moved down significantly over a long period of time. we don't think the natural rate of unemployment, it's not one of ose variables that moves around a lot it tends to be moving by the education level, the population, the functioning of the labor market things like at so it may have moved down, too, on a cyclical basis lower as the economy gets hotter. there's some possibility of that you know, the thing is if you look back, there's been a lot of studies done realtime estimates of natural rate of unemployment have uncertainty bands which are quite wide so we have to remember that. very much be guided by theng da. you ask about inflation. you know, inflation we look at the 2% inflation objective as something that central banks, the fed really control we have to be strongly committed

to that. i think in recent years the dominant force has been, you know, disinflationary, has been pushing down on inflation. we've been pushing back up of course all those years growing up, it was the opposite. inflation was too high and central banks were constantly pushing down. it's really important that inflation not fall below 2%. that inflation expectations remain well anchored at 2% very important because the implications of inflation below 2% are that you're closer to zero lower bound, meaning the fed has less room to cut, meaning we'll spend more time there and we won't be able to do the job we're assigned to do for our citizens. >> bloomberg television. you guys moved the median unemployment forecast for 2020 down to 3.5% but you're only forecasting a

moderate overshoot on the federal funds rate beyond your longer run value how are you going to get unemployment from 3.5% up to that 4.5% rate >> i would just emphasize that -- couple things. first, we' learning about the real location of theuralunemplo. so it's moved down by more than a full percentage point since 2012 so it's not so simple as thinking, boy, we've got to get that rate up if you look at the forecast, two years from now end of 2020, you're still seeing inflation close to target. so there's no sense that inflation will -- no sense in our models or forecasts that inflation will take off or move unexpectedly quickly from these levels even if unemployment does remain low so that's -- so it's important to know that the unemployment rate forecast go with the inflation forecast and go with the rate forecast.

and so each person who is submitting them is submitting appropriate monetary policy that fits with that person's assessment and their assessments generally are to support maximum employment and stable prices around 2%. so if we thought that inflation were going to take off, obviously we'd be showing higher rates. that's not what we think will happen >> if i could just follow up really quickly why, i guess, would the longer ruunemployment rate not be lower and closer to that 2020 number >> yeah. it may be. it may be. we may find that out the best estimate we have over the longer run is that although there's a range of views there's some people in the low 4s the uncertainty bands are not quite a full percent it's very possible we can't do -- we can't be too attached to the variables.

we have to be practical about the way we do these things and we do that by being grounded >> i have a couple of regulatory questions. first of all, on the countercyclical buffer, what are the chances that the fed is going to need to use that in the next year or two second questiok lately in congress about the ability for banks to serve marijuana businesses and i was wondering if you think banks should be able to serve those businesses in states where marijuana is legal >> so the countercyclical buffer gives us the ability to raise on institutions when financial stabilities are meaningfully above normal that's certainly a possibility i wouldn't say that i wouldn't look at today's financial stability landscape and say that risks are meaningfully above

normal i would say they're roughly at normal you have, you know, households are in good shape. they've paid down their debt incomes are rising people have jobs so households are not really aay capitalized. that's not really a concern. we see there's some concern with asset prices in a couple of pockets. but overall, if you bake it all in, i think we see generally financial vulnerabilities as d modera moderate you also asked about marijuana businesses so this is a very difficult area because we have state law. many state laws permit the use of marijuana and federal law doesn't. it would be great if that could be clarified we don't have -- you know, it puts the supervisor in a difficult position

of course this isn't -- our mandate has nothing to do with marijuana. we would just love to see it clarified, i think >> american banker so since even before you were chairman of the fed when you were chair of the supervisory tee, you ld out revisionary agenda that's beenp. so there was the guidance on boards of governors. there were some chans to the stress tests not changes to the stress tests, but rather clarification on the modeling and now more recently the changes to the enhanced supplemental leverage ratio. the fed has also proposed changes to the volcker rule. ans tohe strwith the capital buffer are these kind of the -- are there any new frontiers of regulatory changes that you are

envisioning? are you kind of done for the time being or what else can we expect i guess we're having a public board meeting tomorrow on the single counterparty credit limit provision. we've also got quite a lotf to promulgate rules to s-2155 that was passed, we've got a lot of work to do under that we've go think how we would reach below that threshold to assess and supervise what am i missing? oh net stable funding ratio is out therlot of work to do, i think. if i can just take this opportunity to say, you know, the financial system all but failed ten years ago we went to work for ten years to strengthen it.

stress testing resolution planning. we wanto keep all that stu we want to makit, you know, even more effective. we want to tailor thosr institutions we want the strongest provisions to applyo the most systemically important we're committed to enhancing that structure but we're finding a lot we can do in thy of tailoring regulations for the smaller important institutions that's a lot of what we're rking on right now >> thank you you said at the beginning of your press con dpreference thatu were planning to be plain spoken want to know what you would say to workers who are worried about the path of rate hikes would kind of undercut the wage growth they are just starting to see. thank you. >> i would say the economy is in great shape. if you look at household

surveys, confidence is high. look at businesses confidence is high if you ask -- if yousurvey workers about the job market, they'll say that it's a really good environment to find jobs. survey businesses, they'll say workers are scce i think overall we have a real solid economy on our hands here. so what we're doing is we are trying to conduct monetary policy in a way to keep inflation above -- right at -- sorry. not above but right at 2%. that's really what we're trying to do. i would say i like the results so far we've been very, very careful not to tighten too quickly i think we've been patient i think that patience has born fruit. i think it continues to. we had a lot of encouragement to g much faster. and i'm really glad we didn't. but at this time, to continue on that gradual pace seems --

continues to seem like the right thing. is reacting badly, we'lleconomy certainly react to that. >> hi. david harrison with dow jones. interest rate isdo you see it ie of the recent fiscal stimulus measures and how will you know when we're getting close to that neutral point? so if, you know, if inflation stays around 2%, it doesn't go above 2% for awhile. do you see a need to exceed that neutral point? >> so i would just point you to the range of estimates at the committee which i think is 2.25% to 3.5% and the median is 2.9%, right there that's the range of estimates of the nominal neutral rate of

interest and we do understand that there's high uncertainty around the level. so you can think of 2.9% which is sort of a full percentage point away from where fed funds is going to trade after today's decision you ask is the neutral rate p b policy yes. there should be an effect if you have increased deficits that should put upward pressure on, you know, a few tenths let's say. again, we're estimating these things it's one of these unobserved variables. so it's hard -- we shouldn't try to speak of that with a lot of provision or confidence. yes, that should put upward pressure on it how will we know well, i think you have to look at inflation you've got to look at all of the indicators in the economy and look at unemployment lot what's happening in the job market and inflation's ally important. it's worth noting that the last two business cycles didn't end with high inflation. they ended with financial

instability. so that's something we need to also keep our eye on >> have you talked during the meeting about when the fed is going to remove or change the worlaccommodative that describe the policy. and then kud this change in the vocabulary make the market nervous? and have you saw options to know how you're going t >> language gets in the statement and then, you know,

the economy changes. that's what happens. our approach to policy hasn't changed. and, yourn, as i mentioned earlier for a long time. as the economy's recovered, we have been gradually raising. we'll be at a placvely assuming we stay on this path where interest rate be in the zone of what fomc participants think is roughly neutral. and at that point, it would no longer be accurate for us to say that the committee this that policy is accommodativwe kno com we kind of don't think it's here yet. it's certainly coming. i think the market will understand that. the real message is you're getting close to the neutral rate it's a characterization about where policy is. it's not a statement, really, that should upset the markets. but we'll obviously discuss it carefully in meetings and

communicate about it>> japan ner would you expand on the views on the downside rusks especially in regard to our trade issues many people are concerned that the united states made the underpinnings of the liberal order, the united states has created and built up in the post-war environment that will of course have tions on the

global economy as well as the u.s. economy so would you -- can i have your views on that? >> sure. so, you know, as i mentioned earlier, i'm really committed to staying in our lane on things. we have very important jobs assigned to us by congress that's maximum employment, stable prices, financial stability. trade is explicitly assigned to the executive branch tus we don't really seek to play a role in trade policy we're not at that table. those powers and decisions are given to others. and so we want to stick to what we do. you know, as i mentioned earlier, we do hear from our business contacts which are extensive in the united states and we do report on that in the minutes.ve jusntioned what those are. there is concern that trade changes could be disruptive. and as i also mentioned, we don't see it in the numbers yet. we really don't. we see a strong economy across a

bunch of fronts. it hasn't reached everyone, let's be clear on that but most people who want a job there are people who have not felt the recession yet but broadly speaking, it's a good economy >> freelance journalist reporting for npr. ouial conditions, which worries you more short-term rates are bringing the yield closer to inversion or the fact that long rates have rizing slowly. that long rates have been so slo rise what does it say about the inflation outlook as well? >> so t me briefly mention the yield curve.

