what happens there the final point i would like to make is a lot of the tools we brought to bear in the last crisis have been curbed or taken away one of the ways the fed contained the initial shockwaves from the crisis was to prevent bear stearns from failing by lending it money those powers have been significantly curbed so we have in some sense taken the attitude that we don't need those tools because we're regulating the firms so much more but isn't there a risk that some kind of crisis is going to happen and we have taken away the sorts of kind of like swiss army knife tools that we need to deal with those unexpected sorts of events. >> if i could make a quick point, i think greg is right on. there was a bit of deja vu in what you said about the volatility tools that people didn't even know existed, not everybody, but obviously, many people didn't know existed as of a few weeks ago when they became serious points of focus.

this reminds me of 2007 and '08 when there were markets and products that we as financial reporters at the "wall street journal" had never even heard of, and all of a sudden, we were going to have to study up and figure out what their implications were for the broader marketplace because all of a sudden, there was serious risk emanating from those portions of the economy and the markets. they risked bleeding over on a macro basis. >> i think it's really, as we tie it off there, really the points made are that the next threat will come from someplace else it may be a triple levered inverse etf over whatever, who knows. >> i had a banker describe it to me the other day, like a bullet to the back of the head. you never see it coming. it was a very graphic description. but look at the leverage out there. corporate debt >> on that cheerful thought, we're going to leave it. appreciate it. kate, have a good weekend. >> despite massive demand, housing starts are coming in weaker than analysts expected. we'll tell you why we can't seem to build enough homes. >> and a big upset in march madness.

arizona, a four seed that a lot of teams thought would go to finals, loses. mo oe they could have used this rot.ren this new basketball star ahead. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

housing starts coming in lower than expected.

while demand is strong, home builders are having a tough time meeting it diana olick joins us from silver spring, maryland, to explain hi, di >> hi, ty. home construction is improving, but so slowly given that high demand it is not helping the critical shortage of homes for sale, nor helping to cool some very hot home prices. now, single family housing starts did rise 3%, both monthly and annually in february but the real story is here take a look. at the peek of the housing boom, we were building nine homes for every 1,000 people aged 18 to 65 at the bottom in '09, that fell to just over two homes per 1,000. now we're barely back to four, and a normal level is about seven homes. big hat tip to our own steve liesman for doing the math on that so what's the problem? this is why i'm standing here in a lumber yard. the price of framing lumber is up over 40% since the start of 2017 and hit a record high last week. builders have been up against a shortage of labor and buildable

lots, but now it's tariffs on their materials and economic policy that are making it even harder to build homes buyers can afford >> it's not just lumber. it's lumber. it's steel it's impact, it's permitting delays it's rising interest rates you know, there's a concern that a lot of these cumulative impact of these increases will curtail demand at some point and that's, i think, the bigger concern. >> and it hurts demand because all of those costs get passed on to the buyer, and today's buyer does not have the cash to put down big down payments and pay these higher prices. back to you guys >> thank you very much one headline caught our attention today, with march madness officially under way, everybody is rooting for virginia tonight there's one shooter that might top anybody in the tournament. toyota debuting a basketball shooting robot called q. and a demonstration of the

robot's skills, it sank every single shot, beating two japanese professionals there's a glaring hole in q's game, though he is stationary he is not a mobile big man look at that, though >> does he have to be stationary in that exact spot or if you move, could he also adjust >> he must adjust. might be lasers, right >> seems like a useless robot. >> but he can shoot shots. >> all right >> but he can't move anywhere. >> all right, this next story, this is for you, too the video game that's taking over every living room, basement, and bedroom across america. many a team tandroom and missed homework assignment happening right now because of this red hot game if you don't know already, when "power lunch" returns. let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks,

$0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online. we've been preparing for this day. over the years, paul and i have met regularly with our ameriprise advisor. we plan for everything from retirement to college savings. giving us the ability to add on for an important member of our family. welcome home mom. with the right financial advisor, life can be brilliant.

you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes!

xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. it's the biggest video game phenomena in the world, millions of daily players reporting from los angeles over the frenzy over fortnight. i don't know anything about this game. >> well, according to this night, shot to the top of the app charts after private epic

games opened for the iowa version of the battle, 100 players virtually fighting it out until one is left. this mode is free within app purchases. gamers can sign up with the android version of the game as well epic tells us it crosses pcs, and other devices more than 45 million played the game. last month 3.4 million playing at the same time the gaming company twitch says over 1 billion minutes were watched last month alone rapper drake joined the game it broke twitch's record for the most viewed game stream. evan wingrim of keywank warns of the risk to public gamemakers. it's tooer to know the entire competitive impact but our best estimate, the most multiplayer games will see a 10% engagement monetization declines as a result

you can bet gamemakers are trying to figure out how to recrat the platform success. phenomenal. >> how do they make money? >> a lot of games are free to download extra packs or access, extra content, you pay for what they call in-app or in-game purchases. hooked free and charge you once in there and once you want to do better and advance within the game. >> why my son is asking for my credit card. when he's playing one thiev inie games? >> exactly. >> julia, thanks. time for "trading nation." a look at rates. u.s. treasury yields climbing. for more bring in the esteemed trading nation team. stacy, start with you. what do you expect from the fed next week? >> really two events within next week's fed meeting what will happen in terms of a rate hike? 25 or 50 basis points and what changes with the dot plot if

anything the stock market not placing in outliers 25 basis point, no significant changes. broader s&p might be up 20 to 40 basis point. an outlier event like a 50 basis point rake height, down 3% not thecraziest statement i'm ever going to make. >> gina? >> i think what's interesting now is you have the short end of the curve going up partially because of more supply and less demand repatriation at the corporate level. however, the news out of washington has been pushing the long end of the curve down yeah i agree with stacy we probably get 25 basis points next week and if we get 50, a surprise however, i think the more interesting thing is happening in the twist of the curve. >> folk, thank you very much appreciate it. thank you. for more insights, head to our website and check, please, coming up next

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time for "cheshg, please." check this video, in the country of georgia throwing seats in the air, into the know below the malfunction caused the lift to go into reverse and full speed. miraculously, no one seriously injured. i am grimacing watching that terrifying. >> wow that is scary as the dickens okay how about -- want to buy magazines? >> report saw meredith corporation just bought time inc. engaged a third party to begin the sale process of some of their biggest titles former biggest title "time," "sports illustrated," "fortune" maybe "money" magazine holding ton to lifestyle brands like "in-style," "real people. big magazines? there you go and a nightly for many, many years down to something like 14

issues a year. >> 14 issues a year? >> amazing. >> on this ten-year anniversary of bear stearns, bank stocks six of the past ten years gainers for the s&p bank index kwipt quite a recovery thanks for watching "power lunch." >> "closing bell" starts right now. hi, everybody. welcome to the "closing bell." kelly evans on this friday. >> and wilfred frost coming up, chairman of the council ofors talking tax reform. >> looking forward to that shares of at&t and time warner today. both trading lower could be the last day of trading ahead of at&t's federal court date next week we have the court date with the justice department verdict is sure to hav