you have a range of views. it's something we're going to continue to be talking about it's one of many things we talk about. i think that that discussion is ly what is appropriate policy how do we understand what the neutral rate is and what are the consequences of beine or below it that's what when people are talking about the slope of the yield curve, that's really what they're talking about. we know why the yield curve is flattening it's because we're raising the federal funds rate it makes all the sense in the world that the short end would come up. i think you asked the harder question is what's happening with long rates. and there are many things that move long rates around of course there's an embedded expectation of the path of short rates. there's the term premium which has been very low by historical standards. and so arguments are made that a flatter yield curve has lessf a signal embedded in it. in addition, i think what you

saw most recently that you referred to, steve, was just risk on/risk off risk off environment, people want to own u.s. treasuries and you see, you know, treasury prices go up, rates go down. i thin what they really care about is the stance of policy. there may be a signal in that long-term rate about what is the neutral rate and i think that's what people are paying attention to the yield curve >> nancy marsh market place. companies are buying back their shares at a record rate. corporate debt is up consumer debt is rising. are we in a credit bubble? is that something you're worried about? >> so if you look at households, you do not see excess credit growth you don't see high levels of credit going out

so not so much households. that's where the problems were before the financial crisis was particularly in among households particularly mortgages if you think banks, of course their leverages are significantllower. or to say it differently, their capital is significantly higher. that's really where leverage is at levels that are high relative to history so that's something we're watching very carefully. but again, i don't think we see it as -- i thinkre are a range of views on that but we are watching non-financial corporates households are in good shape that is so important that's where we got into trouble before it's often around property and particularly housing where you see real problems emerge we don't see that now.

>> you referenced a minute ago the idea of cushion or the fact the fed doesn't have much when the rates are low. i wonder if you or the committee have thoughtut your move to raise interest rates as partly responding to the economy but partly giving yourself room to navigate and do you think that has played any part in your outlook for policy or recent policy decisions? or is it just a pure l lly base what the economy is doing. >> if you raise rates too quickly, you'rincreasing the likelihood of a recession. if you're worried about going back to the lower bound, then ru risk management would say you go slower raising rates and tolerathat's likely to be a more sustainable strategy i think we're far enough away no though, that the risks are

kind of balanced so i think it's more just -- we're looking at the economy and what does it need and keep the labor market strong and try to keep inflation up. >> i'm wondering -- i'm sorry. bank rate. you talked earlier about wage grnd your basic message to workers. how confident are you that when we do see stock buybacks and the like, the workers will get whatever your viewf that share is as well and wage hikes in the near term and in the foreseeable future thank you. >> you know, we don't have the tools to control that. companies choose to -- companies in our system are free to do what they can once they've made profits and have cash to dithey can distributit to their shareholders buy either through dividends or buybacks and we don't play a role in those decisions.

the part we focus on we view maximum employment as the maximum sustainable employment meaning it's not so much that it will cause the economy to overheat so i think we take that very seriously. you know, over time when labor markets are strong and companies are hiring, we should see higher wages. but again, we t have the tools that will address the distribution of profits and that kind of thing. >> that is fed chair jerome powell wrapping up his news conference now we're going to have news conferences starting in january. every single meeting right now it's every other welcome to "the closing bell." i'm kelly evans with wilfred

frost. >> good afternoon to you fascinating conversation there let's have a quick check in on the 10-year treasury note. we did see the 10-year along th all the yield curve rise as the rate hike was announced. 25 point basis hike. it has slipped back half of those gains. either way, you'd say we're looking at this, the dollar, or the equity markets, the markets already have not a huge reaction >> show the dollar real quickly. that was up. now it's moderated those gains even though there were a lot of hawkish things in the meeting between now here that means a couple to go here keeping rates below the long-term average far long time. again, the idea of having press conferences every meeting starting january gives him the opportunity to explainvery rate hike if that's what they're looking to do. >> absolutely right. some comments on trade he said trade issues could be disruptive, but we're really not seeing it in the numbers yet as you s quite hawkish comments in terms of growth

overall. and some comments about the flat yield curve. he said they're not that concerned as wcted if you're hiking short-term rates it's really a estion of risk aversion opposed to anything fundamental on the economy >> dowown about 18 points right now. russell weaker too oil hanging onto some gains here with the dollar now a little bit weaker >> let's bring in our panel to discuss this fed hike and that news conference. victoria hernandez, dick kavacivic, and rick santelli rick, let's start with you a little bit of a rise on the yield curve. a little bit of a pullback he marketshis not a huge move priced in already. >> what i found interesting was we saw everything snug up to really significant areas of resistance we popped briefly above 3%, came right back off in the 10-year. we tested 2.59% in the 2-year.

we backed off of it. dollar index jumped over 94. backed off a bit i think that jay powell is doing a great job communicating. maybe the best communicator i've seen running the fed i've been monitoring it basically since 1978 and i think that his message is reflected in the markets i think the key tomorrow is going to be whether we take out some of these key resistance levels if i was a trader i would look at the response in most sectors. almost got your toes wet but eased back a bit i would think when we come in tomorrow, if the 10-year isn't well above 3%, then you'll see this thing ease off as we move and distance ourselves from the fed. then put the europeans in the box. but that could have a distort. with the post-fed process of

pricing in the fixed income markets. >> there's some good alliteration kenny will continue the theme. there was once upon a time if they came out with this, the market would have been down more >> i think rick is right he's got this kind of style in this way about him i think janet did too. but i think the problem is we were in a different time when janet was fed chair. people were more anxious and nervous. we now ever since jay powell's been there, we were talking about this we were talking about this potential hike now for months and months >> don't you think because it's so strong -- >> and because the economy certainly has done better. i think people are getting more comfortable. i think jay powell said it right when he said he maintains this moderate pace. so we didn't see that spike in treasury yields. we didt see it go like it did a couple weeks ago i'm getting the sense that investors in the market are much

more comfortable with where we are and unless you get a real spike in the macro data, it's going to continue to chug along. >> we saw a positive response for the banks. felt like this could be a catalyst to kick the share prices into gear a bit the bank index was up. it slipped back now. it's pretty much flat. is this or should it be a catalyst for the banks to perform a little bit better? or should we be focusing on another fed event coming up which is the stress test results a couple of weeks away >> well, i think the stress teare certainly going to -- depending on what it says, could be much more -- have much more impact on banks. i think the reason -- listen iny opinion this was all signalled. there were no surprises in what the chairman said. there were no surprises in the words. so i expected that they would talk about four increases for the year i expected there be minimal impact on the banks because this was built in

and whatever you -- if you thought they would do what they had been communicating, they did it and so why should there be any surprises? >> do we think that everybody's too comfortable? i mean, given what dick and kenny were just talking about, is there something to be said for keeping markets and everybody on edge or no? >> well, i think it's good for markets to be on edge a little bit, right it's the ability for them to have t press conferences at every meeting. i think that will be a good thing. before people like me would read the tea leaves when the minutes would come out and try to figure what they're thinking. this is going to be a good thing. we had a fear there was going to be more risk to the dovish side coming out of this meeting so the fact that things came out as expected as everyone else has mentioned, i think that's why the t having that big of a reaction to this. tomorrow's ecb meeting, however, i think might have a more hawkish tone than what people

anticipate that's where we might get reaction >> steve leisman, our chief economics reporter has rushed out of the press conference and is ready for us. what was your take there in terms of what powell had to say in the conference? >> what i would say is together with the statement and the press erence, we're beginning to have the very beginnings here of the powell era the first several months, i think, were those where he's just continuing what janet yellen had done. now he's made a few changes. initially there are some policy changes. you just point out he to do rather than the past two chairma chairmans who sat at their press conference hebegan with a folksy part of policy and he did also make some slight changes in policy in terms of changing the statement, getting it down to one page. some simpler language.

i think one of the big takeaways here, i'd say there are several including the idea of a new press conference every meeting one of the big takea is his optimistic outlook on the economy. let's give a listen. >> i would say the economy's in if you lk at household surveys, confidence is high. look at businesses confidence is high if you survey workers about the job market, they'll say that it's a really good environment to find jobs you survey businesses, they'll say that workers are scarce. so i think overall we have a really solid economy on our hands here and so what we're doing is we are trying to conduct monetary policy in a way that will sustain that expansion, keep the labor market strong and keep inflation ove -- right at -- sorry, not abo right at 2% >> the other takeaways very quickly, guys, is with the 20, 30, 40, or 50 foot pole,

chairman spoul not going to be draggeical debate i tried to ask him to settle the differences of the gdp outlook of the federal reserve and the white house. he really didn't answer the question other journalists asked him about the trade disputes out there. i thinl he has to, he's not going to answer those questions. >> you're trying to stir up trouble, steve. >> no. there's implications to the deal they're not forecast in the kind of growth the white house is let's say we get that 3% growth next year but the fed still sees potential at 2%. it means the fed will still see the economy running 1% hotter. if they raise up their potential, that's a different story. they won't see that growth as inflationary so something's going to give here mark my words. and this dispute will be resolved in the data either in inflation or higher potential growth rate. so we need to watch that it's important for the outlook for monetary policy and for

investors. >> as steve mentioned, he didn't say much about trade but what he did say is while it could be disruptive, we're not seeing it in the numbers yet in terms of the domestic economy. does that mean another extra reason to stick with u.s. equities at the moment >> yes that's what we would be doing as well you have a lot of growth going on here in the u.s. as powell mentioned as we've been seeing in the numbers coming out. the manufacturing numbers. and we see that slowing going on in other countries so staying here close to home is a good bed i mean, you look at some of these regional banks, they're doing really well. so i would kind of stick with that area right now and not worry about the trade issues until they come into play. we do have june 15th as the deadline to see if tariffs are going to go. we'll play it by ear as powell is saying and see how it affects policy going forward

>> talks last week, jamie dimon said he thinks we're only two-thirds ainto the recovery. is that something you agree with more broadly >> i don't think i would describe it as a golden era. i think banks in the past have had a good run if you go back, 15, 20 years it's not anywhere close to what banks are doing today. but i do agree that if we continue to reduce regulations and keep taxes low and keep inflation controlled, there's no reason why this expansion can't continue remember, this is the slowest expansion in history and many, many geographies in the united states are still at the low where they were when the

recession started. and certainly countries are in that situation so because it's been such a slow recovery, it's not a surprise that it's still continuing for a longer period of time. so we of wind up in the same place it just took many more years to do it. i think times are reasonably good remember, the gdp this quarter could start with a four le thatt happened in ten years. >> and that's why -- >> inflation is low and so is interest rates so it's -- times are pretty good >> a lot of people are talking about goldilocks, rick i wonder if it's time to bring back the great moderation. all these

he doesn't look to pick. an issue with what was an in the same trading frame as the fed is >> yeah, but rick. >> really the dark side of the future is the tsunami waves from other central banks. that's what we need to be on the outlook for. >> not yet, rick i think you make a great point he's not picking a fight with the market because he doesn't have to quite yet. what happens when the next rate hike in the future ends up inverting the yield curve? that's when he's going to start picking a fight with the market. >> no. that's when he's going to say now i know i've done enough. he's going t if i had tot -- ok. he'll say, listen.

i probably went a bit too far. i'm going to take my foot off the gas a bit. >> i think that' interestingndig take on the chairman i'm going to take my advice from rick on this an economist with an idea about where things should be the idea that rick thinks that powell is going to be guided by the market talked to a couple -- >> wouldn't they have done the same thing >> not if she had a definitive fear that the economy was running much hotter than expected and you needed that rate and you needed to actually put the brakes on the economy. >> so you're saying yellen stood up more powell will

going to be a pers guided by that market more so than bernanke and yellen would have been >> can i -- >> there ione risk discussed here that i think is real a long piod ofime.about this for ths the obsession with 2% inflation. we're now in a situation where there is not -- there's been a huge reduction in income with the consumer we're at about 1.2%, 1.3% inflation for the last three or four years you had a 1% omo positive to discretionary income we're now getting close to even. and i still think the feis making a huge mistake by talking

about 2% inflation we should be talking about stable inflationi don't think te trying to inflate the economy particularly when wages are low and having low for ten years that's going to bring consumer consumption down and the consumer has been the one driefing the recession for t last ten years >> bringing it back to the markets, we're near the lows of the day dow down 50 points o fo. can they keep selling off? >> i think you might get some weakness going into the bellows. i don't thino a breakdown. but look, we tested 2800 on the s&p now two or three times in the last days. i'm not surprised to see the market back off. in anticipation of what's going to happen tomorrow witecb, there might be a bit of positioning ahead of what potentially the ecb could say. >> victoria, final word to you >> yeah, i think we have to take powell at his word similar to what rick saying. he's there, looking at theata we have right now. he's not guessing what we're

going to do, 12, 18 months from now. that's where we're situated. if wn a little bit hot, i think he's okay with that. if we run above the neutrate, ih that so we have to look a little longer term view and know we may reach that 3.25% on the ear and they're willing to take that chance. >> all right we'll see. thank you, all meantime, we ha news alert on tesla phil lebeau. noabout the fed. >> kelly, let's take a look at shares of tesla. they say put your money where your mouth is. that's what tesla chairman and ceo elon musk is doing he has purchased in the last couple of days0 additional shares of tesla at $343 and change per share comes out to a roughly $25 million he has spent on buying addi tesla shares. that means he now has 33.7

million or roughly 19% of the outstandinares at tesla. so again, elon musk making a big purchase at $343.78, share price when he bought those shares. guys, back to you. >> phil, thank you for that. phil lebeau for us i can think of somebody who might have been on the other side of that >> we'll ask mr. chanos about that in a couple of minutes. still to come, bank of america chairman brian moynihan. that's coming up next hour >> but up next, jim chanos will join us. we'll get his take on the elon musk purchase at tesla and so much more when "the closing bell" comes right back keep it here a bachelor.

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reporting he bought more than 70,000 additional shares of tesla. let's get to someone who's been critical of the company in the past 37 joining us from the yale ceo summit is jim chanos president and founder of k kinykos. did you sell him the shares? >> i don't think so. not specifically how are you? >> very good thanks for joining us. how long can you keep the tesla short think most t positions you can keep on indefinitely there's no time limit on them. it's just a matter of price and your willingness to hold there's no time frame. >> what's your take on the fact that elon musk has just bought more shares? does that alter your idea of wanting to be shortened? and his actions over the last couple of months, his negative

comments for those criticizing him, what's your take on that? >> i think it's interesting. more interesting was the fact he had an annual meg last week.and predictions were made. and lots of futuristic shall we hype but somehow the company and its leader could not see the immediate future and see the layoffs that they were about to announce a few days later. so again, it's often this matter of it's about the future, it's about keeping investors focused on some point out in the future. but the fact of the market is the company is not profitable from operations. the company will pull out all the stops. it will do a lot of one-time items, we believe, to show a gap profit in the third quarter. but they are just that me items and the basic problem is that he's making the cars at not

enough of a gross margin to make money. and that's before the competition rolls out which is year this year and early next >> jim, the last time we saw you, you had just announced you were also short on dunkin' brands before we get into that, any other positions that you care to share? any places where you're taking a look and saying, nope. too much hype, overvalued. >> one of the things we talked about today at the conference which i thought was interesting and we had john from "the wall street journal" to talk about theranos is the culture in silicon valley this ties a little bit in with tesla. why some of these things appear to be growing out in silicon valley, the willingness to sort of say anything by ceos. there was an expose or vice media talking about the same thing and the lack of due

diligence on behalf of both the boards and the investors in believing a lot of these things. and is it increasings the market goes on i think you know jeff sonifeld who runs the conference is also one of mbosses where i teach a course and one of the central tenets of the course is as bull markets go on, people's sense of disbelief is reduced and they begin to believe things that are too good to be true it's human nature. and bad people take advantage of that and i think we're going to see an increase in these kinds of revelations as time goes on. particularly out in silicon valley i agree with john on that. there seems to be a culture where you're allowed to say things that in any other time,o. you can't lie to investors

>> so you're saying there are a lot of badple in silicon valley and there are some big frauds that will come out of that from companies that otherwise we talk about positively day-to-day? >> i'm saying the field is fertile for that we're seeing instances of that and we'll see more of it i'm not saying everybody is like that, of course. but investored to do their due diligence. investors need to hold people at silicon valley to the same standards. whatever it might be you can't not tell t truth and that at thd of the day was the story of theranos. i think it's the story at some other companies as well. >> on dunkin' spec, we had the ceo responding to your shorting of the company. he said, listen. the stock has gone up since you announced your short position.

go ahead >> that goes back to previous conversation it seems to me that both the prosecution and defense of bad behavior is the stock price. so if the stocprice goes up despite people raising some serious concerns, it's okay. right? the market has voted and therefore it's irrelevant. if the stock price goes down or the company encounters financial difficulty, why, then, we need to have an investigation d really the standard should be much higher than that the standard should be you can't lie to investors i mean, we had a well known investor, maybe the most well known investor in the world talking about in his quest about not having to release guidance saying he served on boards where the ceos made up the numbers i thought that was the most newsworthy part of that

interview was hoere you have the most well respected investor in the world saying he was on a board where the ceos made up the numbers. i was floored by that. that was not the news from that interview. i thought that if this well regarded investor is saying that, then oh my gosh. we really need people to be looking out for investors when management is doing this >> jim, stepping away from talks of possible fraud, i want to ask you about the media landscape. of course, at&t/time warner deal has been approved. there's now talk of all sorts of other potential media consolidations does that now pose a big threat to the likes of netflix the new media companies. arey going to meet their match, as it were? >> it seems to me that netflix is the one providing the difficulties for the other companies. which is why you have the mergers. and i think as i read the counts

were not involved there. but the judge said basically the same thing that it's not just the need kra companies we have to look at for antitrust. we have to look at silicon valley as well they are the real competition. to me it seems as an outside observer with no skin in the game, if you will, that these are defensive mergers. >> yeah. jim, what about china? we know in the past you have talked about shorting alibaba. i think coved that one awhile ago.ut the oth names now that we continue to see high valuations i was thinking even of the zte instance which is not what you're typically looking for but its core behaviors led it to a near collapse with it hugely valued are you looking at the culture there scene sand seeing the fres

to short >> china doesn't see them in the same economic importance as the current administration in the u.s. does. china is much more focused on thinkings like the one belt one road initiative. china is going to be more than happy setting aside the financial question to take up any mantle that the u.s. is willing to sort of give up in terms of leadership they're more than happy to fill that void as a rispower. and so they -- the aspects of trade with them are now taking second or tertiary viewpoint to the opportunity that the u.s. is giving china not only in asia but globally to become a respected power. and i think that's one of the -- ani dowant to make this political, the conversation, but they see the trade issue through that prism where we are seeing

the trade issue simply through the prism of lost jobs and immediate tariffs. i think china is looking further down the road on this than we are. having said -- >> any reason to short alibaba again? i mean, it's been an extraordinary run. baidu, alibaba, tencent. >> they have been incredible you know that my view on alibaba was an accounting view and i still hold that view, by the way, even though we're not short the shares you know, the most amazing statistic about alibaba i keep pointing out to people is that if you look at alibaba's tangible equity, right now less external share offerings, less any capital they've raised in the markets, their tangible equity is lower now than when they went public from all their profitability, they've taken back eitr affiliated companies or made further deals. it is a financial perpetual motion machine

it's quite a marvel to behold. but because of my view that the s.e.c. and others probably aren't going to be too worried about a chinese company's accounting even though it trades >> weryou surprised about the valuation that ali pay got with the previous funding market capitalization -- implied market capitalization of over a hundred billion dollars. >> that's exactly to my point. we're inhis game now where all these companies who are affiated with each other or investors who are affiliated with each other, i'll swap you catr your dog and we do a markup oit that's what's so amazing in this story. that we're taking these gains on asset revaluations which may or may not hold up. but they are not from cash flow from operations.

ali pay is barely profitable from what we know. so a baow has a valuation based on -- that's good work if you can get it in any country. >> jim, before we go, envision health care was just taken o by kkr that cause some pain around the office >> well, it was taken out at a whopping 7% premium. this one puzzles me. if you look at this company, they're in the business of buying up doctor practices and if you look at the cash fl statemy had ebf $900 million they had capital spending and purchase of management contracts of over $900 million there's no free cash flow here they're about to put billions of debt on it i'm puzzled why anybody in their right mind would think that's a smart move

but, you know, they've spoken and i haven't. >> that's what makes the market. jim, thank you very much always a pleasure. >> take care, guys >> jim chanos joining us from the yale ceo summit today. >> we'll be right back here on "the closing bell" with the closing countdown. >> then we'll talk to brian moynihan see how the rates could affect the baottom line and serve with confidence that it's safe. this is a diamond you can follow from mine to finger, and trust it never fell into the wrong hands. ♪ ♪ this is a shipment transferred two hundred times, transparently tracked from port to port. this is the ibm blockchain, built for smarter business. built to run on the ibm cloud.

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welcome back to "the closing bell." about a minute left to trade let's talk through what happened today starting with the 10-year yield. we did see yields rise after the rate hike. we briefly crushed 3% on the 10-year. things pulled back down again. that's the same sort of story in terms of intraday moves we've i. positive open, small gains, but we did sell off. we then recovered a bit. then we're selling off at the lows of the day. this story intraday moves most pronounced if you look at the banks which did get a bit of a jump up with the rate s but have since seen that pullback. there's the intraday chart for the bank index as i bring in bob pisani, we've got three indices. all three in the red now >> i think the key here is upgraded the economy a little bit on the inflation front

2018, 2019, 2% over. they didn't seem to be concerned about that point of view >> still very relaxed as the chair of the fed about the state of the u.s. economy which is encouraging. bell. ringing here at the big board cubic corporation. right at the low of the day for the dow. welcome to "the closing bell," everybody i'm kelly evans. federal reserve came down about two hours ago with a decision to raise interest rates again other elements include starting january press conferences in every meeting. some tweaks about how many rate hikes they expect the rest of the year the dow down 116 on the bell similar kind of decline for the s&p down 11 to 2,775 and the russell 2000 small caps today. the nasdaq relatively better

got a lot coming up on the show today. bank of america's ceo brian moynihan will give his reaction to the rate hike in an exclusive interview coming up in a little while. joining me on the panel to talk about all this, we have -- well, we have mike santoli, denn berman, and who else kelly firestone is here. let's go to leslie picker because we have news crossing the wire at this moment. it involves our parent company as well. what's going on with comcast >> that's right. this is a highly anticipated announcement from comcast. officially throwing its hat in the ring for those fox assets. now, comcast the parent company for cnbc writing in a release that it's bidding $65 billion in cash for fox's film and tv studios regional sports networks and movie networks comcast is looking to outbid disney who has cited its own stock deal for the same assets

they say this bid is $35 a share. about a 19% premium to that of disney's offer a court decision paved the way for today's move by comcast. the judge's approval of such a large vertical mover particularly in the media world. gave more confidence that an acquisition of fox's assets would also pass antitrust muster back over to you >> okay. thank you ve muc again, just crossing the wire at this moment, comcast as was expected is going to make a bid. try to get disney out of the way and get those fox assets that disney already made a deal for let's get morerom this on andrew ross sorkin who joins us now. with this coming, yesterday the big news was that at&t/time warner deal could go forward and just as expected, now -- explain to us how we got here. why was yesterday's decision so relevant >> well, i can tell you literally both brian roberts and

the entire legal team for comcast were waiting tinder hooks yesterday afternoon to understand what the judge's decision would be if, in fact, the judge had blocked that deal. it is not clear. in fact, it is unlikely that we would be here today with comcast pursuing this deal in part because there would be a view the department of justice would try to block this deal with the approval, though, by the judge of the time warner at&t deal, it now seems likehe market or the coast is clear, if you will, for transactions of this sort. i just want to make a couple of points about this traction the new details that have come across the tape. perhaps the most important, comcast effectively saying they are going to have the same reverse breakup fee that the disney deal does that was a big issue previously. so $2.5 billion breakup fee. disney had that in their deal.

original originally made a prior bid which was rejected by rupert murdoch. there was no breakup fee think about.portant point to they make the point in this press release, they say that 70% of 21st century fox's assets or revenue, rather, are outside of the united states. that's an important point because it's a signal to washington and a signal to investors that they think that this deal would not be blocked of course, one of the main reasons that rupt murdoch took the original disney offer which was lower than the comcast offer was becae of concerns that this transaction would be blocked and the fact that mcast did not have a reverse breakup fee on the table at the time, by the way, we should say that the comcast bid that was rejected was an all-stock bid. this is an all-cash bid. this does not require the vote of shareholders. and al day, we have watched the disney stock

and comcast stock and 21st century stock move around. lots of questions about what shareholders are trying to say in all of this the fact that disney stock did not go down today actually raised some questions about whether shareholders believe that disney is ultimately going to lose this so that's an issue and makes it more complicated in terms of whether bob iger is now going to come up with a higher bid. >> disney started to rise throughout the session today andrew stay with us. you've got walstreet starting to wonder now, wait a minute what if they don't get the fox assets before anybody thinks msnbc and fox news would be part of the same company, that will not be happening. they split this up to say the news would be over here. this is more entertainment, regional sportsexactly i think what the market is doing and whenever you have merger

stocks, it's a probability, right? what we knew today with this bid coming in on top of the disney bid, it at least raises the probability that perhaps disney doesn't end up with this also does the fact thame warner went through change the landscape in general for who ght be a potential b and seller i don't think the market's making any determination on this they're not saying the verdict is in, we have a winner. it does change the game. maybe it doesn't necessarily think this is going to be a massive open ended bidding war that goes to the moon and basically creates a winner's curse. >> is this rupert murdoch's decision to make or the all comcast cas door "b. or is it going to come down to the superior offer on paper? >> of course the murdoch family has a significant amount of control in the company but of course shareholders have their say as well as in any siion. to key off what mike was saying, looking a bit at the big picture in terms of things that are possible that we might not have

thought were possible just two days ago, here's the thing i thought most about amazon prime is going to be streaming premierely soccer games to the uk customers. media and across four or five different industries it does not surprise me nor should it surprise the publiat large there are all sorts of -- >> by the way, one reported in "the wall street journal" today is that amazon had talked about splitting some of these assets with comcast that apparently went nowhere but to your point, this came up yesterday. people said why couldn't netflix then buy more media properties why couldn't one of the other tech giants. >> not to come under any individual stock, but they are so high. if you're going to be paying in stock, it really is a great time to be doing that so i think that everything gets rescrambled in part because technology really is changing so many different industries. >> what do you do as an investor do you try to say, okay. now all of a sudden anybody can be a target and they become much

more valuable? do you get worried about a name likey and how mut may have to pay up here? >> well,e don't owy of the mpanies that wld be acquired in this space. i would point out two things the first is the judges made it clear that the companies involved, disney or comcast are in a position not of strength but of some weakness that the new players in the market, whether it's facebook, amazon, google, apple, they and netflix have disrupted this whole media landscape in a way that makes the other former major powers much less competitive. and they are allowed now to have whatever access they need to make auisitions. that doesn't mean they'll be smart acquisitions doesn't mean they'll pay the right price. they're really going to have to pay up but i think it puts into

question whether these companies know what they're going to do with the products they're buying how they're going to make them profitable and having watched the media years as a form er media analyst and you can look at companies whether it's tribune or "the new york times" that bought "the boston globe." how did all of these deals work out? not very well. so i think it's better to just watch. and if you're lucky, pick the acquirers. you know, the acquired companies because it's going to be to make money.them to figure out >> i thought it was fascinating, too, netflix was up about 5% today. this was deemed a competitive threat by allowing these companies to bulk up, the investors weren't treating it like it. >> they were not everybody's chasing the netflix multiple whether they can get there or it

you know, when you look at this particular bid, though, one of the points that's worth making is at this very moment, comcast is now officially put disney into a box yes, rupert murdoch effectively does have the last word on this. but it's almost impossible for him to say at this price, no, no, no we're not going to take this deal the futuiduciary duty -- bob ig is going to have to raise his bid. bob iger historically has only tried to make a private transaction or transactions that have not historically been part of public bidding wars in this way. so i think we're going to really see whether this is something he's going to pursue in a meaningful way the other piece of it is clearly from all of the conversations that i've had, rupert murdoch has always liked the idea of selling toisney and taking a piece of disney.

that has been part -- that was pa oe sale sos predisposed to disney. so the question is at what price would bob iger really have to come back at does he necessarily have to come back at a higher price than comcast? could he come in at a lower price? how much of that has to be stock? and how far can comcast go comcast historically if yo shareholders have always liked the idea they've been an unlevered company. very few turns by default as comcast pursues this transaction and if they have to raise the bid, the leverage level goes up and of course we've watched as shareholders at least some have clearly voted with their feet. so there's going to be a lot of drama going on over the next couple weeks if not longer >> and comcast shares down about 1% after-hours let's bring in mario gabelli i don't even know where to begin. let's start with the point that andrew just made

will disney -- is diss knney pun a box here do they have to offer more and how much room does murdoch have to make this decision >> i think the notio free market system at work is gd and scaling up on a global basis. so unlike some of the deals you though sony bought the colombia pictur pictures, you know, the world has changed. so let's look at the global market place how can disney get bigger globally how does comcast break outf geographical concentration based on the $35 and we assumed that would be a number in cash, i mean, you knowthe deal will take about a year and a half to close. they'll only be trading at 3.9 times debt to ebitda and, you know, comcast has room for another increase in its bid. so now iger says to himself, look do i have to go to a share of disney stock

right now he's giving you 0.275. he's got 1.5 billion shares out. rupert would prefer taking a tax deferred deal, so would my taxable clients. i some of fox and i geit so i've got a dollar basis unlike real estate so i think disney will bump to -- maybe they can putn a portion of cash. 20% standard election, no prorate. and give you some -- give you the stock. so that would work at the moment, it's kind of neutral. because yore paying -- if you live in the state of california, you're paying a 35% capital gain tax. you've got to n the numbers. >> by the way -- >> go ahead. >> mario, the one thing i was going to say, in many ways brian roberts either wins or plays spoiler and wins that way. i mean, the real issue is in many ways, you can't -- if you're in the comcast position

in this case, it's hard to lose. unless you believe they overpay. >> andrew, is that true? we've heard comcast say the international assets here are what they love about this. right? it's sky, it's star india. there's nowhere else to go for that kind of international growth exposure, is there? >> there's not many options. by default you win the asset or forceheonent. and there shareholders who i imagine may have that view but the last option we haven't talked about yet is whether at some point -- and we talked about this a bit on "squawk box. whether bob iger finds a way to communicate with brian roberts and they decide to ultimately split this company in anwhether that's something that will be palatable to the murdochs given if you think about the assets, there are certain assets that disney really wants and certain assets comcast really

want >> that we agree with. you already have 40%, andrew, of sky owned by fox/disney. therefore they don't have to pay that extra juice in cash >> the question i would ask you, mario, as a shareholder is would you be unhappy if they made that phone call to each other and how got together and the bad news for some shareholders is they might not get the bidding war they're expecteah, well, on the other se of the coin, i wouldn't rule out a small possibility that one of the global behemoths that judge leon talked about may come in over the top i can'rule that out either assigned probabilities of 1% or somelike that. you know, i -- so that's the way i would look at it i think you got most of the moving parts i would like to also say this sets off a chain reaction so that everybody in an industry --

it's like the old buffalo hunters. if you want to go out hunting for buffaloes, you're going to pay for the last one >> mike? >>y scarcity values going up with all this i do think it's -- as these guys have been saying, it comes down to a what would it take to get this done for murdoch with a perceptiont disney has a slight advantage because of all those reasons. it's a kind ofcession stor i ink the market is interesting. it's nudged up fox after-hours even after being up more than 7% today. so maybe the deal came in slightly richer than was anticipated. >> yeah, but if i'm paying $44 for fox today, i'm getting what i perceive to be a $15 of economic value of the spenco >> right that's what's left over. >> that both companies, both

comcast and disney are saying they're being spun off and with the new tax rate, the amount of debt thacompany is going to undertake is less so that i have private market value. is probably where it trades in the public market. that's why i'm willing to buy fox today. >> one final question. because bob iger i believe is on the board of apple, is there a role apple could play here as it is also looking to bulk up on media assets >> just one last comment apple, amazon, netflix i only remember because i've vie companies with greaties. stock green light abilities have created things like water world and i guess sahara these are the huge bombs out there. wait until netix can't constantly make money. so we'll see

who else wants to get a content company? there was six or seven movie studios 50 years ago and if you'd exclude some in bangalore, there's only six or seven today. so scripted shows or significantly increasing in popularity think about sahara how about even disney with all the success, think about john carter >> right that's right that was a -- more of a flop for them and hulu of course is in the middle of all of this as well. i think each company -- you know, the companies all have a piece to portion up right now. but that's one of the most significant streaming assets in the media landscape right now. all right. so mario, your best guess as to

how this plays out right now >> i'm applauding the action on behalf of my shareholders who have clients who are significant holders of fox and they're rooting that the auction which just started is going to continue. >> all right mario, thank you for your time >> i'm delighted to be here, kelly. look forward to saying hello in three or four months from here with youe. >> sounds good or before. let's bring in david faber as well who's keeping a close eye all of these moving pieces. again, if you also could kind of give that contexhe ruling y, why was the vertical merger ruling yesterday so significant to comcast entering a bidding war for fox? >> well, because of the potential that judge leon had with the government and said the combination of content in particular in the case of time warner but also would be the case with comcast which already

owned nbd the fox assets would be competitive the ruling we got in particular really a green light to the fullest for comcast to move ahead with the long planned bid. and you saw that today you did see on the regulatory front their willingness to say if the doj wants behavioral or structural remedies, wll at least enter into that conversation with an open mind they are willing to sort of match diss knee on the reverse termination fee. and they have the regulatory blueprint for this, they feel it's better. ul ke i'll keep it brief here. i have a couple of observations reporting over the last months rupert murdoch is a hyper rational person. they say he's unsentimental.

i think he's willing to take it as is the fox board. i think bob iger is going to compete aggressively here. i don't think they're seen as backing off in any way i do expect them to add cash to any potential bid when they do raise as i expect they will for the company in order to stay in the driver's seat and maintain their merger agreements. have to sign the new one as this thing goes along and i think there's the potential for this to go back and forth. prior to that, july 10th at least scheduled. so we're going to have a lot of back and for potentially and we're going to have this battle joined on all sides i don't think anybody else is coming in over the top i don't necessarily think there's going to be the partners here that you might see some names bandied about to buy regional sports networks if that's required. but it's going to be interesting to watch, for sure and right now there are no talks between the two to andrew's point about trying to flip this company. they are going after each other. and rupert murdoch is going to sit back along with that and

watch their value keep going while people put into premium what they're going to take out of or benefit from the deal itself >> do you think we're talking about any silicon valley entrants here? is there an opening even on the fang companies or do we look more at the sinclairs and the smaller cable companies now probably trying to think, what role are we playing in this new world? >> yeah, i don't see at this point nor have i really heard in any way that i believe the presence of a silicon valley name you might end up more likely with a name like charter than anyone else. you can never rule out amazon. but i don't necessarily see it i certainly haven't really heard it from anybody, i believe, kelly. i'd be surprised >> all right andrew there i guess is your answer in terms of whether they carve this thing up. it sounds like if comcast is

serious enough about the international assets, that maybe they'd be willing to do something on that front. >> ultimately the question is if they were to, how you would do it because you could also, by the way, hit all sorts of trip wires legally. this idea of collusion ie ofese. so is not so easy. i know it sounds rational and makes a lot of sense, but getting there and how you get to that place is a bit more complicated than it is straightforward. >> all right and guys, finally, how do you think the market should interpret this going forward does it mean moving forward, paul dieterich was here and said look. he thought the thing could trade like netflix i do think that it is net positive for the sector. there's no doubt about it. i don't think you really need an apple or an amazon to come in and create that umbrella bid it's probably just going to be -- it's about -- you know, i

think both disy and comcast have the wherewithal to execute this deal. i do think -- look they have some things they can universe that doesn't matter on the comcast side so i do think it's a matter of preference they both have the balance sheet to go the distance it's a matter of what you choose >> one last general observation. karen i think mentioned this before about the risk of overpaying in a competitive situation. but if there's a risk of doing nothing. that in some ways is t calculus here. should i do something and perhaps pay more than perhaps wanted or doothing at all. and right now given so much change in the industry at large, i think the risk of doing nothing is greater than the risk of potentially overpaying. >> let's see if tom rogers agrees he tom, what do you think of this comcast offer and what fox may do and even if we pursue that, the

competitive position it leaves both comcast and disney going forward. >> well, i think people have to be careful what they wish for. i think that at&t won a court fight it should have won but now it has acquired assets at a huge price. burdened with $249 billion or so of debt. and what it has is the right to bundle the content which it's already doing with declining businesses of bundling or moving to the direct now over the topside of the equation that looks like it is stemming revenue decline. so you move to the comcast fox disney side of things. and the satellite issue which, ction now, but everybody's

got to think of it as eyeing that 60% of sky that is not part of those numbers and probably another $20 billion or so added to the deal. and you've got close to half the transactions that's going to be caught up again in satelliteass. just look at dish. dish was the third worst performing asset on the s&p 500 this year.satellite around the n decline. and sky is not quite in decline the way directv and dish is. but it isn't going to be far behind and disney's really got to think hard about getting into a business at that kind of price where it knows nothing about managing the roles that really isn't the asset that it's most after, i think, in terms of creating a global

streaming entertainment presence that can be the media competitor to netflix and the others getting into that game >> all right so tom, if you think these are decling businesses and that they -- everyone should be careful what they wish for, to dennis' point, what should they do then? what is the right way to pursue growth we >> well, i agree with both andrew and david there's going to be another round of bidding here no doubt. i think the rational result is the win/win/win for everyone but the win/win/win is the higher bidding gets fox not only the higher they're getting but the super premium bidding war. and ultimately i think what disney cares more about is getting the studios, getting full rights to hulu.

i think comcast probably cares more about the getting out of the geographical box it's in as being a u.s.-only company. and knowing how to manage sky better it can certainly drive the issues that are facing decline on the satellite side. and some kind of splitting here where everybody gets the piece they most need and murdoch gets the higher premium that comes from all this is probably the rational result. whether rational minds will pris another >> well, as it always is tom, thank you very much tom rogers joining us there with his thoughts saying he thinks this will split up with the assets going to the people who favor them the most. carrie, if that's the case, you know, anything that you would do would you stay on the sidelines in the media space >> well, i think for the time being i wouldn't buy any of these participants today i would like to just add one

comment which is that a couple of people mentioned assets that are included in this such as the comic book franchise. and one could make the case that's peaking if you look at the growth in the marvel films and what happened over the last -- >> are you suggesting the superhero market is saturated now that we have one movie a month? >> it's a little bit like live action sports. everybody says that's the only thing one pays up for. and we saw how much all the broadcasts have gone for and what happened with espn? espn which was half of disney's ebitda is really declined. some of this everyone has to be careful about overpaying and kpoo exuberant in the future. >> this is why you wouldn't start an old media business

today. if you are in it and have the franchises and the networks you have, what are your options today? gaining scale if you're that much bigger you can put resources behind the stuff that works. if you're already in the comic book world, whnot add it ve av all the rest of it so i think that's what all the players are dealing with also you can sunset the stuff that's disadvantaged look what disney over the years has done with abc. disinvested from it as that part of the business has been in decline and lost viewership. >> i was just going to ask is this all espn's fault. just to the sense that it's so important to diss knee and it has been in decline. did that become a catalyst for disney needing to do something this big >> of the appeals is to shrink that and change the story a little bit also we can't underestimate how opportunistic all of this was. the idea tt the murdochs

signalled they were a potential seller of assets i mean, that is what i think got this moving more so than bob iger sitting back. >> let's see what ken auletta thinks he joins us from the new yorker. ken, it is extraordinary if we kind of step back for a second that this is no matter how it end up or a little bit of both? >> i think you got to spend a moment thinking about what is motivating rupert murdoch here here's a guy who has a netwo which he's not selling he keeps control of fox network. yet he's selling the production arm or the one that manufactures the content for the network. and that seems on the surface to be crazy why would he be doing that i think he's doing that in part

because $8 billion a year is their programming budget four times the amount. so he's saying i can't compete with these p what do i d by selling to one else, i still have my network. but what's my network going to be i'm going to get out of potentially the scripted business totally i'm going to do sports i'm going to do news and i'm going to do reality programming nap will then put pressure on all the other net works to say, hay, can we compete with netflix and apple and amazon for scripted programming. they have the money,e don't. i think murdoch may have made a calculated and future oriented decision that this is not a business i continue to be in >> and what options does that leave for everybody else in the business is the answer just netflix is

throwing more money at this than anybody else so we have to get that big maybe consolidate down to a couple other players and call it a day? >> i think one of the things is hulu has a dysfunctional organization with four owners. and it's very hard for them to agree and they're losing money now. if you had one owner, they could act potentially. but they have very deep pockets as is amazon and apple so as the judge said, these are the -- these people have changed the mix and the game >> and ken, fi if you had to zesguess about how this endsp or to remind everybody what this means down the road, what do you think it looks like? >> well, i mean, if you get out of the script, if murdoch gets out of the scripted business, assuming he does at the fox network, what pressure does that

put on cbs, nbc, and abc to also get out of the scripted because theyan't compete with netflix. and the other dujal giants that happens and obviously the consumerthe kind of programming they're going to get on the networks is going to be very different big issue. >> yeah. it's interesting to contemplate. thank you for joining us ken auletta. andrew, want to react to that before we let you go >> i would just make one comment and ken made -- you asked the question about consumers the bigger consumer impact is going to be felt by the disney/fox transaction far more than the comcast/fox transaction. when you really think about the film business, for example, or the tv business, for example the concentration that takes place and we've already heard that donald trump likes the disney/fox transaction we don't know if he will like the comcast transaction. though i think there's a view

that whatever rupert murdoch likes, perhaps the administration will like we don't know about that but the issue is that the entration of the business betwee is so much greater than what happens with comcast and fox because it gets spread out and because it's an international business i think the consumer question is actually a very important one. it ultimately is a regulatory one in that that's where you would imagine regulators would go but thus far for lots of reasons, they have not gone there at least not yet >> andrew, thank you very much along with dennis berman and carrie firestone joins us to talk about the news of the hour. take a quick break when we come back, we have an exclusive interview with bank of america chairman and ceo brian moynihan the fed just raised rates again a couple hrsgo they've been lagging the broader market this year

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what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley welcome back as expected the financials got a pop after federal reserve r today. joining us for an exclusive interview right now is bank of america chairman and ceo brian moynihan welcome, brian >> it's great to be here thank you, kelly >> first question on everybody's minds, when can i get more from my money in the bank do you move to up the deposit

rates right away >> we move -- really it's a broad process. depending on the markets and what the competition does. but we'll move rates as we have in other rate hike scenarios the good news about a rate hike scenario, it shows the economy is still going strong. >> still it's pretty low what people are getting for their money right now. do you think the competitive landscape -- we were talking how you can get 2% for your money six months on a cd right now is there starting to be a bidding war there? >> i think if you think about the last year and a half or so, you've seen as rates rose, people have looked for alternatives ogher rate earning. opd to money in their transaction accounts so it really determines the type of customer, type of account but the goal is to provide great services of which the rate and the capabilities beyond that whether digital capabilities,

investment capability, investment advice is key to it so we've enjoyed good success as rates rise we will continue to do so. >> want to ask you about somnew. the banks, you're all trying to kill venmo and e-marketers say you might be winning in that regard zell is to peer platform, they expected to overtake venmo in terms of u.s. users this year what accounts for this rapid growth >> well, we had to create a better experience for our customers to move money to each other. embedded within our safety and security directly from their account. and one of the unique things we realize is between the assets we have that we operate as cooperatives, we put those together and bring out zell. what zell gave us because of the instant connectivity of all those numbers and the whole industry will have access to it, basically you can connect all through a cell phone and e-mail.

we're seeing 100% per year growth our peers are seeing also growth and it's just rolling out. so as people get more and more used to it, it's embedded in the app. we think it will be a great r sr what we're trying to do is give the safety and securities of our bank account structure and the transferability to anybody by having those two pieces of information. >> and i wonder is it millennials who are largely using that or is it people of all ages is the take up rate pretty good? >> i think if you think about something like zell, it is across the board and always any of these digital products have cohorts or higher usage among younger people that's the nature of the business think about our mobile bank, our digital banking. we have 35 million digital customers. 25 million-plus mobile customers. and we have 50 million customers. so we have penetration rates

where everybody is using it. we're seeing zell broaden out. my friends have learned how to use it they're sendinmoneto usingit you're starting to see it adopted. we do have an effort with our student accounts as we open accounts, we embed it as part of the process with the new kids coming in to open accounts to go to college or go to high school and make it part of that outcome also >> i'm trying to think what you and your friends are using zell for. are you splitting golf fees? you know, picking up lunch or dinner for each other? what, you know what are you using it? >> golf would be me paying them. the interesting thing is at the end of the day our generation was used to using checks so when you had something that somebody had to reimburse you for, they'd say send it to me through your bank to my cell phone number and it's there.

it's wonderfully simple. and once they do it, it just has a network effect it has an ease of use it's on the back of the digital customers and mobile customers half our money today moves digitally by consurs and that's already there we're just driving that largely because it's customer convenience. >> want to ask you about the big news of the week we were just talking about. with this comcast deal but the department of justice has said at&t can go ahead and buy time warner. now that comcast/fox pursuit is showing just how much more deal making might be in the pipeline. you think it's going to lead to a big pickup in investment bankin>> it should and there art of deals in that -- this particularustry, this segment of industries that we're testing the question of mpetitive combinations and the clarity of the decision yesterday and allows a lot of ideas to get to the table.

you see one of them today. and so, our bankers tell a lot of people are waiting there for the outcome decision and are moving forward it'll be a fun time to be an investment banker, frankly. >> yes i'm sure they're excited to feel the flood gates are open do you think that's going to be a strongs part of your business. we have the trading environment. people watching closely. and just are you getting pressure in general to ramp up the risk taking to improve your profitability like some others are? >> the end of the day, we take the risks our clients need us to take as you look in the first quarter, our risk was consistent where it's been for eight or ten years. we continue to make more loans obviously we're taking on more risks bying more loans outstanding. growing loans every quarter. we're growing deposits again that means you're taking on more operational risks. and then in trading, you know, the idea of the team putting $600 billion in the balance sheet every day to help capabilities

they do a great job. they've been able to manage the risk we focus on doing what our clients need us to do. and so we didn't lose money any trading day in the first quarter. you know, the business continues to be solid. but we don't push it just to make money we push investment banking to really meet the market's needs and not go too far it's the philosophy we are as a responsible growth that's worked well for us. >> all right and on that note, you're getting the legend and leadership award at themit today. so congratulations on that and thank you for joining us >> thank you >> that's brian moynihan, ceo of bank of america. stocks close lower today after the federal reserve raised interest rates and forecast more hikes to come. up next, how that will impact the economy. coming up on "fast money," a top technician has three stocks to buy following the second rate hike of the year he'll reveal those names at 5:00 vernor has dec wither emeency... treme risk opipes and water. soon, insurance companies won't pay for damages. that is, not if they can help prevent damages from happening in the f.

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welcome back the federal reserve announced it's raising rates earlier today and pointed to two more hikes by the end of the year. jan, welcome to you. hawkish overall. what's the point of doing is press conference every time starting next year that was also part of the news today. >> they said this previously the market is so conditioned that you can only mo at the quarter end meeting and just make it a bit less clear i mean, i don't think tryig mes in -- i don't -- >> that's what they did in the past going back to 2006, they would raise a quarter point every meeting. >> that would be the upside. i mean, i think they will probably do a little more than

what they're saying at the moment they moved to four hikes this year in total. that's consistent with what we're expecting for next year we're expecting four they're still at three but, you know, there's risk in both directions. so it's certainly possible that they would actually want to go more quickly it's got to depend on the data, not the schedule of press conference >> the market reaction was interesting. no reaction, then a positive one. >> which does sometimes fit the pattern. i mean, the market seems to have to assimilate it i think initially the reaction to the press conference was upbeat i mean, he keeps hitting this message we're not afraid of frothy financial conditions. we don't really see an overheating problem. it's just the economy's better and this is our response to an economy moving in the right di do you think that message will continue on for coming months? we're going to find something to worry about in all othis >> no. i think that will be the message for the next few rate hikes stil one other thing he said that was

interesting was that policy is still accommodative. they didn't change that statement. he was asked about it. and sort of suggests that we're still a ways away from actually removing that language i mean, eventually it's going to go but it doesn't seem like it's imminent so the next few hikes can still be basically still be basicallpackaged as economy's better so we're normalizing. at some point you go beyond what you think is neutral and then that's a slightly mo difficult communication job. >> is it time to change the target, the definition of succession which right now frankly revolves around the inflation rate does it need to revolve more around gdp and how fast that's growing? >> it is a dual mandate. i think sometimes they emphasize more one side of the mandate, sometimes they emphasize more of the other. i think it's always important to make clear that you look at both sides. >> you've got summers out there saying they should target nominal gdp and that rates will always be this low basically if they maintain the status quo. >> well, i think -- i mean, my own view is that for the time

being in this kind of environment the current framework looks pretty good, and i think powelln agreement with that. there were times back in 2011 when i think it would have been a good idea toyou kntarget the level of nominal gdp at least for a temporary period so that's sort of consistent with what former chair bernanke said that there are times, exceptional circumstances when you might want to deviate from the current framework. right now i don't think it's really broke so i don't think it really needs fixing. >> there remains all of this focus on the shape of the yield curve, the fact that between the two year note and ten-year treasury it's about 40 basis points now that's wider than it was for most of 1997 and '99, 2005 to 2007 is there something to worry about here does that limit how much the fed can do ultimately? >> i don't think so. this came up in the press conference and i think powell gave relatively short shrift to the idea that the yield curve in and of itself is something to

worry about. he really phrased it more couched it more in terms of, you know, this being a consequence of them moving the funds rate higher that's the way we would look at it so i don't think that a flat yield curve or even an inverted yield curve causes recessions. i mean, it's the sort of thing that typically you observe later in the business cycle, but i don't think it's a sort of independent signal that the economy is bound for a sharp slowdown or recession. so i think the outlook is still pretty good and, yeah, that's i think the message from chairmawl >> well, 4%, is it possible we're going to do 4% this quarter gdp? >> it's possible we're not quite there at our own tracking but it's not far away this quarter is stronger than the 2.2% but obviously quarter to quarter these numbers jump around bit. >> week to week, jan a pleasure up next, much more on

comcast. $65 billion bid for those fox assets and whether disney has a new offer up its sleeve now. be sure to tune in to the closing bell tomorrow. i'll be talking to julian robertson in an exclusive interview. you won't want to miss it. we'll be right back. - i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain impr memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling

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welcome back second day in a row media stocks are on the move after hours. this after comcast right after the close announce bidding $65 billion for most of 21 century fox. that would top a bid from disney netflix is to blame for the spate of media mergers. >> it seems to me netfx is providing the difficulty for the other companies. the judge said basically the same thing, that it's not ju the media companies we have to look at for antitrust, we have to look at silicon valley as well because they, in fact, are the real competition >> let's bring in former netflix exec mitch lowe. welcome to you i guess now everybody in old media is on their back heels, right? >> yeah. yeah i find that statement completely inaccurate you know, silicon valley is the home of innovation and option

for consumers. >> well, we won't tell you the rest of it where he suggested that culture basically fostered fraud. we're going to find out more about it once the tide goes out. totay on the netflix point, the idea that they're going to spend $8 billion on content like ken oletta was saying, fox is going to spend 2 billion don't they have to scale up to compete with netflix today >> well, they have to scale up, buu also have to leave options for new companies to create different opportunities for consumers and now that you build these huge conglomerates, they're essentially going to keep future netflix out of the business we see it all the time with increasing prices and fewer and fewer titles we're focusing on bigger and bigger titles and tv series. you know, companies like netflix, independent film makers make all kinds of different things for different people. big studios make big blockbuster

hits >> how is the current arrangement, or even if we get some of these mergers going through, how would it prevent a future netflix the existing netflix doesn'trean it's purely an app on the internet so exactly in what way does it close off that path? >> sure. yeah they'll prevent the opportunity for a small startup to license content, to bring on creative community, to get access to, you know, whether it's into the home or to the website. so it's really just, you know, con straining or making it harder for the new startups if it's under capitalized and trying to start something new. we see it all the time we see it, you know, in the theater industry where prices keep going up. selection keeps going down >> mitch, last question. what would you do if you were in their shoes? >> well, you have to -- you have to do what you have to do to grow your company so i don't

blame anybody, i'm just saying from a consumer point of view that this is -- reduces selection and options and makes it harder for the small company to get started >> yeah. well, to your point, it makes it clear they're doing more than just trying to fight with bigger size, they're tryingo fight back on that market power, too mitch, thanks for joining us >> thank you. >> mitch lowe, former netflix exec michael, where does that leave us now it's been crazy sort of 36 hours digesting all of this, and now a long road ahead still. >> it still is look, i think right now is the perfect time for all of this to play out in the sense of what's happening in terms of long term, everybody figuring out what's right for their business model and also the capital markets are saying go for it in a way. i do think it's going to be months of this probably to figure out exactly where it's at. >> netflix stock is up 5% today. shouldn't it be the opposite if this is a competitive threat >> netflix has said it's not

going to be a buyer so don't worry about any financial engineering on their front this whole idea that everyone is implicitly chasing not just them but the eyeball s that they dominate puts them in a pretty good spot. big tech is strong >> netflix still competing fore michael, thank you that does it for "closing bell." "fast money" begins right now. >> "fast money" starts right now live from the nasdaq market site overlooking new york city's times square tonight on "fast" media bidding frenzy is on comcast making a $65 billion bid for fox. ll it leave disney in the dust what does it mean for e rest of the space we have all the details. plus, can you trust crypto bitcoin's big run to 20,000 wasn't all that it seemed to have been. the man behind the explosive l be here to explain, but first we start off with a big story of the day the federal reserv